Romney skirts paying his taxes by using laws that unfairly benefit the wealthy

The Republican front-runner said Tuesday in Florence, S.C., that his effective tax rate was "probably" close to 15 percent because his income "comes overwhelmingly from investments made in the past."

Yet those investments were largely made by Romney's former partners with other investors' money, not his personal funds.

The vast majority of the resulting gains represent compensation for Bain's work acquiring, sprucing up and selling individual companies, critics say.

"This is labor income for them, not a return on capital invested," said Victor Fleischer, an associate law professor at the University of Colorado whose 2007 paper on the topic helped spark a move in Congress to try to change the law. "It's a method of converting one's labor into capital gains in a way that's unusual outside the investment management industry. Ordinary people wouldn't be able to do this."

Though he retired from Bain in February 1999, Romney, 64, continues to benefit from the firm's profitable private equity funds and to invest alongside them in so-called "co-investment" vehicles, both of which generate income taxed at the 15 percent rate.