Republican presidential front-runner Mitt Romney acknowledged on Tuesday that he pays an income-tax rate close to 15 percent, the same rate that billionaire investor Warren Buffet has criticized as being lower than the rate that most middle-class Americans pay.
Asked a press conference what rate he pays, Romney responded, “What’s the effective rate I’ve been paying? It’s probably closer to the 15% rate than anything. Because my last 10 years, I've -- my income comes overwhelmingly from some investments made in the past, rather than ordinary income or rather than earned annual income. I got a little bit of income from my book, but I gave that all away. And then I get speaker's fees from time to time, but not very much.” The "not very much" in speaking fees amounted to more than $362,000 in one year, USA TODAY reported in August.
Romney, who made his millions in corporate takeovers at Bain Capital, in effect confirmed that he pays the rate Buffett and President Obama say is unfair. Obama has proposed what he calls the “Buffett Rule” and defined it this way: “No household making over $1 million annually should pay a smaller share of its income in taxes than middle-class families pay."
Buffet kicked off the debate last August in a New York Times opinion piece. He complained that the tax system was so dysfunctional that he pays a lower rate than the salaried people who work for him.
Buffett wrote, “Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as 'carried interest,' thereby getting a bargain 15 percent tax rate.… These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.”
Romney has spoken out against Obama’s plan to raise taxes for the wealthiest Americans, saying in August, “Right now, we need job creators to use their capital to start new businesses, to put people to work; and the last thing I want to do is to take money away from entrepreneurs and innovators, small-business people.”
Romney said on Tuesday he will release his tax returns but not until April. His rivals have been pressing him to release the returns before the GOP nominating process is over. Newt Gingrich made the case again on Tuesday before Romney disclosed his tax rate, asking if there is something Romney doesn't want voters to see.
"You do not want a nominee who blows up in September, because in September you have no choice," Gingrich said. "If somebody has a fatal weakness, you had better find out about it before they get the nomination, because I guarantee you, Barack Obama’s billion-dollar campaign is going to put pressure on anybody who’s the nominee."
Later, Gingrich noted that he has proposed a 15 percent flat tax. He suggested he might rename it the Mitt Romney flat tax and "all Americans could then pay the rate that Mitt Romney paid. I think that's terrific."
Gingrich did not say what his tax rate was, nor did Rick Perry. Perry simply reiterated his call for Romney to release his tax returns. "Release it all, not just the front page," he said, back to the 2000s.
One candidate -- Rick Santorum -- said he's pretty sure he pays a higher rate than Romney. "I do my own taxes but I haven’t looked at them in quite awhile, thank God, so I don’t know what my effective rate of tax is," he said. "But I’m fairly confident it’s a lot higher that 15 percent.”
Sarah Huisenga, Rebecca Kaplan and Naureen Khan contributed