McCain earnings trail Obama, Clinton

WASHINGTON -- Republican presidential hopeful John McCain reported earning $405,409 last year and paid $118,660 in taxes, according to tax returns released Friday that did not include many details of his wife's wealth.

The presumptive GOP nominee also reported income of $358,414 in 2006 and $96,933 in taxes paid.

McCain's reported total includes some income earned by his wife, Cindy, heiress to one of the nation's largest beer distributorships. She keeps many of her finances separate from her husband, an Arizona senator.

On his own, McCain earned $361,373 last year and $264,169 in 2006. McCain's earnings over the last two years are far less than what Democratic rivals Hillary Rodham Clinton and Barack Obama reported.

Most of McCain's individual earnings come from his Senate salary ($161,708) and sales of his five books ($176,508). The 71-year-old senator also reported receiving $23,157 in Social Security benefits last year. McCain, a former pilot held for five years as a prisoner of war in Vietnam, also collects a non-taxable pension from the Navy, which totaled $58,358 last year.

McCain's tax release is different from the information provided by Clinton and Obama, who file tax returns jointly with their spouses. The McCains file individually and his campaign did not release tax returns for Cindy McCain.

However, some information about Cindy McCain's earnings are included in the senator's tax returns. He reported that his wife earned more than $430,000 in each of the past two years in salary and benefits for her work as chairman of Hensley & Co., the company she inherited from her parents.

Because Arizona has community property laws, married couples living there must report their salaries and income from jointly held assets on each spouse's taxes when the husband and wife file separate tax returns.

McCain's campaign said the senator and his wife, who have a prenuptial agreement about their assets, "have kept their personal finances separate throughout their 27-year marriage" and have filed separate tax returns for several years.

Campaign spokeswoman Brooke Buchanan brushed aside criticism from the Democratic National Committee that McCain should have released more information. She noted that McCain has filed annual financial disclosure reports required of every member of Congress since his first election to the House of Representatives in 1982.

"He's been completely transparent in his 25 years as a public official," Buchanan said.

Clint Stretch, managing principal of tax policy with the national office of financial firm Deloitte, said he didn't want to comment on McCain's taxes speficially, but, "it's very unusual for people to file separate returns."

"There really is not a tax policy reason to do a separate return," Stretch said.

A closer look at the numbers

Congressional disclosure reports contain much less detail than tax returns. The forms allow reporting of asset values and business income in broad ranges, not specific amounts, and do not require disclosure of personal residences or spouses' salaries. The couple's homes are all owned solely by Cindy McCain or her individual trust, according to land records in Virginia and Arizona. This includes a condominium in Phoenix for which she paid $4.7 million in 2006 and another condo in Arlington, Va., assessed at about $850,000.

In other details from McCain's 2007 tax return, the senator paid $136,572 to household employees last year. Buchanan said those workers include a caretaker on the McCain ranch in Sedona, Ariz., child care for the couple's teenage daughter, Bridget, and a personal assistant for Cindy McCain. The return says the McCains paid $33,942 in Social Security, Medicare and income taxes for those employees last year.

In total, McCain reported income for himself and his wife of $701,000 in 2006 and $794,000 in 2007. McCain's tax filings released Friday report they jointly paid taxes of $96,933 in 2006 and $118,660 in 2007.

"I don't see any smoking gun," said Greg Valliere, chief political strategist with the Stanford Financial Group. But he noted that McCain's rivals will question why the campaign did not release Cindy McCain's returns, especially after Clinton and Obama detailed their spouses' earnings.

"I would think they would be pressured to do that," Valliere said. "She's worth a lot of money obviously."

Using McCain's financial disclosure statement and other public records, the Associated Press estimated Cindy McCain's net worth as possibly more than $100 million in an article earlier this month.

Comparing the candidates

Democrats criticized McCain for releasing only two years' worth of returns for himself, when the top Democratic candidates released their joint tax returns for every year since 2000. "McCain should hold himself to the same standard set by past presidential candidates, both Republican and Democrat, and the example already set by both Democratic candidates," DNC Chairman Howard Dean said in a statement.

Clinton and her husband, former president Bill Clinton, had estimated income of $20.4 million in 2007, up from more than $16 million in 2006. The Clintons' largest source of income is fees the former president took in for making speeches, which totaled more than $10 million last year. The Clintons released a summary on April 4 of their 2007 tax information because they have asked for an extension to file their return, which was complicated by the dissolution of their blind trust last year.

Obama and his wife, Michelle, reported $4.2 million in income last year, more than quadruple the $991,000 they made in 2006. About $4 million of that came from sales of his two books, Dreams of My Father and the bestseller The Audacity of Hope. Michelle Obama, an administrator at the non-profit University of Chicago Hospitals, made slightly more than $103,000 last year.

McCain and his wife reported donating $129,390, or about 18%, of their joint income to charity in 2006 and nearly $211,000, or about 27%, last year. McCain's campaign says he donates royalties from his five books to charity, as well as each increase to his Senate salary since he first took office in 1991.

The Clintons gave $3 million to charity last year, about 15% of their income, and a total of more than $10 million over the past eight years, according to summaries released by her campaign. The Obamas gave $240,000 to charity last year, about 6% of their income.