If it seems like every other day you get an invitation to have dinner with Barack Obama in some impossible location or another. As in, “hey! I’ll fly you and a guest to George Clooney’s house where you’ll totally hobknob with the stars and meet me and eat steak off gold platters because you just gave $3 to my campaign, and while that’s totally gambling, you should be honored that you were just gifted with the privilege of donating to me.” You know the drill. One time it’s a glamorous affair with Anna Wintour, one time it’s carrots and sugar cubes with Sarah Jessica Parker (I couldn’t resist. I’ve been wanting to do that since forever, people). It’s always the same spiel: give us a couple of bucks and we’ll give you, the peerless intellectual with the stellar voting record a chance to take a free trip on an airplane to meet people who have been instructed not to think for a living, lest they have to afford more Botox.
Well, in case you hadn’t noticed already, the free dinner with Barack Obama that he’s gifting you, his loving supporter with, is actually not free. Nope. The value of the dinner is $4800, and depending on where you fall in the progressive income tax scheme, could end up costing you a pretty penny.
Three winners and their guests will receive:
- Roundtrip airfare (valued at $1,200)
- One night in a hotel ($200)
- Dinner with President Obama ($200)
The rules state that “all federal, state and local taxes associated with the receipt or use of any prize are the sole responsibility of the winner.” The $1,600 is includible in each winner’s income under § 74 — at the 35% rate, that results in $560 of federal income tax.
To qualify for the 35% rate, you have to be more than the average taxpayer, obviously. The values come from the campaign itself, which seems to enjoy buying it’s food and travel at the top of the market:
A $200 dinner? Or is it 2 $100 dinners? What are they eating? Luckily, you’re only likely to be taxed on fair market value. Unless you’re eating an endangered species, I think you’ll probably safely escape with at least a little spending cash.