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Pres. Bush's Fed Tax Rate Dropped -- Did Yours?   :  Published April  2007 All Rights Reserved


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Pres. Bush's Fed Tax Rate Dropped -- Did Yours?

There is no greater social sin in the United States than to publish one's salary and tax rate.  However the publisher of Think & Ask has volunteered his salary and tax figures publicly for four years simply to draw attention to whether or not the presidential tax cut of year 2001 was of any benefit to this average tax payer.

For years 2001, 2002, and 2003 the federal tax rate increased slightly for this publisher; however, as a result of job layoff in 2004 and career change in 2005 the overall salary was cut by 50 percent and the federal tax rate drop was finally realized for the first time in 2006. Roughly 30 percent of savings were eaten away by rising costs (inflation) during the 24-months ending December 2006.

First however, start at the top: President George W Bush earned almost $643,000 in 2006, and paid about $186,000 in federal taxes. The president's home state of Texas does not have an income tax. President Bush overpaid federal tax by $19,361 and rather than take the refund, he applied it to what he'll owe in 2007. The president's tax rate was 28.9 percent, down from 30.35 percent in year 2005.

Vice President Dick Cheney earned $1.6 million during 2006 and paid 25.8 percent in federal taxes, down from a 27 percent federal tax rate in 2005 on earnings of $1.96 million. Cheney overpaid his federal tax by $51,463 and chose to apply the figure to taxes owed in 2007. Some $473,000 of income to Cheney represented income from his wife's book royalties.

This publisher paid $7,237 in federal taxes for 2006, a 14.8 percent rate on $49,000, and overpaid by $2,615, giving a final percentage on federal taxes of 9.4 percent in 2006. (Due to a hefty drop in salary, and early 401K withdrawal to survive layoff in 2004, a direct federal rate comparison is not possible.) However, for 2006 this writer paid an additional $2,359 in New York state taxes, and an additional $1,407 in city income taxes, or 7.7 percent in addition to the federal rate. There was no state or city refund. In all for 2006, the total income tax rate, plus Social Security and Medicare tax withheld represented 25.1 percent of the salary or $12,283.

One year ago, this publisher paid 16.8 percent federal taxes on a salary (including the 401K withdrawal of $14,000 to stay afloat) of $61,900. State income tax totaled 8.2 percent, and when combined with Social Security, Medicare, and federal taxes, the total burden was 31 percent of the income.

Comparing year-to-year change, income fell $12,900 or 21 percent, the federal tax rate dropped 7.4 percent, state income tax rate dropped 0.5 percent and the total burden against salary dropped 5.9 percent.  (Sales tax was not figured into the overall rates.)

Living expenses, food, utility bills, rent, and transportation costs rose 11.3 percent from 2005, leaving $1,128 in cash at the end of 2006. At the end of 2005, cash on hand --mainly as a result of finding a job after taking the 401K withdrawal-- was $10,173. There were no debts owed during the two comparable years. So, from January 2005 through March 2007 -- the amount of cash on hand has fallen by approximately $3,000.


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