text: TAMPA, Fla./WASHINGTON (Reuters) - Republican presidential candidate Mitt Romney bowed to political pressure and gave the public a glimpse inside his personal fortune on Tuesday, releasing U.S. tax returns showing he pays a lower effective tax rate than many top wage-earners. 
   
   Unlike Americans who rely on a paycheck, Romney earns most of his income from investment profits, dividends and interest. The returns for 2010 and estimates for 2011 showed that he will pay a total of $6.2 million in taxes on income of $42.5 million. 
   
   Romney and his wife Ann paid an effective tax rate of 13.9 percent in 2010 and expect to pay a 15.4 percent effective tax rate when they file their returns for 2011. 
   
   Those rates are far below the top income tax rate on wages, which is 35 percent, because the U.S. tax code in recent years has favored investment income over wage income. 
   
   Targeting popular unease with rising U.S. income disparity, President Barack Obama on Tuesday night in his annual State of the Union speech at the Capitol will put efforts to make the tax code fairer at the center of his reelection campaign. 
   
   Obama will renew his appeal for a “Buffett rule” to ensure that the ultra-wealthy pay their “fair share” of taxes. This idea is backed by multibillionaire Warren Buffett. His assistant Debbie Bosanek - whom he says pays a higher tax rate than he does - will sit with First Lady Michelle Obama for the speech. 
   
   One of the wealthiest Americans ever to run for the White House, Romney did not release returns from the years 1984-1999, when he began making his fortune buying and selling companies as a private equity financier with Bain Capital, but those lucrative years did give him a special tax advantage. 
   
   THE CARRIED INTEREST EDGE 
   
   Romney got about $13 million in income over the past two years from “carried interest,” a form of earnings that is available to private equity partners and taxed at the 15-percent investment income tax rate, not the higher wage income rate. 
   
   The “carried interest” provision of the U.S. tax code has repeatedly been targeted for elimination by Democrats who say it is unfair, while the private equity industry defends it. A campaign spokesman said that Romney “has not addressed carried interest specifically in this campaign.” 
   
   The former governor of Massachusetts released his tax returns after a week when his chief Republican presidential nomination rival, former U.S. House of Representatives Speaker Newt Gingrich, questioned whether Romney was hiding financial information and cast him as out of touch with most Americans. 
   
   For 2011, about 46 percent of Americans will pay no federal individual income taxes, most of them because they are poor, according to the Tax Policy Center, a think tank. 
   
   Counting all U.S. taxpayers, the average tax rate is 11 percent, according to The Tax Foundation, another think tank. 
   
   Effective tax rates vary wildly from person to person due to the maze of deductions, exemptions and credits in the tax code, which has not been thoroughly overhauled in 25 years. 
   
   Romney’s estimated net worth is $190 million to $250 million. “Governor Romney’s investments are reported and taxed in full compliance with U.S. tax laws,” said Romney campaign counsel Ben Ginsberg on a conference call with reporters. 
   
   NEXT ON GOP FIGHT CARD: FLORIDA 
   
   The Republican candidates are fighting for the nomination to face Obama, a Democrat, in the November 6 general election. The next Republican state primary contest will be in Florida on January 31. 
   
   Gingrich scored by attacking Romney’s finances and upset him in the South Carolina primary on Saturday. The release of Romney’s tax returns was meant to blunt Gingrich. But it could further inflame the debate about the tax code and income inequality, as reflected in the Occupy Wall Street protests. 
   
   Romney campaign officials said his tax rate is based mostly on blind trust investment income. Returns for three blind trusts were released. The officials said Romney makes no decisions on how money is invested. 
   
   They said that Romney’s holdings also include amounts in funds based in the Cayman Islands and other overseas entities. 
   
   The first page of the 2010 U.S. 1040 tax return for Mitt Romney and his wife Ann showing a gross adjusted income of $21,646,507.00 is seen in this document released by the Romney campaign January 24, 2012. REUTERS/Handout 
   
   The Cayman holdings and holdings in a Swiss bank account - closed in 2010 after an adviser decided it could be politically embarrassing to Romney - were reported on tax returns and were not vehicles to avoid taxes, the advisers said. 
   
   Brad Malt, who oversees the Romney blind trusts, said on the conference call that Romney’s wife’s trust had a $3 million bank account at UBS AG, the Swiss banking giant. Malt said he closed the bank account in late 2010. 
   
   Malt said that “taxes were all fully paid” on the account, but that “it just wasn’t worth it; I closed the account.” 
   
   The tax returns showed Romney and his wife contributed $7 million to charity over the two years covered, much of it going to the Mormon church. That represents more than 15 percent of the Romneys’ income for those years. 
   
   COUNTDOWN TO CAPITAL GAINS SCRAP 
   
   Romney had capital gains income of $12.5 million for 2010 and an estimated $10.7 million for 2011. 
   
