President Obama and First Lady Michelle Obama released their 2012 tax returns to the public on Friday. Predictably, the Obama tax return shows that their income has dropped from previous levels, primarily due to declining sales of the president’s books.?
The couple’s taxable income was around $5.5 million in 2009. It was only $608,611 in 2012. The effective tax-rate for the Obamas was 18.4 percent (much more than, oh, Mitt Romney!), meaning they paid approximately $112,000 in federal income taxes and around $30,000 in state income taxes in Illinois. The first couple also donated approximately 25 percent ($150,000) to various charities. This greatly reduced President Obama’s Taxes.
The right is, of course, infuriated. They believe that the president’s effective tax rate should be significantly higher. The argument seems to be that the president is being hypocritical because he says that the wealthy should pay a higher tax rate than the middle class when he himself actually pays a rate that is less than many middle class individuals.
What this line of reasoning fails to note, however, is that the Obama’s effective rate was significantly reduced because the first couple was able to deduct a large portion of their income due to their contributions to various charities. Furthermore, as reported by The Chronicle of Higher Education, the president has repeatedly pushed to limit the value of deductions for charitable contributions made by families earning more than $250,000 per year and that he has seen his efforts blocked by Congressional Republicans.
“They don’t serve an economic purpose,” the president said at a news conference last Wednesday, in reference to these deductions. “They don’t grow our economy,” he continued. “They don’t put people back to work. All they do is to allow folks who are already well-off and well-connected game the system.”
In other words, Mr. Obama would have paid a higher rate had he been able to close these loopholes during the course of his first term, as he repeatedly tried to do. The argument for hypocrisy, therefore, fails. The president cannot be criticized by the right in good faith, as his tax rate would have been higher had his policies not been blocked by the GOP.
