Apr 15th 2013
By Ken Berry
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Just before the April 15 due date, the White House released the 2012 federal income tax returns for President Barack Obama and Vice President Joe Biden. Both the POTUS and the Veep filed joint returns with their respective spouses, Michelle and Jill. Overall, there were just a few mild surprises.
The Obamas reported an adjusted gross income (AGI) of $608,611. They paid $112,214 in total tax for an effective tax rate of 18.4 percent. Notably, the president has called for tax reforms which would increase federal income tax liability for the couple and other upper-income taxpayers.
The couple claimed deductions for charitable donations of $150,034 – nearly 25 percent of their AGI. They contributed to thirty-three different charities, with the largest gift of $103,871 going to the Fisher House Foundation. Also, it was noted that the couple's income declined to its lowest point since Obama was elected to his first term. "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," said the Associated Press.
Barack and Michelle Obama also released their joint tax return they filed for Illinois. They paid $29,450 in state income tax.
The Bidens paid $87,851 in total federal tax for 2012 based on an AGI of $385,072. They contributed $7,190 to charity. Interestingly, $2,000 of the charitable deduction they claimed was for used property donated to Goodwill in Wilmington, Delaware. "[O]n June 25 of last year, the Bidens gave 'Clothing, Boots, Kitchenware, Glassware' totaling $400 to Goodwill," reported the Weekly Standard, a conservative magazine. "Earlier, on May 16, the Bidens gave 'Furniture and Exercise Equipment' valued at $1,100 to the Ministry of Caring. And on May 27 of last year, the Bidens gave 'Bicycles, Toys, Glasses, Pottery, Kitchenware' valued at $500 to the same Goodwill."
Furthermore, Vice President Biden, who is seventy years old, collected $29,761 in Social Security benefits, according to his 2012 tax return.
Finally, the couple filed a joint Delaware income tax return, while Dr. Jill Biden filed a separate nonresident tax return for the state of Virginia. They paid $13,531 in Delaware income tax and $3,593 in Virginia income tax.
How will our two top government officials fare taxwise in 2013? It seems likely that both the Obamas and the Bidens will face increases due to the new 3.8 percent Medicare surtax. This add-on tax, which was included in the 2010 health care legislation known as "Obamacare," applies to the lesser of net investment income (NII) or modified adjusted gross income (MAGI) in excess of $200,000 for single filers and $250,000 for joint filers.