President Barack Obama said in his weekly address.
“We’ve tried this trickle-down experiment before. It doesn’t work,”
President Obama and his wife, Michele, gave a total of $48,000 in tax-free gifts to their daughters, according to tax records made public on Friday.
The president and his wife separately gave each daughter a $12,000 gift under a section of the federal tax code that exempts such donations from federal taxes.
There is nothing illegal about the president’s taking advantage of this tax shelter, but it does raise eyebrows given that he has lamented the myriad tax exemptions used by the wealthy—“millionaires and billionaires” like himself—to pay less in taxes. He hasyet to propose a comprehensive plan to reform the byzantine tax code.
The Obama’s tax return indicates that the gifts, likely for their daughter’s college educations, began in 2007, when the maximum exemptible amount was $24,000 per couple. The maximum exemption has since increased to $26,000 per couple.
The Obamas paid a total federal tax rate of 20.5 percent on a gross adjusted income $789,674, which would typically fall within the top federal rate of 35 percent. According to an analysis of the president’s tax return, he may have paid a lower rate than his secretary despite making more than eight times as much money as she did.
His most recent tax proposal—the so-called “Buffett Rule”—would increase taxes on about 4,000 millionaires and raise about $4.7 billion in new revenue per year, enough to cover about 0.4 percent of the projected budget deficit in 2012. Though the rule would apparently not hit the president himself.
The Obama’s untaxed gift to their daughters will leave American taxpayers to subsidize the college education of the children of the multi-millionaire Obamas.