Romney says he pays about 15 percent in income tax

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http://thecaucus.blogs.nytimes.com/2...y-tax-returns/

January 24, 2012, 8:42 am

Inside the Romney Tax Returns
By FLOYD NORRIS, NICHOLAS CONFESSORE and STEPHANIE STROM

9:16 a.m. |Gift to Bush Library
The Romneys’ Tyler Charitable Foundation made gifts to markedly more organizations in 2010 than it had previously.

While the largest amount paid out of the foundation that year, $145,000, went to the Mormon Church, as in the past, the George Bush Presidential Library received the second largest grant, $100,000.

The foundation made gifts to a variety of well-known Boston charities like the Dana-Farber Cancer Institute and City Year, as well as Brigham Young University, which is affiliated with the Mormon Church and received $25,000. For 2010, the foundation made a total of $647,500 in grants, compared to grants totaling $631,000 the prior year.

The Romneys’ blind trust contributed shares valued at roughly $1.5 million to the foundation during the year, bolstering its asset to about $10 million from about $8 million in 2009.

Most of its assets are invested in various types of funds managed by Goldman Sachs, which was paid $48,582 in management fees.

While foundations are tax-exempt, the Tyler Foundation paid $3,048 in foreign taxes on its international investments.

9:05 a.m. |Advantages of Carried Interest

One of the advantages of carried interest is that it does not count as income for Medicare and Social Security tax purposes. People normally pay a tax of 6.2 percent of their earnings for Social Security up to a certain income level (a rate reduced under the payroll tax cut) and 1.45 percent on all their earnings.

In 2010 and 2011 Mitt and Ann Romney reported no W-2 income. But they did report some “self employment” income that effectively is the same as Medicare and Social Security.

In 2010, they reported $593,996 in such income, out of $21.6 million in total income. That produced self-employment tax of $29,151.

In 2011, total income came to $20.9 million, but just $110,500 of that was “self employment income, with a tax of $13,572.

8:56 a.m. |Carried Interest Revealed

In a conference call to discuss the returns, Benjamin Ginsberg, the Romney campaign’s chief counsel, disclosed one piece of information not immediately apparent from glancing at the returns: the amount of profits from Bain Capital, the private equity firm Mr. Romney helped found, that the candidate continues to earn from the company under his retirement agreement.

Mr. Romney, who retired from Bain in 1999, earned $7.4 million in such profits – known as “carried interest” — from Bain in 2010. Mr. Ginsberg said the candidate expected to get $5.4 million in carried interest in 2011.

Private equity executives are taxed at the capital gains rate of 15 percent on most of their earnings, a rate well below the top 35 percent tax on ordinary income.

Thats a pretty nice big loophole right there.

8:55 a.m. |No Home Mortgage

Mitt Romney and Newt Gingrich have one thing in common. Neither of them seems to have a home mortgage.

In their 2010 tax returns, neither took a deduction for mortgage interest.

Barack Obama has a mortgage, and a big one. In 2010, he took a home mortgage interest deduction of $49,945.

8:28 a.m. |A Blizzard of PaperworkTax simplification should appeal to the Romney family.

His campaign released five 2010 tax returns on Tuesday. The joint return from Mitt Romney and his wife came in at 203 pages. His blind trust form has 37 pages, while Ann Romney’s has 83. A family trust comes in at 81 pages, and a charitable foundation at 39.

Total pages: 443.