Path 2

Wednesday, Jul 1 2015

Yahoo: Bush had a 21.3% average tax rate

Jul 01, 2015

It turns out Jeb Bush had an average effective tax rate of 21.3 percent according to financial planner Michael Kitces on Yahoo Finance, not the 36 percent he’s been fudging about. Bush only paid more than 36 percent in one year — 2013 — while his rate was less than that in the other 32 years.

As Kitces explains, Bush’s “total tax liabilities are also inflated by the fact that for many years when he was self-employed, he paid self-employment (SECA) taxes. While this is certainly part of one’s total tax liability, it is somewhat confusing to include it in a normal effective income tax rate calculation as these taxes appear on the personal tax return simply because Bush was self-employed.”

Even though Jeb has released 13 years of new tax returns (bringing the total to 33 years), outlets like the Tampa Bay Times and Wall Street Journal are calling him out for his lack of transparency — hiding everything from his consulting clients, details of their payments, or the limited liability companies he’s set up to boost his income.


Here’s more about Bush’s hidden secrets in his nontransparent tax returns:

Bush Tax Release Roundup

  • Bush neglected to include tax forms that typically disclose the names of consulting clients, and declined to list all of the charities he contributed to.
  • In his release, Bush went out of his way to emphasize that he did not attempt to profit from his actions as governor after leaving office, despite many questionable dealings. Lehman Brothers sold risky securities to Florida before revealing they hired Bush. Bush received a lucrative board membership from a company for whom he’d approved a profitable land deal. In total, Bush became far wealthier after leaving office.
  • Despite complaints about his high tax rate, Bush appears to have fudged the numbers to inflate his actual rate. While Bush claimed his average tax rate was 36%, he only paid higher than that rate for one year. Other measurements of Bush’s tax rate place the number at closer to 20%, conflicting with Bush’s apparent message that people in his income bracket are taxed at extreme rates.
  • The release showed ties to controversial companies, including Enron, and a South Korean company with a large interest in securing federal contracts.
  • The release shows that Bush held investments in offshore entities located  in Malta, The Cayman Islands, and Bermuda.
  • Bush donated 1.5% of his income to charity, half the rate of an average American.

Lack of Transparency

Bush Release “Did Not Include Forms That Typically Disclose The Names Of Consulting Clients”

Jeb Bush Did Not Include Forms That Typically Disclose The Names Of Consulting Clients Or Details Of Their Payments. According to the Washington Post, “Bush did not include forms that typically disclose the names of consulting clients or details of their payments. That information would have provided a lens into how Bush might have used his influence and connections to build the $29 million in wealth he accumulated after leaving the governor’s office, including about $7 million he earned in 2013 alone. What we do know is that Bush was hired by the financial services company Lehman Brothers in 2007. The firm’s U.S. operations were acquired by Barclays and Bush reportedly made $1 million a year working as a consultant for the London-based firm.” [Washington Post, 6/30/15]

Tampa Bay Times: “Bush’s Transparency Has Limits. He Would Not Commit To Releasing More Details About Some Of His Consulting Clients Or Several Limited Liability Corporations He Had Created.” According to the Tampa Bay Times, “Bush’s transparency has limits. He would not commit to releasing more details about some of his consulting clients or several limited liability corporations he had created but has since resigned from. Confidentiality agreements prohibit full disclosure, he said. People pouring over his reports likely will be drawn to overseas investments.” [Tampa Bay Times, 6/30/15]

Jeb Bush Would Not Release A Complete List Of Consulting Clients, Citing Confidentiality Agreements. According to Bloomberg, “Bush and his campaign wouldn’t release a complete list of consulting clients, citing confidentiality agreements.” [Bloomberg, 6/30/15]

Jeb Bush Did Not Release Details Of The Income From His Consulting Engagements. According to the New York Times, “The campaign did not release details of the income from his consulting engagements. In the early going of the 2016 campaign, the candidates’ financial and business affairs have drawn particular scrutiny. Their wealth can be seen as a double-edged sword, signifying both financial acumen but also socioeconomic distance from most voters at a time when income inequality is a pressing issue.” [New York Times, 6/30/15]