   The capital gains tax rate was slashed to 15 percent in 2003 under President George W. Bush. President Bill Clinton had cut it to 21 percent from the 28 percent level set under President Ronald Reagan, who raised it to match the tax rate on wages. 
   
   The capital gains rate will jump to 20 percent in 2013 if the Bush tax cuts are allowed to expire, an issue that is sure to prompt an intense political fight later this year. 
   
   Asked why Romney was not releasing tax records for the years in the 1980s and 1990s in which he made his fortune at Bain, Ginsberg said the two years covered by the tax returns should give a broad picture of Romney’s financial situation. 
   
   “We’re not going to get into the game of once you give them something, they demand more,” Ginsberg said. “This is a fulsome release and we’re proud of it.” 
   
   Malt said Romney had not been audited by the Internal Revenue Service in the last 10 years. 
   
   Slideshow (3 Images) 
   
   FUZZY ANSWERS HURT 
   
   The tax issue may have been a factor in Romney’s loss to Gingrich in the South Carolina primary last Saturday. It became a distraction to Romney’s campaign, and Romney’s fuzzy answers on releasing his records aggravated the problem. 
   
   First he said he might release them, or might not. When the questions kept coming, he said he would put them out in April, after his 2011 forms were completed. Only after he was defeated in South Carolina did his aides say he would release them this week. Gingrich has released his returns for 2010, but has not released an estimate for last year, as Romney did. 
   
   Long considered the front-runner for the 2012 Republican presidential nomination, Romney was staggered by Gingrich’s lopsided win in South Carolina, and is looking to regain enough momentum to defeat Gingrich in Florida. ||||| Mitt Romney offered a partial snapshot of his vast personal fortune late Monday, disclosing income of $21.7 million in 2010 and $20.9 million last year — virtually all of it profits, dividends or interest from investments. 
   
   None came from wages, the primary source of income for most Americans. Instead, Romney and his wife, Ann, collected millions in capital gains from a profusion of investments, as well as stock dividends and interest payments. 
   
   The couple gave away $7 million in charitable contributions over the past two years, including at least $4.1 million to the Church of Jesus Christ of Latter-day Saints. Romney’s family has for generations been among the Mormon Church’s most prominent members. 
   
   The Romneys sent somewhat less to Washington over that period, paying an estimated $6.2 million in federal income taxes. According to his 2010 return, Romney paid about $3 million to the IRS, for an effective tax rate of 13.9 percent. 
   
   For 2011, Romney estimates that he will pay about $3.2 million, for an effective rate of 15.4 percent. That’s in line with his earlier estimates, but sharply lower than the rates paid by President Obama and Romney’s closest Republican rival, Newt Gingrich. 
   
   “You’ll see my income, how much taxes I’ve paid, how much I’ve paid to charity,” Romney said at a debate Monday night in Tampa. “I pay all the taxes that are legally required and not a dollar more. I don’t think you want someone as the candidate for president who pays more taxes than he owes.” 
   
   He said his tax bill is “entirely legal and fair,” adding: “I’m proud of the fact that I pay a lot of taxes.” 
   
   Romney released his tax returns — nearly 550 pages, including the 2010 returns for three family trust funds and a foundation — in a bid to regain his footing in the Republican presidential campaign after stumbling badly in last weekend’s South Carolina primary. 
   
   The Romney campaign planned to publicly release the tax documents Tuesday morning but gave a preview late Monday night to The Washington Post. 
   
   In recent days, Romney’s GOP rivals have pressed him to make his returns public, arguing that it is critical for the public to vet his finances before the party settles on its nominee. The revelation that Romney pays a significantly lower tax rate than most wealthy Americans underscores his image as a multimillionaire financier, an image that some Republicans believe would hurt his chances in the general election. 
   
   Economic inequality is emerging as a central theme in the battle for the White House, with Obama trying to harness populist anger at Wall Street and corporations against a backdrop of chronically high unemployment. He plans to call for higher taxes on millionaires in his State of the Union address to Congress on Tuesday night, embracing an idea advanced by billionaire investor Warren Buffett and Occupy Wall Street protesters. 
   
   “The president believes that it is not fair — inherently not fair — that those who are millionaires and billionaires pay at a lower rate than average Americans who are struggling to get by,” White House press secretary Jay Carney told reporters Monday. “This theme about economic insecurity for the middle class . . . is what got this president into politics. So this is a foundational belief for him, and he’s happy to have that debate.” 
   
   A lower rate 
   
   Because the bulk of Romney’s income flows from investment profits, it is taxed at a flat 15 percent rate, far below the highest rates on ordinary wages. 
   
   His 2010 returns show that he made $12.6 million in capital gains, $4.9 million in ordinary dividends and $3.3 million in taxable interest. 
   
