Do the U.S. tax rates apply to everyone but the President?

Question

Is President Barack Obama willing to practice what he preaches when it comes to taxes? He is exposing the lack of importance his own agenda really carries — even in his own household.

In the 2008 campaign, then-Senator Obama repeatedly scoffed at the tax rates for the majority of the small business class of our country. He repeatedly chided those in the tax bracket that included the highest number of small business owners. He declared that these folks would need to do “more” and suggested that everybody should, “do their share.”

He also promised that if he were elected president he would increase tax rates for those making over $250,000 per year, that he would force those in that tax bracket to do more, and that it would be the true measure of patriotism for this group of Americans to pay more in taxes.

He spoke in glowing terms about returning the tax rates in his administration to the levels of the Clinton-era, and challenged those earning above $250,000 a year to embrace their responsibility to pay 39% in federal income taxes (not the rate at the time, which was then 35% under President George W. Bush.)

And then we saw his tax return.

In 2010 the Obama household–after every loophole, donation, and tax exempt charitable donation had been deducted –recorded earnings of $1,700,000 and change. To repeat, this wasn’t gross earnings, this was adjusted earnings. This is the amount that he the president had a responsibility to pay taxes on.

From reports concerning the president’s tax returns, however, it looks like he paid roughly $454,000 and change in federal taxes. Sounds like a lot doesn’t it?

But on taxable income of $1,700,000 that only works out to be just a tad more than 26 percent. Whoa! Wait a minute… The president–who had a taxable income of $1,700,000–paid how much?

Had President Obama voluntarily paid his taxes at the rate he believes everyone else in his income bracket ought to pay (39%) in federal taxes, he SHOULD have paid $663,000.

But wait there’s more… To put the cherry on top of the sundae, President Obama even received a tax refund back from the government of $12,000.

American citizen and taxpayer · Accepted Answer

The laws apply to the president as well as anyone else.  But there is also a simple way to voluntarily pay more money in taxes, and to my knowledge neither Obama, Biden, nor any Democrat in the House or Senate did so.

If someone thinks taxes are too low, wouldn't the first thing to do be pay more?  Not doing so is like complaining that a house is on fire but not picking up the hose right next to you and putting water on the blaze.

Anonymous · Answer

They apply to everyone.  And if the President had cheated the IRS would have noticed and called it to his attention so obviously he didn't.

WASHINGTON – President Barack Obama is making less money than he used to, though it's still a lot: He and wife Michelle reported income of $1.73 million last year, mostly from the books he's written, according to his just-filed tax return. That was down from the $5.5 million of a year earlier.

The president, who has been campaigning to raise taxes on the wealthy, paid the government $453,770 in federal taxes, about a quarter of the income. Just last week, he renewed his push to end Bush-era tax cuts for households with annual incomes above $250,000 — noting that that would include him.

Being the the President of the United States has its perks, but one of the downsides is that people get access to even the most private of details. A prime is example is the annual ritual of scrutinizing the President’s tax return. Here are the salient details:

They earned $1.73 million, the vast majority of which came from his books (1.38 million, after expenses) 
He maximized his employer contributions to retirement in a SEP, SIMPLE, or some other – $49k 
They donated nearly $250,000 to charity, or about 14% of his income. 
They received a tax refund of $12,334 because of his estimated tax payments (higher than the average tax return!). 
He used a Chicago, IL accounting firm – Wineberg Solheim Howell & Shain.

Mutt · Answer

From your description, it sounds like it does apply to him. I'm no expert in what the current tax rate is, but 26% sounds about right. And this is what he paid. 

Yes, a lot of the Democrats are saying the "rich" (those that make over $250,000 a year) should pay a higher rate. But there have been no laws passed yet requiring them to do so. So they are legally allowed to still pay at the current rate.

Hypocritical yes. Illegal no.

Anonymous · Answer

If YOU paid more than 26% of your total "Taxable Income" in Income taxes you either need to FIRE your accountant or fess-up that you are incapable of doing your own taxes, my innumerate friend!

(The national average "tax bite" taken by Income taxes on American earners was 26.9% for Tax Year 2010....if you paid MORE than that, that was YOUR fault, not the President's!)

But wait, there's more! People who get a tax refund just made an Interest Free Loan to the IRS!

Your grasp of how tax "brackets" work is broken....maybe you should learn it again! Silly goose!

justa · Answer

Don't like it?  Call you congressman and tell him.
Obama paid all taxes due, and his deductions were legal and available to everyone.

There is no obligation for one man to pay more just because he's president.  What he has said is that its wrong for anyone to garner all those deductions and pay less, not just him, but all the thousands like him.   When (insert snort of laughter here) Congress straightens out and ends its love affair with millionaires, he will pay the increased amount, because that's what the law calls for.

Charles Veidt · Answer

Obama paid the same taxes as everyone else in his tax bracket.  You fail.

Naughtums · Answer

You might want to try reading the tax code.  We don't have a flat tax rate system in this country.

Anonymous · Answer

you never mentioned the fact that he donated over a quarter million to charity... which to me is the only acceptable "tax loophole"

Anonymous · Answer

Once again he says one thing....then does another. No integrity.

JOE · Answer

No they apply to no one because of all the loop holes

Trending News

Do the U.S. tax rates apply to everyone but the President?

10 Answers