How the Obamas Managed To Scrape By

[Tigermike 3,054]

Tuesday, March 25, 2008

Michelle and Barack: The Tax Returns

Byron York

A lot of emailers have been taking a look at the Obamas' tax returns from 2000 to 2006, just released by the campaign. Several are pointing out the couple's charitable contributions prior to Barack Obama's big book-related payday — in 2002, the Obamas contributed $1,050 from an adjusted gross income of $259,394, and in 2001 they gave $1,470 from an adjusted gross income of $272,759. They contributed far more in Obama's big earning year, 2005, when they gave $77,315 on an adjusted gross income of $1,655,106.

Something else that strikes me about the returns is their relation to Michelle Obama's tales of her and her husband's struggle. When I saw Mrs. Obama at an appearance in Zanesville, Ohio last month, she was telling a group of low-income women — the median household income in the county in which Zanesville is located was $37,192 in 2004, well below the state and national medians — about how hard it can be to keep things together. Her talk often touched on money. "I know we're spending — I added it up for the first time — we spend between the two kids, on extracurriculars outside the classroom, we're spending about $10,000 a year on piano and dance and sports supplements and so on and so forth," she told the women of her own household expenses. "And summer programs. That's the other huge cost. Barack is saying, 'Whyyyyyy are we spending that?' And I'm saying, 'Do you know what summer camp costs?'"

The women nodded in agreement, although the Obamas were spending what amounted to nearly a third of a Zanesville resident's annual income on piano and dance lessons. Nevertheless, Michelle Obama portrayed herself and her husband as going through a lot of the same struggles as the women and their families. She conceded that she was doing fine financially, but only after Barack Obama hit it big with his books. And then there was this, from my story of that day:

As she has many times in the past, Mrs. Obama complains about the lasting burden of student loans dating from her days at Princeton and Harvard Law School. She talks about people who end up taking years and years, until middle age, to pay off their debts. “The salaries don’t keep up with the cost of paying off the debt, so you’re in your 40s, still paying off your debt at a time when you have to save for your kids,” she says.

“Barack and I were in that position,” she continues. “The only reason we’re not in that position is that Barack wrote two best-selling books… It was like Jack and his magic beans. But up until a few years ago, we were struggling to figure out how we would save for our kids.” A former attorney with the white-shoe Chicago firm of Sidley & Austin, Obama explains that she and her husband made the choice to give up lucrative jobs in favor of community service. “We left corporate America, which is a lot of what we’re asking young people to do,” she tells the women. “Don’t go into corporate America. You know, become teachers. Work for the community. Be social workers. Be a nurse. Those are the careers that we need, and we’re encouraging our young people to do that. But if you make that choice, as we did, to move out of the money-making industry into the helping industry, then your salaries respond.” Faced with that reality, she adds, “many of our bright stars are going into corporate law or hedge-fund management.”

And now we have the tax returns from some of those struggling years. We all know that the Obamas did well in 2005 and 2006, when Barack Obama's books were selling and the University of Chicago gave Michelle Obama an unusually large raise, from $121,910 in 2004 to 316,962 in 2005. In those years, according to the tax returns, the Obamas' adjusted gross income was $983,826 in 2006 and $1,655,106 in 2005.

But now we see that the Obamas managed to scrape by in the years before that, as well. The returns show them with an adjusted gross income of $207,647 in 2004, the year Barack Obama spent running for the Senate. Their adjusted gross income was $238,327 in 2003. It was $259,394 in 2002; $272,759 in 2001; and $240,505 in 2000.

Now, there's no doubt that with their Ivy League pedigree, both Michelle and Barack Obama could have made more in corporate law or hedge-fund management. But I don't think Michelle Obama's portrayal of herself as making sacrifices to serve the community will resonate with most voters. To me, that kind of talk seems completely in line with Barack Obama's inordinate appeal to the Whole Foods/NPR constituency. He'll need a lot more than that, plus the black vote, to get elected.

(Just a footnote for you readers who might be coming from places like DailyKos or the Huffington Post: Yes, I did stories back in the 2000 campaign about George W. Bush's rather well-connected path to riches. You can look it up.)

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[TitanTiger 20,511]

To be a little more fair, $240,000 is not exactly the same in Chicago as it is in Montgomery, AL for instance. According to one calculator, making $240k in Chicago is like making about $174k in Montgomery, but the caveat is that the calculator did not factor in any state or local taxes. I promise you the tax situation in Chicago, Illinois is much tougher than anywhere in AL.

If you figure they bring home about 70% (being generous) of that after federal, state and local income taxes, plus Soc. Security and Medicare, that's $168,000. Montgomery take home equivalent would be about $121,000.

