Tax code changes could cost you


Ready or Not, Here We Come! Campaign 2016 is here! Last Thursday, 10 Republican presidential candidates squared off against each other in Cleveland’s Quicken Loans Arena, tackling such crucial topics as hugs, pimps, and Rosie O’Donnell. That same day, the Democratic National Committee announced their schedule of six debates to begin on October 13 in early-primary state Nevada. Sooner rather than later, we’ll all be drowning in the vicious sort of campaign commercials that make some of us envy the North Koreans.

That also means now’s the season when candidates are releasing tax returns and financial disclosures. Mitt Romney took heat when he ‘fessed up to paying just 14% tax on $20 million in 2011, reinforcing the “GotRocks McBucks” caricature he worked so hard to shake. So candidates are doing their best to spin their numbers to look like they grew up in log cabins. Let’s take a peek inside some of their wallets, shall we? (No fair crying if we poke a little fun at your favorite candidate!)

Former Florida Governor Jeb Bush takes the path of early and full disclosure, sharing 33 years of tax returns dating nearly back to his first job bussing tables at the Kennebunk Yacht Club. He paid an average tax of 36% on $44 million of lifetime income, including $7.4 million in 2013 alone.

Wisconsin Governor Scott Walker takes pride in being a financial Everyman who cuts his own grass and shops at discounter Kohls. Apparently that means he’s up to his eyeballs in debt like so many voters. Walker’s disclosure shows his net worth is actually $72,500 in the red. He also owes over $10,000 on a Barclays credit card with a 27.24% interest rate.

Developer Donald Trump hasn’t released his taxes, and some observers scoff at his self-proclaimed $10 billion net worth. However, previous investigations reveal him to be a stingy charitable giver, at least as far as billionaires go. The hotelier and reality-TV star, who appears to dye his hair with Orange Tang, established The Donald J. Trump Foundation nearly 30 years ago in 1987 — but he’s given it just $3.7 million since then.

On the Democratic side, Hillary Clinton just released her last eight years of returns, showing $139.1 million of earnings since 2007. She and husband Bill paid 31.6% in tax on that income — which works out to $43.8 million, or just enough to pay for an F-18 Hornet fighter jet. The Clintons also gave $15 million to charity, with 99% going to the Clinton Family Foundation and Clinton Global Initiative.

Clinton’s chief rival, Vermont Senator Bernie Sanders, shows a net worth of $330,000. That lands him 14th from the bottom in the Senate, where the average net worth tops $2.8 million. The self-professed Democratic Socialist, who drives a Chevy Aveo (not the Prius you expected), reported $4,900 in income from his wife’s position on a radioactive waste commission. (Of course, Sanders’ most conservative rivals might say his entire economic platform consists of radioactive waste!)

We have no idea who’s going to take the oath of office on January 20, 2017. But we can promise you, the new President will want to make changes to the tax code. And odds are good that at least one of those changes could cost you.

Provided by James E. Mahoney, EA

Tax Matters Representation, Inc.

A tax practitioner from Galion, OH.

(419) 468-8509

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