Bushes' tax return reports income drop

Vice president, wife pay 52 percent more than they did last year

April 16, 2005|By James Gerstenzang | James Gerstenzang,LOS ANGELES TIMES

WASHINGTON - President Bush and his wife reported $673,000 in taxable income in 2004, a slight drop from the previous year, and Vice President Dick Cheney and his wife reported a 63 percent increase in their taxable income, to $1.3 million, according to their tax returns, which were released yesterday.

The Bushes paid $207,000 in federal income tax, approximately $10,000 less than last year. Their adjusted gross income last year was $784,219.

The Cheneys paid $393,518 in federal income tax, up 52 percent from the year before.

The increase in the Cheneys' income over their 2003 earnings stemmed in part from a stronger performance by their mutual funds and increased royalties from Lynne Cheney's books, their attorney said. Before deductions, their adjusted gross income was $1.7 million.

As he has since he became vice president, Cheney received deferred income from Halliburton Co., the Texas oil services company of which he was once chief executive officer.

In 2004, the payment to the vice president was $194,852, his office said. That amount was roughly $16,000 greater than the previous year. The 2004 payment was the fourth of five annual payments he elected to receive in an irrevocable deferred compensation arrangement.

Terrence O'Donnell, a private counsel with the Washington firm of Williams & Connolly who represents Cheney, said that before the vice president took office, he bought an insurance policy on the deferred income guaranteeing the payment and interest regardless of the company's fortunes, as a means to avoid potential conflicts of interest.

The lawyer attributed the increase in the Cheneys' income to four factors: improved returns on mutual funds reflecting market growth in 2004 over 2003; an increase in book royalties earned by Lynne Cheney, who published a children's book on women in American history; the income, which went to charity, from stock options that were exercised in 2004; and deferred compensation to Lynne Cheney from the Readers Digest Association, from which she retired as a director in 2003.

The Cheneys' tax payments for 2004 of nearly $400,000 included $102,663 to make up for a shortfall in the amount withheld from their paychecks. The Cheneys were not assessed a penalty for the underpayment because during the course of 2004 they paid more than 110 percent of the amount they owed in taxes the previous year.

The White House said that Bush's income was made up of his $400,000 annual salary and $390,000 in income from taxable interest, dividends and real estate. He and his wife claimed itemized deductions, which were not made public, of $111,431. They overpaid their taxes by $38,534, which they applied to their 2005 estimated tax.

According to the White House, they made contributions of $77,785 to churches such as Evergreen Chapel at Camp David and St. John's Churchin Washington and to various charitable organizations.

The vice president's office said the couple donated $303,000 to charity in 2004, about a 5 percent decrease from 2003.

The Los Angeles Times is a Tribune Publishing newspaper.

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