Schumer, Gillibrand among five senators who release tax info

WASHINGTON -- A recent decision by New York's Democratic senators to post their tax returns on their Senate web sites has added to the national conversation about taxes and the wealthy.

The issue became a focus of the presidential campaign after Republican challenger and former Massachusetts governor Mitt Romney released a 2010 return showing he paid a much lower tax rate than President Obama's 2011 rate.

Senate Majority Leader Harry Reid of Nevada has worked to keep the issue alive by making unsubstantiated claims that Romney legally avoided paying income taxes for up to 10 years.

Sen. Chuck Schumer, the No. 3 Senate Democratic leader, posted his 2011 tax return online on July 26 after discussing the issue with his staff.

"When it became an issue with Gov. Romney, we said, why don't we do it?" Schumer said. "We should do it. It's the right thing to do."

New York's other senator, Kirsten Gillibrand, posted her 2007 through 2011 tax returns — dating back to when she first took office in the House — a day after Schumer. She considers it a natural next step in her efforts to make government more transparent.

"The more I kept reading in the press about this debate about presidential taxes, the more I really thought it was the right thing to do," Gillibrand said in a recent interview. "I thought it was an additional step I could take to lead by example."

Obama has released his tax returns for every year dating back to 2000.

In addition to his 2010 return, Romney also has released his estimated 2011 return. He has declined to release others.

Romney paid a tax rate of 14.7% on 2010 income of $21.37 million. That compares to Obama's 23% rate on 2011 income of $838,674, according to calculations by the advocacy group Citizens for Tax Justice.

That doesn't surprise tax professionals. Many of the nation's wealthiest households are taxed at lower rates because most of their income comes from investments rather than from wages or salaries, which are taxed at higher rates.

"It's one of the reasons why we need to reform our tax code so we don't have a system where Romney makes $20 million bucks and pays 15%, and a lot of us pay more than that," said Bob McIntyre of Citizens for Tax Justice.

Every president since Richard Nixon has released his tax returns for the years he's served in the White House, but there's no established practice for presidential candidates, according to Joe Thorndike, director of the Tax History Project at Tax Analysts in Falls Church, Va.

He described Romney as "on the skimpy end of the spectrum, but he is not the skimpiest and he is not the most forthcoming."

Congress plans to begin overhauling the tax code next year. Tax breaks for the wealthy is expected to be a major focus of that debate.

The wealthiest 1% of households (those with incomes higher than $1.2 million) paid an average income tax rate of 21 percent in 2009, the most recent year for which data is available, according to the nonpartisan Congressional Budget Office.

Families in the top 20% (those with incomes higher than $271,000) paid an average income tax rate of 13.4%.

Two other Senate Democrats — Richard Durbin of Illinois and Herb Kohl of Wisconsin — have been releasing personal tax information since the 1980s.