Factor in a few items like student loan debt and any other debt you might have incurred while in school and before you started your career and it could be a decent chunk taken out. From there you have to decide what you're going to do in terms of retirement, whether your kids will go to public or private school, how much you can save for college for them, putting back enough in case of emergency or loss of job and so on.

Granted, that doesn't make them poor, but when you start looking at some of the details, it's like they were making out like bandits either.

[japantiger 4,051]

What an apologist, this still puts them in the top 15% of wage earners in America in any city.

[arnaldoabru 11]

I wonder what McCain and his wife make.He probably doesn't spend much because he gets to fly on all those lobbiest jets and probably still has some of his KEATING 5 money stashed away.You would have thought he would have given some of it back to the people since it ended up costing taxpayers millions.He said he felt bad about the whole thing

[AUTiger1 0]

I wonder what McCain and his wife make.He probably doesn't spend much because he gets to fly on all those lobbiest jets and probably still has some of his KEATING 5 money stashed away.You would have thought he would have given some of it back to the people since it ended up costing taxpayers millions.He said he felt bad about the whole thing

Wow! Atta way to totally miss the freaking point of an article and attacking someone else to try and divert attention away from the topic at hand so you can attack someone that is not a member of your own. But in your defense after watching you post some of the things that you do, I can totally understand it.

[BamaGrad03 0]

I wonder what McCain and his wife make.He probably doesn't spend much because he gets to fly on all those lobbiest jets and probably still has some of his KEATING 5 money stashed away.You would have thought he would have given some of it back to the people since it ended up costing taxpayers millions.He said he felt bad about the whole thing

Not sure what he's worth, but he put his money seeking efforts on hold to serve in the military and be tortured in a POW camp. I'll bet what he was worth back then didn't matter to him.

Besides, he's not the one touting "economic hardship" due to student loans...while making a quarter mill a year.

[TitanTiger 20,511]

What an apologist, this still puts them in the top 15% of wage earners in America in any city.

I take it English isn't your first or even second language if this is all you took away from what I said.

[TitanTiger 20,511]

I wonder what McCain and his wife make.He probably doesn't spend much because he gets to fly on all those lobbiest jets and probably still has some of his KEATING 5 money stashed away.You would have thought he would have given some of it back to the people since it ended up costing taxpayers millions.He said he felt bad about the whole thing

Wow! Atta way to totally miss the freaking point of an article and attacking someone else to try and divert attention away from the topic at hand so you can attack someone that is not a member of your own. But in your defense after watching you post some of the things that you do, I can totally understand it.

It's just the daily edition of arnold posting random nonsense that has nothing to do with anything people are actually discussing.

[arnaldoabru 11]

It looked like a sarcastic attack to me,so lets look at , I take lobbiest perks while I rail against the system,I mean McCain, while we are at it .And its arnaldo.

[Ranger12 46]

All I know is, if you are bringing home at least $100,000 after taxes and even paying on student loans, you are not "scrapping by" no matter what U.S. city you live in. Given they were not living as well as they are now and with student loans, it probably seemed to them that they were not getting anywhere. However, I wonder how they would have described their situation if they were only making $30,000-$50,000 a year like the average person does.

[BamaGrad03 0]

It looked like a sarcastic attack to me,so lets look at , I take lobbiest perks while I rail against the system,I mean McCain, while we are at it .And its arnaldo.

None of that has anything to do with this thread, or this story.

[TitanTiger 20,511]

It looked like a sarcastic attack to me,so lets look at , I take lobbiest perks while I rail against the system,I mean McCain, while we are at it .And its arnaldo.

I don't care if it's "Mickey Mouse," you're still rambling about off-topic nonsense. And you lack a firm grasp of English sentence structure.

[arnaldoabru 11]

I wonder what McCain and his wife make.He probably doesn't spend much because he gets to fly on all those lobbiest jets and probably still has some of his KEATING 5 money stashed away.You would have thought he would have given some of it back to the people since it ended up costing taxpayers millions.He said he felt bad about the whole thing

Not sure what he's worth, but he put his money seeking efforts on hold to serve in the military and be tortured in a POW camp. I'll bet what he was worth back then didn't matter to him.

Besides, he's not the one touting "economic hardship" due to student loans...while making a quarter mill a year.

I applaud McCain for his military sevice/sacrifice.I am also sure his first wife does too.He left her for his younger sugar mommy.

[TitanTiger 20,511]

All I know is, if you are bringing home at least $100,000 after taxes and even paying on student loans, you are not "scrapping by" no matter what U.S. city you live in. Given they were not living as well as they are now and with student loans, it probably seemed to them that they were not getting anywhere. However, I wonder how they would have described their situation if they were only making $30,000-$50,000 a year like the average person does.

