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FREE TAX ADVICE - THE HARD WAY
April 20, 2004
Presidential candidates traditionally make their tax returns public. Revealing every questionable deduction on your return to the world does have one redeeming feature: free tax advice. Senator John Kerry has now taken advantage of some of that free advice to amend his 2003 tax returns.
COLLECTIBLES 28%, STOCKS 15%.
Senator Kerry sold a painting for a $175,000 gain on March 23, 2003. On his original return, Senator Kerry reported the gain as long-term capital gain eligible for the 20% lowest capital gain rate in effect at the time (the rate is 15% for sales after May 7, 2003).
A Texas CPA saw the return and pointed out that "collectibles," such as artwork, are ineligible for the lowest capital gain rate; they are instead taxed at a 28% maximum rate. A Kerry spokesman, while not refuting the CPA's statement, told Tax Analysts "We’re going to take a lot of punches from people from Texas.” But the Senator's campaign has now released an amended return correctly reporting the painting as 28% gain.
STATE RETURN NON-ISSUE
Senator Kerry files a Massachussetts state return. Massachussetts has a peculiar provision allowing taxpayers to voluntarily pay their taxes at a higher rate than the law requires. Some commentators say Senator Kerry is hypocritical for not voluntarily paying the higher rate on his return.
In fact, declining to pay extra tax is normal and healthy. After all, we make a living helping folks do just that. Most voters, we suspect, would consider a voluntary payment of extra tax to be cause for alarm. If a relative were found to be paying extra tax, many of us would discreetly inquire about a conservatorship and a nice rest home.
Tax Analysts has helpfully made the tax returns of President Bush, Vice-President Cheney, and Senator Kerry freely-available (pdf format) here. No links are provided for returns for presidential candidates Nader and Kucinich.
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Comments
Sir:
Declining to pay extra tax is normal and healthy for normal healthy people. However, a politician in MA (my home state) who always pushes for tax increases bloody well better be paying MA tax at the higher rate. I believe those politicians who get hot and bothered by increasing taxes had best put their own money where their mouths are.
If such politicians do not pay at the higher rate, they are hypocrites, pure and simple. They deserve to be turned out of office with a farewell boot to the backside.
Posted by: Tom | May 8, 2004 7:35 PM