Declined to list All CHARITIES He Contributed To

Jeb Bush Released The Names Of Some, But Not All, Charities That Got Donations From The Family, Including The Urban League Of Miami, Knights Of Columbus, Ave Maria University, And The Green Beret Foundation. According to Bloomberg, “The campaign released the names of some, but not all, charities that got donations from the family. They include: the Urban League of Miami, Knights of Columbus, Ave Maria University and the Green Beret Foundation.” [Bloomberg, 6/30/15]

Claims About Double Dealing

Claimed He Did Not Cut Deals With State Government

Jeb Bush: “One Thing I Didn’t Do Was Get Paid To Lobby Or Cut Deals With The State Government I Just Left. That Was A Line I Drew And It Was The Right One.” According to a news release from the Jeb 2016 Campaign, “My most recent tax return reflects that success with an annual income of $7.4 million. But one thing I didn’t do was get paid to lobby or cut deals with the state government I just left. That was a line I drew and it was the right one.” [News Release – Jeb 2016 Campaign, 6/30/15]

  • Jeb Bush: “And It’s A Line More People Should Be Drawing In Washington, D.C. Where Lobbying Has Become Our Nation’s Premier Growth Industry. And This Culture Of Special Interest Access Is A Problem I Plan To Tackle As President.” According to a news release from the Jeb 2016 Campaign, “And it’s a line more people should be drawing in Washington, D.C. where lobbying has become our nation’s premier growth industry. And this culture of special interest access is a problem I plan to tackle as President.” [News Release – Jeb 2016 Campaign, 6/30/15]

Lehman Brothers Sold Risky Securities To Florida Before Revealing Its Hiring Of Jeb Bush

July – August 2007: Lehman Brothers Sold Risky Funds To Florida Just Before Bush’s June Appointment To Board Was Revealed. According to the St. Petersburg Times, “The State Board of Administration confirmed Wednesday that more than 40 percent of the downgraded investments under its management were purchased from a single investment firm: Lehman Brothers Holdings. Lehman Brothers was the source for $1-billion, or about 41 percent, of the $2.5-billion in state board investments that have been downgraded below purchase guidelines. Most of the Lehman Brothers purchases occurred in July and August, just before Lehman Brothers revealed that Florida Gov. Jeb Bush had joined its private-equity advisory board.” [St. Petersburg Times, 12/20/07]

As Governor, Bush Approved Land Deal For Company That Later Gave Him A Seat On Its Board

2000: Jeb Bush Approved The Purchase Of A Parcel Of Land After Expressing Concerns About The Value Of The Property. According to International Business Times, “Florida was buying wetlands. Seeking to conserve its fragile coastline, the state sought to set aside acreage in perpetuity, ensuring it would never be developed. But as then-Gov. Jeb Bush assessed a proposal to buy a choice parcel — a 26,000-acre piece of swampland near Jacksonville — he worried that the price was far higher than the land’s true worth. ‘I’m concerned about the value of the property,’ Bush told top state officials during a meeting in Tallahassee in March 2000. This was a subject Bush knew something about, having previously earned his living in real estate. After expressing his reservations, however, Bush quickly assented to the purchase, calling the parcel ‘a jewel.’ Then he cracked a prescient joke. ‘Man,’ the governor said, according to the minutes of the meeting, ‘I can’t wait to get back into the real-estate business and sell property to the state.’ That wish would ultimately come true.” [International Business Times, 6/19/15]

2001: Jeb Bush Approved A Plan Through Which The State Purchased Logging Rights On Part Of The Property, Paying $4.6 Million To Rayonier, Inc. According to the International Business Times, “That wish would ultimately come true. A year after the state bought the land, Bushapproved a plan through which the state purchased logging rights on part of the property, paying $4.6 million to a publicly traded timber and real-estatecompany called Rayonier Inc.” [International Business Times, 6/19/15]

  • State Audit Later Concluded That This Price Was Likely Inflated And That Florida Officials Had Relied On “Questionable Assumptions” That “May Have Led To Misleading And Overstated Value Conclusions.” According to the International Business Times, “A state audit would later conclude that this price was likely inflated: Florida officials had relied on ‘questionable assumptions’ that ‘may have led to misleading and overstated value conclusions.’” [International Business Times, 6/19/15]

During Jeb Bush’s Eight Years In Office, Rayonier Secured Almost $100 Million From The State Of Florida In Exchange For Surrendering Logging Rights And Property. According to the International Business Times, “During Bush’s eight years in office, Rayonier would secure almost $100million from the state of Florida in exchange for surrendering logging rights and property.” [International Business Times, 6/19/15]

