As Romney Talks of Taxes, Bloomberg Says He Pays Highest Rate

A day after Mitt Romney conceded he pays a significantly lower tax rate than most Americans, Mayor Michael R. Bloomberg — another politician who made his fortune in the financial industry — said on Wednesday that he personally paid “the highest personal income tax rate.’’

Mr. Bloomberg, a billionaire who is usually reticent to discuss his finances, said the bulk of his earnings stemmed from holdings in his eponymous media company, which he said was taxed as ordinary income at the highest city, state and federal rates, before he takes deductions for charitable giving.

The highest federal income tax rate is 35 percent, far higher than the 15 percent effective tax rate that Mr. Romney said he pays.

And in a remark sure to bother some of the mayor’s high-flying friends, Mr. Bloomberg said he opposed the controversial tax loophole that has allowed Mr. Romney, along with other wealthy financiers, to pay a lower rate than most Americans on his income.

Mr. Romney currently receives a significant chunk of his income in the form of “carried interest,” a once-obscure term that refers to a portion of the profits he receives from past investments in his former firm, Bain Capital. Federal legislation allows many hedge fund and private equity executives to essentially declare this income as a capital gain, allowing for a lower tax rate.

But Mr. Bloomberg stopped short of criticizing Mr. Romney, who has been attacked by his Republican rivals for admitting that he pays only about 15 percent of his annual income in taxes despite earning millions of dollars a year.

“Romney paid his taxes, I assume,” the mayor said Wednesday at a news conference in the Bronx. “He didn’t write the tax law. This is ridiculous. There’s got to be other things to ask candidates who want to be president about what they would do.”

Mr. Bloomberg, who accepts only a $1 salary from the city, said that “virtually none” of his own income is in the form of carried interest.

“When you take out the money I give to charity, then I pay the highest personal income tax rate,’’ he said. “I don’t even have carried interest or any of those things. I don’t even have a lot of capital gains. It’s virtually none. It is all the income from the company and it’s taxable as ordinary income, and I pay the highest rate, state, city and federal.”

Mr. Bloomberg said that the elimination of the carried interest provision would be a painful but necessary step toward balancing the federal budget.

“If it were up to me, I would end the concept of carried interest,” Mr. Bloomberg said. “In every industry there are things that were put there perhaps to encourage or discourage certain kinds of economic activity, but that may not be appropriate today.”

The mayor’s statements echo the remarks of another billionaire, Warren E. Buffett, who is also an opponent of the carried interest exception. But they also pit Mr. Bloomberg against many Wall Street financiers who have fought to retain the lower tax rate.

Mr. Bloomberg, whose net worth is estimated at $19.5 billion by Forbes magazine, is relatively secretive about his own finances. Each year, he allows reporters to inspect a heavily redacted version of his tax forms for a few hours, and photocopies are not allowed. In the redacted forms, the mayor’s earnings and losses are represented by a letter-based system of dollar ranges, rather than exact amounts.

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