Campaign officials said Romney's overseas investment strategy is legal and fully disclosed, and independent tax experts who reviewed the returns Tuesday said they found no evidence to the contrary. Campaign officials argued that Romney reports all the income and pays the same U.S. taxes he would if the funds were based in the U.S.
"There is a suggestion that there is some tax haven aspect to these investments that results in a reduction of taxes," Malt said. That is "flatly wrong."
The campaign did not say why Romney's trusts hold overseas investments, but outside tax accountants said individuals often seek such vehicles for the returns they offer and to diversify their risk.
The fact that Romney has plowed a substantial share of his wealth into overseas investments could complicate his efforts to connect with voters on tax fairness and the struggling economy.
"Traditionally, Republicans say invest in America and buy American," said Steven Bank, a vice dean of the UCLA School of Law who studies business taxation. "It doesn't bother me in theory, but it suggests something about his view of the tax code or his diversification or his confidence in the U.S. If the president doesn't have confidence in the U.S., how can everybody else?"
Martin Sullivan, contributing editor of Tax Analysts, a nonpartisan research organization, said he was surprised Romney had a Swiss bank account since such accounts were sometimes used to hide assets. "Why would somebody who knows he's going to be so visible screw around with a Swiss account?"
Romney benefits from a low tax rate on payments he receives from Bain Capital in the form of what is called carried interest. Those payments, typically 20% of the fund's profits, are taxed as capital gains, not as salary. In the last two years, Romney earned $12.9 million in carried interest, his campaign said.
Romney's tax liability also was reduced by the substantial sums he and his wife have given to charity — more than $7 million in two years, outstripping the $6.2 million they'll pay in federal taxes.
The chief beneficiary has been the Church of Jesus Christ of Latter-day Saints, which received more than $4 million in the last two years. Romney follows the Mormon Church's tenet that he tithe, handing over at least 10% of his income to the church.
The Romneys also directed about $2 million to the Tyler Charitable Foundation, a nonprofit they control. The Mormon Church was also among the foundation's beneficiaries, along with the Boys and Girls Clubs of Boston, the Center for Treatment of Pediatric MS in Boston, Boston's Dana-Farber Cancer Institute and the George W. Bush Library in Texas, among several others.
Romney has sought to make his wealth an asset in his White House bid.
"I will not apologize for having been successful," he said during a debate Monday in Tampa, Fla. "I did not inherit what my wife and I have, nor did she. What we have, what I was able to build, I built the old-fashioned way — by earning it, by working hard."
It's a fortune now sustained largely through investments. In 2010, the Romneys earned $12.6 million in capital gains, which is taxed at 15%. That helped Romney pay a much lower rate than his political rivals: President Obama paid an effective tax rate of 26.3% in 2010, while former House Speaker Newt Gingrich paid a rate of 31.7%.
Taking into account taxes on individual income, payroll, corporate income and estates, the average effective federal tax rate is 18.1%, according to the Tax Policy Center. For the wealthiest 1%, it's substantially higher — 27.6%.
Experts said Romney's low rate of taxation puts a focus on a tax code that has contributed to a widening gap between the rich and poor.
"The question is whether this is appropriate policy going forward," said Kleinbard, who joined national Democrats on Tuesday in critiquing Romney's returns. "Is this candidate so financially invested in certain tax positions that he cannot divorce himself from decisions that are in the country's best interest?"
Times staff writers Walter Hamilton and Melanie Mason in Los Angeles and James Oliphant in Washington contributed to this report.