The returns show that the Alaska governor and her husband Todd had adjusted gross income of $166,080 in 2007 on their joint return. They paid $24,738 in taxes, approximately a 15 percent rate, and claimed exemptions on four of their now five children. They claimed $4,880 in charitable gifts.
In 2006, they had adjusted gross income of $127,869 and paid $11,944 in taxes, less than a 10 percent rate. The couple claimed $3,325 in charitable deductions. H&R Block prepared the returns.
The returns do not include the $17,000 in per diem payments that the governor received from the state for days she spent at home, nor for her children's travel expenses, which were also paid by the state. Some tax experts have argued that the payments should be considered taxable income, while others have noted that the taxable nature of fringe benefits is a thorny area.
The McCain campaign released a letter from tax attorney Roger Olsen pointing out that the state did not include the payments on the governor's W-2 form. "Unless employees have reason to know that the W-2 is incorrect, the IRS expects employees to rely on the employer's W-2 as prepared and filed with the IRS, as Governor Palin did," he wrote. "The income tax aspects of fringe benefits are complex and highly technical, and not subject to second-guessing by laymen. The State of Alaska is confident that its position is correct. Its employees were entitled to rely on that determination. So was Governor Palin."
The Palins also did not check off the optional $3 contribution for public financing of presidential elections, which the McCain-Palin campaign is now tapping.
Palin came under pressure to disclose her tax returns after Sen. Joe Biden, D-Del., released 10 years' worth of his returns last month (see Biden Reveals Tax Returns). Palin's move came a day after the two vice presidential candidates debated on Thursday night.
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