April 23, 2011 at 8:14 pm
By BRENT BATTEN
Political opinion columnist, Naples Daily News
President Barack Obama and his wife donated $131,075 to the Fisher House Foundation last year.
God bless them for doing so. Among other things, the charity provides scholarships to the children of military personnel killed or seriously wounded in the line of duty.
But the appearance of the donation as an itemized deduction on the president’s 2010 tax form provides a curious contrast to the speech he gave on taxes and the federal deficit just five days before the filing deadline.
On April 13, the president told his audience at George Washington University that itemized tax deductions amount to loopholes that allow the richest Americans to avoid paying their fair share.
“And while I agree with the goals of many of these deductions, like home ownership or charitable giving, we cannot ignore the fact that they provide millionaires an average tax break of $75,000 while doing nothing for the typical middle-class family that doesn’t itemize,” he said.
He went on, “My budget calls for limiting itemized deductions for the wealthiest 2 percent of Americans, a reform that would reduce the deficit by $320 billion over 10 years.” With a reported income of $1.7 million, the first family is comfortably nestled among that 2 percent.
The Obamas’ tax return fills 59 pages of forms and deals in complexities such as capital gains tax, self-employment tax and foreign tax credits. The family paid income taxes amounting to $453,770.
The president says he wants a simpler tax code, “So that the amount of taxes you pay isn’t determined by what kind of accountant you can afford.” Still, The Fisher House tax deduction is perfectly legal under current law and the professional preparers who claimed it on behalf of the Obamas are doing their job by seeking every advantage they can for their client, so that’s not what’s curious.
What is noteworthy is that later in the same speech, Obama suggested that the wealthy would be glad to pay more, if only given the chance.
“I say that at a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more…. And I believe that most wealthy Americans would agree with me. They want to give back to the country that’s done so much for them. Washington just hasn’t asked them to.”
The $131,075 deduction, money the president earned through sales of his book, “Of Thee I Sing, a Letter to My Daughters,” coupled with the maximum 35 percent rate now in place, yielded a tax savings of $45,876 to the Obamas.
Without the option of a tax deduction, would the president or other wealthy Americans be less likely to give money they’ve earned to charities? How much might charities suffer as a result?
The Obamas’ total itemized deductions, including home mortgage interest, state taxes and other gifts, amounted to $373,289, providing a $130,651 tax break.
The president had a perfect opportunity to pay a little more and limit the itemized deductions of a wealthy taxpayer _ himself _ and chose not to do so.
In spite of his rhetoric and in abdication of his position of leadership, the president’s actions show he hasn’t personally embraced the ideals he discussed at George Washington University.