Bernie Sanders 2014 tax return

Well it's easy to give to charity if you're doing it with other people's money.

That article has two conflicting statements:

U.S. presidential candidate Bernie Sanders, who has made income inequality a top campaign theme, had taxable income of $205,271 in 2014

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The return does show Sanders had federal taxable income after deductions of $140,994.

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I don't know if the writer is being deliberately misleading, or is just ignorant/uneducated about how basic tax math works.

Deductions would include things like charitable donations, mortgage interest, real estate tax, and 401Ks (or the federal equivalent, the TSP plan). I.e., the same sorts of deductions most of us are eligible for, which is why no one pays taxes on their gross income.

The 13.5% figure is based on comparing his taxes to his gross income, whereas 28% assumes that he had no deductions at all applied to his income (which is no one in that income bracket - even if you have no property, no charitable deductions, no dependents, and no IRAs or retirement investments, you still have at least a standard deduction).

Likewise, the "average American with an income of $65,021" (I assume they mean a couple filing jointly) did not pay 14.7% unless they had zero deductions.

This article is crap. Sanders paid approximately what the average American does in taxes - i.e., exactly what he should pay after the usual deductions.

Amadan said:

That article has two conflicting statements:





I don't know if the writer is being deliberately misleading, or is just ignorant/uneducated about how basic tax math works.

Deductions would include things like charitable donations, mortgage interest, real estate tax, and 401Ks (or the federal equivalent, the TSP plan). I.e., the same sorts of deductions most of us are eligible for, which is why no one pays taxes on their gross income.

The 13.5% figure is based on comparing his taxes to his gross income, whereas 28% assumes that he had no deductions at all applied to his income (which is no one in that income bracket - even if you have no property, no charitable deductions, no dependents, and no IRAs or retirement investments, you still have at least a standard deduction).

Likewise, the "average American with an income of $65,021" (I assume they mean a couple filing jointly) did not pay 14.7% unless they had zero deductions.

This article is crap. Sanders paid approximately what the average American does in taxes - i.e., exactly what he should pay after the usual deductions.

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Agree. And I think the writers (there are two) are being deliberately misleading.

Based on actual taxable income, Sanders is paying 19.6%.

ETA: And the average effective rate for someone with Sanders' income is around 13%.

Here's another article which breaks down his tax info a bit more. It also explains mortgage deductions more. I'm so clueless about these things. Hey, Cass - can I join you under the bed?

http://www.nationalreview.com/article/434194/bernie-sanders-tax-returns-reveal-hypocrisy

“We need a progressive tax system in this country which is based on ability to pay. It is not acceptable that corporate CEOs in this country often enjoy an effective tax rate which is lower than their secretaries.”

With such rhetoric, you might think that Sanders would be reluctant to take every deduction he possibly could. Yet he and his wife took these deductions: $22,946 on home-mortgage interest $14,843 on real-estate taxes $9,666 on state and local income taxes $8,000 in gifts to charity $350 in gifts to charity other than by cash or check $4,473 in unreimbursed job expenses, which according to tax law can include fees such as union dues and travel Keep in mind, Bernie Sanders doesn’t really like people itemizing their deductions to keep their taxes low. Under his tax plan, people making more than $250,000 per year — a bit more than he makes as a senator, but less than the $400,000 he would make as president — would see the value of their deductions limited to 28 cents on every dollar of taxes they paid. (The Sanders family, which falls in the 28 percent tax bracket, would just avoid being affected by the change.)

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So you're not allowed to talk about tax reform unless you voluntarily abstain from taking the standard or itemized deductions the current system allows someone of your income?

*Joins Sanders in hall of shame*

I don't think you were out to get him, but the people playing "Gotcha!" with this article clearly are.

As someone who does his own taxes because I'm too cheap even to buy TurboTax (it helps that my mother is a retired IRS auditor, so I can ask her if I have questions...), it annoys me that people are so ignorant of basic tax math, which is how articles like this get away with such obvious shenanigans as stating Sanders's pre-deduction and post-deduction income right there in front of you and then comparing his tax rate based on the former with the "average American's" based on the latter.

CassandraW said:

That's lower than the rate the average American with an income of $65,021 paid (14.7%), and much lower than the 28% bracket an income of $205K would fall into.

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Sure, but no-one at the 28% bracket pays 28% on all their income. Only on the slice of their income that falls within that bracket.

