Obama earned less in 2012, pays $112k in taxes
Saturday, April 13, 2013
WASHINGTON (AP) — President Barack Obama made less in 2012 than in any other year since taking office, with about 40 percent of the nearly $609,000 in income that he and first lady Michelle Obama reported coming from book sales.
Obama, who renewed his call for higher taxes on the wealthy in the budget he released Wednesday, paid $112,214 in taxes last year, putting his effective federal tax rate at 18.4 percent. The Obamas donated almost one-quarter of their income to charity, helping to lower their overall tax bill, according to tax returns released by the White House.
Most of the $608,611 that the Obamas reported in adjusted gross income came from the president's salary, as he reported $394,840 in wages. An additional $258,772 came from royalties from his books, including his 1995 memoir "Dreams From My Father," his 2006 political book, "The Audacity of Hope," and a 2010 children's book, "Of Thee I Sing: A Letter to My Daughters."
Income from Obama's books has fallen off since 2009, when his books sales surged after his inauguration. The Obamas made $5.5 million that year — his first year in office — but the figure dropped precipitously the next year to $1.73 million. In 2011, the Obamas reported about $790,000 in income.
The president and Mrs. Obama signed their tax returns on Monday — one week before the April 15 deadline for Americans to file their 2012 returns.
Itemized deductions of $258,385 brought the Obama's taxable income down to $335,026. The first family deducted $45,046 in interest on the mortgage for their home in Chicago, plus $36,554 in state and local taxes and $26,751 in real estate taxes.
Through withholding and estimated tax payments during the year, the Obamas paid $129,029 to the Internal Revenue Service — an overpayment of $16,815. The Obamas directed that, rather than receive a refund, the overpayment will be applied to their taxes for next year.
The Obamas also claimed $39,875 in income from outside the United States. A White House official said all of that income came from book royalties, but did not disclose details about which countries the income came from. The official was not authorized to comment publicly on Obama's taxes and spoke on condition of anonymity.
The president and first lady reported donating $150,034 — or 24.6 percent of their income — to 33 charities. That's a slight dip from the previous year, when the Obamas donated more than $172,000. The largest contribution last year was a $103,871 donation to Fisher House Foundation, which provides humanitarian services to military members, veterans and their families. Other charitable groups that received donations from the president for $5,000 or less include the American Red Cross, Habitat for Humanity, Boys & Girls Clubs of America and the United Negro College Fund.
The president and the first lady also paid $29,450 in income taxes to Illinois, according to their state tax returns.
The White House also released tax returns for Vice President Joe Biden and his wife, Jill, who teaches at Northern Virginia Community College.
The Bidens paid $87,851 in federal income taxes on $385,072 in adjusted gross income. The vice president and his wife paid state income taxes in two states — $13,531 in Delaware and $3,593 in Virginia. The Bidens overpaid a bit last year in their withholdings, so they'll get a refund of $4,608 from the IRS.
They reported donating $7,190 to charity. The largest sum of $2,400 went to the Catholic Diocese in Wilmington, Del.
The president this week revived his push for wealthier Americans to pay higher taxes, arguing that higher earners like himself should bear a larger share of the burden for deficit reduction. The $3.8 trillion budget blueprint he unveiled Wednesday proposed that "wealthy millionaires pay no less than 30 percent of income, after charitable contribution, in taxes," to ensure that poorer Americans don't get stuck paying higher rates than the wealthy. Obama also proposed a change in the way inflation is calculated that, if proposed, would have the effect over time of pushing more Americans into higher tax brackets.
"The president believes we must reform our tax system, which is why he has proposed policies like the Buffett Rule that would ask the wealthiest Americans to pay their fair share while protecting families making under $250,000 from seeing their taxes go up," White House spokesman Jay Carney said in a statement accompanying the release of Obama's tax returns.
During the negotiations with Congress over New Years, Obama won a tax increase on incomes over $400,000 for individuals and $450,000 for couples, although he had wanted those thresholds to be lower. The deal to avert the so-called fiscal cliff preserved the lower Bush-era tax rates for the middle class.
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