Monday, October 06, 2008

Vice Presidential Candidates' Finances

Which Vice Presidential candidate is a better personal finance role model? It pains me to say this, but I think it might be Sarah Palin! The tax returns released by politicians may not always tell the full story, but there are some striking contrasts here:

The Palins reported taxable income in 2007 of $166,080, consisting largely of Ms. Palin’s salary as governor. The couple paid $24,738 in taxes on this income, at a tax rate of around 15 percent. But in 2006, the couple reported taxable income of $127,869, which consisted mainly of Mr. Palin’s income from BP Exploration Alaska and an income of less than $5,000 for Ms. Palin from the State of Alaska before she was elected governor.

That year, the couple paid $11,944 in taxes, a tax rate of just under 10 percent.

Yet for a couple with modest incomes, the Palins have amassed a sizable portfolio that consists mainly of retirement investments and real estate.

The family home in Wasilla, which has been valued for tax purposes at $550,000, was listed on the federal financial disclosure form, which requires that all values be given in ranges, between $500,000 and $1 million.

The remaining real estate, valued at between $150,000 and $365,000, consisted of a fishing leasehold on the Nushagak River and partial interest in two other parcels of land.

The Palins kept their taxes low by putting all their investable assets into tax-deferred accounts, including 401(k)’s, I.R.A.’s and defined-contribution plans from Wasilla, the State of Alaska and BP Alaska.

Financial Papers Show Palins' Assets Top $1 Million

Mr. Biden’s tax returns show why he consistently ranks as one of the least wealthy members of the Senate. He has virtually no outside or investment income and pays a substantial amount in interest on his home mortgage.

For 2007, Mr. Biden and his wife, Jill, paid taxes of $66,273 on an adjusted gross income of $319,853, which included $71,000 in royalties from his book. The couple, who file jointly, claimed $62,954 in deductions, including $995 in gifts to charities and $38,712 in interest payments. They earned $99 in interest on savings accounts and nothing in dividends.

Biden Releases Tax Returns, in Part to Pressure Rivals

At least by Senate standards, Mr. Biden does not have to try too hard to underscore his relative lack of wealth. He has long shouldered a heavy debt load; he obtained or refinanced mortgages 29 times since he was elected in 1972, and currently owes $730,000 on two mortgages on his home. In addition, he has had several personal loans, including one for up to $50,000 secured by the cash value of six life insurance policies.

Mr. Biden supplements his $165,000 Senate salary with a stipend from teaching a college course. His biggest boost came a few years ago, when he collected $225,000 in advances for his best-selling memoir. The Bidens have several checking accounts with less than $15,000 each, and Jill Biden’s retirement fund with between $15,000 to $50,000, according to their tax returns and Mr. Biden’s Senate financial disclosure reports. The couple reported virtually no investment income last year, and their largest asset by far was their home.

An Everyman on the Trail, With Perks at Home

I'm glad Governor Palin and her husband seem to be managing their family finances quite responsibly... but I still don't want her anywhere near the White House!

18 comments:

Frank said...

Wholeheartedly concur with that sentiment.

Kady said...

How the heck do the Palins have an income tax rate of 15% on over $150k in income??

Adrienne said...

Yeah but the Palins have also breeded like rabbits. Each one of those kids knocks a nice little chunk off the total income.

Optioned Unarmed said...

There has been a lot of discussion since the tax records were released about whether the husband man, Todd, reported his race car activities illegally as a "business" instead of as a "hobby". He had significantly more (several thousand dollars) in expenses than he did in income for his racing, and he deducted this from his taxes as a business loss. If he did illegally report his racing as a business instead of a hobby, it would technically be tax fraud/evasion.

asgreen said...

agreed!

Gord said...

Yet another example of an 'inconvenient truth".

Parties on the right tend to keep taxes low and government services threadbare. At least, they aspire to; many don't get it done because they start pandering to where the votes are.

