Friday, April 11, 2008

 

The Obama Tax Returns

Mr. Obama's tax returns are here. 2000-2004 he and his wife earned about 250,000 dollars per year and gave about 2,500 dollars to charity. In 2005 and 2006 they went up to 1.6M and 1M in income (his book came out and earned a lot), and raised their donations too. When Mr. Obama became senator, the U. of C. created a high-paying administrative job for Mrs. Obama, another reason for the increase in income.

The oddest thing about the returns is the lack of capital income before the big pay increase in 2005. Did their savings all go into tax-exempt vehicles such as life insurance, pension plans, etc.? Or did they not save anything?

In three of the years, even interest from a bank account isn't included. They probably had it, but were sloppy and didn't report it. That isn't a significant violation of tax law either legally or ethically, but it indicates remarkable sloppiness. They must have been filling out their own taxes (a sensible thing to do) rather than hiring someone, but a lawyer-administrator couple ought to notice details, especially when the lawyer is in politics.

2000. Interest 38. Dividends 0.
2001. Interest 0. Dividends 0.
2002. Interest 33. Dividends 0.
2003. Interest 0. Dividends 0.
2004. Interest 0. Dividends 0.
2005. Interest 13,385. Dividends 2,754. From two banks. I think one bank was investing in stocks for him.
2006. Interest 4,590. Dividends 1,188. Capital loss taken 3000 (10,136 total loss, Nuveen floating rate PDF SHS).

The TaxProfblog has a good post, links, and, especially, comments on the tax returns. One commentor suggests that they should have paid AMT, and thus underpaid about $14,000 in one year. That fits with the general naivete of the tax returns. Also, it seems they deducted a $13,000 contribution to the Congressional Black Caucus-- a political contribution! They later amended the return to fix that up. APril 22: He has released his 2007 returns now too. There is a big change: Lots of tax-exempt interest income, $200,000+ in charitable donations, AMT paid too.

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