Two Years After Jeb Bush Left Office, Rayonier Gave Jeb Bush A Seat On Its Board Of Directors As It Continued To Sell Property To Florida.According to the International Business Times, “In 2008, two years after Bush left office, Rayonier gave him a seat on its board of directors as it continued to sell property to Florida.” [International Business Times, 6/19/15]

Bush Became Far Wealthier After Leaving Office

Jeb Bush Made $29 Million In The First Seven Years After He Left Public Office, Dramatically Increasing His Wealth During A Recession, A Financial Crisis, And The Obama Presidency He Has Criticized. According to Bloomberg, “Jeb Bush made $29 million in the first seven years after he left public office, dramatically increasing his wealth during a recession, a financial crisis and the Obama presidency he has criticized. Bush’s tax returns, released Tuesday, show how the former Florida governor set up a successful consulting and speaking business and plowed the profits into an array of investments including offshore holdings and business ventures in the shipping and oil industries.” [Bloomberg, 6/30/15]

  • 2015: Jeb Bush Had A Net Worth Of $19 Million To $22 Million, Which Meant His Wealth Was More Than 14 Times Larger Than When He Left Office. According to Bloomberg, “Bush now has a net worth of $19 million to $22 million, his presidential campaign said, which means his wealth is more than 14 times larger than when he left office in early 2007. While he was governor, his net worth declined.” [Bloomberg, 6/30/15]

Bush’s Income Soared While His Father was President

Jeb Bush’s Income Truly Soared During His Father’s Presidency, During The First Year Jeb Bush Was In The Private Sector During His Brother’s Presidency, And The Few Years Before Jeb Bush’s Own Presidential Run. According to Vox, “GOP presidential candidate Jeb Bush has released the past 33 years of his tax returns (which were filed jointly with his wife Columba). ‘Over these 33 years my income increased thanks to hard work and experience,’ he writes, in a post accompanying the disclosures. Well, that might be part of it. But, as the below chart shows, there were a few periods when the Bushes’ income truly soared: during Jeb’s father’s presidency, during the first years Jeb was in the private sector during his brother’s presidency, and in the past few years before Jeb’s own presidential run” [Vox, 6/30/15]

During The Second Year Of His Father’s Presidency, Jeb Bush’s Income Reached $1.24 Million. According to Vox, “But suddenly, in 1990, the second year of George H. W. Bush’s presidency, Jeb’s income balloons. Not only was that his first year making six figures, but his income of $1.24 million also makes it his first seven-figure year. He had to settle for just under half a million in 1991, but topped a million in both 1992 and 1993. Then, from 1994-1998, Jeb’s ambition to become governor of Florida seems to have limited his income to the mid-six figures, and once he’s actually in office as governor (from 1999 to 2006), it drops again.” [Vox,6/30/15]

Associated Press: Jeb Bush’s “Financial Successes Coincided With” His “Father’s Election As President In 1988.” According to the Associated Press, “Bush’s financial successes coincided with two political events: his father’s election as president in 1988 and his own departure from office as Florida’s governor in 2007.” [Associated Press, 6/30/15]

Bush Is Fudging The Numbers On His Tax Rate

Bush Claimed To Pay A Total Tax Rate Of 36%

Jeb Bush: “The Total Effective Rate Was 36 Percent. I Think I Speak For Everyone, No Matter Your Tax Rate: We Need To Get More Money Back In Your Pocket And Less In The Federal Kitty.” According to a news release from the Jeb 2016 Campaign, “But part of the reason they are out of reach is that we have a tax code that stifles growth and opportunity. In my case, I paid the government more than one in three dollars that I earned in my career. Astounding. The total effective rate was 36 percent. I think I speak for everyone, no matter your tax rate: we need to get more money back in your pocket and less in the federal kitty.” [News Release – Jeb 2016 Campaign, 6/30/15]

Bush Only Paid Over 36% During One Year

Jeb Bush Had Only One Year Where He Faced An Effective Tax Rate Higher Than 36%. According to Yahoo! Finance, “Yesterday presidential hopeful Jeb Bush released 33 years worth of tax returns in the spirit of campaign transparency with a headline that he had paid an effective tax rate of 36%. A deeper look reveals that Jeb Bush has only had one year in the past 33 that he faced an effective tax rate higher than 36%, the most recent year of 2013. That was the year the 39.6% tax bracket returned under the American Taxpayer Relief Act. In other words Bush stated his effective tax rate was 36% for the past 33 years, when in reality it was lower than that in 32 of the last 33 years and was only slightly above that level in the very last year.” [Yahoo! Finance, 7/1/15]

