The Daily Deduction

Revisiting The Pirate Top Earnings Chart

On Talk Like A Pirate Day in 2008, Forbes.com named the top-earning pirates of all time. It’s widely known across the internet that Samuel “Black Sam” Bellamy, Sir Francis Drake, and Thomas Tew hold the top three career wealth positions on the chart of highest-earning pirates. What would their career hornswagglin’ look like as a tax situation if the government wanted to look into their lives as they were in the year prior to the deaths of each pirate?

Assuming their cumulative earnings were made all in that year before their deaths, if we take the earnings from the 2008 article and adjust them for inflation, their estimated career earnings for 2013 would look like this:

Samuel Bellamy $129.6 Million
Sir Francis Drake $124.7 Million
Thomas Tew $111.2 Million

We’ll start by calculating exemptions for each pirate. Why not? Pirates are people too and they certainly can’t be claimed as a dependent of another taxpayer. Samuel Bellamy can claim a personal exemption which reduces taxable income by $3,900 in 2013. Sir Francis Drake was married to Elizabeth Sydenham before he died, so he can claim a personal exemption for himself and one for his spouse. This could make his exemptions worth $7,800. Thomas Tew was married and had two children (according to multiple sources) so he can claim up to 4 tax exemptions, which reduces his taxable income by $15,600.

We’ll assume that they didn’t make any investments, accrue and taxable interest, have any pensions or annuities, or report any capital gains, so there’s no additional income to adjust for.

One potential area where they could off-set some of their taxes considers the fact that pirates rule the sea with their hired crew and are their own bosses. Assuming that they paid their dues for Social Security and Medicare taxes, it’s likely that they could deduct half of the self-employment tax from their tax returns and file a Schedule SE.

Little is known about the education of the three pirates, so any deductions or credits for education are out. It is unknown (and probably unlikely) whether or not these Old Salts gave any of their booty to qualifying charities. Without any IRAs or 401(k) plans to contribute to, these pirates are certainly leaving money on the poop deck.

Samuel Bellamy would take the standard deduction. According to the IRS, the standard deduction rates for individual taxpayers in 2013 will be $6,100. If claiming exemptions for spouses and dependents in the first part of the tax return, both Sir Francis Drake and Thomas Tew would have to list their filing status as married filing jointly status. The applicable standard deduction rates for 2013 are $12,200 for married taxpayers filing jointly.

On top of failing to maximize their earnings with tax advantages, these mates owe almost 300 years in back taxes, penalties, and interests. Blow me down! This goes to show that piracy simply doesn’t pay!

What do you think of a pirate's life against today’s tax code?

Posted To: The Daily Deduction By: Lauryn on 9/19/2013 02:10:00 AM
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