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Romney says he pays about 15 percent in federal income tax, will release 2011 return in April
FLORENCE, S.C. (AP) ' His wealth and taxes suddenly a campaign focus, Mitt Romney said Tuesday he pays an effective federal tax rate of about 15 percent. That's far less than if his earnings were wages rather than gains from investments and dividends, and the disclosure under pressure triggered a sharp response from the Democratic White House as well as one of his GOP presidential rivals.
Romney told reporters he also received money from speechmaking before he announced his presidential candidacy early last year "but not very much." He provided no details, but in his financial disclosure statement, released last August, he reported being paid $374,327.62 for such appearances for the 12 months ending last February.
That amount alone would place his income among the top 1 percent of all Americans, and Romney's description of it as a relatively small amount suggested his overall income was far higher.
It's well known that Romney's father was the chairman and president of America Motors, and he himself was a successful businessman and founder of Bain Capital, a private equity firm, where he earned millions. At the same time, his refusal to release his tax returns has been a persistent issue, and one that flared anew in a debate Monday night in which he grudgingly said he might release them in April.
On Tuesday, he said he would release at least one year's returns in April.
Republicans trying to defeat him in Saturday's South Carolina primary are hoping he'll make them public far sooner.
The White House, which expects Romney to win the Republican nomination and take on President Barack Obama this year, reacted, too.
Spokesman Jay Carney said: "This only illuminates what (Obama) believes is an issue, which is that everybody who's working hard ought to pay their fair share. That includes millionaires who might be paying an effective tax rate of 15 percent when folks making $50,000 or $75,000 or $100,000 a year are paying much more."
Newt Gingrich, the former House speaker who runs second in some polls in South Carolina, taunted the former Massachusetts governor: "I think we ought to rename our flat tax. We have a 15 percent flat tax, so this would be a Mitt Romney flat tax and all Americans would pay the rate" that he paid. Gingrich is expected to release his own returns on Thursday.
At 15 percent, Romney's federal income tax rate would still be higher than the rate paid by many Americans.
On average, households making between $50,000 and $75,000 will pay a federal income tax rate of 5.7 percent this year, according to projections by the Tax Policy Center, a Washington think tank.
However, when Social Security and other taxes are included, that same household would pay an average federal tax rate of 16.6 percent.
Overall, the average American household will pay 9.3 percent in federal income taxes' and 19.7 percent in all federal taxes.
Romney's wealth ' he is worth between $190 million and $250 million' puts him among the richest Americans. But if most of his income is from investments, it could help him to significantly lower his federal tax bill compared to people who make money in other ways.
While the top federal tax rate for investment income' qualified dividends and long-term capital gains 'is 15 percent, the top tax rate for wages is 35 percent on taxable income above $388,350. Wages are also subject to Social Security and Medicare payroll taxes, while investment earnings are not.
With unemployment high and the country still struggling to recover from the worst recession in decades, Obama's re-election campaign has signaled it intends to make income disparity a central part of this year's campaign.
Romney's remaining nomination foes emphasized in the debate in Myrtle Beach on Monday night that whatever vulnerabilities he might bring to a campaign against Obama, the party should know about them now.
Romney was asked about his taxes shortly before he left South Carolina for a high-dollar fundraiser in New York.
"What's the effective rate I've been paying? It's probably closer to the 15 percent rate than anything," Romney said. "Because my last 10 years, I've ' my income comes overwhelmingly from investments made in the past, rather than ordinary income or rather than earned annual income."
By his own account, Romney hasn't received a regular paycheck since 1999. That's when he left the private equity firm he founded, Bain Capital, where he became a multimillionaire. Most of Romney's taxable income comes from investing the fortune he made there. He donated income from his time running the Salt Lake City Olympics to charity.
He also told reporters Tuesday that he has donated the proceeds from the sale of his book, "No Apology," to charity.
Romney said in the Monday debate he probably would release returns because it's tradition.
"I have nothing in them that suggests there's any problem and I'm happy to do so," he said then. "I sort of feel like we're showing a lot of exposure at this point."
At the White House, Carney said that as a candidate in 2008, Obama released multiple years of tax records and has disclosed his returns annually since becoming president. He said George W. Bush and Bill Clinton did the same thing, as did "nominees for each party for years and years and years." In a jab at the Republican front-runner, he said Romney's father, George Romney, released his own returns when he ran for the White House in 1968.
Obama has called on Congress to let Bush-era tax cuts on upper income earners expire at the end of 2012. Romney is opposed, as are most if not all of the Republicans in Congress.
But the former Massachusetts governor has also come under pressure from some of his Republican rivals for recommending no change in the capital gains tax for anyone making more than $200,000 a year. Gingrich, for example, wants to abolish the capital gains tax.
In the debate Monday night, Texas Gov. Rick Perry insisted that Romney release his returns, saying that the party needs to fully scrutinize its nominee now instead of later.
Associated Press writer Stephen Ohlemacher contributed from Washington.