First there was “dead broke,” and now it’s ‘”truly well off.”
Just a week after Hillary Clinton stepped in it over her family’s post-presidency finances, she has again offered some questionable comments suggesting a link with ordinary struggling Americans.
She argued to the Guardian that her family's wealth would not injure her ability to talk about income inequality on any hypothetical campaign trails. "But they don't see me as part of the problem, because we pay ordinary income tax, unlike a lot of people who are truly well off, not to name names; and we've done it through dint of hard work."
The new comments have some screaming “out of touch.”
Setting that aside, we thought it was worth asking: Do the Clintons really feel the average Americans’ pain when they pay their taxes? And are they truly paying more taxes than your average multi-millionaire, as she suggested?
The Clintons last released their tax returns during Hillary's 2008 presidential run. From 2000 to 2007, they paid $33.8 million in federal taxes, or 31 percent of their adjusted gross income — which was $109 million. At the time, the IRS said that taxpayers making $10 million or more — i.e. the people safely in 1 percenter territory — were paying 20.8 percent of their adjusted gross income in federal taxes.
In 1990, the Clintons made $268,646 and paid $50,932 in federal taxes, or 18.9 percent.
How do these previous tax returns compare to now?
In 2011, the top earners in America were paying 24.5 percent of their income in federal taxes, according to the Tax Policy Center. We won't know how the Clintons' return looks in relief until they decide to release their latest tax returns ahead of a new presidential bid.
If they need to release new tax returns ahead of a presidential bid.
Mitt Romney paid 13.9 percent of his income on federal taxes in 2010, according to returns he released during the 2012 presidential election. His low tax rate is apparently what Hillary Clinton was referring to in the Guardian interview. Most of the Romney family's income that year came from investments, which are taxed at a lower rate than wages. The Clintons may be raking in millions from speaking engagements, but the fact that the income is grouped in the same box as many Americans — unlike millions made in an investment account — is a point the Clintons seem to be testing to see if she can frame in a positive light.
The narrowness of the point seems to work better at showcasing how different her financial life is from most of the United States, just like the statement about being "dead broke" after leaving the White House in 2001.
Presidential candidates often only released their federal income tax returns. Federal taxes are also the most progressive in the nation, and tend to put high-earning politicians in the most flattering light — unless your income comes from investments, as the Romney campaign reminds. Middle class income earners were paying about 13 percent of their income in federal taxes, according to the Tax Policy Center. However, they are paying far more in payroll and state taxes, as analysis from Wonkblog during the 2012 election shows.
High incomes mean you pay taxes differently than many Americans, regardless of whether the income tax you pay is ordinary or not. High incomes also mean that you prepare for paying taxes differently than many Americans. A report from Bloomberg News last week notes that "the Clintons are using financial planning strategies befitting the top 1 percent of U.S. households in wealth."
Regardless of the nuances absent from Clinton's comments, her family's past tax returns have looked like many a past presidential candidate's.
In 2007, the Obamas paid 33.3 percent in federal income taxes, according to Wonkblog. In 2003, John Kerry paid 22.9 percent, while his wife paid 12.3 percent. In 1998, George W. Bush paid about 20.5 percent. (If you're interested, here's the link to fulfill all your presidential tax return rabbit hole desires.)
The question that everyone is even more eager to answer now, given her recent interviews on the subject, are how her and Bill's more recent returns will compare. One thing is for sure, they are definitely not dead broke, and their hard work has left them with a tax return that many Americans will never see. As previous presidential candidates have proven, this doesn't disqualify one from running for office. It doesn't mean that you can't discuss economic policy and income inequality. It just means you have to be careful about how you talk about your own money.
Just ask Romney, who, like Clinton, tried to connect with voters on money matters in a less than ideal way.
Exhibit A: “I’m also unemployed.”
Exhibit B: “I know what it’s like to worry whether you’re gonna get fired. There were a couple of times I wondered whether I was going to get a pink slip.”
It's not the money itself that induces the face palming. It's the need to say that it isn't as much money as everyone knows it is.
In an article in the New York Times, Republican strategist Steve Schmidt recommended that Romney stop trying to tangle his wealth into a campaign-friendly narrative. “He would be in a stronger position if he framed the race not through the prism of his biography but what his biography can bring to the American people.”
If Clinton is thinking about running, she might want to keep the same advice in mind.