Huge income gap between Tom Smith and Bob Casey in past years

However wide the policy gulf between Pennsylvania's U.S. Senate candidates, Republican Tom Smith and incumbent Democrat Bob Casey, it is dwarfed by the gap in their personal finances.

Smith, who has been buying millions of dollars in TV ads with his own money, reported total income of almost $22 million in 2010, the year he sold his main coal-mining businesses, according to federal tax returns he has released to The Inquirer.

Smith made far less - about $265,000 - last year, his returns indicated. In 2009, while he still operated mines near his home in Western Pennsylvania, he earned about $3.2 million.

Casey, who is paid $174,000 yearly in Senate salary, reported $171,000 in total income last year, deducting pretax expenses for health savings and retirement savings, his campaign said.

Casey had total income of about $173,000 in 2010 and about $176,000 in 2009.

The Inquirer had asked each candidate to make public three years' worth of tax returns.

Smith and his wife, Saundra, a recently retired public-school teacher, paid about $45,000 last year in federal income tax, an effective rate of 16.97 percent.

That was higher than the rate paid by GOP presidential nominee Mitt Romney (14.1 percent) and less than the rate paid by President Obama (20 percent). Tax fairness has been an issue in national politics this year.

In 2010, Smith and his wife paid $5.95 million in federal income tax and had an effective rate of 27.1 percent.

In 2009, according to their returns, they paid $1.03 million in taxes and had an effective rate of 31.6 percent.

Casey, who paid about $21,000 in federal income tax last year, had an effective tax rate of 12.4 percent.

His rates on relatively comparable income in 2010 in 2009 were 12.6 percent and 13.6 percent, respectively. All of those numbers are lower than Smith's as well as those of the presidential candidates.

Smith, in a recent interview, declined to estimate his total wealth. "I'm not going to tell you that," he said when asked.

He said he sold his two coal businesses, which produced about 100 tons of bituminous coal per month, at the close of 2010. He said he had owned 52 surface mines and seven deep mines near his home in Shelocta, Armstrong County.

Smith's 2011 tax return showed he still owned a trucking company. His campaign said that incorporated coin-operated car washes and a family farm. The company reported losing money.

He also has a company that manages some investment properties he owns, Jim Conroy, his campaign manager, said Thursday.

Smith claimed about $2,200 in foreign tax credit for 2011. Conroy said that derived from dividends paid by a U.S.-based mutual fund that had investments overseas.

He reported making $2,490 in charitable gifts last year. He made $1,087,355 in such gifts in 2010, and $37,906 in 2009.

Casey, a law school graduate and son of a former governor, has been on the public payroll for the last 16 years - eight as the elected state auditor general, two as the elected state treasurer, and now six as a senator.

He took tax exemptions last year for himself and his wife, Terese, and four daughters. The Caseys also claimed an educational tax credit.

His income included about $1,200 in dividends and $300 in capital gains.

Casey reported $5,001 in gifts to charity last year, including what he valued at $1,824 in clothing, footwear, and household items donated to nonprofit groups in his hometown of Scranton.

In 2010, Casey gave $4,756 to charity, including $1,831 in noncash items. In 2009, he donated $6,729, including $3,446 in noncash items.

In his campaign, Smith is proposing a single flat-rate tax to be paid by all Americans. He has not said what that rate should be.

Smith would exempt investment income from federal taxation. He reported $15,783 in capital gains last year, and $5.57 million in 2010. He reported no capital gains in 2009.

He would also exempt home-mortgage interest, charitable donations, and certain other itemized deductions currently permitted by the tax code.

Casey, like Smith, has said the tax code needs to be made simpler and fairer. He has not proposed specific changes.