Eye-opening facts from candidate tax returns
Which president paid just 7 percent in taxes? And how did Al Gore make $100 million after leaving office? We dug up some interesting facts by looking at the tax returns of presidential candidates.
Federal income taxes were codified in the 16th amendment, which was put into law in 1913.
And they didn’t really become a presidential issue until the 1960s.
In the 2012 election, the GOP and Democrats are currently sparring over Mitt Romney’s tax returns. The GOP says the issue is a distraction from bigger campaign issues, while the Democrats say the returns could be evidence of Romney’s ability to manage the economy.
Other Democrats are dropping hints that Romney has something to hide, even though he’s released two years of tax returns.
To be sure, there have been tax-return battles in other presidential campaigns. For example, Ronald Reagan and George H.W. Bush fought over tax returns until the 1980 Republican convention.
And a controversy over Geraldine Ferraro’s tax returns took up much of the 1984 presidential campaign.
So far, there hasn’t been an election decided by a tax return, and the issue usually fades away after the returns are released.
The issue over taxes paid by potential presidential candidates is a 20th-century development. It picked up steam in the 1960s, when Mitt Romney’s father, George Romney, made returns available for multiple years as he prepared to fight Richard Nixon and Lyndon Johnson.
Since then, only a handful of candidates have declined to make their detailed federal tax returns public. They have no obligation to do so; citizens’ tax returns are a private matter, and candidates who release such information do it voluntarily.
Jerry Brown, Pat Buchanan, Mike Huckabee, Steve Forbes, Rudy Giuliani, Richard Lugar, and Ralph Nader didn’t release tax returns.
A recent analysis from TheStreet.com shows that the candidates with the most net worth haven’t had success becoming president. Four of the five wealthiest candidates to run in recent years didn’t win the general election: Ross Perot, Steve Forbes, John Kerry, and Al Gore.
The fifth candidate on that list is Mitt Romney, who has an estimated net worth of $250 million, about $10 million more than Kerry (and Kerry’s wife, Teresa).
What Kerry and Romney have in common is a relatively low income tax rate. Romney paid 13.9 percent in taxes in 2010, while Kerry paid 13.1 percent in 2003. That’s because Romney and Kerry have significant investment incomes, which are taxed at a lower rate.
In comparison, Barack Obama paid 33 percent in taxes in 2007 and paid 26 percent recently.
Another analysis in the Daily Beast shows decades of return data from other candidates.
If you wonder why Reagan opposed government taxes, a look at his 1979 return showed he paid a whopping 44.8 percent in taxes on $515,000 in income.
Richard Nixon paid just 7 percent in taxes when he ran for re-election in 1972, while Jimmy Carter paid 12 percent when he ran for president in 1976.
The Daily Beast also worked with two economists to figure out a ratio that shows how much richer a candidate was compared with the average American.
Romney and Kerry lead that list, with Romney approximately 405 times wealthier than the average citizen.
The “poorest” candidates were Michael Dukakis, Bill Clinton and Al Gore.
That leads to an interesting paradox: How could Al Gore go from being one of the poorest candidates (with annual income of $240,000 in 1999) to one of the current wealthiest politicians?
TheStreet.com says that Gore has made the most of his business opportunities since the 2000 election, with a net worth of more than $100 million.
“Gore also has a number of lucrative business interests. He has sat on the boards of Google and Apple, which earned him some sought-after stock options that made him tens of millions of dollars,” it says.
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