Ah, Presidents’ Day! Our chance to honor the 43 men (sorry Grover Cleveland, we are only counting you once) who have taken the oath to become President of the United States. Today, unless you are looking for a sale on furniture or a new car, you will likely go about your business as usual. As for The Tax Warriors, we are attending to tax season business (read: preparing tax returns for our early-bird clients who already gave us their information– thank you!). For fun, we also examined charitable contribution information from tax returns of U.S. presidents. What we found might surprise you!
U.S. presidents are not legally required to release their tax returns to the public, but many do. Most of these returns are available online at the Tax Analyst’s Tax History Project website for the public to see. The site includes tax returns of U.S. presidents, presidential hopefuls and other political figures. We will blog throughout the 2016 election season with fun facts and charts analyzing the data found there.
Today, our analysis focuses on charitable contributions as a percentage of adjusted gross income (AGI). In the 20th Century, charitable giving became strategic with the creation of the federal income tax and the deduction for contributions. Since most presidents were millionaires, there was an abundance of money available for them to give away. But, what about once they became president? Did these men continue to give as they did as ordinary citizens?
Below, is a chart summarizing Barack Obama’s charitable contributions during his presidency, starting in the 2009 tax year:
Data is tough to appreciate without context. So we analyzed President Obama’s contributions as a percentage of AGI compared to George W. Bush’s (during W’s presidency) to see if being president changed Obama’s contribution pattern. Below is a chart showing Obama’s charitable contributions before he occupied of the Oval Office.
Following the 2008 election, Barack Obama’s contributions clearly increased. His AGI in the years proceeding his presidency (2001-2008: ~$1.2M) and the years during his presidency (2009-2014: ~$1.6M) also increased (by approximately 25%). We cannot be sure if increased gross income or becoming the Commander-in-Chief changed President Obama’s tax planning, but the data clearly shows his inclination to donate to charity increased during his presidency.
TRIVIA QUESTION – Guess the President!
The chart below summarizes the tax returns of which U.S. president during his first term?
(scroll down for the answer)
Whatever you do on this Presidents’ Day, we at Drucker & Scaccetti wish you a safe and happy holiday. With tax season underway, remember that like you, even the president needs to file on time!
TRIVIA ANSWER – Richard Nixon (1969-1972)