President Benefits From His Tax Cut
Bushes' Payment Drops 15 Percent On 2003 Return; Kerry's Taxes Triple
By Jonathan Weisman
Washington Post Staff Writer
Wednesday, April 14, 2004; Page A04
Last year's tax cut proved to be a significant windfall for its main architect and political instigator, saving President Bush tens of thousands of dollars on his 2003 return.
Meanwhile, for Sen. John F. Kerry (Mass.), the Democrat seeking to drive Bush from the White House, his tax burden more than tripled on income that surged with the sale of a million-dollar painting.
Bush and first lady Laura W. Bush had income totaling $822,126, down 4 percent from the $856,058 they reported last year, according to tax forms released yesterday by the White House. But the president's taxes fell much more. His federal income tax payment last year dropped $41,229, or 15 percent, from the 2002 level of $268,719.
In all, the tax cut Bush signed into law last summer saved him and his wife $30,858, according to Robert McIntyre, executive director of the labor-backed Citizens for Tax Justice.
Vice President Cheney and his wife, Lynne V. Cheney, reported income of $1,273,334, up $102,965, or nearly 9 percent, from 2002. Their tax burden dropped sharply, to $253,067 from $341,114, a decline of more than $88,000. Although the Cheneys were easily in the top tax bracket of 35 percent, their effective tax rate fell from 29 percent in 2002 to 20 percent in 2003.
But the Cheneys' declining tax burden was due to other write-offs and was not directly related to the new tax cut, according to Terrence O'Donnell, an attorney for the vice president. The cut would have lowered the Cheneys' tax payments by an additional $35,400, but they ran afoul of the alternative minimum tax, a parallel tax designed to ensure the affluent pay their fair share. The Cheneys' AMT hit totaled $47,198.
"The AMT ate their tax cut," McIntyre said.
Kerry's income totaled $395,338 last year, up from $144,091. Because he filed a return separate from his wife, Teresa Heinz Kerry, income from her substantial fortune is not included.
The increase in John Kerry's income was almost entirely from capital gains worth $145,805. Those gains came almost exclusively from the March 3 sale of a painting by the Dutch baroque artist Adam Willaerts, which fetched $1.35 million. Kerry's tax payment was $90,575, up from nearly $30,000 last year.
Kerry opposed Bush's tax cuts of 2001 and 2003, but he was a beneficiary. Dividends last year worth $11,047 would have cost him as much as $2,600 more in taxes without last year's cut. His $147,818 salary put him in the 28 percent tax bracket, which was 30 percent before the 2003 tax cut was enacted.
© 2004 The Washington Post Company