Once you subtract the itemized deductions, Sanders is paying 19.61% and the average American is paying 16.67% on the remainder.

From your link -- The Sanders deductions do appear to be legit, however. The couple deducted $9,666 in state and local income taxes and another $14,843 in real-estate taxes, presumably on their residence in Burlington, Vt. They also claimed $22,946 in mortgage interest paid in 2014, along with charitable gifts of $8,350. While the amounts are larger than for most Americans, those types of deductions are typical for middle-income families that own a home.

Seems fine to me.

The National Review piece does the same bullshit. It's dreadfully dishonest or ignorant.

This isn't about Sanders, this is about intellectual honesty from reporters.

Amadan said:

it annoys me that people are so ignorant of basic tax math, which is how articles like this get away with such obvious shenanigans as stating Sanders's pre-deduction and post-deduction income right there in front of you and then comparing his tax rate based on the former with the "average American's" based on the latter.

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This. Though I think the gist is that anyone who is in favor of a higher tax rate for the wealthy or in favor of eliminating some deductions that exist now should voluntarily abstain from taking any deductions and just pay taxes on their gross income? I don't agree with this either.

CassandraW said:

I'll let you talk about tax reform, but I won't let you criticize others for maximizing their perfectly legal itemized deductions under current tax law.

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What if I criticize some of those legal deductions and argue that they should be eliminated? What if I criticize people who have used their considerable wealth and power to influence the political system into giving them access to deductions and loopholes that most people don't have or even understand?

Should I then abstain from taking the mortgage interest, state and property tax, and charitable deductions I never opposed for anyone?

As far as I know, Sanders has not argued for eliminating deductions for charitable donations, mortgage interest, etc. And even if he was proposing that everyone should pay a flat tax of 50% (which he obviously is not), I don't think that would obligate him to donate 50% of his gross income to the government before his proposal becomes law.

Amadan said:

As far as I know, Sanders has not argued for eliminating deductions for charitable donations, mortgage interest, etc. ...

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According to NR, he has argued against mortgage deductions:

The Sanders’s single largest deduction was for the interest payments on their home mortgages. The senator isn’t such a fan of that deduction. In a 1997 book and again in his 2015 autobiography, he called for raising nearly $35 billion in new taxes by capping it at the first $300,000 in home-mortgage debt. In a speech on the floor of the House in 1997, he portrayed the deduction as a welfare payment to billionaires: “[Republicans] don’t talk about a housing policy through the home-interest mortgage deduction, which allows billionaires to get checks from the government when they deduct the mortgage from their mansions.”

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In Canada, we do not have deductions on the interest paid on our primary residences. We got rid of that sometime in the 80s, I believe. Instead, we are able to not include the gains from the sale of our primary residence when we sell the home. As you can guess, this was removed because the interest rates were very high at the time.

Amadan said:

I don't think you were out to get him, but the people playing "Gotcha!" with this article clearly are.

As someone who does his own taxes because I'm too cheap even to buy TurboTax (it helps that my mother is a retired IRS auditor, so I can ask her if I have questions...), it annoys me that people are so ignorant of basic tax math, which is how articles like this get away with such obvious shenanigans as stating Sanders's pre-deduction and post-deduction income right there in front of you and then comparing his tax rate based on the former with the "average American's" based on the latter.

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I don't know if it's intellectually dishonest (or bullshit or dreadfully ignorant). The point is, it's the deductions that are making his taxable income less. The argument is that taking the deductions reduces his actual tax burden. The articles show how much lower that is for him. And both articles point out that what he's done is perfectly legal.

c.e.lawson said:

According to NR, he has argued against mortgage deductions:

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According to that article, he's argued for capping it at $300K, which would be well above what most middle class people pay for a home outside of the most expensive markets. Not quite the same as arguing for eliminating it completely.


(I find it hilarious that in two threads now, I've wound up being a Bernie defender...)

c.e.lawson said:

I don't know if it's intellectually dishonest (or bullshit or dreadfully ignorant). The point is, it's the deductions that are making his taxable income less. The argument is that taking the deductions reduces his actual tax burden. The articles show how much lower that is for him. And both articles point out that what he's done is perfectly legal.

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Everybody who pays taxes takes deductions. Nobody pays taxes on their gross income.

