Presidential tax returns: Obama vs. Bush vs. Clinton
While Obama had the highest tax rate and gave the most to charity, his income his first year in office was millions more than Bush or Clinton.
By Jim Wang, Bargaineering
I always look forward to the annual ritual of the White House releasing the president’s tax return because it feeds one of my guilty pleasures -- financial voyeurism. This year is no different as pundits pick apart the 2010 tax return and look to draw conclusions about the president’s financial life.
In this article, however, I intend to do something slightly different. I'm going to compare President Obama’s return with the returns of former Presidents George W. Bush and Bill Clinton, using their first year in office. For my analysis, I leaned on the archives at Tax Analysts, which saved the releases as they were made available.
Presidential First Year Incomes: How do President Obama, Bush and Clinton compare in their first year in office? Obama certainly out-earned Bush and Clinton. Obama and Bush enjoyed $400,000 a year salaries while Clinton was paid a mere $200,000 a year in his terms.
- Obama (2009): $5.5 million
- Bush (2001): $811,100
- Clinton (1993): $293,757
The vast majority of Obama’s income came from the sale of his books. Most Presidents don’t pen multi-million dollar books until after their Presidency. Even when adjusted for inflation, both Bush and Clinton earned $982,557 and $436,136 respectively (in 2009 dollars) -- far less than Obama did.
That said, Obama overpaid in his estimated payments by over $8,000 (something he would do again in 2010). I wonder if that skews the IRS’s average tax refund statistic!
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Charitable Contributions: Obama and Clinton both gave less, as a percentage of adjusted gross income, than Bush.
- Obama (2009): $329,100 (5.98%)
- Bush (2001): $82,700 (10.2%)
- Clinton (1993): $17,000 (5.8%)
As you can imagine, percentages don’t always tell the story. Obama gave significantly more, even adjusted for inflation, than the other two Presidents.
As an aside, a lot has been made of President Obama’s charitable contributions in 2010, which amounted to 14.1% of his income. As you may remember, Obama promised to donate all theproceeds of his children’s book, Of Thee I Sing: A Letter to My Daughters, to the Fisher House Foundation, which provides free or low cost lodging to veterans and military families receiving treatment at military medical centers. We now learn that the proceeds resulted in a $131,075 contribution. Excluding those proceeds, the Obamas donated 6.6% of their income, which is closer to historical averages.
If you’re curious, President Reagan took in $412,730 ($974,101 in 2009 dollars) and gave $5,965 to charity. President Roosevelt earned $62,019 ($1 million in 2009 dollars) while giving $1,020 to charity. Presidents have become more generous lately!
Effective Tax Rates: Here were each President’s effective tax rate (despite all being in the top tax bracket) for that first in year in office:
Obama (2009): 32.56%
Bush (2001): 30.85%
Clinton (1993): 21.33%
Post-Presidency Earnings: It’s a little unfair to compare former Presidents and current ones, though Obama’s $5.5 million haul in 2009 puts him in the same league with former presidents, because they typically earn staggering sums to speak and write memoirs. As we learned from the release of the Clinton tax returns in the 2008 Presidential Election, President Clinton earned nearly $110 million between 2000 and 2007, paying $33.7 million in federal taxes. In fact, Clinton earned more in his first full year out of office, $15.9 million in 2001, than he did while he was in office ($3,719,188 from 1992 to 1999).
Since President Bush is no longer disclosing his returns, we can only rely on news reports that President Bush’s speaking fees were around $150,000 a piece and he received a $7 million advance on his memoir, “Decision Points.”
Lessons from the Presidents
There are some valuable lessons we can take away from reading the tax returns of current and former Presidents. First, despite their high incomes, many Presidents take advantage of every opportunity to defer income. President Obama made the maximum contribution to his retirement plans in 2009 and 2010, despite earning several million dollars.
It’s also important to keep charitable organizations in mind, as each President has made sizable contributions to various charities. Most of them rely on the generosity of the public in order to continue their great work. Donating even 5% of your more modest income can have an impact if you select the right local charities.
BO is living the American dream, goes to Harvard on student loans, junior Senator from IL, POTUS. He's living his dream, but trying to take ours away from us. Punish the rich, make them pay. Anyone with a lick of sense can look at what he's doing and call it what it is------class warfare. If it was simple math, he wouldn't have a leg to stand on. If 47-49% of the people pay no federal income tax, the other 50% pay it all for everyone. Redistribute what to whom?? How about transferring the tax that the 50% pay to the 1/2 that pay nothing???? Is that fair? Seems fair to me! I think his logic is flawed.
waraksas - while it is true that many in this country do not pay federal taxes, critics of this fact conveniently ignore the reality that almost all pay social security, Medicare,etc - this amounts to
~15% and doesn't include state sales and income taxes (half of SS and Medicare is paid by the employer but in effect this is money that could be paid to workers.)
These latter taxes are regressive (if you don't understand this reality and how it effects the lower earning population then you need to take some classes in economics!)
After $110,000+, individuals no longer have to pay into SS and Medicare. almost all individuals making over this amount and particularly those making in the millions have multiple legal (and illegal) means of writing off expenses. As a primary care physician, I have been in the higher categories of the taxable and have paid in many years
$30- 50k in federal income taxes + SS, Medicare, state and sales taxes. I certainly take deductions available and put money into my IRA, but I have no problem with paying my fair share - I have benefitted from a country that allows one to do well with hard work.
I have no use for those who don't make an effort to find work and live off government welfare, but I think that most individuals, particularly in this economic downturn are not slackers.
Most individuals who are making substantial income either have inherited it or have worked in a country that has stability, relatively little corruption, good public schools (these could be improved substantially), and a functional legal system. Anyone who thinks they did it all on their own are
I'm not a religious person, but doesn't Christianity encourage us to help those that are poor, infirm, etc.
For those who hate Obamacare, I think you really need to check out Paul Ryan's budget and see how that may impact us all. If some of his proposals become law, one day many of you may pray for Obamacare.
Something has to be done about medical costs. As usual, it is somewhere in the middle where the issue can be truly addressed. Medicare is a government program. If you don't like government programs, try not to take advantage of them. Don't use Medicare or Medicaid. Don't rely on Fema if there is a natural disaster. If you own a home, stop writing of the that pesky mortgage interest. Yep, that is that government subsidizing homes. Don't get me wrong, The government has many things that are wrong with it. Some things are right. Let's just fix what is wrong and enhance what is right.
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