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Wednesday, July 14, 2004

Wall Street Journal Charges Kerry-Edwards with Tax Hypocrisy

Wednesday, July 14, 2004

Photo John Kerry and John Edwards
Image of Form 1040A


A Wall Street Journal editorial, Liberal Loopholes, charges John Edwards and John Kerry with tax hypocrisy: taking positions on their personal tax returns that are inconsistent with their public tax policy positions. The allegations:

• Edwards conducted his solo trial practice through an S corporation, paying himself a $360,000 salary while taking $6.3 million per year as dividends as the sole shareholder, thus dodging the 2.9% Medicare tax:
As a political matter, the dodge is especially hypocritical because the income limits on which Medicare taxes are paid were lifted by Democrats in 1993 specifically to hit "the rich," as Mr. Edwards likes to call people in his tax bracket. And the supreme irony? Mr. Edwards has claimed that he set up the subchapter S company to protect himself from legal liability. You know it's time for tort reform when even the trial lawyers say they're afraid of getting sued.
• Kerry's wife's prepayment of only $750,000 in taxes on $5.1 million of income in 2003 is an effective return of less than .5% on her net worth of over $1 billion:
More likely, the majority of her investment income is sheltered within trusts so that tax is deferred until she or her family actually wants to spend it. Again, perfectly legal, but this is a luxury that the average middle-class professional working for a wage does not have. These are the non-rich who will pay the bulk of any Kerry tax increase.
The Journal closes with the tax hypocrisy charge:
So when John Kerry and John Edwards say that they want to tax the wealthiest Americans, let's be clear about what they really mean. They want to tax the most productive people at higher marginal rates and close loopholes for corporations, while they themselves dodge taxes by exploiting loopholes they plan to preserve.

Mr. Edwards is right that there really are two Americas. The people who work for their money and want to keep more of their own paychecks. And wealthy politicians who want to raise taxes on the middle class secure in the knowledge that they won't have to pay.

http://taxprof.typepad.com/taxprof_blog/2004/07/wall_street_jou_1.html

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