John Kerry's presidential campaign finally began releasing information about his wife's taxes this week. What drips were made available have raised more questions than they have answered. And it is clear that the senator's wife, who has ably served as his indispensable political sugar momma ever since he came within a whisker of being drubbed out of the Senate in 1996, is going to have to share a lot more information. Yes, we know that Teresa Heinz Kerry has received an extension until Oct. 15 for filing her tax return on 2003 income. So, releasing her return for 2002 income will be a good first step.I don't think they're going to be pleased with that suggestion, since it's likely that the 2002 return wasn't "sanitized". And why does Kerry always dribble out heavily edited information? Tax returns, miltary records, the still missing medical records. One gets the feeling that he is a congenital spinner or he's got a lot to hide.
Anyhow, the thing that struck me from the available info is that ole Terry is getting a rather crappy return on her fortune:
Mrs. Heinz Kerry, whose net worth Forbes magazine estimated to be $550 million in 2002, reportedly earned $5.115 million last year in interest and dividend income. Now, that comes to less than 1 percent of her 2002 net worth. She paid $587,000 in estimated federal income taxes. That amounts to 11.5 percent of her reported income and one-tenth of 1 percent of her estimated net worth.Maybe Lurch ought to sign up up for the Senate Credit Union - they're paying 0.8% in Christmas Club accounts.
One reason her federal income tax bill was so low was due to the keen foresight she demonstrated by investing in tax-free state and local bonds. Those bonds generated $2.777 million in nontaxable interest income in 2003. Overall, state and local bonds yielded a tax-exempt 4.75 percent last year, a return that actually exceeded the 4 percent taxable yield on 10-year Treasuries. Thus, Mrs. Heinz Kerry's investment in state and local bonds approximated $60 million, leaving nearly $490 million of her net worth for other investments. The balance of her 2003 income — $2.338 million — was earned from dividends and taxable interest income. This would represent a return of less than half of a percentage point on the $490 million balance of her Forbes-estimated wealth. That is astonishingly low, and would get any portfolio manager the boot in a heartbeat.
