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Tuesday April 21, 2015

Washington News

Washington Hotline

Obamas and Bidens Publish 2014 Tax Returns

Each year President Obama and Vice President Biden publish their tax returns. For 2014 President and Mrs. Obama paid $93,362 in federal tax on total income of $477,383. The tax rate is approximately 19.6% of their income.

President and Mrs. Obama gave $70,712 to 27 charities. This represents about 14.8% of their adjusted gross income. While most gifts were $1000 or $1500, two charities received larger transfers. The Sidwell Friends School, a private school that daughters Malia and Sasha attended, received a $5,000 gift. The Fisher House, which provides housing for families of injured veterans who are in VA hospitals, received a major gift of $22,012.

Vice President and Mrs. Biden received income from his salary from the federal government and her position on the faculty of Northern Virginia Community College. Their income was $388,844 and the Federal tax paid was $90,506. This was a tax rate of 23.3%.

The Bidens gave $7,380 to charity. This represents about 2% of their adjusted gross income. Their largest gifts were $2,400 to the Annual Catholic Appeal for the Diocese of Wilmington, Delaware, $1,200 to the Northern Virginia Community College Foundation and $2,755 to the USO.

Top 10 Tax Failures

On April 15, Senate Finance Committee ranking member Ron Wyden (D-OR) published his “top ten” failures for the income tax code.

Wyden stated, “As Americans race to meet tonight’s midnight tax filing deadline, we are reminded that it is long-past time to clean up our nightmare tax system. Such a complex code is only dividing taxpayers into two different camps – the fortunate who have extra resources to successfully navigate the system to their benefit and the rest of Americans.”

Wyden explained the top ten tax failures that impact Americans.

1. Unfair Tax Rates – The average wage earner pays a higher tax rate than better-off Americans who have capital gains from asset sales.

2. Tax Code Too Complex – With 74,608 pages in the Internal Revenue Code and references, many Americans fail to understand tax-saving provisions that could benefit them.

3. Too Much Time – Americans spent 6.1 billion hours and paid $168 billion to prepare and file their 2014 tax returns.

4. Family Business Burden – Small businesses spend over 80 hours per year preparing their tax returns. They could use this time much more productively to operate their business and hire more employees.

5. Wrong Retirement Benefits – Most of the current retirement benefits help upper-income Americans. Only 16% of the total retirement benefits are transferred to the lowest 60% of income-earners.

6. IRS Busy Signal – With the cutbacks in IRS customer service, only 4 in 10 taxpayers who call the IRS are actually able to speak to an IRS representative. Wyden noted that “calling the IRS is like shouting into a void.”

7. Scams and Identity Thefts – The Federal Trade Commission (FTC) notes that its top complaint is now tax-related identity theft. In addition, the Federal Communications Commission (FCC) reported that tax-related identity theft over the past four years has increased from 15% to 43% of all its identity theft complaints.

8. Offshore Accounts – Some wealthy Americans transfer funds offshore into various tax havens. The total cost for this tax avoidance is $110 billion per year.

9. Unqualified Tax Preparers – Because there are no basic standards, some preparers are incompetent, unethical or give incorrect advice.

10. Financial Product Loopholes – There are complicated financial products that are designed to lower the taxes paid on investments. These loopholes must be closed because they only benefit a few affluent persons.

Published April 17, 2015

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