U.S. Politics: No 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.