Next week, your taxes are due. It’s the worst time of the year. So, how much did the Obamas pay in income taxes this year? Around 19.6 percent (via Politico):
President Barack Obama and his wife, Michelle, paid nearly $94,000 in federal taxes on $477,000 in income, they said in tax returns released Friday.
That translates to an effective tax rate of 19.6 percent.
This is the first tax filing season the Affordable Care Act requires people to say whether they’ve had coverage.
Obama reported receiving $395,000 in salary in 2014, about $90,000 related to his books and $16,000 in taxable interest.
The Obamas gave about $70,000 or 14.8 percent of their income, to charity.
The biggest beneficiary was the Fisher House Foundation, a group that helps military families. It received $22,000. The Obamas also gave $5,000 to Sidwell
Friends, the exclusive private school in Washington their children attend.
They gave between $1,000 and $2,000 to more than 30 other groups, including the
Central Illinois Food Bank, the National Ovarian Cancer Coalition and the United Negro College Fund.
The Obamas reported being due a $20,000 tax refund.
The publication added that the Obamas paid $22,000 in Illinois state taxes, and Vice President Joe Biden paid an effective rate 23.3 percent in taxes after donating $7,000 to charity.
So, the Obamas and the Bidens have their taxes all set, but what about everyone else? Tax policy brings the typical liberals voicing their opinions about the wealthy, also known as the job creators, paying their fair share. Well, it seems that they are–and then some. In fact, if you expand the bracket, the top 20 percent of earners pay 84 percent of all federal income taxes (via WSJ):
The income cited in the tables includes untaxed amounts for employer-provided health coverage, tax-exempt interest and retirement-plan contributions and growth, among other things. This can be significant.
On average, such benefits double the income of people in the bottom quintile and add more than 25% to the income of people in the top quintile, says Roberton Williams, an income-tax specialist at the Tax Policy Center. That means a taxpayer whose stated pay is $130,000 might be reaping another $35,000 annually in untaxed income.
“Most people focus on the income they see in their paychecks or portfolios and forget about untaxed benefits they receive,” Mr. Williams says.
The tables show just how progressive the income tax is. The three million people in the top 1% of earners pay nearly half the income tax.
Why is the share of income taxes negative for 40% of Americans? In recent decades Congress has chosen to funnel important benefits for lower-income earners through the income tax rather than other channels. Some of these benefits, such as the Earned Inc
ome Tax Credit and the American Opportunity Credit for education, make cash payments to people who don’t owe income tax.
People receiving such payments do pay other federal taxes, of course, such as those for Social Security and Medicare. If these taxes are included, the share of federal taxes paid by the lowest two quintiles turns positive.
Still, even if those rates of taxation hit the post for those paying negative income taxes in the tables above, it wouldn’t come near the amount the top 20 percent fork over every year. Additionally, as George Will has written, the number of people paying little to no federal income taxes creates a situation of moral hazard. He noted how the bottom 50 percent only pay three percent of federal income taxes. Thus, we have a segment of the population that has no vested interest in limiting a government that they’re not paying for.
Yet, before we can address that problem, we have to revamp our tax code, which is only slightly under 74,000 pages.
Yes, Happy Tax Day, folks.