Facebook
Fark
Digg
Reddit
Stumble
Sam Morris and Mona Shield Payne/Las Vegas Sun
Left: Dean Heller speaks at the grand opening of the Mandarin Oriental at CityCenter on Dec. 4, 2009. Right: Shelley Berkley laughs with constituents during a “Congress on the Corner” event Jan. 14, 2011, at her Las Vegas office.
By Anjeanette Damon (contact) 
Tuesday, June 12, 2012 | 2 a.m.
2011
Total gross income: $1,235,046
Taxable income: $864,747
Taxes paid: $230,547
Effective tax rate: 19 percent
Charitable giving: $54,396
DEAN HELLER:
2011
Total gross income: $258,993
Taxable income: $104,503
Taxes paid: $17,639
Effective tax rate: 7 percent
Charitable giving: $19,170
Sun coverage
As a politician, Shelley Berkley opposes cutting the capital gains tax rate. As a taxpayer, maybe she should vote for Dean Heller.
More than 20 percent of the taxable income Berkley and her husband, Dr. Larry Lehrner, made last year came from capital gains, which are taxed at a lower rate than typical salaries and wages — and which Heller would like taxed even less.
The couple, which reported $1.2 million in total income, should be in the highest tax bracket — 35 percent.
Their effective tax rate — after accounting for capital gains and a slew of different investing strategies, tax exemptions and deductions — wound up being 19 percent last year.
By contrast, Heller’s tax return reads more like a typical middle-class family’s might — his income notwithstanding. He takes advantage of child tax credits, Making Work Pay credits, education credits for his kids in college and home mortgage deductions.
But he also bought a farm two years ago, which allowed him to shave nearly $7,000 from his income before calculating his tax last year. Heller and his family also enjoy more than $45,000 a year tax free from his wife’s family trust, which invests in tax-exempt government bonds.
With a total gross income of nearly $260,000 a year, Heller should be in the second-highest tax bracket of 33 percent.
Instead, his effective tax rate was a scant 7 percent last year.
Senator Dean Heller, R-Nev., speaks during the Memorial Day Ceremony at the Southern Nevada Veterans Memorial Cemetery in Boulder City on Monday, May 28, 2012.
Heller, a Republican, and Berkley, a Democrat, are in a tight race for the U.S. Senate this year.
In an unprecedented move, both candidates agreed to share three years of their personal income tax returns with the Las Vegas Sun. No major Senate candidate in Nevada has made his or her tax returns public in the past.
But how candidates pay their taxes has become more of a focus in national campaigns this cycle, particularly in the presidential race.
Republican presidential candidate Mitt Romney spent weeks dodging requests for his returns before finally releasing two years worth of information. The multimillionaire has been criticized for paying an effective tax rate of less than 14 percent.
Like Berkley, much of Romney’s income is from capital gains.
Candidates in the fierce battle for U.S. Senate in Massachusetts have also released their returns.
In addition to the transparency on their personal finances, the returns offer a bit of context for the candidates’ positions on tax policy.
Perhaps ironically, neither of their public positions necessarily square with their personal economic interests.
Berkley’s family could stand to benefit from a lowering of the capital gains rate. She and her husband have a robust portfolio of stocks, which is managed by Morgan Stanley Smith Barney. The couple’s portfolio manager has complete control over investment and buy-sell decisions within that portfolio.
Berkley and her husband also invest in nearly two dozen limited liability corporations and partnerships — business entities that offer a variety of strategies, mostly employed by the wealthy, for limiting tax exposure.
Lehrner is a partner in a number of medical partnerships. His investment choices reflect diversity, including a metal finishing company and a yogurt shop franchise.
Berkley has repeatedly voted against efforts to lower the capital gains tax. She also supports the so-called Buffett rule, which would impose a 30 percent tax rate on those who earn more than $1 million a year.
Depending on how those earnings are calculated, it’s possible Berkley’s family would fall under the rule. (Berkley’s adjusted gross revenue came in just under $1 million last year. Her total gross revenue, however, was $1.2 million.)
Berkley declined to be interviewed for this story but sent a written statement in response to questions — though she declined to answer all of them.
“The president and I both share the same deeply held commitment to making sure we have a fair tax system, which guarantees middle-class Nevada families are not paying a higher tax rate than Wall Street millionaires, big oil company executives and hedge fund managers,” Berkley said.
Heller, on the other hand, has consistently opposed efforts to increase the capital gains rate — even though his family doesn’t benefit quite as much from it.
Last year, Heller and his wife earned $7,400 in capital gains — compared with the $190,000 in capital gains and qualified dividends earned by Berkley’s family.
