Mitt Romney Tax Returns For 2011 Released (UPDATE)

Romney Tax Returns For 2011 Released

WASHINGTON -- Mitt Romney paid an effective tax rate of 14.1 percent in 2011, according to a tax return filed on Friday, a relatively low tax rate resulting from exotic deductions, the special tax treatment for his Bain Capital retirement package and the low tax rate on capital gains. Romney also opted not to deduct millions in charitable contributions from his tax bill in order to maintain a pledge from August that he has paid at least 13 percent in federal income taxes for each of the past 10 years.

Romney's income was $13,696,951 in 2011, and he paid $1,935,708 in taxes. Romney's income for the year was more than 263 times larger than the U.S. median household income of $51,914.

At 379 pages, Romney's 2011 tax return is nearly twice as long as his as his 203-page return from 2010. A full 267 pages of the latest return are devoted to listing Romney's investments in 34 offshore corporations and partnerships, including 15 in the Cayman Islands. Of the 34 offshore companies, 30 are located in countries considered to be offshore tax havens by the U.S. Government Accountability Office.

Romney's Swiss bank account, which appeared on his 2010 tax return, has disappeared. His personal Bermuda-based corporation, Sankaty, remains. Romney also shifted $111,081 offshore to a Bain Capital affiliate based in the Cayman Islands during 2011, and an additional $296,471 to a Golden Gate Capital fund, also organized in the Caymans.

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Romney also recognized a $102,790 foreign tax credit on his 2011 tax return -- a refund the U.S. government provides taxpayers for taxes they pay to other countries. Romney's decision to forgo some of his charitable contribution deductions leaves him open to criticism from political opponents, who may question why he chose to recognize other tax benefits in the code, like his foreign tax credit. Romney listed a total of $3,505,188 in foreign income in 2011.

Romney listed no income from wages, salaries or tips on his tax return. He recognized $6,810,176 in capital gains, $3,649,567 in dividends, $260,390 in directors fees, and $190,350 in speaking fees.

President Barack Obama's 2011 tax return filed in April, is 48 pages long. Obama paid $162,074 in taxes on income of $789,674 for an effective tax rate of 20.5 percent. Obama's income is divided between the president's $400,000 annual salary and royalties from book sales.

Much of Romney's investment income flows from his retirement package from Bain Capital. Unlike most retired financiers, Romney was allowed to receive his Bain retirement as carried interest, rather than ordinary income. Carried interest is subject to the favorable capital gains tax rate of 15 percent, rather than the 35 percent tax rate that the wealthiest Americans pay on ordinary income.

"The preferential rate on capital gains and dividends saved Mitt Romney a whopping $1.2 million in taxes in 2011, cutting his tax bill almost in half," said Rebecca Wilkins, senior counsel for federal tax policy at Citizens for Tax Justice. "He would have paid $3.1 million in taxes without that special treatment."

The capital gains tax is one of the most lucrative perks in the tax code for wealthy Americans, with half of all capital gains flowing to the top 0.1 percent of taxpayers, according to the Washington Post.
Romney's running mate, Paul Ryan, released his tax returns for 2010 and 2011 last month. According to the documents, the GOP congressman and his wife Janna Ryan paid an effective tax rate of 15.9 percent in 2010 and 20 percent in 2011.

On Friday, Romney also released a doctor's letter signaling he is healthy and fit to meet the demands of serving in the White House.

This article has been updated with additional details throughout.

Click here to view the documents released by Romney on Friday.

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