Sunday, January 21, 2001
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Posted on: Sunday, January 21, 2001

Bush portfolio will take hit from taxman

Strategy pays off for Bush portfolio

USA Today

Clearly, George Bush doesn’t have to worry about paying his credit card bills.

Still, his heavy dose of Treasury notes exacts a steep toll at tax time, because the interest is taxed at his ordinary income tax rate, says Mark Bass, a financial planner in Lubbock, Texas.

As president, Bush will earn $400,000 a year. That means interest on his Treasury notes will probably be taxed at the top rate of 39.6 percent, unless Bush succeeds in getting his tax-cut plan through Congress. By contrast, the capital gains tax on stocks and funds held for more than a year is just 20 percent.

Bush won’t have to rely entirely on his investments when he retires. After he leaves office, he’ll receive a government pension, now set at $157,000 a year.

While stocks and mutual funds account for a relatively small portion of the president’s portfolio, it includes dozens of individual stocks, some of which are tiny start-ups. Some of the stocks might have been sold since the disclosures were filed last year.

None of Bush’s individual stock holdings exceeds $1,000, so a bad call won’t have much impact on his net worth. Among his holdings:

Oil and energy stocks. In keeping with his oilman background, Bush’s disclosure lists lots of oil, exploration and utility stocks. Helped by rising energy prices, many soared last year.

For example, Parallel Petroleum, which operates oil and natural gas wells in Texas and Oklahoma, rose 125 percent last year.

Technology blue chips. Bush’s disclosures list several tech stocks, but unlike his energy holdings, most are large, well-known companies. Unfortunately, that didn’t keep them from going into the tank last year.

Among the tech losers on Bush’s list: Intel, down 27 percent; Micro-

soft, down 63 percent; and Compaq Computer, down 44 percent. His telecommunications picks fared even worse. The list includes Lucent, down 81 percent, and AT&T, down 65 percent.

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