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Citizens for Tax Justice

FOR IMMEDIATE RELEASE
APRIL 18, 2006
1:00 PM

CONTACT: Citizens for Tax Justice
Bob McIntyre, 202-299-1066

 
Bush Tax Cuts Saved President $26,000, Cheney $1.1 Million in 2005
 

WASHINGTON - April 18 - On Good Friday, April 14, 2006, President Bush and Vice-President Cheney released their federal income tax returns for 2005. An analysis by Citizens for Tax Justice of the White House figures shows:

  • Due to the 2001-05 Bush tax cuts, the President’s 2005 income tax was reduced by $26,204.

  • The President’s income tax rate was 25.4 percent of his reported income. Without his tax-cut legislation, he would have paid 29.0 percent.

  • Vice-President Dick Cheney’s 2005 income tax bill was reduced by $1,093,937 due to the Bush tax cuts.

  • The Vice-President’s income tax rate was only 5.7 percent of his $9.1 million reported income. Without the Bush tax cuts, he would have paid 17.7 percent.

President Bush’s $26,000 tax cut stemmed from both the lower regular tax rates and his reduction in the top tax rate on dividends from 39.6 percent to 15 percent. Vice-President Cheney’s $1.1 million tax cut in part reflected the lower regular tax rates and the 15 percent tax rate on capital gains and dividends. Cheney also was able to take an additional $2.5 million in itemized deductions due to a tax-law change signed by Bush in 2005, which was ostensibly designed to encourage charitable donations to the victims of Hurricane Katrina.

Normally, charitable deductions cannot offset more than half of a taxpayer’s adjusted gross income. (Unused deductions can be carried forward for possible use in later years.) A special rule for 2005, however, allows unlimited charitable deductions if made after August 27, the date of the Katrina disaster. The law does not require that these donations be linked in any way to hurricane relief.

None of Cheney’s charitable donations went to hurricane victims. Instead, they went to the Washington, D.C. hospital that takes care of his heart condition, the University of Wyoming (his alma mater), and Capital Partners for Education, which helps low-income Washington, D.C. students pay private school tuition.

Tables showing the tax figures released by the White House, as analyzed by Citizens for Tax Justice, follow.

George W. & Laura Bush’s 2005 Federal Income Taxes Bush law Prior law

Total Reported Income $ 738,880 $ 738,880
Less: adjustments 3,700 3,700
Adjusted gross income 735,180 735,180
Less: itemized deductions 116,486 116,486
Total taxable income 618,694 618,694
Less: qualified dividends 13,758 na
Taxable income without qualified dividends (if applicable) 604,936 na
Tax thereon 185,790 214,058
Plus: tax on qualified dividends (if applicable) 2,064 na
Total Income Tax $ 187,854 $ 214,058
2005 tax cut from Bush tax cut program $ –26,204

Addendum: income tax as % of total income 25.4% 29.0%
Source: White House, April 14, 2006, with CTJ calculations.

Dick & Lynne Cheney’s 2005 Federal Income Taxes Bush law Prior law

Total Reported Income $ 9,120,960 $ 9,120,960
Less: tax-exempt interest 296,198 296,198
Tax return “total income” 8,824,762 8,824,762
Less: adjustments 5,756 5,756
Adjusted gross income 8,819,006 8,819,006
Less: itemized deductions 6,857,849 4,393,319
Total taxable income 1,961,157 4,425,688
Less: Long-term capital gains 563,281 563,281
Qualified dividends 152,620 na
Taxable income without long-term capital gains & qualified dividends (if applicable) 1,245,256 3,862,407
Tax thereon 409,902 1,498,568
Plus: tax on long-term capital gains & qualified dividends (if applicable) 107,385 112,656
Total Income Tax $ 517,287 $ 1,611,224
2005 tax cut from Bush tax cut program $ –1,093,937

Addendum: income tax as % of total income 5.7% 17.7%
Source: White House, April 14, 2006, with CTJ calculations.

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