Obama and First Lady Michelle Obama filed a joint tax return, according to White House spokesman Jay Carney, in which they reported adjusted gross income of $798,674. “About half of the first family’s income is the President’s salary; the other half is from sales proceeds of the President’s books,” Carney wrote in a blog post on the White House Web site. “The Obamas paid $162,074 in total tax.” Obama’s effective federal income tax rate is 20.5 percent. The Obamas also released their Illinois income tax return and reported paying $31,941 in state income tax.
In contrast, his likely rival in the November general election, former Massachusetts Governor Mitt Romney, has so far only released an estimate of his 2011 taxes, indicating an effective tax rate of 15.4 percent on earnings mostly from investment income (see Romney Does Reversal on Releasing Tax Returns). Romney filed for an extension on Friday, as he has done in previous years. He and his wife Ann paid $3.4 million in estimated taxes on their joint return, but estimated that they will have only $3.2 million in tax liability for last year.
The Obamas reported donating $172,130—approximately 22 percent of their adjusted gross income—to 39 different charities. The largest donation was a $117,130 contribution to the Fisher House Foundation, a scholarship fund for the children of fallen and disabled soldiers. The President is donating the after-tax proceeds from his children’s book to the cause.
The Bidens also released their 2011 federal income tax returns, along with state income tax returns for both Delaware and Virginia. The couple filed joint federal and combined Delaware income tax returns. Jill Biden filed a separate non-resident tax return for the state of Virginia. Together, they reported adjusted gross income of $379,035. The Bidens paid $87,900 in total federal tax for 2011. They paid $13,843 in Delaware income tax and $3,614 in Virginia income tax. The Bidens contributed $5,540 to charity in 2011.
Obama has been pushing for the so-called “Buffett Rule” in recent months, named after billionaire Warren Buffett, under which millionaires and billionaires would need to pay a minimum tax rate of 30 percent (see Obama Says Congress Will Vote on “Buffett Rule” Millionaire Tax).
Congress is expected to vote on the legislation as soon as next week, perhaps Monday according to some reports. However, the bill is not expected to pass amid widespread opposition from Republicans, who have derided the proposal as a political campaign maneuver.
“The President believes we must reform our tax system which is why he has proposed policies like the Buffett Rule that would ask the wealthiest Americans to pay their fair share while protecting families making under $250,000 from seeing their taxes go up,” wrote Carney. “Under the President’s own tax proposals, including the expiration of the high-income tax cuts and limitations on the value of tax preferences for high-income households, he would pay more in taxes while ensuring we cut taxes for the middle class and those trying to get in it.”
On Thursday, as part of the effort to push for passage of the Buffett Rule, the White House Web site debuted a Buffett Rule Calculator to show taxpayers how many millionaires pay a lower effective tax rate than them. The Buffett Rule is intended to ensure that millionaires and billionaires don’t pay a lower effective tax rate than their secretaries. The proposal stems from a New York Times editorial that Buffett wrote last year called “Stop Coddling the Super-Rich,” in which he noted how the Tax Code allows wealthy investors like him to claim tax breaks that lower their effective tax rates below middle-class wage earners.
Once again this tax season, the White House Web site is also offering another tax season tool, the Federal Tax Receipt. Like the Buffett Rule Calculator, it is an interactive tool that allows taxpayers to enter in their income and tax amounts, but in the case of the tax receipt, it will give taxpayers a rough estimate of how much and what percentage of their tax dollars is being spent on various federal programs and services.
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