Instead, the biggest boon to Heller’s tax bill is the tax-exempt interest from his wife’s family’s trust and the write-offs from the alfalfa farm they bought two years ago.
“Business expenses are always a write-off,” Heller said. “What I’m doing is typical of what 80 percent of businesses in America do.”
Rep. Shelley Berkley. D-Nev. speaks during the Nevada State Democratic Party Convention at Bally's Event Center in Las Vegas on Saturday, June 9, 2012.
Indeed, Heller’s focus on tax policy is business-centric.
“I’m a low-tax, small-government, free-market Republican,” he said. “I want to keep taxes as low as possible. I want to do something very different than (Berkley’s) economic policies.”
Heller refused to “talk about specific tax rates” but acknowledged he wants to cut the corporate tax rate and lower capital gains rates in order to boost business confidence and free up money for them to invest.
He argued Berkley’s economic policies hit the very people she says she is trying to help the most.
“No one has been hurt more in this economy than women, the middle class, Hispanics and students,” he said. “They are getting creamed in this economy.”
Berkley disputed Heller’s assertion, arguing he supports tax credits for “companies that send jobs overseas” while she supports developing clean energy jobs.
Both Berkley and Heller have fared well in the economic recession.
Over the past three years, Berkley’s family income has grown by 8 percent. Heller has seen his income grow 20 percent — mostly because of the farm income and stronger capital gains.
Both candidates also give a significant amount of money to charity. Heller routinely gives about $20,000 a year, mostly to the Church of Jesus Christ of Latter-day Saints.
In the past three years, Berkley has given from $46,000 to $82,000 to charity.
I wonder if their is a write off for Heller associated with the Eddie Floydd race car that the DEA seized on Heller's property?
A 7% tax rate? That should be illegal. This abuse of tax breaks that were supposed to help poor people and NOT RICH people is why this country has such a huge national debt.
The author suggesting that what Heller is doing is better just compounds this situation and fools people into thinking that heller's unethical abuse of the tax laws is acceptable.
heller's effective tax rate...
7%...
that is UNAMERICAN!!!
I obviously need a better tax adviser. Both of these candidates pay a lower percentage than I do. The tax system needs to be simplified and loopholes and special deductions eliminated. These politicians know how to work the system.
heller paid more to the mormon church than he did to our country...
frickin joke!!!
trickle down economics is a farce. if a profit is to be made, it will be made. taxes don't stop rich people from making profits.
Against a Flat Tax? Everyone should pay a %. Grow your net worth and know what to expect to have to pay. Many people do not get a rebate from the government, they get a REFUND. I am not against people making money, I am against Congress People that make money off the TAXPAYER. Shelly? Stop it.
Dean, No pay with no budget, it does not go far enough. Everything should be "on the table". First, let's start with Government Pay and Benefits. Place all benefits just like private companies, social security and self funded IRA's or 401K's. No pension until 65, then only a pension for the number of years you served.
Most Americans effective tax rate is ZERO. That is the real unamerican. I am not shocked by these tax rates at all. Only the zero offends me.
isn't it funny...
pathetic really...
that these republican clowns always cry about taxes...
and yet...
they hardly pay any taxes...
how frickin pathetic is that...
especially when we have a national debt of $15 trillion...
and we are laying off teachers...
and on and on and on...
but these clowns want to pay even less...
they have no sense of community...
it is all about greed...
WAKE UP AMERICA!!!
hey berkley...
heller just handed you the election...
DESTROY HIM!!!
if you need some help...
call me...
i promise you...
i could take him down...
with just this one issue...
i'll do it for pennies...
that's how important this race is...
CALL ME!!!
tbvegas: how about those with a negative number for a tax rate? Those who get refunds but have minimal income. With a small "earned income" one can get more in refunds that earned--by claiming all those child tax credits, child care credits, education credits, deductions, exemptions. And then all the illegals borrowing SSN's to claim refunds....
Major reform is needed here, from top to bottom. Individuals from the bottome to the top are getting away with paying NO to LITTLE tax. I worked for the biggest tax preparer in US(1yr only) and was shocked and stunned to see how many people CHEAT...plain and simple and how easy the govt makes it. WHY? because ALL are doing it...if the little guy gets away with it, they will continue to keep quiet and the bigger fish(companines & above jokers)will sneak by with their loopholes. Their are too many individuals benefiting, that is why nothing will change.
I'm with John Dough. I need a new advisor.
Dean Heller's 7% tax rate is outrageous. It is enough to make one stammer. Unbelievable, really. Immoral. I wonder if he has any knot in the pit of his stomach telling him it is wrong. On top of that, he gets a federal income, and has also been on the state payroll. Dean Heller is totally subsidized by the taxpayers. Government seems to be working very well for him.