Romney says his effective tax rate is 15%
January 17th, 2012
12:00 PM ET
3 years ago

Romney says his effective tax rate is 15%

Florence, South Carolina (CNN) – Mitt Romney said Tuesday he pays roughly a 15% effective tax rate on his income - an acknowledgment that the multi-millionaire pays a smaller percentage of taxes on his income than many middle-income Americans.

"It's probably closer to the 15 percent rate than anything," Romney told reporters when asked about his effective tax rate. "The last ten years my income comes overwhelmingly from investments made in the past rather than ordinary income or rather than earned annual income."

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The information came as his opponents ratcheted up pressure on the GOP front-runner to release his tax returns in a debate Monday night – a disclosure that is not required by law and one Romney has been reluctant to make. Some Americans of far more modest means pay a 15% marginal tax rate on income, while the highest tax bracket tops out at a 35% marginal rate. Because Romney's income comes primarily from investments, it is taxed at a much lower rate.

The candidate, a former chief of private equity firm Bain Capital, went a step further Tuesday and committed to releasing his tax returns in April if he were to become the GOP nominee.

"We'll wait until the tax returns for the most recent year are completed, then release them," he said.

Romney said he had donated the "little bit of income" he earned from his book, "No Apologies," and said occasionally he had been paid fees to speak at events.

The candidate was also elaborated on his views on super PACs, independent political action committees that can raise unlimited funds to advertise on behalf of a candidate. A campaign cannot share strategy with a super PAC.

Romney said he had both encouraged and raised money for his super PAC, and said both former Sen. Rick Santorum and former House Speaker Newt Gingrich had done so as well. He added that although he did not like the existence of super PACs, he would not "disadvantage" his campaign by not taking advantage of the process.

"I wish that law were not as it is. I wish we could just raise money for our campaigns instead of having to create super PACs," Romney said. "I think the whole idea of these PACs becoming larger than the campaigns themselves is a very bad idea."

Gingrich has faulted Romney for failing to publicly denounce attack ads aired by a super PAC supportive of Romney's candidacy, Restore Our Future.

In the press conference, Romney did defend some of the charges made against other candidates by Restore Our Future, including a dig at Gingrich for ethics violations and for his participation with former House Speaker Nancy Pelosi on a climate change awareness initiative, and an ad that charged Santorum supported allowing felons to vote.

"I hear that Rick Santorum is very animated that the super PAC ad says that he is in favor of felons voting, well he is!" Romney said. "What's he missing? That's his position."

The press conference was not without several light moments. After walking to the microphone, Romney first called on his wife, Ann, who had been talking with reporters.

"Where'd the skinny jeans go?" she asked her husband, who did not answer the question.

Romney also weighed in on a campaign commercial aired by Comedy Central comedian and host Stephen Colbert. The ad jokingly calls Romney a "serial killer."

The candidate said he had not seen the ad but admitted of Colbert: "he has a tradition of being able to touch my funny bone."

CNNMoney's Charles Riley contributed to this report.


Filed under: 2012 • Mitt Romney • Taxes
soundoff (194 Responses)
  1. John K

    Omigosh, he's rich? I didn't know that.

    January 17, 2012 02:53 pm at 2:53 pm |
  2. rosaadriana

    You forgot to mention that he said he made some money doing speaking engagements, not much, just $360,000 for last year.
    On what planet is $360,000 not much? I could retire on that amount.
    Oh an I have a job and I work my butt off.

    January 17, 2012 02:55 pm at 2:55 pm |
  3. Butter My Butt And Call Me a Biscuit

    Why do you think Jeb Bush, Chris Christy, Mitch Daniels, Haley Barbour, etc. etc. decided not to run this cycle? Because they know that Americans are finally awakening to the fact that the GOP ONLY cares about rich people. Most of the "informed" Americans would rather have a president in the White House who knows what it is like to live in the real world.....just like the great man who resides there now. Mitt Romney doesn't have a clue about what my life is like. He also is not very good at creating jobs because when he was Governor of MA, that state ranked 47th out of 50 in job creation. George W. Bush inherited the best economy in the history of this nation and screwed it over and he left Barack Obama the second worse economy except for the Republican created "Great Depression" of 1929 which was preceded by 10 years of almost exclusive Republican rule just like the Republican created "Great Recession" of 2007.
    "Romney for the Millionaires"
    "Obama for the Millions"

