Fat cat

Arianna Huffington, the socialite populist, pays almost no taxes, reports the LA Times.

TV commentator and author Arianna Huffington, who launched her campaign for governor with criticism of “fat cats” who fail to shoulder a fair share of taxes, paid no individual state income tax and just $771 in federal taxes during the last two years, her tax returns show.

Huffington, who released her tax returns for the last two years to The Times, lives in an 8,000-square-foot home in Brentwood above Sunset Boulevard that is valued at about $7 million. She socializes with many wealthy and prominent people.

But the returns show that at least for the last two years, her income was far outweighed by losses that she reported were incurred by Christabella Inc., the private corporation she owns and uses to manage her writing and lecturing business.

In announcing her candidacy last week, Huffington blamed California’s fiscal crisis, in part, on the corrupting influence of special interest groups that have helped “corporate fat cats get away with not paying their fair share of taxes.”

Failing to close corporate tax loopholes, she argued, would “be a slap in the face of all the hard-working taxpayers being forced to dig deeper and deeper in their pockets so the well-connected can pad their bottom line.”

Huffington told the Times her deductions are “conservative.” While she earned $183,000 in 2002, her business expenses totaled $410,363 for research, travel, entertainment and rent on her Brentwood house, which is the address of her corporation. For example, she spent nearly $10,000 on make-up and a make-up consultant.

I write out of my home too, so I understand how those costs mount up. I wonder if I can write off the roof repairs as a business expense. Oh, I keep forgetting. I can avoid income taxes the old-fashioned way: No income.

Lt. Gov. Cruz Bustamante, who earned $117,685 in 2002, donated $105 to charity. I guess he’s only generous with other people’s money.

Update: On her site, Huffington points out that she pays property taxes and payroll taxes, and that her employees pay taxes on their salaries. She also gives a quarter of her income (including child support?) to charity, she says.

About Joanne

Comments

  1. jeff wright says:

    Actually, Joanne, you can write off a portion of the roof expenses if you work out of your house. And if you don’t currently capture such expenses, you need to brush up on the tax laws. I’ll bet Arianna is totally legal.

  2. jeff wright says:

    Actually, Joanne, you can write off a portion of the roof expenses if you work out of your house. And if you don’t currently capture such expenses, you need to brush up on the tax laws. I’ll bet Arianna is totally legal.

  3. Analogue Voter says:

    Paying no taxes?

    Surely that’s the goal of all you “free” market fundamentalists?

    Aren’t you just jealous?

  4. Analogue Voter says:

    Paying no taxes?

    Surely that’s the goal of all you “free” market fundamentalists?

    Aren’t you just jealous?

  5. Alex Bensky says:

    On the other hand, the rules regarding home office deduction are fairly strict. I can’t write off the proportion of rent that covers my home office, for example, because I use it for some minor personal purposes and as an occasional guest room.

    If she’s writing off the entire house expenses as a business deduction but she lives there, something is amiss.

  6. Alex Bensky says:

    On the other hand, the rules regarding home office deduction are fairly strict. I can’t write off the proportion of rent that covers my home office, for example, because I use it for some minor personal purposes and as an occasional guest room.

    If she’s writing off the entire house expenses as a business deduction but she lives there, something is amiss.

  7. Anonymous says:

    Interesting. I can’t speak for everybody, but we not only paid far more taxes than Arianna but donated several times as much as Cruz, and on significantly less income. I’m willing to bet we paid more in taxes than Cruz, too.
    Ken Summers

    Posted by at August 17, 2003 10:19 AM

    She claimed the rent on her house as a business expense?! Not just her home office but her whole house? This is, shall we say, a little aggressive.
    Former Philadelphia Lawyer

    Posted by at August 17, 2003 10:19 AM

    And considering Arianna gets some wild amount in child support, on which she pays no taxes, I’ll bet she’s not clipping coupons in Sunday’s LAT. She can use that child support for overhead in anyway she sees fit, as well.
    Kate

    Posted by at August 17, 2003 10:20 AM

    If Arianna’s writing and lecturing business earned only $183,000 in revenues on expenses of $410,363, the market is trying to tell her something.
    Stefan Sharkansky

    Posted by at August 17, 2003 10:20 AM

    I’d like the number of her accountant, if anyone can get it….
    Steve

    Posted by at August 17, 2003 10:21 AM

    The IRS should be very interested in that income to expense ratio. Under their rules, only the room actually used as the office is deductible, and only a portion of the other expenses (such as electricity) can be deducted (for example, if the square footage of the office is ten percent of the house, only ten percent of the utilities can be deducted).

    Also, if you’re showing a loss for several years (it may be 3 out of the last 5, but don’t quote me), then the IRS could rule your profession as a “hobby” and there go a lot of your deductions.

    If you’re not socially or politically connected, high home office expenses pops up the red flag at the IRS auditors’ division with unnerving frequency.

    Hope she’s got her receipts in order.
    Bill Peschel

    Posted by at August 17, 2003 10:21 AM

    re: Bustamante,

    Why should he give anything to charity when the State should pay for it all? And since he works so hard to make that happen, why not give him a pay hike and a customized tax credit?

