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Bush: Tax return filed. Bush and Laura donated $75,560 to charity. Plus the Cheney's return, big bucks from stock options donated to charity.

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President and Mrs. George W. Bush reported taxable income of $618,694 for the tax year 2005. This resulted in a total of $187,768 in federal income taxes paid by President and Mrs. Bush.

UPDATE The Cheneys' return is so complicated that the White House is referring questions to the tax lawyers. Details below.

THE WHITE HOUSE

Office of the Press Secretary

___________________________________________________________

For Immediate Release April 14, 2006

PRESIDENT AND MRS. BUSH RELEASE 2005 TAX RETURN

President and Mrs. George W. Bush reported taxable income of $618,694 for the tax year 2005. This resulted in a total of $187,768 in federal income taxes paid by President and Mrs. Bush.

The President’s 2005 income included salary earned as President and investment income from the trusts in which their assets are held.

President and Mrs. Bush contributed $75,560 to churches and charitable organizations, including the American Red Cross – Hurricane 2005 Relief, the Salvation Army – Hurricane 2005 Relief, the Salvation Army – Pakistan Earthquake Relief, Martha’s Table, the Archdiocese of New Orleans Catholic Charities, the Mississippi Food Network, and the Federal Government’s Combined Federal Campaign.
=================================================================================
THE WHITE HOUSE

Office of the Vice President

For Immediate Release April 14, 2006

FOR MORE INFORMATION

CONTACT

Terrence O’Donnell

Williams & Connolly LLP

(202)434-5678

VICE PRESIDENT CHENEY AND MRS. CHENEY

RELEASE 2005 INCOME TAX RETURN

Vice President and Mrs. Cheney released their 2005 federal income tax return today. The return shows that the Cheneys owe federal taxes for 2005 of $529,636 on taxable income of $1,961,157. The Cheneys’ adjusted gross income in 2005 was $8,819,006 which was largely the result of the exercise by an independent gift administrator of stock options that had been irrevocably set aside in 2001 for charity. The Cheneys donated $6,869,655 to charity in 2005 from the exercise of these stock options under the terms of the Gift Administration Agreement and from Mrs. Cheney’s book royalties from Simon & Schuster on her books America: A Patriotic Primer, A is for Abigail: An Almanac of Amazing American Woman, and When Washington Crossed the Delaware: A Wintertime Story for Young Patriots. As provided in the Gift Administration Agreement, gifts were made to three designated charities named in that Agreement. The Cheneys’ return was filed on March 20, 2006.

During the course of 2005 the Cheneys paid $2,468,566 in taxes through withholding and estimated tax payments. Taxes were withheld from their salaries and from the net proceeds of stock options that were exercised under the Gift Administration Agreement. Given that the option proceeds were dedicated to charity, there was a substantial over withholding in 2005 from the income attributable to the exercise of the stock options, which reduced the amount available for charity in 2005.

To enable the gift administrator to maximize the charitable gifts in 2005, the year in which the options were exercised, the Cheneys wrote a personal check in December 2005 to the gift administrator in the amount of $2,331,400. That amount, combined with the net proceeds from the stock options, was given to the three designated charities by the gift administrator. As a consequence, the Cheneys are entitled to a refund of $1,938,930. This refund returns the Cheneys to a neutral position of no personal financial benefit or financial detriment resulting from the transactions under the Gift Administration Agreement. Thus, the Cheneys received no financial benefit from the stock options. The transactions were tax neutral to the Cheneys. The amount of taxes paid by the Cheneys from their income, other than the income from the exercise of the stock options, was the equivalent of what they would have paid if the options had not been exercised.

In a press release of March 5, 2001, the Cheneys reported that they had established the Gift Administration Agreement on January 18, 2001 to donate all net after tax proceeds from various stock options that the Vice President had earned at Halliburton and for their service on the boards of directors of other companies to three designated charities--George Washington University Medical Faculty Associates, Inc. for the benefit of the Cardiothoracic Institute, the University of Wyoming for the benefit of the University of Wyoming Foundation, and Capital Partners for Education for the benefit of low-income high school students in the Washington, D.C. area. By entering into the Gift Administration Agreement the Cheneys divested themselves of the economic benefit of the options and granted the gift administrator full discretion, power and control over the options. The Agreement directed the gift administrator to maximize the gifts to the three charities while avoiding financial or after tax benefit or detriment to the Cheneys.

The wage and salary income reported on the tax return includes the Vice President’s $205,031 government salary. In addition, the tax return reports the payment of deferred compensation from income earned in 1999 from Halliburton Company in the amount of $211,465. In December 1998, the Vice President elected to defer compensation earned in calendar year 1999 for his services as chief executive officer of Halliburton. This amount was required to be paid in fixed annual installments (with interest) in the five years after the Vice President’s retirement from Halliburton and thus could not be paid in a lump sum prior to his taking office. That election to defer income became final and unalterable before Mr. Cheney left Halliburton. The amount of deferred compensation received by the Vice President is fixed and is not affected in any way by Halliburton’s current economic performance or earnings. This 2005 payment closes out the payments under the deferred compensation plan. The tax return also reports Mrs. Cheney’s royalty income from her book A Time for Freedom: What Happened When in America, salary income from the American Enterprise Institute, and a director’s retirement benefit from Reader’s Digest, on whose board of directors she served until 2003.

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Lynn Sweet

Lynn Sweet is a columnist and the Washington Bureau Chief for the Chicago Sun-Times.

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This page contains a single entry by Lynn Sweet published on April 14, 2006 12:34 PM.

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