Sun, Sep 23, 2012 - Page 7 News List

Romney’s 2011 tax returns are unusual, experts say

TAXING ISSUE:The US presidential hopeful, a Mormon who ‘tithed’ 10 percent of his income to the church, faces criticisms over his finances amid a tightening election race

Reuters, WASHINGTON

US Republican presidential nominee Mitt Romney steps off his campaign plane in West Palm Beach, Florida, on Thursday.

Photo: Reuters

US Republican presidential candidate Mitt Romney and his wife, Ann, gave about 30 percent of their US$13.7 million income last year to charity, but did not take the full write-off, making their effective tax rate higher.

‘MANIPULATION’

The move, which was contained in Romney’s tax return for last year which was released on Friday, was described by tax experts as unusual and by the top Senate Democrat as a manipulation of the tax code.

“I was in private practice for 40 years and don’t know that I ever had a client who said, ‘I don’t want to take all my deductions,’” said David Kautter of American University’s Kogod Tax Center, who spent his career at accounting giant Ernst & Young.

Kautter estimated that if Romney had taken the full charitable tax break, his effective tax rate would have been about 10.5 percent. The return showed Romney paid an effective rate of 14.1 percent last year.

During a Republican presidential debate in January, Romney said: “I don’t think you want someone as the candidate for president who pays more taxes than he owes.”

MORMON CHURCH

The Romneys reported about US$4 million in charitable donations — including at least US$1.1 million given to the Salt Lake City-based Mormon Church to which they belong. Mormons typically “tithe” 10 percent of their income to the religious group.

TAX RATE

Romney’s attorney Brad Malt said the Romneys took a deduction of only about US$2.25 million. He said the move was meant to keep their effective tax rate above a 13 percent minimum level that Romney said recently his rate had stayed above for 10 years.

“The Romneys thus limited their deduction of charitable contributions to conform to the governor’s statement in August,” Malt said in a statement.

Senate Majority Leader Harry Reid, who has questioned whether Romney paid taxes in some years, criticized the move.

“The information released today reveals that Mitt Romney manipulated one of the only two years of tax returns he’s seen fit to show the American people — and then only to ‘conform’ with his public statements,” the Democrat said in a statement.

Romney has been under fire to release more than two years of tax returns. He released his 2010 returns in January along with a draft of his tax record for last year.

SUBSTANTIAL INCOME

The former Massachusetts governor and co-founder of private equity firm Bain Capital said in January he estimated his income for last year at about US$20.9 million. He revised that down to US$13.7 million in the filing released on Friday.

President Barack Obama and his wife, Michelle, reported earning about US$789,674 in income last year, and gave about US$172,130 to charity, or about 22 percent, according to filings.

The Obamas’ largest contribution was to the Fisher House Foundation, which is a charity that provides housing for war veterans.

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