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Thursday, April 17, 2008

Obama Releases 2007 Tax Return

Democratic presidential candidate Barack Obama yesterday released his 2007 tax return.  For the first time (perhaps after reading Why Didn't Obama Save for Retirement?), the Obamas contributed the maximum $45,000 to a SEP-IRA to shelter some of their book royalties.  Here are the key figures from the Obamas' 2007 tax return, as well as the comparable figures from their 2000-2006 returns (previously blogged here):

Clinton_obama_tax_returns_1

Here are the comparable figures from Hillary Clinton's 2000-2007 tax returns (previously blogged here):

Clinton_obama_tax_returns_2

For press and blogosphere coverage of Obama's 2007 tax return, see:

http://taxprof.typepad.com/taxprof_blog/2008/04/obama-releases.html

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Comments

The Clintons must have some very good tax advisors. Must be nice to pay a mere 25% when you are earning over $20 million a year. How did they manage that, when the vast majority of their income is subject to the highest marginal rate of 35%? Note that their rate is far lower than what Obama paid on a far smaller income, and in 2002 the Clintons paid a rate of 38% on an income of less than half of what they earned in 2007. The year 2000 was also good th them, paying a mere 13.9%(!) on AGI of over $350k.

Posted by: DEM | Apr 17, 2008 9:26:59 AM

Lot of income with virtually no savings

Posted by: Joe - Dallas | Apr 17, 2008 9:53:33 AM

DEM, they managed a lower tax rate because they donated $3 million dollars to charity. Your messiah Barack Obama would also have a lower overall tax rate except he gave sometimes less than a tenth as much to charity while earning six-seven figures. Not to mention part of Obama's charity was an illegal deduction for contributing to a race-based political committee.

Since the Clintons gave 15% of their income away, their effective top tax rate is reduced to 29.8%. That's not far from the 25% paid considering they also got 3 million dollars in investment income taxed at around 15%. In 2000, over half their income was capital gains or deducted as mortgage interest, so it's no surprise the rate is halved. There are no special tax advisor shenanigans, despite what you would believe.

I know it's popular among Obama supporters to soak the rich and covet their neighbors' possessions, but you really need to improve your seize-their-wealth rhetoric and learn to read the returns.

Posted by: zed | Apr 17, 2008 10:36:08 AM

Thanks for posting, prof.

Posted by: Lance Weber | Apr 17, 2008 11:29:05 AM

they donated $3 million dollars to charity

Actually, in 2006 a 10 million charitable contribution went to the Clinton Family Foundation

Not exactly "charity" as it's commonly known.

Posted by: The Ace | Apr 17, 2008 12:31:12 PM

Can someone explain to me how Hillary Clinton, who makes $20 million a year, pays less taxes than Barack Obama, who makes $4 million a year?

Hillary pays 25% of her income, Barack pays almost 34% of his income in taxes.

How is this "fair?" Hillary is cheating the people, by paying less, is she not?

Posted by: somehistorian | Apr 17, 2008 1:28:38 PM

You are comparing apples to oranges here, who in their right mind would even think Obama's income would compare with a former President of the U.S. not to mention his many speaking engagements, books on top of books not only on Bill but on Hillary, come on folks, use common sense..

Posted by: Ann | Apr 17, 2008 3:36:08 PM

Can someone please explain why the SEP-IRA limit is so far above the Roth-401K and Roth-IRA limit. $45,000 vs. $20,500. Why are self employed people allowed to save for retirement more effectively than people employed by companies?

Posted by: David | Apr 17, 2008 5:12:19 PM

The real question should be, "Do we really want a President who has no concept of how the average American lives?" Millionaire candidates who are experienced at using all the loopholes for personal gain have no business running the lives of others.

Posted by: Nunya | Apr 17, 2008 5:47:19 PM

What I want to know is how do the Obamas and the Clintons avoid paying the AMT but poor little upper middle class me and my wife get stuck with it?

Posted by: AMT hater | Apr 17, 2008 5:48:15 PM

The Clinton Family Foundation is a charity vetted by the IRS that distributes the money to other charities over time. You can check their form 990.

Believe it or not, but you can name charities after yourself. Maybe the Obamaites think that the Bill and Melinda Gates Foundation, the Ford Foundation, the Rockefeller Foundation, or the Carnegie Foundation are not real charities either. Actually, those are charities as that word is "commonly known".

Obamaites attacking the Clintons over charity are simply digging themselves a bigger hole by drawing attention to Obama's uncharitable ways.

Posted by: zed | Apr 18, 2008 9:25:26 AM

"Can someone explain to me how Hillary Clinton, who makes $20 million a year, pays less taxes than Barack Obama, who makes $4 million a year?"

- - -

If you're asking us to explain how $1.4 million can be more than $5.0 million, um, no.

HRC paid almost four times as much in taxes as BO paid.

Posted by: bobby B | Apr 18, 2008 1:45:33 PM

Zed, that's true the Clintons donated a lot of money to charity...if it's anything like their 2006 return, which I downloaded and copied, it only went to one source: The Clinton Foundation. Cute, huh? Legal, and from what I understand, most of the dough is still there, drawing interest.

Posted by: Liz | May 7, 2008 7:02:14 PM

Hillary's tax percentage is less because she's more charitable. In '07, She gave appx 15% and Obama gave only 5.8%... Why would he want to give more to government and less to charity when he's always pushing for more of our taxes for the needy? I guess not out of his pocket. For the record McCain gave 26% and Bush gave 23% in '07.

Posted by: R-Wing | Oct 7, 2008 3:57:56 AM

Joe from Dallas. Get a life.

Posted by: Sam | Oct 23, 2008 11:26:16 PM