Obama's Tax Avoidance: Common Sense or Hypocrisy?

Appearing on CNN's "State of the Union" with Candy Crowley this Sunday, political adviser David Axelrod stated that the President saw tax loopholes differently than Mitt Romney:

"I'm not suggesting that, based on what we know, that he's done anything illegal. I'm not suggesting that. But what I am suggesting is that he's taking advantage of every single conceivable tax shelter and loophole that we can see..."

Crowley followed up by asking if the President doesn't also avoid taxes where possible. Axelrod responded:

"Well I'm sure he could have a Swiss bank account if he wanted it...The President could do those things, but he doesn't do those things. He looks at this through a different lens."

Apparently that different lens did not prevent the President and the First Lady from making tax free gifts to their children. The President released his 2011 tax returns on Friday. The Free Beacon reports that the documents show each of the Obama's made a $12,000 donation to each of their daughters, for a total of $48,000 in tax free gifts. That's just shy of the maximum amount a couple can give without triggering an IRS "gift tax." These donations, which are perfectly legal, have been ongoing since 2007 and are likely aimed at providing college tuition for the first daughters.

By keeping his gifts to his family under the taxable limit, Obama avoids an unnecessary tax hit on his three quarters of a million dollar annual income. This is exactly what Candy Crowley asked David Axelrod during his interview, i.e. "Doesn't President Obama use every means he can to pay as little taxes as he can?" Axelrod claims that the President sees things differently, but Obama's tax returns belie that claim. In practice, Obama avoids paying more than necessary in taxes. That should be something we put down to common sense in the President's favor but, given the whining of his advisers about loopholes, maybe we should instead view it as hypocrisy.


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