Romney paid 14% effective tax rate in 2011

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NEW YORK (CNNMoney) -- Mitt Romney made $13.7 million last year and paid $1.94 million in federal income taxes, giving him an effective tax rate of 14.1%, his campaign said Friday.

His effective tax rate was up slightly from the 13.9% rate he paid in 2010.

The majority of the candidate's income came from his investments, said Brad Malt, a lawyer who presides over Romney's blind trust, in a blog post.

His 2011 income was considerably lower than the $21 million estimated by the campaign in February.

The Romney campaign, in a statement to CNNMoney, explained that his "income can vary significantly from year to year, depending primarily on what investments are sold and how much they have appreciated or depreciated."

Romney and his wife, Ann, gave just over $4 million to charity.

In addition, tax and accounting giant Pricewaterhouse Coopers, which prepared the Romneys' taxes from 1990 through 2009, issued a letter stating they paid 100% of the federal and state income taxes owed during those 20 years.

The firm also said their average annual effective federal tax rate was 20.2% for the period. And annually, they never paid an effective rate below 13.66%.

PwC did not detail how much Romney made in income during that period or how much he paid in taxes. But the firm did note that federal and state income taxes combined with charitable deductions came to 38.49% of the couple's total adjusted gross income.

Romney has been criticized by both Democrats and even some Republicans for not releasing more than two years' worth of tax returns. Criticism reached a crescendo when Senate Majority Leader Harry Reid, repeatedly claimed, without identifying the source of his information, that Romney hadn't paid federal income taxes for a decade.

In response, Romney has said he never paid less than a 13% effective tax rate in any year over the past decade. He further said the obsession over his tax returns is "small minded."

And the GOP presidential nominee has often gotten flak for having paid a low effective tax rate given his outsized income.

But contrary to popular perception, Romney's effective federal income tax rate is still higher than that of most Americans -- 80% of whom have an effective rate below 15%. That number, however, does not include other federal taxes such as the payroll tax.

Romney's running mate, Paul Ryan, released his final 2011 tax return this summer. He paid $65,000 on $323,416 in income, giving him an effective tax rate of 20%. (Related: Romney vs. Obama on tax policy)

The reason Romney's rate is so low -- despite having one of the highest incomes in the country -- is because his income was derived almost entirely from capital gains and dividends from his extensive portfolio of investments. And that form of investment income is typically taxed at just 15%, well below the 35% top tax rate for high earners.