   Romney’s overall tax rate is in line with that of the average American taxpayer. However, it has drawn fire because the federal tax system is designed to be progressive — the more you earn, the more you are supposed to pay. 
   
   Romney’s tax documents are voluminous and extraordinarily complex, and his opponents are sure to comb through them in the coming days. They reflect the far-flung finances of one of the richest men ever to run for president. His 2010 tax return alone runs to 203 pages, crammed with information about foreign holdings, contributions to family trusts — and even a Swiss bank account. 
   
   In a conference call with reporters, Brad Malt, Romney’s trustee, called the Swiss account “fully legal, fully disclosed” but said it was closed in early 2010. He added: “The income earned on that account is taxed just as any other domestic or other bank account owned by the blind trust.” 
   
   Pages and pages are devoted to foreign entities in which Romney is invested. Many are located in places like Luxembourg, Ireland and the Cayman Islands, all famous tax havens. None shows much income. 
   
   “These entities are not evading one dime of taxes,” Malt said. 
   
   Monday’s disclosure marked the first time the former Massachusetts governor has released his personal tax returns. Though Romney has relied on his wealth to finance his political career, he did not disclose his tax returns in his three prior campaigns — not even in the 1994 Senate race, when he blasted Sen. Edward M. Kennedy (D-Mass.) for failing to release his own taxes. 
   
   This time, Romney had hoped to keep the details of his finances under wraps until he won his party’s nomination. But over the past week, as even his Republican rivals raised questions about whether he had something to hide, he concluded that the political cost of secrecy had grown too great. 
   
   The release of his taxes is unlikely to satisfy Democrats, who said they will continue to push for more transparency — particularly if Republicans select Romney to face Obama in November. Democratic strategist Paul Begala called on Romney to release 12 years of returns — just as his father did when he ran for president in 1968. 
   
   “If you release one year, you can pretty it up,” Begala said. “He’s got to go back a dozen years and really show us — or a lot of fair-minded people are going to conclude that he probably skated with paying less, or maybe even zero, for some of those years.” 
   
   Placating his rivals? 
   
   It was unclear whether Romney’s disclosure would achieve the more immediate goal of silencing his GOP rivals as they barrel toward a critical showdown next week in Florida. Polls show him trailing Gingrich, who suggested Sunday on C-SPAN’s “Washington Journal” that he was ready to let the tax matter drop. 
   
   “As far as I’m concerned, that issue is behind us,” Gingrich said. 
   
   Among the details that may spur fresh debate: The returns show that Romney was able to cut his taxable income by $4.8 million because of losses carried over from previous years. Under the tax code, taxpayers who lose money from their investments can deduct those losses against their capital gains. If a taxpayer ends up losing so much that the losses outweigh the gains in a given year, the rest of those losses can be carried to the next year and subtracted from income. 
   
   The returns confirm, however, that Romney continues to benefit from his association with Bain Capital, the private-equity firm he founded in 1984 and left in 1999. His earnings through Bain have drawn controversy because they are treated as capital gains rather than wages and thus benefit from being taxed at the lower rate of 15 percent. 
   
   Critics say such income, known as “carried interest,” should not be counted as investment earnings because private-equity partners are mostly relying on the money of others rather than their own. The returns show that Romney earned more than $13 million in “carried interest” over the past two years. 
   
   Complicated as they are, the tax returns provide only a partial picture of Romney’s wealth. They don’t show the full extent of his net assets, which are estimated to be worth between $190 million and $250 million. Romney has an individual retirement account worth between $20.7 million and $101.6 million, according to his 2011 financial disclosure. He also has a blind trust for his wife, Ann, containing $10 million.
target: – Just hours after debating tax rates during the GOP debate in Florida, Mitt Romney released his tax returns, revealing that he collected $20.9 million in income last year, and $21.7 million the previous year—nearly all of it in profits, dividends, or interest from investments. None came from wages, reports the Washington Post. He estimates he'll pay $3.2 million in federal taxes for a tax rate of 15.4% for last year's income. The previous year, he paid $3 million in taxes at a 13.9% rate. His tax rates are below most American wage earners because his income isn't from wages, notes Reuters. The Romneys gave away $7 million in charitable contributions the last two years, including $4.1 million to the Mormon church. Romney boasted during the debate that his tax bill is "entirely legal and fair," adding: "I'm proud of the fact that I pay a lot of taxes." Newt Gingrich, who supports a 15% flat tax, quipped during the debate that he wants to bring Americans' tax rate "down" to Romney's. But Romney pointed out that Gingrich wants a 0% tax on capital gains, and that under such a strategy, he would pay "no taxes." Romney has released nearly 550 pages of tax documents, including the 2010 returns for three family trusts and a foundation, after criticism from rivals for failure to bare his income earlier and following a sound trouncing in South Carolina by Gingrich.