The President's Tax Return
A lot of news media wrote about the 2003 tax return for the President and Vice President this morning (NY Times, Washington Post, LA Times, to name a few).
The President family is paying 27.7% of their Adjusted Gross Income (AGI) of $822,126 to IRS. According to some analysts, the President will pay $30,000 more without the tax cuts he advocated.
The Vice President family is a bit richer but they paid out 19% of their AGI of $1,267,915, thanks to higher charity donations. Cheneys are not saved much by the tax cut because they are hit by the notorious Alternative Minimal Tax (AMT).
According to NY Times, John Kerry, the Democratic presidential candidate, paid out 22.9% of his AGI of $395,338. He was filing tax separately from his wife, who is sitting on top of several hundred million dollars.
I paid out 15.4% of my AGI this year but I am pretty sure after adding back my Social Security Tax and Medicare contributions, my effective tax rate is in par with these politicians. (I expect next year I will pay out much less as my mortgage interest deduction and my child tax credit kick in.) Our tax system, at best, is mildly progressive.
Two more interesting notes:
First, I spent a lot of time searching for the real 1040 form of the President and Vice President but I found nothing. The Whitehouse website only includes a press release about "releasing" the tax forms, but with no details. If someone knows where to find it, please let me know.
Second, one story mentioned that Bush overpaid 2003 tax by $61,451 and Cheney by $5,712. Both elected to apply the overpayment toward 2004 tax payments. This means:
1) By overpaying almost a quarter of the tax due, Bush is less financial literate or he hires a bad financial planner. Cheney is much smarter by only overpaying less than 2% of the tax.
2) Both elected to apply the amount to next year's tax instead of taking the tax refund. This move is apparently politically savvy but not wise in personal finance angles. Anyway, we cannot complain: at least the President is do something to cut our deficit :-)
This New York Post story regarding John Kerry is yet another example why we cannot trust politicians, especially in terms of tax reform. They can talk the talk but not walk the walk. Read
Tax Foundation predicts that for the next tax year (tax year 2004), 44 million units (individuals or families) will owe zero federal tax or will get some tax credit, and another 14 million units will earn less than necessary to file tax return. These zero-tax ... Read
GeorgeBush.com put together this calculator to illustrate how much one will pay because of John Kelly's proposal of 50 cents/gallon gas tax increase. According to the calculator, I would pay $337.96 more under Kelly's administration. Read
WebCPA compiled this funny list of unusual sales tax laws: Read
