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Time - Man of the Year
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1992-10-19
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U.S. POLITICS, Page 37No New Taxes -- For George
A typical working couple making $53,000 paid about 28% of its
1991 income in total federal taxes. Mr. and Mrs. George Bush,
who reported a total income of $1,329,580, paid only 16%. The
First Family did nothing illegal: their tax bite was similar to
that of the other 62,000 U.S. households with annual incomes of
more than $1 million. One big reason for this disparity is that
Social Security payroll taxes exempted income above $53,400.
Social Security taxes doubled in the past decade, even as the
top rate of income tax was cut sharply. As a result, almost
three-fourths of taxpayers now pay more in Social Security
levies than in federal income tax. A large majority of Americans
pay more in total federal taxes than they did in 1980, although
the richest 10% pay less.
In the Bushes' case, the tax bite was further reduced this
year by the fact that they contributed to charity all the
after-tax proceeds of the book that the First Lady penned in the
name of their dog, which earned $889,176 in royalties. If the
Bushes had kept those royalties and not taken a charitable
deduction, their tax bite would probably have been higher. But
even in 1990, when their reported total income was $452,803, the
Bushes paid only 23% of their earnings in federal taxes because
of the cap on Social Security contributions and various
investment deductions. Even as he has worked to cut the
capital-gains tax on investment income, Bush has opposed
bipartisan efforts to cut the Social Security tax, declaring
that such a move would require "increased taxes around the
corner" -- meaning increased income taxes on wealthy people like
himself.
Meanwhile, the President's federalist philosophy has
pushed responsibility for many government services down to
states and cities, whose taxes consume 10% of the typical
family's income. Yet the Bush family escaped those taxes almost
entirely. Because the President is a federal official, the
Bushes are exempted from taxes in the District of Columbia,
which would have cost them about $58,000. They declare their
voting residence in Texas, which collects no income tax, even
though they own no home there and spent only three days in the
state last year. Had the First Family paid state income tax in
Maine, where they own an oceanfront mansion and spent 40 days
in 1991, they would have been out $59,000 more.
By Dan Goodgame/Washington.