Zero Income Years Effectively Received A Zero Weighting In Jeb Bush’s Self-Reported Results, While High Income Years With Higher Tax Brackets Received A Higher Rating. According to Yahoo! Finance, “In fact as shown above from Bush’s own tax return data in many years his income and taxes were zero. However zero income years also effectively received a zero weighting in his self-reported results, while high income years with higher tax brackets receive a higher weighting. And the most recent year with the highest income – the one year Bush’s effective tax rate actually was over 36% – received the greatest weighting of all.” [Yahoo! Finance, 7/1/15]

Other Measures Show Bush’s Tax Rate As Closer To 20%

Average Of Jeb Bush’s Effective Tax Rates Across Each Of The Years Would Only Be 21.3%. According to Yahoo! Finance, “Thus Bush’s reported effective tax rate of 36%, even though the reality is that the average of his effective tax rates across each of the years would have been only 21.3%.” [Yahoo! Finance, 7/1/15]

Yahoo! Finance: “When All The Years Of His Earnings Are Evenly Weighted His Effective Tax Rate Averages Out To Only 20.6%.” According to Yahoo! Finance, “When these amounts are excluded – along with a modest amount of household employment taxes that Bush paid on behalf of his housekeeper (which is a tax for his role as an employer, not on his personal income), Bush’s effective tax rate even by his own methodology is only 34%. And when all the years of his earnings are evenly weighted his effective tax rate averages out to only 20.6%.” [Yahoo! Finance, 7/1/15]

Bush Inflated His Numbers By Adding Self Employment Taxes Not Normally Included

Jeb Bush’s Tax Liabilities Were “Inflated By The Fact For Many Years…He Paid Self-Employment Taxes.” According to Yahoo! Finance, “Notably Jeb Bush’s total tax liabilities are also inflated by the fact that for many years when he was self-employed, he paid self-employment (SECA) taxes. While this is certainly part of one’s total tax liability, it is somewhat confusing to include it in a normal effective income tax rate calculation as these taxes appear on the personal tax return simply because Bush was self-employed.” [Yahoo! Finance, 7/1/15]

  • Yahoo! Finance: “They’re Not Typically Included When Doing A Proper Calculation Of An Effective Tax Rate.” According to Yahoo! Finance, “Had he earned wage income instead – which he actually did for many years – those taxes are recorded as payroll taxes, paid by the employer, and while they are a tax cost, they’re not typically included when doing a proper calculation of an effective tax rate.” [Yahoo! Finance, 7/1/15]

Ties to Controversial Companies

Bush Profited From Enron Stock Sales

February 1995: Jeb Bush Paid $91,527 For 4,100 Shares Of Enron; December 1995: Jeb Bush Sold His Enron Shares For $98,645, Pocketing $7,000 In The Process. According to the National Journal, “Bush paid $91,527 for 4,100 shares of Enron Liquids in February 1995, six years before the Texas energy behemoth was engulfed in scandal that led to bankruptcy and prison sentences. But he sold them later that year, in December 1995, for $98,645 — pocketing $7,000 in the process.” [National Journal, 6/30/15]

Bush Was Paid By Poongsan – Foreign Company Sought Federal Contracts

Jeb Bush Received Speaking Fees On 10 Occasions From South Korean Company Poongsan, A Company That Supplies Blank Coins To The US Mint Through Iowa-Based Subsidiary PMX Industries. According to the Financial Times, “Jeb Bush, the former Republican Florida governor running for president, has made $29m since leaving office in 2007, including reaping speaking fees on 10 occasions from a South Korean metal and munitions manufacturer. Over that period, he has spoken to numerous institutions including universities, lobby groups and pharmaceutical companies such as Pfizer. While most of his speeches were to US groups, he has spoken 10 times to Poongsan, a South Korean company that supplies blank coins to the US mint through Iowa-based subsidiary PMX Industries.” [Financial Times, 7/1/15]

