Tax Prof linked this morning to a Chicago Tribune story announcing the release of Obama's federal income tax return. At the Chicago Tribune story, there is a link to the return itself.
The story notes a few key facts based on the return and a campaign release about the return:
- 2006 taxable income of $983, 826 includes: book deal $506,618, Senate salary $157,082, Chicago hospital administrator salary $273,618 and board fees $51,200.
- 2006 charitable contribution deductions of $60,307 includes: church contribution $22,500, Congressional Black Caucus $13,107, CARE $15,000, and Muntu Dance Theater $5,000.
Kudos to Obama's campaign staff. It is encouraging to see Obama's willingness to release his return immediately after filing. Let's hope that this release sets the standard for similar releases from every other national candidate.
It is discouraging, however, to see once again more concrete evidence that candidates for our highest public office are almost inevitably millionaires in the very top percentage of the income distribution curve. (Obama's income in 2006, by the way, is about half a million less than it was in 2005, when he had more income from his book deals.)
That simple fact brings home, again, the class/status problems in this country. The disparity between the economic backgrounds of most of our elected (and nonelected) officials and the rest of America makes it very difficult for public officials to identify with the problems of the majority of ordinary Americans who make much, much less a year. It also makes it much easier for corporate executives, who have come to view their workers as disposable commodities even while they receive higher and higher multimillion-dollar pay packages, to have a significant influence over public officials, on our laws and on official attitudes towards issues like global warming or health care, sometimes (often?) to the detriment of ordinary Americans.
One of those problems, of course, is the alternative minimum tax (AMT). In the Wall Street Journal and the New York Times, the discussion about the downward bracket creep of the AMT suggests bewilderment that it could mainly target "middle class" taxpayers who make from $200,000 to $500,000 a year. But remember that the wealthiest American taxpayers don't pay AMT because their incomes are so high that they are paying the higher rate tax under the regular tax system (the regular tax maxium rate is 35%, compared to the 28% maximum rate, on a broader base, of the AMT). And the $200-500 thousand income range is still way up in the top quintile of incomes in the US--not really the middle class. It is the AMT reach down to some households in the $100,000, $75,000 or even $50,000 income range that is disturbing, since those households are ones that are more likely to need the tax relief intended by the tax cuts passed in the last six years. The solution that I have argued for--to define a cut-off point below which the AMT will not apply, based on a total income determination--may be hard for politicians from the upper crust to enact, since it would require those with considerably higher incomes to continue paying a higher share of taxes.
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