President Bush has legally avoided paying most state or local income taxes since taking office by taking advantage of differing tax laws in the three places where he has residences, according to a magazine report.
Money magazine said Bush and his wife, Barbara, paid $3,596 in state taxes in 1990, or less than 1 percent of their adjusted gross income of $452,732.As a result the Bushes were able to cut their total tax bill, including federal income taxes, social security and local property taxes, to about 29.5 percent of their income, the magazine said.
A typical U.S. family with adjusted income of $52,011 paid 37.7 percent of income in combined taxes in 1990.
The magazine noted that state and local taxes have soared during the Reagan and Bush administrations as federal policymakers shifted expenses like health care and environmental cleanup costs to the states.
The Bushes live most of the year in either the White House or their vacation home in Kennebunkport, Maine, but their legal residence is a rented hotel suite in Texas, a state with no personal income tax.
Bush earned $200,000 as president in 1990; the rest of his income came from investments.
Taxpayers with an equivalent income in Washington would have paid about $30,000 in D.C. income tax. Maine residents would have paid about $29,000, the magazine said.
The Bushes take advantage of a special exemption from D.C.'s income tax, with a top rate of 9.5 percent, which frees 61,000 residents, including senators, congressmen and other politicians, from paying taxes there as long as they maintain a home elsewhere.
He also legally skirts Maine's top 8.5 percent income tax rate by claiming a rented three-room suite in the Houstonian hotel as his permanent home.
Since moving to the White House in 1989, Bush has spent 103 days in Kennebunkport as opposed to 14 in the Houston suite, which he rents for $264 a night, discounted from its regular $600 per night rate. The magazine said Bush pays only for the nights he is there.
Texas law allows Bush to call the state home as long as he promises to return to live there eventually. There is no minimum residency requirement.