Yes, the articles show how much lower it is for him, but they are clearly trying to imply that he's a hypocrite, taking unseemly advantage of tax breaks not available to the "average American." When in fact, his tax rates are perfectly in line with his income and his deductions don't involve anything more complicated than a Form 1040 Schedule A (that's the Itemized Deduction worksheet, and really folks, it ain't that complicated).

c.e.lawson said:

According to NR, he has argued against mortgage deductions:

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No. He argued for capping it at the first $300,000 of mortgage debt. I don't know the specifics of his mortgage--he may have a second one, or two different ones--but $22,000 in mortgage interest isn't outrageous. None of his deductions are outrageous, imo. They're pretty typical for someone making the money he makes.

Really, they're a little low, given that he doesn't seem to be pocketing an awful lot in capital gains. His Senate salary is $174,000. Other income? Look here: http://www.politico.com/story/2015/07/bernie-sanders-wife-accounts-for-reported-assets-120261

Amadan said:

Everybody who pays taxes takes deductions. Nobody pays taxes on their gross income.

Yes, the articles show how much lower it is for him, but they are clearly trying to imply that he's a hypocrite, taking unseemly advantage of tax breaks not available to the "average American." When in fact, his tax rates are perfectly in line with his income and his deductions don't involve anything more complicated than a Form 1040 Schedule A (that's the Itemized Deduction worksheet, and really folks, it ain't that complicated).

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When the article clearly states that what he did was perfectly legal and within the norm, then I don't think they're saying he's taking advantage of breaks not available to the average American. I think they're saying there's a level of hypocrisy involved in taking every deduction one legally can, in order to lower one's tax burden WELL below that which he espouses many of us would have to pay under his proposals. And this is from a man who, according to one of the comments on an article linked, will be receiving a 160K per year retirement benefit. If someone looking forward to that large a retirement income must STILL deduct every deduction allowed and decrease his taxes as much as possible, then I think it says something about the economy and what a higher tax burden will do to many of us.

It probably would have been more inspiring if he'd walked the walk. I mean, he must have realized his tax info would be scrutinized during his campaign.

CassandraW said:

I didn't say that.

I apologize for posting articles that apparently have some fuzzy math -- it was not malicious on my part. And I agree it sucks if the reporters were deliberately dishonest (or didn't do their homework).

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I know that, and I didn't think you posted the article in bad faith. It's frustrating when journalists cook numbers like this because they're out to get someone.

All that said -- Bernie's not just any guy. He's a politician who has made statements (c.e.lawson quoted one above) that indicate that he's not so fine with well-off people using exemptions to reduce their effective tax rate below that of those with much lower incomes. (That was discussed in another thread or two, I believe.) And though the articles' math may be fuzzy, it seems he does exactly that. And to me, it seems a bit hypocritical. Your mileage may vary.

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Maybe or maybe not. Everyone uses exemptions to reduce their effective tax rate. I never got the impression that Sanders was against all exemptions, nor has he used his to reduce his effective tax rate to one that is lower than what lower-income Americans pay.

However, it's hard to say exactly what he meant by the statement. I'm not especially enamored of Sanders, but like him, I'm critical of people using exemptions to lower their effective tax rate below that of people with lower incomes. I find it extremely unjust and frustrating that people can do this. However, I don't blame individuals (or their accountants) for taking advantage of the deductions that are available to them. It's a rare person indeed who would deliberately overpay their taxes on principle.

Which is why I favor eliminating deductions that only favor the highest income Americans, or adjusting them so they don't disproportionately benefit the wealthiest.

I don't know if Sanders's statement meant that he thinks wealthy individuals should voluntarily overpay their taxes (by the current law) or they are Bad People, or whether he is simply saying it's wrong that the tax code is so disproportionately beneficial to the wealthy. I'd disagree with the former and not the latter, though the former meaning wouldn't necessarily make him a hypocrite (unless he's taking the same deductions he personally opposes and calls others to voluntarily abstain from them when he's not doing so himself).

It's always hard to get at what someone actually meant when they make a statement, especially when quotes are often cropped and passed around without full context. I think we all tend to jump on things that look like inconsistencies or hypocrisies made by people who are at the opposite end of the political spectrum from us, especially regarding laws or changes we don't support. I do it too, so

Far be it for me, of all people, to defend the political elites, but Sanders is a little Biden-esque, here. He's not one of the uber-rich tools in DC using their positions and connections to amass great wealth...*cough*Clintons*cough*...but is basically just doing his thing (like Biden actually has, by and large), taking his salary and leading a relatively low-key life.