I understand that. And I pointed out they were still doing well. But it's disingenuous in my opinion to throw a salary figure like $240k out there and not analyze it a little further to come up with a more realistic figure like pointing out the difference in taxes, housing prices and so on in a place like Chicago compared to say, Iowa or Alabama.

[TitanTiger 20,511]

I applaud McCain for his military sevice/sacrifice.I am also sure his first wife does too.He left her for his younger sugar mommy.

Actually, he and his first wife were already separated when he met his second wife, Cindy:

http://www.azcentral.com/news/specials/mcc...o-chapter5.html

He admits his own fault in his first marriage disintegrating, but it's not quite the tawdry little summary of things you posted above.

[Tigermike 3,054]

It looked like a sarcastic attack to me,so lets look at , I take lobbiest perks while I rail against the system,I mean McCain, while we are at it .And its arnaldo.

I don't care if it's "Mickey Mouse," you're still rambling about off-topic nonsense. And you lack a firm grasp of English sentence structure.

It could also be added that he does not have a firm grip on reality.

I wonder what McCain and his wife make.He probably doesn't spend much because he gets to fly on all those lobbiest jets and probably still has some of his KEATING 5 money stashed away.You would have thought he would have given some of it back to the people since it ended up costing taxpayers millions.He said he felt bad about the whole thing

Not sure what he's worth, but he put his money seeking efforts on hold to serve in the military and be tortured in a POW camp. I'll bet what he was worth back then didn't matter to him.

Besides, he's not the one touting "economic hardship" due to student loans...while making a quarter mill a year.

I applaud McCain for his military sevice/sacrifice.I am also sure his first wife does too.He left her for his younger sugar mommy.

Reality and truth is something you and the leftist at KOS, moveon & huffington know nothing about.

[Ranger12 46]

I applaud McCain for his military sevice/sacrifice.I am also sure his first wife does too.He left her for his younger sugar mommy.

Again, what does this have to do with the topic?

As far as your comment, you must be perfect and never made a mistake. Titan corrected you on your misinformed remark, but you sure seem very judgmental. I think especially hypocritical when you support a candidate that has admitted to drug use in his past. Do I hold that against Obama? No, because he was young and made a mistake. Yet, you make some snarky, and erroneous, comment about McCain's failed marriage that happened 29 years ago.

[AUTiger1 0]

All I know is, if you are bringing home at least $100,000 after taxes and even paying on student loans, you are not "scrapping by" no matter what U.S. city you live in. Given they were not living as well as they are now and with student loans, it probably seemed to them that they were not getting anywhere. However, I wonder how they would have described their situation if they were only making $30,000-$50,000 a year like the average person does.

I understand that. And I pointed out they were still doing well. But it's disingenuous in my opinion to throw a salary figure like $240k out there and not analyze it a little further to come up with a more realistic figure like pointing out the difference in taxes, housing prices and so on in a place like Chicago compared to say, Iowa or Alabama.

I can see where you both are coming from. I understand that $250,000 in Chicago is not the same as making $250,000 in Huntsville, Montgomery or B'ham. I see where Ranger's line of thinking is coming from too. They shouldn't portray themselves as "struggling". I do understand though they are trying to appeal to the masses so they can get votes. I can't stand politicians for that reason. They don't know every ones situations but try as they may, until they walk a mile in one of our shoes they don't have a clue to where any of us are coming from.

That being said, I can't say that I feel sorry for them "struggling" with trying to get their kids in private schools, piano and dance lessons and paying back college loans. My household gross salary is over 40% less than they would bring home if they happened to live in Montgomery. We have a mortgage, car payment, college loan to repay, put 10% in 401K, wife puts the max in RSA, we have $200/month going into an IRA and even though we don't have any children yet, we are planning on it and we have started putting money in an account for it. Shoot, after all that we still find the time and money to give to charitable donations, and not that is anyones business but we gave more than they did. If she thinks they are "struggling" they need to make some lifestyle changes. I would never say that I am rich, b/c I am no where close, but I wouldn't ever say that I am struggling either. Shoot, we were talking about how good we have it compared to a lot of people the other day when I was griping about Charter not being at my house on time. All I am saying is that we make a lot less than them, on any scale and we don't seem to be struggling.

Disclaimer: Sorry for the rant. I have had way too much caffeine today and I am ill at my job.

[AUTiger1 0]

I wonder what McCain and his wife make.He probably doesn't spend much because he gets to fly on all those lobbiest jets and probably still has some of his KEATING 5 money stashed away.You would have thought he would have given some of it back to the people since it ended up costing taxpayers millions.He said he felt bad about the whole thing

Not sure what he's worth, but he put his money seeking efforts on hold to serve in the military and be tortured in a POW camp. I'll bet what he was worth back then didn't matter to him.

