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
Biden Releases Tax Returns, in Part to Pressure Rivals
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.
An Everyman on the Trail, With Perks at Home
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.
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!