Parties on the left like to play Robin Hood blaming the rich and big corporations for their "undeserved" profits (a dirty word). They promise to raise the taxes on the rich and use that money to fund social programs for the middle class and the poor.

Trouble is, the numbers don't balance and they never will.

I wonder how many of us would put their personal income tax returns up to media and public scrutiny? No wonder so many good people don't go into public life. Palin at least has entertained us and brought Tina Fey some more work. In the end it may well be the Republican ticket that in hindsight would have been the better choice for our wallets.

Wendy said...

I don't care to see Obama & Biden OR McCain & Palin anywhere near the White House.

So far Bob Barr speaks the most common sense as far as I can tell.

Anonymous said...

Palin - Totally agree. I keep asking myself, how are any of these four people the "best" America could do?

I do wonder though about the character of the women who have been second on a ticket in modern times. Ferraro - everyone knew she had really bad stuff in her past, including organized crime connections.

Do the presidential candidates pick these women knowing that they didn't stand a chance at the presidency and could thus blame the loss on the woman running with them?

Cindy Brick said...

Is your problem that the Palins might have been careful with their money, so were able to invest more than the average American? That figure didn't seem too outrageous to me, considering they've both been working.
I also guess I figured that the $550,000 house may well have been purchased decades ago, when it was a LOT less expensive. My parents paid $10,000 in 1960 for a Michigan farm that's easily worth a cool half-million today.
Palin is a breath of fresh air who (fortunately) doesn't seem to have the Congressional insider no-how for playing games and maneuvering. I, for one, would welcome the chance to put someone in the White House like her!
(And BTW, I REALLY enjoy your blog...keep on letting us know what you think!)

Anonymous said...

Whoever that knowingly brings a downs syndrome child into this world at age 44 does not get my vote. That is completely irresponsible- especially when it's your 5th child. I'm not putting down parents with special needs kids (I have had two in my extended family) who stay close to home to take care of their kids. Palin is obviously not that type- involved parents rarely have knocked up 17 year olds. I would not vote for someone who runs a country like they do their family.

Her finances look decent. But all the negatives wipe it all out. This is America -we can do better.

Anonymous said...

Nice commentary. Let's just hope that Biden is not the one we look to in helping America (and the world) out of our financial mess.

Suburban Wife said...

Great post. I completely agree about Palin getting close to the White House.

Will you be posting about the Presidential Candidates' finances? Obviously McCain has more money than the rest of them put together, but it would be interesting nonetheless.

Anonymous said...

i am tired of people with kids paying 15% or less income tax and those of us who choose not to have kids get slammed with higher tax rates.

why should i pay higher taxes when their kids get free public school?

Anonymous said...

Anonymous,

'why should i pay higher taxes when their kids get free public school?'

I couldn't agree with you more. People who have kids should pay the same tax if not more because they use the government resources more than people who don't have kids!

Anonymous said...

Wow- I didn't realize the blogger here was so dim-witted as to want to have a socialist take over as President of the U.S. Why don't you simply contribute more of your money NOW to charity than force all the rest of us to drastically increase taxes.

Anonymous said...

Oh please, at least Palin really understands whats going on in the world, as opposed to that loud-mouth Biden who doesn't know his *** from a hole in the ground. I don't understand how an intelligent person like yourself could prefer him to her.

Anonymous said...

Anybody who votes Republican this election is really dumb. McCain's plan to rescue irresponsible homeowners means that you and I will be stuck with the bill. See what cnn has to say.
http://money.cnn.com/2008/10/08/news/economy/McCain_mortgage_plan/index.htm?postversion=2008100811

Supercop said...

Whats really sad here is how anyone could think one pair is going to do any better than the other. On one hand you've got a guy that plans on saving America "with a dream", yet never gives any specifics on that dream or how its going to be paid for and the other..a man that looks perpetually constipated and several seconds away from a stroke. I wont even get into his politics.
This really isnt a choice about you picking the best candidate..its about picking the lesser of two evils. Either way we're getting screwed, the best we can hope for is that we get kissed first.