According to the New York Times, there are growing questions about whether or not Sarah Palin may owe federal taxes on those per diem payments she collected while sitting at home in Wasilla.
The McCain camp is responding to demands that the Palin's release their tax returns. And according to a number of tax experts, it is likely that the first couple of Alaska will owe unpaid taxes on the $17,000 Governor Palin received for the 312 nights she decided to work from home.
Anthony C. Infanti, a professor of tax law at the University of Pittsburg law school, raised the issue in a blog called “Feminist Law Professors.” Mr. Infanti writes that if Governor Palin was not engaging in business while in Wasilla, but simply preferring to spend the nights there, then the per diem payments would be taxable income.
“If these are really just personal expenses paid by her employer, that sounds like taxable income to me,” Mr. Infanti wrote in his posting.
Alaskan officials are don't too worried:
Kim Garnero, the Alaska director of finance, has said that the state does not consider the payments to Ms. Palin to be taxable income at the federal level.
But other experts are claiming that per diems should be taxed as income.
One of them is Robert S. McIntyre, director of the Citizens for Tax Justice, a labor-backed group whose calculations are widely respected by tax experts.
“It’s obvious that the per diems are taxable income. There’s no question it is taxable,’’ Mr. McIntyre said. “If it were not taxable, no one would pay taxes. People would convert their salary into a per diem and no one would pay taxes. You can deduct travel expenses when away from home. But you cannot deduct travel when you are at home.”
McIntyre also raises the question about federal taxes on fringe benefits like travel reimbursement for the First Dude, Trig, Spit, Bubbles, Rock and Sassy.
This could very well turn out to be the "Nanny Tax" or "Housekeeper Tax" issue that plagued a number of high-profile politicians and judicial nominees in the 1980s and 1990s.