Romney Paid $3M in Federal Income Tax in 2010, Gave $1.5M to Mormon Church

Mitt RomneyRepublican presidential candidate Mitt
Romney paid about $3 million in federal income taxes in 2010, having
earned more than seven times that – $21.7 million – from his investments
and making him among the wealthiest of American taxpayers.


At the same time,
Romney gave nearly $3 million to charity – about half of that amount to
the Mormon Church – which helped lower his effective tax rate to a
modest 14 percent, according to records his campaign released early
Tuesday.

For 2011, he’ll pay about $3.2
million with an effective tax rate of about 15.4 percent, the campaign
said. Those returns haven’t yet been filed yet with the Internal Revenue
Service.

The former Massachusetts governor
had been under pressure in recent weeks to release his tax returns, his
GOP opponents casting him as a wealthy businessman who slashed jobs in
the private sector. Rival Newt Gingrich made public his returns on
Saturday, showing he paid almost $1 million in income taxes – a tax rate
of about 31 percent.

Romney’s campaign
confirmed the details of his tax information after several news
organizations saw a preview of the documents. He had said planned to
release his returns in full Tuesday morning, and campaign officials
would be prepared to discuss them in detail with reporters.

“You’ll
see my income, how much taxes I’ve paid, how much I’ve paid to
charity,” Romney said during Monday night’s debate in Tampa. “I pay all
the taxes that are legally required and not a dollar more. I don’t think
you want someone as the candidate for president who pays more taxes
than he owes.”

Romney’s 2010 returns show the
candidate is among the top 1 percent of taxpayers. The returns showed
about $4.5 million in itemized deductions, including $1.5 million to the
Church of Jesus Christ of Latter-Day Saints.

Before
the tax records were released, Romney’s old investments in two
controversial government-backed housing lenders stirred up new questions
at the same time his campaign targeted Gingrich for his work for
Freddie Mac.

Gingrich earned $1.6 million in
consulting fees from Freddie Mac even though Romney has as much as
$500,000 invested in the U.S.-backed lender and its sister entity,
Fannie Mae.

The dimensions and the sources of
Romney’s wealth, which he has estimated to be as much as $250 million,
have become pivotal issues in the roiling GOP primary campaign. For
months, Romney dismissed calls to release his personal income tax
records. But after mounting criticism from his rivals and others,
coupled with his stinging weekend loss to Gingrich in the South Carolina
primary, Romney agreed to release his 2010 return and 2011 estimate.

Romney
already has acknowledged that his current tax rate is about 15 percent,
a level far lower than standard rates for high-income earners and
similar to the capital gains rate. “I’m proud of the fact that I pay a
lot of taxes,” Romney said.

The current lowest
rate for long-term capital gains is 15 percent, but a higher rate of 20
percent had been in effect since 1981 until President George W. Bush
signed into law a massive tax cut program in 2001.

Romney’s
vast investments contain other funds than the ones he profited from as a
Bain Capital executive. But it was unclear whether he had any direct
role in handling the investments in Fannie Mae and Freddie Mac that
appear on his 2012 presidential disclosure.

One
investment, listed as a “Federated Government Obligation Fund” and
worth between $250,000 and $500,000, was a mutual fund that included
both Fannie Mae and Freddie Mac assets among a larger pool that included
other government securities.

The holding was
not listed in Romney’s blind trust, which led some Democratic Party
activists to suggest that the investment was under his direct control.

“He
is relentlessly attacking Newt Gingrich over his ties to Freddie Mac
despite the fact that he personally invested up to a half a million
dollars in both Fannie Mae and Freddie Mac,” said Ty Matsdorf, a senior
adviser with American Bridge 21st Century, a PAC associated with
Democratic Party and liberal causes.

Former
GOP Rep. J.C. Watts, a Gingrich supporter, said Monday that Romney was
on a slippery slope calling his opponent a lobbyist and raising doubts
about Gingrich’s work for Freddie Mac. But he did not directly address
Romney’s investments with the lender or with Fannie Mae.

“Some
might see it as splitting hairs. But Newt Gingrich was not walking the
halls of House and Senate,” Watts said on a conference call arranged by
the campaign. “He was never doing the hand-to-hand combat doing the
lobbying, consulting, whatever you want to call it.”

A
Romney campaign official who insisted on anonymity to discuss that
investment in greater detail said that Romney’s trustee had bought the
government investment fund in 2007, before the housing crisis broke.

The
Romney official said that the government fund was purchased through a
charity trust that does not appear in Romney’s presidential disclosure
but will show up on his income tax return for 2010. That trust, called a
Charitable Remainder Unitrust, is a standard tax strategy among the
wealthy that provides investors with a fixed payout each year. What
remains in the account at a later date, or when the investor dies, is
turned over to charity, the official said.

Romney
does not directly control the investment account, Romney campaign
senior adviser Eric Fehrnstrom said earlier on Monday. “His investments
are controlled by a trustee,” Fehrnstrom said.

Separately,
Romney’s IRA retirement account lists both a Fannie Mae and a Freddie
Mac security, each worth between $100,000 and $250,000. But because
those are in Romney’s IRA, they also appear to be under control of the
trustee.

Tax experts said Romney’s income tax
returns may contain other charity structures and tax strategies designed
to both boost his income and charity donations, while minimizing his
involvement because of his presidential ambitions.

Associated Press writers Kasie Hunt and Brian Bakst in Tampa contributed to this report.

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