    Has anyone heard his excuse on this? I saw him once on O’riely and he came off as a complete ass. His excuse could be, “I don’t give because I’m a complete ass.”
    John from OK

    Posted by at August 17, 2003 10:22 AM

    Shouldn’t the AMT prevent that, anyway?
    Jeff Medcalf

    Posted by at August 17, 2003 10:23 AM

  8. Anonymous says:

    Interesting. I can’t speak for everybody, but we not only paid far more taxes than Arianna but donated several times as much as Cruz, and on significantly less income. I’m willing to bet we paid more in taxes than Cruz, too.
    Ken Summers

    Posted by at August 17, 2003 10:19 AM

    She claimed the rent on her house as a business expense?! Not just her home office but her whole house? This is, shall we say, a little aggressive.
    Former Philadelphia Lawyer

    Posted by at August 17, 2003 10:19 AM

    And considering Arianna gets some wild amount in child support, on which she pays no taxes, I’ll bet she’s not clipping coupons in Sunday’s LAT. She can use that child support for overhead in anyway she sees fit, as well.
    Kate

    Posted by at August 17, 2003 10:20 AM

    If Arianna’s writing and lecturing business earned only $183,000 in revenues on expenses of $410,363, the market is trying to tell her something.
    Stefan Sharkansky

    Posted by at August 17, 2003 10:20 AM

    I’d like the number of her accountant, if anyone can get it….
    Steve

    Posted by at August 17, 2003 10:21 AM

    The IRS should be very interested in that income to expense ratio. Under their rules, only the room actually used as the office is deductible, and only a portion of the other expenses (such as electricity) can be deducted (for example, if the square footage of the office is ten percent of the house, only ten percent of the utilities can be deducted).

    Also, if you’re showing a loss for several years (it may be 3 out of the last 5, but don’t quote me), then the IRS could rule your profession as a “hobby” and there go a lot of your deductions.

    If you’re not socially or politically connected, high home office expenses pops up the red flag at the IRS auditors’ division with unnerving frequency.

    Hope she’s got her receipts in order.
    Bill Peschel

    Posted by at August 17, 2003 10:21 AM

    re: Bustamante,

    Why should he give anything to charity when the State should pay for it all? And since he works so hard to make that happen, why not give him a pay hike and a customized tax credit?

    Has anyone heard his excuse on this? I saw him once on O’riely and he came off as a complete ass. His excuse could be, “I don’t give because I’m a complete ass.”
    John from OK

    Posted by at August 17, 2003 10:22 AM

    Shouldn’t the AMT prevent that, anyway?
    Jeff Medcalf

    Posted by at August 17, 2003 10:23 AM

  9. I do write off my home office and a fraction of the utilities. My problem is not having enough write-offs. It’s having enough income.

  10. I do write off my home office and a fraction of the utilities. My problem is not having enough write-offs. It’s having enough income.

  11. Bill Leonard says:

    I write off business expenses — and there can be quite a few; watch these things closely. But be careful about writing off a portion of your house if you use a home office. That comes b ack to bite you (according to my tax guy) on the back end when you sell the house.

  12. Bill Leonard says:

    I write off business expenses — and there can be quite a few; watch these things closely. But be careful about writing off a portion of your house if you use a home office. That comes b ack to bite you (according to my tax guy) on the back end when you sell the house.

  13. jeff wright says:

    Well, Joanne, it looks as if Arianna has trumped you and the L.A. Times. Whether we like the tax code or consider it “fair,” I think we can be confident that Arianna’s tax returns will withstand IRS scrutiny. In other words, legal deductions. Are you and the Mercury—which carried your op-ed—now going to publish a clarification? Fair’s fair, right?

    With regard to Bustamente’s charitable donations, isn’t it odd how so many leftie politicians give very little? As suggested earlier, I guess they think that making the rest of us pay makes up for it.

    Bill Leonard: I’ve worked out of my house for years and I do take the home office deduction for the percentage of the house used for business. What I do is allocate utilities, repairs, etc., along with interest and property taxes (while being careful not to double-dip on the Schedule A). What I don’t do is depreciate the home office percentage. This is where payback comes in. All of the other stuff is year-to-year and has nothing to do with the house basis.

  14. jeff wright says:

    Well, Joanne, it looks as if Arianna has trumped you and the L.A. Times. Whether we like the tax code or consider it “fair,” I think we can be confident that Arianna’s tax returns will withstand IRS scrutiny. In other words, legal deductions. Are you and the Mercury—which carried your op-ed—now going to publish a clarification? Fair’s fair, right?

    With regard to Bustamente’s charitable donations, isn’t it odd how so many leftie politicians give very little? As suggested earlier, I guess they think that making the rest of us pay makes up for it.

    Bill Leonard: I’ve worked out of my house for years and I do take the home office deduction for the percentage of the house used for business. What I do is allocate utilities, repairs, etc., along with interest and property taxes (while being careful not to double-dip on the Schedule A). What I don’t do is depreciate the home office percentage. This is where payback comes in. All of the other stuff is year-to-year and has nothing to do with the house basis.