Sen. John McCain reported income of $405,409 last year, but the money he spent on charitable contributions, wages to household staff, alimony and taxes ate up most of that -- showing how his wife, Cindy, helped support a wealthy lifestyle.
McCain on Friday released his 2007 and 2006 tax returns, but not those of his wife, whose income from ownership of a beer distributor far exceeds $1 million, according to financial disclosure statements filed previously in the Senate.
McCain, the presumptive Republican presidential nominee, has never before released his tax returns. Outside groups estimate the McCains' combined wealth to be between $28 million and $100 million.
Democratic presidential contenders Sen. Hillary Rodham Clinton and Sen. Barack Obama filed joint returns with their spouses, providing a clearer picture of their finances. Those returns, dating to 2000, were recently released.
"John McCain's lack of transparency is troubling and raises questions about what he's hiding," Democratic National Committee Chairman Howard Dean said in a statement Friday.
John and Cindy McCain, married since 1980, file separate tax returns and hold a wide range of assets separately. The McCain campaign said Cindy McCain would not release her tax returns in "the interest of protecting the privacy of her children."
In 2007, McCain earned a Senate salary of $161,708 and book royalties of $176,508. His wife earned a salary of $432,991 as chairwoman of her company. Since he filed separately, John McCain's return lists half of his income and half of his wife's salary. McCain's return does not include a large stream of dividends, capital gains, private investment profits and interest that went solely to his wife and her dependents.
The McCains own four homes across the nation and employ a staff of at least four that in 2007 cost about $273,000, half of which was listed on the senator's tax return. McCain and his wife's properties, all held mortgage-free, include their creek-side ranch outside Sedona, Ariz. In 2006, they purchased a $4.7-million condo in Phoenix; and in 2004, she bought a $2.6-million beachfront property near the Hotel del Coronado in San Diego County, according to property records.
Despite the large real estate holdings and his wife's business empire, the senator appears to own few income-producing assets individually. In 2007, he reported interest income of just $48 and dividends of $74.
"It doesn't look like he has a lot of money tied up in typical assets," said Philip Holthouse, a founder and partner in the Los Angeles accounting firm Holthouse, Carlin & Van Trigt.
Not listed on his return, but disclosed separately, was $58,358 that McCain received in a tax-free Navy pension.
Asked whether his wife was supporting him, McCain's campaign staff offered a separate income calculation for 2007 showing that the senator's surplus income after expenses amounted to about $64,000 and suggested that he was providing for himself.
By contrast, Cindy McCain reported assets of more than $1 million in a single Chase Bank account and assets of up to $1 million in each of about three dozen accounts and investments, according to a 2006 Senate financial disclosure report.
Cindy McCain inherited ownership of Hensley & Co., said to be the nation's third-largest Anheuser-Busch distributor with sales estimated at $178 million, from her late father, James Hensley, according to financial information company Dun & Bradstreet.
Judging only by his returns, McCain would seem to have the lowest income of the three candidates for the presidency. Clinton earned $20.4 million in 2007 and Obama $4.2 million, thanks mostly to books the two candidates wrote. But with his wife's money included, McCain is ranked by the nonpartisan Center for Responsive Politics as the 19th-wealthiest member of Congress.
The 2007 tax return shows that McCain gave $105,467 to charity, most of it to a family foundation that supports surgery for disfigured children and clears mines abroad. The contribution included all of McCain's earnings from his books.
McCain paid about 29% of his total income and 31% of his adjusted gross income in taxes to the federal government, avoiding tax shelters and even avoiding taking deductions for routine expenses for his business as an author of books. He also paid $34,000 in Social Security and Medicare taxes for his staff.
"He is paying his fair share of income tax," Holthouse said.
McCain paid $5,413 in alternative minimum tax, an assessment hitting more and more middle-class Americans and one that the senator wants to eliminate. The return also shows McCain paid $17,700 in alimony to his first wife, Carol, whom he divorced in 1980.
Arizona is a community-property state, meaning the McCains must share any income they earn for tax purposes but can keep separate dividends, interest and profits from assets they brought into the marriage or inherited during the marriage.