Besides, he's not the one touting "economic hardship" due to student loans...while making a quarter mill a year.

I applaud McCain for his military sevice/sacrifice.I am also sure his first wife does too.He left her for his younger sugar mommy.

Once again, off topic and nothing to do with the article that was posted. Focus....Focus......

[Ranger12 46]

All I know is, if you are bringing home at least $100,000 after taxes and even paying on student loans, you are not "scrapping by" no matter what U.S. city you live in. Given they were not living as well as they are now and with student loans, it probably seemed to them that they were not getting anywhere. However, I wonder how they would have described their situation if they were only making $30,000-$50,000 a year like the average person does.

I understand that. And I pointed out they were still doing well. But it's disingenuous in my opinion to throw a salary figure like $240k out there and not analyze it a little further to come up with a more realistic figure like pointing out the difference in taxes, housing prices and so on in a place like Chicago compared to say, Iowa or Alabama.

Oh, I am not disagreeing with you that more factors probably needed to be thrown in. I understand that. My point was that even when things were not as well as they are now for the Obamas, to say you were "scrapping by" when you are bringing home more then $100,000 is a bit silly. The Chicago median income averages between $35,000-$45000, so the Obamas were doing okay for themselves if you go by those numbers. Of course, as the author pointed out, if you are shelling out $10,000 for your kids extracurricular activities, it is hard to swallow Mrs. Obama's money problem comments.

This is really not an issue that would cause me to not vote for them anyway. What DC politician does not have a lot of money? We are represented mostly by a lot of Ivy League grads that do not know what it is like to "scrape by" after they graduate college. The last two elections, I voted for a man that was born with a silver spoon in his mouth. So even if I think Mrs. Obama's comments are very disingenuous and silly, it is just the typical rhetoric you hear from other politicians trying to "connect to the common man". I wonder when the last time John McCain even pumped his own gas?

[channonc 466]

I agree with Titan. We live in Washington, DC and with my husband and I's income combined, do what most of you consider to be "quite well." Unfortunately, there is absolutely no way (even with the falling home market) for us to buy a house that wouldn't eat up almost all of what we bring home a month. (Trust me, we both have great credit). But the houses around here START at $500,000. And that is for something that is well over 50 years old usually and needs major work (new roof, new plumbing), in fact, you would be hard pressed to find a house that is in a decent commutable distance to DC and in a decent enough neighborhood that has central air. We live in one of the wealthiest counties in the US, which means guess county has the highest taxes... So when it is all said and done, we would be house rich and living on credit cards for groceries. Fortunately for us, we don't have kids to worry about. But if you had to factor in daycare (very few can afford to stay home), it is astronomical! The daycare at my office (yes, government job) is still $2300/month/child which is considered a bargain. If you had student loans on top of all of that... what do you have left at the end of the month??

I say all of this to point out that of course they have exaggerated their conditions to make a point with lower income voters, but I am not going to say that they were livin large.

[MDM4AU 336]

The daycare at my office (yes, government job) is still $2300/month/child which is considered a bargain.

Jiminey Cricket! The daycare we use in Hoover is $560.

[BamaGrad03 0]

Yeah, but there are very few places in the country that cost as much as it costs to live in DC or anywhere surrounding it in Virginia.

NYC, DC, San Fran are all head and shoulders above the rest in terms of cost of living. You have to pay a premium to live there...but it's not news to people living there.

Just like people who live in NYC and make 70 grand a year. They live like poor people...terrible/nasty apartments, build no equity etc. But that's the price you pay for living in that city.

[arnaldoabru 11]

I applaud McCain for his military sevice/sacrifice.I am also sure his first wife does too.He left her for his younger sugar mommy.

Again, what does this have to do with the topic?

As far as your comment, you must be perfect and never made a mistake. Titan corrected you on your misinformed remark, but you sure seem very judgmental. I think especially hypocritical when you support a candidate that has admitted to drug use in his past. Do I hold that against Obama? No, because he was young and made a mistake. Yet, you make some snarky, and erroneous, comment about McCain's failed marriage that happened 29 years ago.

I'm not hypocritical,I'm just pointing out the hypcoracy of the Obama mashers who constantly surf the right wing mags on their endless smear campaign.

[autiger4life 3]

Not sure what he's worth, but he put his money seeking efforts on hold to serve in the military and be tortured in a POW camp. I'll bet what he was worth back then didn't matter to him.

Obama decided to make nothing to be a city organizer. I understand it is not being tortured, but he didn't make much either.

As far as the rest, do they claim that today they are still scraping by. I didn't see that part, I think it is just being inferred. I always understood they meant it before his two books and being a senator. If he was saying that they scrape by then I would obviously disagree, but at one point I think they were scraping by.

Also, is anyone complaining that he makes that much money?