One variety of tax avoidance

The Boston Globe has an interesting story on the taxes paid by Teresa Heinz Kerry in 2003: “Heinz Kerry paid $750,000 in taxes.” Mrs. Kerry hasn’t released copies of her 2003 returns; she hasn’t even filed them yet. The Globe story is based on the Kerry campaign’s report on Mrs. Kerry’s 2003 income and tax payments:

The wife of the presumptive Democratic nominee and heiress to the Heinz ketchup fortune, Heinz Kerry reported a gross taxable income of $2.338 million, primarily from interest and dividends, and tax-exempt interest income of about $2.777 million, primarily from the bonds, for a total income of $5.115 million, according to a summary of her tax information.

Her total effective tax rate on her $5.115 million income was 14.7 percent. What’s wrong with this picture?

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