This morning, former Gov. Mitt Romney released his taxes from last year, and a prospective look at what he will file this year. Over both years, Romney made $42.5 million and will have paid $6.2 million in taxes when he files in April. In 2010, Romney's effective tax rate was 13.9% and his accountants anticipate he will pay an effective rate of 15.4% this year. The Romneys gave $7 million to charities during these two years.
Romney pays a lower rate than most of us because almost all of his income was derived from capital gains on investments. When Ronald Reagan and Bill Bradley negotiated the last serious overhaul of the tax code, they eliminated a special rate for capital gains. The lower rate for capital gains was reinstated by President Bill Clinton in the late 90's in exchange for special tax breaks Clinton wanted. It was one of Clinton's biggest mistakes.