WASHINGTON (Reuters) - U.S. Republican presidential candidate Mitt Romney said he thinks it is "fair" that he pays a lower tax rate on his investment income of $20 million last year than someone who made $50,000 annually.

"Yeah," Romney said in an interview aired on Sunday on the CBS television show "60 Minutes," when he was asked if he thought his relatively low rate was fair.

Democratic President Barack Obama and Romney were both interviewed on the program, in a preview of their upcoming debates ahead of the November 6 presidential election.

"I think it's the right way to encourage economic growth - to get people to invest, to start businesses, to put people to work," the former Massachusetts governor said.

Democrats have been trying to make taxes paid by the former private equity executive a major issue in the campaign. They jumped on Romney's comment, immediately posting the video clip on the Internet and highlighting it to supporters.

Romney was asked about the 14 percent tax rate he paid on the $20 million he made on his investments in 2011. "It is a low rate," Romney said. "And one of the reasons why the capital gains tax rate is lower is because capital has already been taxed once at the corporate level, as high as 35 percent."

Romney released his 2011 return on Friday, which showed he paid an effective tax rate of 14.1 percent. Romney pays a lower tax rate because his earnings come from investment income. Earnings from wages can be taxed at a rate of up to 35 percent.

Romney has steadfastly refused to release more than two years of his tax returns, breaking a longstanding presidential campaign tradition.

Democrats contend Romney is hiding something, arguing that the American people have the right to the information so they can make their own judgments about the finances of a potential future president.

Romney has said releasing the returns would just give his rivals' "hundreds of thousands of more pages to pick through, distort and lie about."

(Reporting By Patricia Zengerle; Editing by Eric Beech)