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Romney smiles during a debate in Tampa, Florida last night. Paul Sancya/AP/Press Association Images
The Taxman

Disclosures reveal Mitt Romney pays lower taxes than the average American

One of the frontrunners for the Republican nomination for the US presidency has released his tax returns and they make for interesting reading…

AS THE RACE for the Republican nomination hots up, new disclosures that Mitt Romney paid less than 14 per cent tax on his income over the past two years are likely to bring his wealth into sharp focus ahead of the crucial Florida primary next week.

Details of the former Massachusetts governor’s federal tax returns were released this morning following much pressure on him to do so. They show that he will pay $6.2 million (€4.7m) in taxes on $45 million (€34.5m) in income over the two tax years of 2010 and 2011.

This amounts to an effective tax rate of 13.9 per cent which, as the Guardian points out, is a rate lower than the average American who would pay 35 per cent on regular income over $379,000.

But as the primary source of Romney’s income is from an array of investments they are subject to a much lower tax rate of 15 per cent under a reform introduced by former president George W Bush.

The Telegraph explains that Romney, who has a fortune of $250 million, paid $3 million (€2.3m) tax on income of $21.7 million (€16.6m) in 2010 which amounts to a rate of 13.9 per cent.

His income for 2011 is expected to fall but he will actually pay more tax for last year, according to the documentation which shows that $3.2 million (€2.45 million) will be taken by the taxman on income of $20.9 million (€16m) – a rate of 15.4 per cent.

Romney had been under pressure in recent weeks to release his tax returns. His opponents vying for the Republican nomination had cast him as a wealthy businessman who slashed jobs in the private sector when he worked for the Bain Capital management consulting firm that he helped set up.

Former House Speaker Newt Gingrich, who caused an upset when he won the South Carolina primary on Saturday, made public his returns last weekend, showing he paid almost $1 million in income taxes — a tax rate of about 31 per cent.

Meanwhile, the White House imcumbent Barack Obama, who Romney and Gingrich are battling to face in the autumn, had a joint income with his wife Michelle of $1.7 million (€1.3m) in 2010 on which they paid 26 per cent in tax.

Prior to the release of his own documentation this morning, Romney said in the first pre-Florida primary debates in Tampa last night that he done everything by the book.

“I pay all the taxes that are legally required and not a dollar more,” he said. “I don’t think you want someone as the candidate for president who pays more taxes than he owes.”

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