Kerry's Wife Releases Part of Her 2003 Income Tax Return

ASHINGTON, Oct. 15 - Teresa Heinz Kerry reported income of just over $5 million last year, slightly more than half of it from investments in tax-exempt municipal and state bonds, her 2003 income tax return shows, confirming her status as the wealthiest spouse of any major party nominee in United States history.

Ms. Heinz Kerry on Friday released a small part of her 2003 income tax return, unlike her husband, Senator John Kerry, and President Bush and his wife, Laura, who have made their full tax returns available for public inspection. The Kerrys file separate tax returns, a common arrangement when one spouse is wealthy.

The two-page document, posted at johnkerry.com, showed total income of $5,073,554 last year. Her primary source of income was the tax-exempt bonds, investments that generally produce a lower interest rate, but those in the highest tax brackets can often pocket more cash if they choose municipals.

Ms. Heinz Kerry paid a federal tax of $628,401, which is 12.3 percent of her total income and 27.4 percent of her adjusted gross income.

She was a big beneficiary of the reductions in tax rates on dividends and capital gains that have been enacted under President Bush. She collected more than $2.2 million in dividends, all of which qualified for the new 15 percent tax rate, saving her $440,000, compared with the 35 percent rate that previously applied to dividends for those with million dollar-plus incomes.

Mr. Kerry, during the campaign, has proposed raising income taxes and dividends taxes on Americans who make over $200,000 back to the levels that they were before 2001, changes that would have an effect on his wife.

Nothing about the trusts that benefit Ms. Heinz Kerry herself and her three sons was disclosed. These trusts, set up after the 1991 death in an airplane crash of her first husband, Senator John Heinz, the heir to the H. J. Heinz Company fortune, are believed to be worth about a billion dollars.

On the return, which was prepared by a Pittsburgh accounting firm, Ms. Heinz Kerry listed her name as "Teresa Heinz" and her occupation as philanthropist. She serves as chief executive officer of the Heinz Family Foundation, which made more than $4.6 million in charitable contributions last year, the Kerry campaign said.

Ms. Heinz Kerry and her husband own a home in Massachusetts, which Mr. Kerry represents, and she also owns homes in Idaho, Washington and Pennsylvania, where her late husband lived. Her official place of residence was blacked out in federal tax return, but a spokesman for the Kerry campaign said it was in Pennsylvania.

One line in the Form 1040 that was released indicated she had a job for which $2,230 in taxes were withheld from her paycheck, but gave no details. A spokesman for the Kerry campaign said this income was related to an investment she had with a limited liability corporation, although he would not provide any more information.

Tax documents that would indicate if Ms. Heinz Kerry has offshore accounts were withheld, as were the schedules detailing her charitable deductions, interest expenses and the nature of the $14,412 in capital gains she reported. But Paul Bschorr, a lawyer for Ms. Heinz Kerry, said Friday that none of her personal investment accounts or accounts controlled by her family trust are deposited outside the United States, a step some wealthy American use to defer or escape taxes.

No information was provided about how much income was earned by trusts of which she is the beneficiary. If the trusts are as large as reported - and the Kerry campaign has not challenged the billion dollar estimate - then even a modest 5 percent return would have generated $50 million of income, 10 times what was on the two pages released by Ms. Heinz Kerry. A statement released by the Kerry campaign noted that income taxes are paid directly by the Heinz family trust, in addition to taxes that Ms. Heinz Kerry pays.

Ms. Heinz Kerry released her tax return this week because she had requested an tax-filing extension last spring.

This answers some of the questions we've been raising about Ms. Heinz's tax returns on the original thread. For those who didn't read it, Ms. Heinz still hasn't released every page of her 2003 tax return, just the first two pages, which tell us little more than what's in this article.

You can find the first and second pages of Ms. Heinz's tax returns here and here.

No, they actually played it pretty straight.........were it Laura Bush, they'd be screaming for full disclosure.

3 posted on 10/15/2004 10:47:49 PM PDT by MamaLucci (Libs, want answers on 911? Ask Clinton why he met with Monica more than with his CIA director.)

Teresa Heinz Kerry, wife of Democratic presidential candidate John Kerry (news - web sites), seen here 08 October 2004, declared 2,291,137 dollars in gross taxable income in 2003 and paid 798,820 dollars in state and federal taxes, or about 35 percent, her office said(AFP/File/Jeff Haynes)

4 posted on 10/15/2004 10:55:25 PM PDT by NormsRevenge (Semper Fi ...... The War on Terrorism is the ultimate 'faith-based' initiative.)

There's an eerie correlation between the issues raised on the first FR thread and the questions the NYT reporters asked the Kerry campaign. We noted her use of her last name only, the blacked out address, strange amount withheld for self-employment taxes, and potential for offshore accounts. It's almost as if the Times reporters were lurking here.

BTW -- she paid more in alternative minimum tax than income tax, which is a bit strange, since most of her taxable income was from dividends. It's probably due to her oil, gas and timber investments or some other (perhaps legal)tax shelters. We don't know, since she didn't release the rest of her tax return.

Am I reading this right, that she only paid $1251 in SS and Medicare taxes?!!

By comparison I paid twice that on my Navy E-8 pay last year.

While all this sheltering is legal, they've obviously made the ethical decision to pay the lowest tax imaginable. IMHO the Kerry -Edwards ticket has lost the moral authority to comment on taxation policy.

Edwards has done the same thing with his lawsuit money by creating his one man corporation. Instead of treating his ill gotten gains as normal income, he launders it through his flim-flam company as dividends then pays no SS or Medicare tax. These libs need to be taken to the woodshed on this.

You only pay SS and Medicare taxes on wages and other similar earned income. Teresa had very little earned income. She doesn't really work for a living, like us little people.

I understand. She claims her occupation as Philantropist yet has no regular wages. Warren Buffet another tax cut critic, does the same thing. Instead of drawing compensation as wages, he makes a conscious decision to recieve compensation as investment income, not subject to normal income rates and SS and Medicare withholding.

All legal, yet very hypocitical, especially since they are so vocal about evil "Taxcuts for the Rich". They have no moral authority to comment on taxation policy.

Sing it from every mountain top!!!

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