TaxVox What Clinton’s 2015 Income Tax Return Tells Us
Leonard E. Burman
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Hillary Clinton released her 2015 individual income tax return today. The Clintons are rich, pay a lot of taxes, and are more generous than average for people in their bracket. They file returns that seem designed for intense scrutiny, which is to say, kind of boring. Interestingly, if Secretary Clinton's tax plan were the law, she'd pay a lot more tax. In contrast, if Donald Trump's plan were adopted, she'd pay much lower taxes.

For a tax geek, there’s a lot of information to be gleaned from the tax filings:

  1. “Speaking and writing” is very lucrative for the Clintons. They earned $10.2 million from those activities and Bill Clinton’s consulting. This puts them in very exclusive company—people with income over $10 million make up less than 0.01 percent of all income tax returns filed in 2013 (the latest data).
  2. For very, very rich people, the Clintons’ tax returns are really boring—the kind of tax returns that you might expect from a couple that expects intense scrutiny. Their capital income comes from bank interest and dividends on a Vanguard index fund. No sales of individual stocks; income from partnerships, S-corporations, or trusts; income from foreign investments. 
  3. In consequence, they pay a lot of income tax. Their overall effective income tax rate is 31 percent. Including self-employment taxes, it’s 34 percent. The average income tax rate (defined as income taxes divided by AGI) for people in the $10 million and over income bracket was 26.2 percent in 2013 (and they’re in the bottom of this elite group).
  4. The Clintons donated $1,042,000 to charity, the vast majority of it ($1 million) to the Clinton Family Foundation (not the controversial Clinton Foundation). That is 9.8 percent of AGI, which is higher than the 7.5 percent average for itemizers in their income bracket
  5. All of their contributions were in cash. Again, boring but safe. About half of donations by high-income people are noncash—mostly appreciated property—which offers the additional tax benefit of avoiding capital gains tax. (In less prosperous times, the Clintons invited some ridicule by donating used clothing, including underwear, to charity.)
  6. Donating to their family foundation gives them flexibility about when the funds will actually be disbursed to charity and also makes their actual philanthropy a bit opaque. All foundations must file 990 forms, which are made public, but with a lag. The Clinton Family Foundation’s 2013 form 990 is here. If you’re curious about who benefits from Clinton philanthropy, the list starts on page 28.
  7. At least in 2015, the Clintons would be unaffected by the 30 percent minimum tax on high-income people that Secretary Clinton proposed—the so-called Buffett Rule. However, other provisions in Clinton’s tax plan would raise their taxes significantly, especially the 5 percent surtax on AGIs over $5 million (for couples) and the 28-percent limitation on the value of itemized deductions (which total $2.2 million on the Clinton’s tax return).
  8. In contrast, Mr. Trump’s tax proposals would save the Clintons a lot of money on their taxes. He’d tax all of their business income at a 15 percent rate—saving the couple about $2 million compared with current law.

So that could be a consolation prize if Secretary Clinton’s quest for the White House falls short.

Tags Hillary Clinton 2015 tax return Buffet Rule
Primary topic Campaigns, Proposals, and Reforms
Research Area Presidential campaign proposals