A blog post

FDR’s Tax Planning

Posted on the 28 January, 2010 at 10:28 pm Written by in General

The following is a post┬áby Sarah B. Lawsky at one of my favorite blogs – TaxProfBlog:

Throughout his first term, President Franklin Roosevelt paid taxes at the rates in effect when he took office, even as statutory tax rates increased. His position was that paying tax at a rate higher than that in effect at his inauguration reduced his salary, which violated the Constitutional provision that states that the president’s compensation “shall be neither increased nor diminished during the period for which he shall have been elected.”

At least one tax historian believes the approach is unique to Roosevelt. The memo on the cover of Roosevelt’s 1937 return thus seems to exemplify chutzpah: “I am wholly unable to figure out the amount of tax for the following reason,” he writes. “The first twenty days of January, 1937, were part of my first term of office and to these twenty days the income tax rates as of March 4, 1933 apply. To the other 345 days of the year 1937, the income tax rates as they existed on January 30, 1937. As this is a problem in higher mathematics, may I ask that the Bureau let me know the amount of the balance due?” Or in other words: I made a problem. Fix it, please!