Poongsan And Its Korean Chief Executive Donated $500,000 To A University Institute Named After Tom Harkin, Who Pushed To Replace The Dollar Bill With A Coin That Would Have Benefited The Korean Company. According to the Financial Times, “Poongsan has come under scrutiny in the past over revelations it and its Korean chief executive donated $500,000 to a university institute named after Tom Harkin, an Iowa senator who was pushing to replace the dollar bill with a coin that would have benefited the Korean company.” [Financial Times, 7/1/15]

US Business Criticized The Decision To Buy Materials From Poongsan Instead Of US Companies. According to the Financial Times, “US business groups have also criticised the decision to buy materials from Poongsan, which describes itself as the world’s largest producer of blank coins, instead of US companies, alleging that it receives state-backed loans.” [Financial Times, 7/1/15]

Poonsgan Chief Executive Served On The Board Of Trustees Of The George HW Bush Presidential Library And Helped Raise $1 Million From Korean Companies For The Library. According to the Financial Times, “The company has a long history with the Bush family. Ryu Jin, chief executive, serves on the board of trustees of the presidential library of George HW Bush, Jeb’s father. Politico reported that he had helped raise $1m from Korean companies for the library.” [Financial Times, 7/1/15]

1992: Barbara Bush Attended The Ribbon-Cutting Ceremony When PMX Opened Its Plant In Iowa. According to the Financial Times, “Barbara Bush, Jeb’s mother, reportedly attended the ribbon-cutting ceremony when PMX opened its plant in Iowa in 1992. PMX was unavailable to comment.” [Financial Times, 7/1/15]

2007: Shortly After Jeb Bush First Spoke To Poongsan, PMX Won A Contract To Supply The US Mint. According to the Financial Times, “Shortly after Jeb Bush first spoke to Poongsan, in 2007 — while his brother George W Bush was president — PMX won a contract to supply the US mint.” [Financial Times, 7/1/15]

Jeb Bush Spokeswoman: “Governor Bush Had Zero Involvement In Any Government Contract Received By This Company And Did Not Advocate In Any Way For It. His Speech Was Completely Unrelated To This Issue.” According to the Financial Times, “Kristy Campbell, spokeswoman for the campaign, said there was no connection between those events. ‘Governor Bush had zero involvement in any government contract received by this company and did not advocate in any way for it,’ she said. ‘His speech was completely unrelated to this issue.’” [Financial Times, 7/1/15]

Poongsan Manufactured Cluster Bombs And Licenses Some Production In Pakistan. According to the Financial Times, “Poongsan has also attracted condemnation from human rights groups for its manufacture of cluster bombs, which are banned by some countries. In the past it has licensed some production in Pakistan. Some institutional investors, including the Dutch government pension fund and UK insurance group Aviva, have included Poongsan in a list of companies in which they will not invest for ethical reasons.” [Financial Times, 7/1/15]

Bush Held Offshore Investments

Jeb Bush Owned Funds Run By Abbey Capital LP That Resulted In Him Filing Tax Forms That Include Addresses In Malta, The Cayman Islands, And Bermuda. According to Bloomberg, “Bush also owned funds run by Abbey Capital LP that resulted in him filing tax forms that include addresses in Malta, the Cayman Islands and Bermuda. Investment funds often set up addresses outside the U.S. to help foreign investors limit their U.S. tax liabilities.” [Bloomberg, 6/30/15]

2013: Jeb Bush Reported $6,575 In Gambling Winnings; Jeb Bush’s Campaign Said It Was Actually A Table Prize At A Dinner And Should Have Been Reported As Regular Income. According to Bloomberg, “In 2013, he reported $6,575 in gambling winnings. That was actually a table prize at a dinner and should have been reported as regular income, not proceedings from gambling, according to the campaign.” [Bloomberg, 6/30/15]

2003-2013: Bush Donated 1.5% Of His Income To Charity; Half The National Average

2003-2013: Jeb Bush Gave 1.5% Of His Income To Charity, About Half The National Average. According to Mother Jones, “Jeb Bush released 33 years of tax returns on Tuesday evening. So how much did he give to charity over the years? Not that much. Between 2003 and 2013, Bush gave 1.5 percent of his income to charity, according to the lists of charitable deductions in the tax returns. That’s about half the national average of 3 percent, according to Charity Navigator.” [Mother Jones, 6/30/15]

Published: Jul 1, 2015

Jump to Content