Income tax changes benefit Bush, Cheney, Kerry

Officials, challenger saved thousands on rate cut

April 14, 2004|By James Toedtman | James Toedtman,NEWSDAY

WASHINGTON - President Bush, Vice President Dick Cheney and their Democratic challenger, Sen. John Kerry, all benefited from the tax cuts enacted by Congress last year, according to their 2003 returns, which were released yesterday.

At the same time, Cheney and his wife were penalized by the Alternative Minimum Tax, a ubiquitous provision of the tax code that increasingly affects middle-class taxpayers and cost them an extra $47,198.

Bush paid $227,490 on his taxable income of $727,083 for 2003, $65,084 less than he paid in 2002.

Cheney paid $253,067 on his 2003 taxable income of $813,226, $88,047 less than he paid in 2002.

Kerry reported taxable income of $395,000 and a tax bill of $90,575.

"The surprising thing is that the president's not getting hit with things the average taxpayer gets hit with - the AMT and the loss of itemized deductions," said Ed Slott, a CPA in Rockville Centre, N.Y.

"The AMT is something that does hit most taxpayers," Slott said. "Most people also lose the deductions because the total doesn't exceed 2 percent of their adjusted gross income."

Instead, Bush was able to deduct charitable contributions totaling $68,360 that included gifts to the chapel at his Camp David presidential retreat and St. John's Church in Washington, D.C.

Bush and Cheney filed joint returns with their wives. Kerry filed as a single taxpayer and did not release the return of his wife, Teresa.

Bush reported his $397,264 presidential salary plus $401,803 in interest income. He also reported $23,471 from dividends.

Cheney's return was more complicated. He and his wife, Lynne, a board member for Readers Digest and a fellow at the American Enterprise Institute, earned $454,301, including his $198,600 salary. They also reported dividend income of $137,644, plus a $302,602 capital gain on the sale of real estate and overseas mutual funds and $327,643 in royalties, presumably from three books Lynne Cheney has written.

Last year's tax bill provided particular benefits to wealthier taxpayers. The top 38.6 percent rate was reduced to 35 percent. That rate cut saved Bush as much as $25,200, Cheney $28,800 and Kerry $14,400. Both Cheney and Bush also kept more of their dividend income this year. The tax on dividend income was cut from the 38.6 percent rate to 15 percent, which meant an extra $2,500 for Bush and $21,000 for Cheney.

Newsday is a Tribune Publishing newspaper.

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