    January 17, 2012 02:58 pm at 2:58 pm |
  4. Butter My Butt And Call Me a Biscuit

    Why do you think Jeb Bush, Chris Christy, Mitch Daniels, Haley Barbour, etc. etc. decided not to run this cycle? Because they know that Americans are finally awakening to the fact that the GOP ONLY cares about rich people. Most of the "informed" Americans would rather have a president in the White House who knows what it is like to live in the real world.....just like the great man who resides there now. Mitt Romney doesn't have a clue about what my life is like. He also is not very good at creating jobs because when he was Governor of MA, that state ranked 47th out of 50 in job creation. George W. Bush inherited the best economy in the history of this nation and screwed it over and he left Barack Obama the second worse economy except for the Republican created "Great Depression" of 1929 which was preceded by 10 years of almost exclusive Republican rule just like the Republican created "Great Recession" of 2007.
    "Romney for the Millionaires"
    "Obama for the Millions"

    January 17, 2012 03:00 pm at 3:00 pm |
  5. Anon-i-mouse

    I don't fault him for paying this rate. It is what our law allows, so why shouldn't he. I would!

    What this should do is to get the American people to wake up and realize that our tax system is terribly unfair and broken. We should be able to have a very fair, simple, progressive tax code. Everyone in the country who earns money should pay taxes. Poor should have a very low rate (maybe 5%) and it should scale up to high earners who should be somewhere near the top rate now (I think it's ~38%). No deductions. No loopholes. Just pay on your earnings from all sources.

    Of course the tax preparation agencies will be lobbying against a tax code that people can understand, but I think it'll be worthwhile. ;-)

    January 17, 2012 03:01 pm at 3:01 pm |
  6. jad

    i know a crook when i see 1 the reason he want to wait for a april is he wants to file the 2011 where he pays more taxes and say here u go i pay my share fare.i wanna see the 2010 and b4 any new filling will be just a joke.

    January 17, 2012 03:02 pm at 3:02 pm |
  7. Anonymous

    Government of the RICH people by the RICH people for the RICH people.

    January 17, 2012 03:06 pm at 3:06 pm |
  8. Whatever

    Amazing that in 2008 Romney was defeated on this argument and now it is back again. He should have run for Congress or Senate so that his Bain experience would be a non issue. Oh well too late!!!!

    January 17, 2012 03:06 pm at 3:06 pm |
  9. Rootieboy

    My wife and I only make $17,000 a year so we don't pay jack squat. In fact, I get like $2000 a year back.

    January 17, 2012 03:07 pm at 3:07 pm |
  10. JJ

    Rick at 1:10: Employers get a deduction for compensation paid to their employees. Learn a little more before making posts like that.

    January 17, 2012 03:10 pm at 3:10 pm |
  11. Carl Peter Klapper

    This says far more about the income tax and its inability to reduce WEALTH inequality than anything else. Consider a laid off working stiff paying an underwater mortgage who gets monthly trust fund payments from his deceased parents' estate. He could have the same kind of income as Mitt Romney but I doubt anybody would be raising a hue and cry over his effective tax rate being 15%. Certainly, he could use the money far more than Mitt Romney so the difference is not income but WEALTH.

    The remedy for the poor guy, moreover, is not to increase his income and then - what? - take a big chunk of that away in taxes? NO! The remedy is to increase his wealth out of negative and one of the most direct ways of doing that is to first eliminate the income taxes, especially the ones the Democrats don't want to call income taxes but "contributions". Contributions, my eye! Replace that whole sorry IRS bureaucracy and create a Tax on Controlling Wealth (TCW) collected at the banks and exchanges by a new Third Bank of the United States.

    More later about the next steps but let's keep our eye on the ball. We need to end debt and the monopolization of controlling wealth. That should point you all in the right direction.

    January 17, 2012 03:15 pm at 3:15 pm |
  12. toxictown

    He is the republicans best option but he is too squirrely. Obama gets 4 more years – better luck next time.

    January 17, 2012 03:17 pm at 3:17 pm |
  13. Independent_me

    15%?????

    We are paying almost 32%!!!!!

    What is wrong with this picture????

    And he wants to lower his tax rate even more??

    Wake up America!!!!

