Bloomberg News

Romney Reveals 15 Percent Tax Rate as Republicans Target Him

January 23, 2012

(For more on the campaign, go to ELECT.)

Jan. 18 (Bloomberg) -- Mitt Romney estimated he pays an effective tax rate close to 15 percent and said he would release more details in April if he clinches the Republican presidential nomination, as his rivals crisscrossed South Carolina working to prevent that from happening.

Former Pennsylvania Senator Rick Santorum derided Romney, the front-runner in South Carolina’s Jan. 21 primary, as “the moderate candidate of the Wall Street types” whose agenda is “timid” and “just a little bit better than what we’ve got” in President Barack Obama.

Newt Gingrich, competing with Santorum to stake a claim as the most viable alternative to Romney, said he is the only candidate standing between the former Massachusetts governor and the nomination.

“From the standpoint of the conservative movement, consolidating into a Gingrich candidacy would in fact virtually guarantee victory on Saturday,” the former U.S. House speaker told reporters in Florence. He questioned whether Santorum could defeat Obama, saying, “There’s no evidence that he could put together a national campaign.”

Romney’s Goal

Facing increasing pressure from his rivals, Romney moved to preserve his lead and blunt any late surge from competitors as he aimed for a victory in South Carolina -- following wins in the initial contests in Iowa and New Hampshire -- to open a path for him to quickly wrap up his party’s nod.

Today, two of his allies -- former Missouri Senator Jim Talent and former New York Representative Susan Molinari -- will hold a conference call with reporters to brand Gingrich as an “unreliable leader.”

Speaking in Florence yesterday, Romney challenged Santorum’s record of supporting voting rights for felons, an issue that matters to socially conservative voters in the state.

“I hear that Rick Santorum is very animated that the super-PAC ad says that he’s in favor of felons voting,” Romney said, referring to a commercial paid for by his allies. “Well he is!”

He and Santorum were at odds over radio ads in South Carolina financed by Restore Our Future, a political action committee that supports Romney while being banned by law from coordinating with his campaign. The super-PACs have become influential in the presidential campaign after the Supreme Court and regulators cleared a path for them.

Pork Barrel Projects

The Restore Our Future ad also attacks Santorum as a backer of wasteful “pork barrel” projects and “amnesty” for illegal immigrants, concluding, “Rick Santorum: Big spender, Washington insider, can’t beat Obama.”

Santorum, who disputes the claims, dismissed as “baloney” Romney’s contention that by law he can’t call on the group to stop such attacks. Santorum also told voters in Lexington that he is better positioned to beat the president.

“Let me assure you, the best chance to win this election is to not compromise,” he told several dozen voters at the Flight Deck restaurant. “The country is looking for leadership; they’re not looking for someone who can manage just a little better than the guy that’s in there now.”

Romney was on the defensive over his tax records following a televised debate this week in which he faced criticism on the issue. The former Massachusetts governor said yesterday he would probably release his latest returns during the April tax-filing season if he is the presumptive nominee. He said that has been the “tradition” in presidential races.

Most Recent Year

“I know that, if I’m the nominee, people will want to see the most recent year,” Romney told reporters.

Asked what effective tax rate he pays, he said, “It’s probably closer to the 15 percent rate than anything because my last 10 years, my income comes overwhelmingly from investments made in the past, rather than ordinary income or earned annual income.”

He also said he had earned “a little bit of income” from his book, which he donated to charity, and “speakers’ fees from time to time, but not very much.”

Romney earned almost $375,000 in speaking fees from Feb. 26, 2010, to Feb. 20, 2011, according to his personal financial disclosure. He reported between $190 million and $250 million in assets.

Romney spent much of his time yesterday in New York City raising money for his campaign, attending three fundraisers hosted by some of the biggest names on Wall Street, including Blackstone Group LP chairman and chief executive Stephen Schwarzman.

Before the Primary

Back in South Carolina, his opponents jumped on his reluctance to release his tax forms.

Gingrich, who plans to release his returns Jan. 19, questioned why Romney wouldn’t follow suit before South Carolina’s primary. “If there’s nothing there, why not release it this week?” he said. “If somebody has a fatal weakness, you better find out about it before they get the nomination.”

Texas Governor Rick Perry pressed the same argument speaking to business leaders in Columbia.

“Everyone who wants to be the president of the United States, you better get ready for your sheets to get lifted up and to look under there and for people to ask questions,” he said.

Obama’s spokesman said Romney’s tax status would be an issue in the general election campaign.

The president “strongly” believes that people who make millions or billions a year “should not pay a lower effective tax rate than middle-class Americans,” White House press secretary Jay Carney said at his daily White House briefing with reporters.

‘Fair Share’ Issue

Romney’s estimate of his tax burden “illuminates” the issue of whether the wealthiest pay their “fair share,” Carney said.

Obama paid an effective federal tax rate of about 26 percent on his 2010 returns, the most recent available.

Santorum told reporters that he prepares his own tax returns and, “I don’t know what my effective rate of tax is, but I’m fairly confident it’s a lot higher than 15 percent.”

The tax flap unfolded as some South Carolina voters who attended town hall meetings, rallies and candidate forums were torn over which candidate to choose in a contest that could offer the final opportunity to derail Romney’s march toward the nomination. A Jan. 31 primary in Florida, where Romney leads in the polls, follows the South Carolina contest.

Conflicted Voters

“Sometimes I think you should vote your conviction, but on the other hand, if you’re concerned about the direction of the country, then you want someone who’s electable,” said Cheryl Moureaux, a retired teacher from Columbia, South Carolina, who said she hasn’t decided between Romney and Gingrich.

Waiting to hear Gingrich address a group of voters in West Columbia, she said, “I’m not sure he could beat Obama.”

Leo Senn, 69, of Leesville said he was drawn to Santorum’s message and his “pro-life stance. He’s honest. He’s a man of integrity. But can he win? Don’t know.”

Senn, a Baptist pastor who is undecided, wore a Harley- Davidson windbreaker as he sat waiting for Santorum at the Flight Deck in Lexington, pondering whether to support him in the face of that uncertainty. He said he mistrusts Romney, calling him “a political speaker -- he speaks what he thinks you want to hear.”

Larry Grooms, a South Carolina state senator who previously supported Texas Governor Rick Perry’s presidential bid, switched his allegiance to Santorum yesterday and made a plea for conservatives to join him to stop Romney.

Made a Mistake

“We probably made a mistake here in South Carolina four years ago by splitting the conservative vote and allowing somebody who’s not exactly the most conservative member of the United States Senate to move forward as the nominee,” Grooms said, referring to Arizona Senator John McCain, the 2008 Republican standard bearer.

“The conservative votes are split right now,” Grooms told voters in Lexington, adding, “Now is the time for the conservative South Carolina vote to coalesce.”

Former Alaska Governor Sarah Palin, a favorite of Tea Party activists, said she will vote for Gingrich in hopes of drawing out the primary season. “If I had to vote in South Carolina in order to keep this thing going, I’d vote for Newt,” she said, in an interview on Fox News. “I would want it to continue. More debates, more vetting of candidates.”

--Editors: Don Frederick, Jim Rubin.

To contact the reporters on this story: Julie Hirschfeld Davis in Columbia, South Carolina at Jdavis159@bloomberg.net; Lisa Lerer in Columbia, South Carolina at llerer@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net


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