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Romney Shares Some Tax Data; Critics Pounce

Mitt Romney held a rally at Florence Civic Center in Florence, S.C., on Tuesday.Credit...James Estrin/The New York Times

Under growing pressure from rival Republicans to release his tax returns, Mitt Romney said on Tuesday that he paid a tax rate approaching 15 percent on his millions of dollars in annual income but said he would not make public his full return until April.

His effective tax rate was “probably closer to the 15 percent rate than anything,” Mr. Romney said at a campaign stop in South Carolina, noting that most of his considerable income over the last decade has come from investments rather than from earned income like salary. He also characterized as “not very much” the $374,327 he reported earning in speaking fees last year, though that sum would, by itself, very nearly catapult most American families into the top 1 percent of the country’s earners.

Mr. Romney mentioned the 15 percent figure in response to a question at a news conference, leaving uncertain whether his comment was unplanned or a deliberate effort to begin airing the issue ahead of a general election campaign. But his remarks on Tuesday drew immediate criticism from the Obama administration and Republican rivals, and are likely to cement Mr. Romney’s place as an unwilling emblem of the intensifying national debate over taxation and income inequality, which burst into the campaign this month when rival candidates began attacking Mr. Romney’s career in the leveraged buyout business.

Mr. Romney’s admission left unclear — and his campaign declined to clarify — whether the 15 percent he was referring to represented his overall tax burden or simply his federal income taxes. That makes it hard to compare the figure with the tax burdens of a typical middle-class American — or of Mr. Romney’s opponents. President Obama reported paying an effective federal tax rate of 26 percent on his 2010 family income.

But in acknowledging that most of his income comes from investments, Mr. Romney underscored a fact likely to figure prominently in attacks from Mr. Obama and other Democrats in the coming months: He is among the small percentage of very wealthy Americans who have benefited enormously from shifts in federal tax policy that have pushed federal tax rates on investment income well below the top 35 percent rate for wages and salaries, which constitute most earnings for the vast majority of people.

“The low taxes on capital gains and dividends are why people who make a ton of money, which is largely from investment income, do awfully well,” said Robert McIntyre, the director of Citizens for Tax Justice, which advocates more progressive taxation. “The Warren Buffetts, the hedge fund managers — they pay really low tax rates.”

Indeed, Mr. Romney probably pays a lower overall rate than many other wealthy Americans. They typically take home more ordinary income from salaries and wages than does Mr. Romney, who left Bain Capital in 1999 and joked to a group of voters last year that he was “unemployed.”

Like other people who amass great wealth at hedge funds or private equity firms, Mr. Romney earned much of his money at Bain in the form of “carried interest,” a share of the profits earned by investors in Bain funds, which current federal rules treat as long-term capital gains taxed at a 15 percent rate. A significant portion of his family’s wealth remains locked up in Bain funds, from which the Romneys draw income on their own investments with the firm, as well as a share of Bain’s profits. The Romneys also derive significant income from other investments and mutual funds.

During 2010 and the first nine months of 2011, the Romney family had at least $9.6 million in income, according to a financial disclosure filed in August, and possibly much more.

Democrats have been calling on Mr. Romney to release his tax returns since early December. But it was criticism in recent days from fellow Republican presidential candidates, including Newt Gingrich and Gov. Rick Perry of Texas, that seemed to jar Mr. Romney, who during Monday night’s debate suggested he would be open to releasing his returns in April without promising to do so.

That answer provoked a fresh attack from Mr. Gingrich on Tuesday morning, when he suggested that Mr. Romney might be hiding something from voters in South Carolina.

“If you’re a South Carolinian, you say, ‘Wait a second, why don’t you want me to know about it? Why are you going to wait until after I’ve voted?’ ” Mr. Gingrich said during a television interview on Tuesday.

Democrats, meanwhile, redoubled their attacks on Mr. Romney as out of touch with the economic concerns of the middle class.

“We won’t be waiting until he reveals his returns in April to remind voters that Romney’s tax policy would keep taxes low for millionaires like himself, putting a burden on the middle class,” said Bill Burton, a spokesman for Priorities USA Action, a “super PAC” supporting Mr. Obama.

At the White House on Tuesday, President Obama’s spokesman said Mr. Romney’s acknowledgment that he paid a 15 percent tax rate underscored an unfairness in the tax code that Mr. Obama was concerned about.

“This only illuminates what he believes is an issue, which is that everybody who’s working hard ought to pay their fair share,” said Jay Carney, the spokesman. “That includes millionaires who might be paying an effective tax rate of 15 percent when folks making $50,000 or $75,000 or $100,000 a year are paying much more.”

Mr. Gingrich, who has criticized Mr. Romney’s work at Bain for causing plant closings and layoffs, has called on Mr. Romney to release his tax returns and has pledged to release his own returns this week. Mr. Perry has been urging Mr. Romney to release his returns since October, when he released his own most recent return.

President Obama’s tax return for 2010 showed he and his wife, Michelle, earned $1,728,096 in that year, most of which came from the sale of Mr. Obama’s books, including “The Audacity of Hope.” The couple, who filed jointly, paid $453,770 in federal taxes and got a refund of $12,334.

Even among presidential candidates, a typically a well-to-do group, Mr. Romney stands out: His fortune of between $190 million and $250 million makes him one of the wealthiest men to run for president in modern times.

His income during the last decade has included millions of dollars from Bain Capital, which has continued to pay Mr. Romney a share of the firm’s corporate buyout and investment profits since he left the firm. That income, too, would likely be taxed at 15 percent, because of federal regulations that treat fees to private equity and hedge fund managers as investment income.

As a candidate, Mr. Romney has also advocated tax policies that would significantly benefit people who, like him, derive most of their income from investments.

Assuming Congress does not act to extend the Bush-era tax cuts, the rate for capital gains income is set to return to 20 percent for the 2013 tax year, while the rate for dividend income will jump to 39.6 percent. But in his economic plan, Mr. Romney calls for making permanent the Bush-era tax cuts on capital gains and dividend income, keeping them both at the current rate of 15 percent.

Kitty Bennett, Michael D. Shear and Alicia Parlapiano contributed reporting.

A version of this article appears in print on  , Section A, Page 1 of the New York edition with the headline: Pressed, Romney Shares Tax Data; A Rate Near 15%. Order Reprints | Today’s Paper | Subscribe

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