McCain's tax troubles

McCain runs into a little trouble over his failure to pay his property tax bill.

Published June 30, 2008 2:56PM (EDT)

One of the bigger stories that came out over the weekend was a Newsweek report about John McCain and his wife having a little trouble with their tax bill. Realistically, this isn't necessarily a huge scandal, but it certainly is an embarrassing one.

When you're poor, it can be hard to pay the bills. When you're rich, it's hard to keep track of all the bills that need paying. It's a lesson Cindy McCain learned the hard way when NEWSWEEK raised questions about an overdue property -tax bill on a La Jolla, Calif., property owned by a trust that she oversees. Mrs. McCain is a beer heiress with an estimated $100 million fortune and, along with her husband, she owns at least seven properties, including condos in California and Arizona.

San Diego County officials, it turns out, have been sending out tax notices on the La Jolla property, an oceanfront condo, for four years without receiving a response. County records show the bills, which were mailed to a Phoenix address associated with Mrs. McCain's trust, were returned by the post office. According to a McCain campaign aide, who requested anonymity when discussing a private matter, an elderly aunt of Mrs. McCain's lives in the condo, and the bank that manages the trust has not been receiving tax bills on the property. Shortly after NEWSWEEK inquired about the matter, the McCain aide e-mailed a receipt dated Friday, June 27, confirming payment by the trust to San Diego County in the amount of $6,744.42. County officials say the trust still owes an additional $1,742 for this year, an amount that is overdue and will go into default July 1. Told of the outstanding $1,742, the aide said: "The trust has paid all bills shown owing as of today and will pay all other bills due."

Now, if there were any evidence at all that the McCains were deliberately trying to avoid paying their taxes, it would be a serious political problem for the Republican presidential candidate. But that doesn't appear to be the case -- this looks like a bureaucratic error, not a couple of tax cheats. The McCains, thanks to Cindy McCain's family fortune, are multimillionaires. They simply wouldn't have any reason to avoid an $8,000 bill.

Dan McAllister, treasurer and tax collector for San Diego County, told Newsweek, "Under the law, the property owner is responsible for keeping the address current." True, on this the McCains were definitely wrong.

Which leads to the part of this that's politically embarrassing: John McCain and his wife own seven properties? As Mark Kleiman put it: "It must be nice to own so many houses you can't remember which ones you're four years in arrears on your real estate taxes."

Exactly. I very much doubt that the McCains deliberately avoided their tax bill, but their defense is kind of awkward. In effect, their argument is, "We own so many properties, it's hard to keep track of how much we owe to whom." It's not the kind of argument that screams, "Everyman."

Moreover, embarrassing stories about McCain's personal finances don't exactly inspire confidence. It creates an interesting contrast -- Barack Obama has no credit card debt and has set up college funds for his daughters; John McCain has a six-figure credit-card debt and hasn't paid one of his property tax bills. Which of these candidates sounds like the fiscally responsible one?

And finally, when a similar bureaucratic error forced Senate candidate Al Franken (D) to have to pay back taxes, Republicans were outraged, and pointed to the issue as an important reason not to vote for him.

If an inadvertent accounting problem constituted a "scandal" for Franken, should McCain be held to a different standard?

By Steve Benen

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