    January 17, 2012 03:17 pm at 3:17 pm |
  14. Hark

    Woman In California–Well my favorite government employee at it again. Did he not say he would release those numbers in April? You must be nervous about job security, as would I if I depended on the democrats to keep my job! Come up with a real reason not to vote for Romney rather than " I don't know his tax bracket so he must be sneaky". Weak!

    January 17, 2012 03:18 pm at 3:18 pm |
  15. rosestool

    @john "It should be zero percent. This money was already tax at the higher rate once when it was initially earned. Why does the media insist on keeping the public ignorant?"

    So, do you think it's fair that descendents of P&G, J&J, Ford, Hilton, etc who have not worked a day in their lives should pay 0% income tax only because their income is effectively "investment return".
    (Probably Ford is a bad example, since it's still a private company, but you get the drift).

    January 17, 2012 03:20 pm at 3:20 pm |
  16. dynax9

    I’ve read a few pages of comment and realized why the majority of people are less fortunate. If you want to pay 15% tax, it’s easy, you can do that do.

    1) First you need to earn 100 million. During that process, you’ll pay about 30 million in tax which left you 70 million. Let’s say you do this in 10 years.

    2) Invest that 70 million. The interest you get from that investment will only be taxed at 15%. For the rest of your life, you can live off of the interest only and only pay 15% tax .
    Most of you never see point (1) but only point (2). Earned income (the first 100 million in the above example) get taxed differently than investment income.

    If interest, investment got taxed the same as earned income, your 401K would tank. Mortgage rate, loan rate etc would go thru the roof.

    January 17, 2012 03:23 pm at 3:23 pm |
  17. Jay

    The Bush tax cuts at their finest!

    January 17, 2012 03:24 pm at 3:24 pm |
  18. Alina1

    Its a shame that we even have "candidates" like Romney.

    January 17, 2012 03:24 pm at 3:24 pm |
  19. Orchid333

    This should come as no surprise to ANYONE. It's almost common knowledge now that the rich who "cry" over their "high" tax rates rarely (if ever) actually pay it. Meanwhile they keep the middle class in check. So let's see, they pay 15% of their income in taxes, and legislation to help create jobs and help the lower and middle classes was held up in the House because Republicans didn't want their rich buddies to pay an extra 1%? Absurd.

    January 17, 2012 03:24 pm at 3:24 pm |
  20. Dean

    GI Joe

    15% effective (minus loopholes, deductions, etc. means he pays 0%).

    Can you not read? He said he PAYS about 15%.
    And the money he pays taxes on has already been taxed before he invested it.

    January 17, 2012 03:25 pm at 3:25 pm |
  21. G

    Good lord.... does anyone understand what the difference between marginal rates and effective rates are? And to all those arguing we should raise taxes on investment income, I better your not asking to start taxing your pension plans as they grow? Well then leave MY retirement vehicle alone unless your going to cough up too.

    January 17, 2012 03:26 pm at 3:26 pm |
  22. Me

    john WROTE,
    "It should be zero percent. This money was already tax at the higher rate once when it was initially earned. Why does the media insist on keeping the public ignorant?"

    and how much in taxes should corporate shills, such as yourself, pay? I can't believe you are defending this. ...yes I can.

    January 17, 2012 03:26 pm at 3:26 pm |
  23. ObamaFlop

    Hello to everyone who does not know the first thing about our tax code!!!!!!!!!!!!! You pay the same rate on your investments. If you sell your house for a profit then you pay the same rate. Liberals will jump on any bandwagon without knowing who the driver is. Jeez!!!!!!!!!!

    January 17, 2012 03:27 pm at 3:27 pm |
  24. FIELD1stSGT

    You Obama supporters are nothing but beggars, whiners, and expect the rich of paying your way. I am a middle class and most certainly not a backer of spend, spend, spend Obama. Foolish people will reap the day they whine because the rich may be smart enough to invest their money in such a manner as to receive a lower tax. You people couldn't even receive the welfare you're on if it were not for them. When you get Obama to destroy them then who is going to pay your lazy rears way. SET DOWN AND SHUT UP PLEASE. I AM SICK OF YOU.

    January 17, 2012 03:28 pm at 3:28 pm |
  25. TM

    Imagine what he would pay if he WORKED for a living, like most americans.

    January 17, 2012 03:30 pm at 3:30 pm |
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