Obama's Tax Avoidance: Common Sense or Hypocrisy?

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 taxloopholes differently than Mitt Romney:

“I’m not suggesting that, basedon what we know, that he’s done anything illegal. I’m not suggestingthat. But what I am suggesting is that he’s taking advantage of everysingle conceivable tax shelter and loophole that we can see…”

Crowley followed up by asking if the President doesn’t also avoidtaxes where possible. Axelrod responded:

“Well I’m sure he could have aSwiss bank account if he wanted it…The President could do thosethings, but he doesn’t do those things. He looks at this through adifferent 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 donationto 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 withouttriggering an IRS “gift tax.” These donations, which are perfectlylegal, have been ongoing since 2007 and are likely aimed at providingcollege tuition for the first daughters.

By keeping his gifts to his family under the taxable limit, Obamaavoids an unnecessary tax hit on his three quarters of a million dollarannual income. This is exactly what Candy Crowley asked David Axelrodduring his interview, i.e. “Doesn’t President Obama use every means hecan to pay as little taxes as he can?” Axelrod claims that the Presidentsees things differently, but Obama’s tax returns belie that claim. Inpractice, Obama avoids paying more than necessary in taxes. That shouldbe something we put down to common sense in the President’s favor but,given the whining of his advisers about loopholes, maybe we shouldinstead view it as hypocrisy.

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