US Republican presidential candidate Mitt Romney acknowledged on Tuesday that his income tax rate is “probably closer to 15 percent than anything,” suggesting that one of the wealthiest people to ever run for US president pays a much lower rate than most Americans.
His comment, a day after Romney agreed for the first time to release his tax returns — but not until April when they are generally filed — added fuel to his Republican rivals’ calls for him to be more transparent about his finances.
It also drew fire from the White House and other critics, who said it reflected how Romney, whose estimated net worth is US$270 million, is out of touch with the experiences and concerns of typical Americans.
Romney, a former private equity executive and Massachusetts governor, seemed to feed that narrative on Tuesday. He said that he gets speaker fees “from time to time, but not very much.”
Annual campaign financial dis-closure forms indicate that he was paid more than US$374,000 in speaker fees from February 2010 to February last year.
Romney’s estimate of his income tax rate suggested that like many of the wealthiest Americans, he could earn a large chunk of his income from investments — much of it in capital gains.
Because capital gains generally are taxed at 15 percent compared with the top income tax rate of 35 percent on ordinary wages, those with significant income from capital gains often pay lower tax rates than many Americans.
Such disparity in the rates within the US tax code are a sore point for many Americans, even some of the very rich whose rates are relatively low.
Billionaire investor Warren Buffett, for example, has said he paid US$6.9 million in federal income taxes on US$39.8 million in taxable income in 2010, a rate of 17.4 percent. Buffett has said it’s unfair that his tax rate is lower than his secretary’s.
On Tuesday, the White House moved quickly to portray Romney as an elitist, which almost certainly will be a theme of Obama’s campaign this fall.
“Everybody who’s working hard ought to pay their fair share” of taxes, the White House said in a statement. “That includes millionaires who might be paying an effective tax rate of 15 percent when folks making US$50,000 or US$75,000 or US$100,000 a year are paying much more.”
Romney has long been reluctant to raise a curtain on his vast financial holdings.
In recent days, Romney’s increasingly desperate rivals — former House of Representatives speaker Newt Gingrich and Texas Governor Rick Perry — repeatedly have questioned whether Romney, in not releasing his tax returns, is hiding something.
Their calls for Romney to release his returns were echoed on Tuesday in a New York Times editorial, which called Romney’s “insistence on secrecy impossible to defend now that he appears to be closing in on the nomination and questions have intensified about his personal finances.”