Schwarzenegger Taxed: The Sequel!
Arnold's stock in Starbucks & More!
Reported By: Reuters
Friday, April 21, 2006

Today, In our follow-up report on Arnold's tax returns, we learn more about his tax situation from Paul Wachter, chief executive officer of Main Street Advisors.

So far Schwarzenegger released three years of tax returns Friday, showing that the actor turned politician is now making more money in investments than he is through his movie company.

Schwarzenegger reported earning a $4.2 million salary in 2004, largely from film revenue. He accumulated most of his income through capital gains, according to copies of tax returns that his investment firm allowed reporters to read but not copy.

Schwarzenegger's tax returns showed he made almost $16.8 million through wages and investments in 2004. The bulk of that income, $9.6 million, came from capital gains payments made from a blind trust that Schwarzenegger set up after he took office in 2003. The trust also yielded much of Schwarzenegger's $1.1 million in dividends and $1.3 million in taxable interest.

"As the movie income comes down, it leads to a lower salary, and capital gains will keep going up," said Paul Wachter, chief executive officer of Main Street Advisors, the governor's investment firm.

He declined to go into specifics about the blind trust or say how much the governor is worth. He is estimated to be worth about $100 million.

Schwarzenegger has filed an extension for his 2005 taxes and likely will file his return in October, Wachter said.

The governor is not accepting his state salary of $175,000.

Until the creation of the trust, Schwarzenegger reported holdings that included dozens of blue chip stocks such as Starbucks, Wal-Mart, IBM and Microsoft. Records show he reported $31.1 million in income in 2000.

His tax returns offered a glimpse into how Schwarzenegger spends some of his money. In 2004, he gave 1,190 shares of Starbucks to his children's school, Brentwood School in Los Angeles. The shares were worth $55,985 at the time.

He also gave $404,087 in cash to a variety of charities, which his advisers declined to name. First Lady Maria Shriver did not release her tax information.