Mitt Romney Says His Tax Rate Is Higher Than 15 Percent

Mitt Romney Says His Tax Rate Is Higher Than 15 Percent

WASHINGTON -- Mitt Romney has begun to make the case that he pays more than 15 percent in taxes.

"The tax rate is really closer to 45 or 50 percent," Romney said Wednesday in an interview with Univision's Jorge Ramos.

That may come as a surprise to those who heard Romney, the Republican presidential candidate and former Massachusetts governor, say last week that his tax rate is "probably closer to the 15 percent rate than anything."

That comment on Jan. 17 put pressure on Romney to release his tax returns, which he did this week. And much was made of the fact that Romney paid only 13.9 percent of his income to the government in 2010.

But Romney argued twice Wednesday that although his investment dividends -- the source of most of his annual income -- may be taxed at roughly the 15 percent capital gains rate, the 35 percent tax on corporate income actually means the federal government gets more than 15 percent from him.

"What capital gains tax breaks have done over time is recognize there are two levels of taxation in capital gains. One at the corporate level, which is a 35 percent rate, and then another at the individual level, which has been 15 percent. So combined, it's about a 50 percent tax," Romney said in a separate interview with CNBC's Larry Kudlow Wednesday.

That Romney is trying to undermine the 15 percent number is no small matter. His tax returns and the rate at which he is taxed have become a focal part of the 2012 presidential race. Romney's Republican rival former House Speaker Newt Gingrich has poked at Romney, using it to his political advantage. And President Obama is seeking to leverage the focus on Romney's tax rate to pass the Buffet Rule, a law that would increase taxes on any millionaires paying less than 30 percent of their income to the federal government.

"Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households. Right now, Warren Buffett pays a lower tax rate than his secretary," Obama said in his State of the Union Address on Tuesday night. "Tax reform should follow the Buffett Rule. If you make more than $1 million a year, you should not pay less than 30 percent in taxes."

Romney's comments on Wednesday were a sign that he is apparently listening to calls from some on the right to fight back and make the case that the corporate tax rate should be part of the discussion about what investors of all incomes make.

The Wall Street Journal editorial board, writing Monday about the taxation of corporate profits and how that impacts the incomes of investors, wrote, "We're not sure if facts will matter in this cacophony, but someone should at least try to introduce a little reality into the debate, especially since Mr. Romney seems so unprepared to make the case."

"One certainty is that if he stays on his current path of playing defense, Mr. Romney won't deserve to be the GOP nominee because he's likely to lose the fall election," the paper said.

The Journal went to bat on the issue again on Thursday, penning an editorial titled "The Buffett Ruse," which pegged the "highest marginal tax rate" -- paid by filers such as Romney -- at 44.75 percent.

When asked whether Romney was saying in his Wednesday interview that he pays a rate of 50 percent, a Romney adviser told The Huffington Post that he was not.

"He's simply explaining the concept of double taxation as it relates to corporate profits," the Romney campaign official said.

But Romney's response to Ramos, in particular, was directly in the context of how much he paid in taxes.

"In 2010 you only paid 13 percent of taxes, while most Americans paid much more than that. Is that fair?," Ramos asked Romney.

"Well, actually, I released two years of taxes and I think the average is almost 15 percent, and then also, on top of that, I gave another more than 15 percent to charity. When you add it together, all the taxes and the charity, particularly in the last year, I think it reaches almost 40 percent that I gave back to the community," Romney said.

He continued: "One of the reasons why we have a lower tax rate on capital gains is because capital gains are also being taxed at the corporate level. So as businesses earn profits, that's taxed at 35 percent. Then as they distribute those profits in dividends, that's taxed at 15 percent more. So all total, the tax rate is really closer to 45 or 50 percent."

Regardless, what will likely matter to most voters, if Romney continues to make this argument, is the pure number. Romney has signaled that he is not going to let the 15 percent number go uncontested in the debate over what he pays to the government.

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