Via tpmmuckraker.com: Citizens for Responsibility and Ethics in Washington files complaint to Federal Election Commission.
I am unfamiliar with campaign finance law at this level of detail. However, I do believe that the Republican National Committee should obey the law.
Well, perhaps, but what you call “Imelda Marcos style shopping sprees” could just as easily be called “SOP for national campaigning”.
I bet they spent heaps of money getting McCain’s wardrobe updated and I bet the Democrats have spent similar amounts on Obama and Biden’s campaign wardrobes.
Perhaps they don’t normally spend that much on clothes and such, but $4,000 sounds like a relatively low bill for daily attention from professional hair and makeup artists (which all four candidates are no doubt receiving).
Actually, we’ve been over this, if you’ll scroll up and read some of the posts. Its pretty clear that in the case of Obama, they’re not spending that much money.
Also, the Obama/Biden campaign hasn’t been making issues out of things like $400 haircuts for the past couple of years.
I think SP could argue that she wasn’t given the clothing as an employee because she doesn’t have the job yet. But maybe she’s an employee of the McCain campaign or something. Also, the clothing was given in contemplation of becoming an employee and in furtherance of that purpose, so this argument seems kinda shitty.
However, if the plan really is to donate it to charity, then maybe she could argue that she was only given the use of the clothing temporarily (resulting in much less income).
Doesn’t matter, if she receives “economic benefit” its income - whether she is an employee or not. Its way in excess of any non-taxable gift allowance, so it can’t be a non-taxable personal gift.
The gift allowance is for the giver, not the givee (er, donee, as it were), and it relates to the estate tax, not the income tax. The idea is that a person cannot avoid estate tax by giving all their stuff away right before they die, so there’s a gift tax on gifts in excess of the personal allowance. But someone who gets a gift doesn’t have income, even if the amount of the gift goes over the giver’s allowance.
Also, I never argued it could be treated as a gift. As I said, even if she’s not an employee of the U.S. government currently, she may be an employee of something else (i.e., the McCain campaign), and the clothing was definitely given in connection with possible employment.
You are right on the gift tax…but its still economic benefit to her - and certainly not immaterial. I think the tax implications of this are going to be complicated…but she already has tax complications with the state paying for her family’s travel.
Right, that’s where the rental argument comes in. What’s the value of the use of a $1000 purse for a couple of months? Hell if I know, but it’s less than $1000.
So if she was given the clothing as an employee it’s either a gift or compensation so subject to either gift taxes or income taxes, right?
ETA: Oops my bad, I thought the gift receiver paid the taxes not the gift giver.
But what if the clothing really is a loan? We all know of many, many cases where tailored clothing is a loan right? (The only one that comes to my mind is celebrity Oscar wear, but that can’t apply to a Republican, can it?) So, if the tailored clothing is a loan, do you pay interest on it? At what rate? And how do you determine the worth of the used clothing when it’s returned?
Read my post above re: the gift tax. This is not how it works.
No, this is a lease and not a loan (becaue she was given the use of property, not money). She was given a lease on the clothing for zero rent as an employee (or something), so she has income in the value of the lease.
Send lawyers, guns and money…
Rand Rover:
With due respect, are you talking out of your ass? Do you have serious reason to believe that the IRS would treat this as a loan? I find that sorta improbable, but I’m not a tax lawyer.
::Googling:: Huh. One bulletin board poster, pushing the loan hypothesis, speculated that it could be compared with a Hollywood costume. Once the production is done, the clothing reverts to the studio.
Ah, this is a little better: http://dontmesswithtaxes.typepad.com/dont_mess_with_taxes/2008/10/palins-duds-uniform-gift-donation.html
http://taxprof.typepad.com/taxprof_blog/2008/10/tax-consequence.html
a) No, it’s not a uniform.
b) Paul Caron, associate dean of the University of Cincinnati School of Law: “This is clearly income.”
c) Linda Beal, re: Loan: Fair use value might constitute 90% of the value.
d) Nobody mentioned the charity auction concept, alas.
e) Hollywood wardrobe hypothesis.
BTW: The RNC paid for this. The employer in question is definitely not the USGovt. Presumably the payment will be connected with her campaigning, not her prospective day job in Washington DC.
Also: The FEC has regs against using campaign donations for personal use: slush funds were supposed to go out in the 1970s. Let’s not evade the possibility of criminal behavior with overly selective focus.
Her purse is gonna have a lot of mileage on it – plenty o’ traveling over the next couple of weeks.
Not to mention blood if she guts a deer along the way.
On the charity auction angle. I am NOT in the US, so I don’t know how much relevance this wil have, however I would think its a pretty universal principle…
I have arranged a charity auction before. Our “donors” (those that bid at the auction) could claim a deduction for the difference between the value of the item and how much they paid (i.e - the amount of the donation).
I would imagine that something similiar would work for Palin’s tax liability. Sell the stuff after the campaign? FIne - your tax liability arises from the difference between original purhase price and selling price - if it sells at a charity auction for more than purchase price then no liability
She absolutely already has the job of vice presidential nominee.
But I love this idea of “These clothes are a loan, to be given to charity afterwards.” Why limit it to clothes? I think the RNC should “loan” her a Ferrari and a jet, maybe a stable of ponies for Piper, certainly a whole bunch of nuclear-powered snow machines* for Todd, some baby strollers and whatnot for the pregnant kid, and so forth. I say $150,000 is only the beginning!!
*[sub]Is a snow machine the same thing as a snowmobile?[/sub]
Nope. Snow machines make snow. But you could always pretend you were talking about one of these, which I’m sure the Toddster would love to hunt moose with.
Wrong. In Alaska, a snow machine is what the rest of the country calls a snow mobile or Skidoo. It is just another peculiarity of Alaskan lingo.
I’m not thinking the IRS would go for that if I tried it - substance over form. Now, the GOP has some more strings to pull than I do - on the other hand, the Palin’s tax issues are going to be fairly visible, and the IRS works on precedence - I’m not sure they would want to let Palin get away with it because suddenly every CEO in the country would suddenly “rent” his Armani suits and his Mercedes from his company.
That’s not a job, since she doesn’t draw a salary for her work (as a nominee). You could argue that she is an applicant for employment, in the same way that someone who flies to Redmond on Microsoft’s dime for a third interview might be.
If this situation is analogous to anything, the RNC is to Palin as a sports agent is to a prospective sports-league draftee; agents loan their clients money (against their prospective earnings once drafted), often pay for their draft prep work (interview coaching, pre-draft training, etc.) and so on.
Yeah, I went back and read the middle bits of the thread after I posted that. I don’t believe that’s significant, though; the issue is not whether the campaigns spend money to prettify their nominees, but how much. If they spend more on Palin than Biden or whoever, that’s simply a difference of degree.
Also, there’s a small difference of circumstance; the three men have held national office previously, while Palin hasn’t. It kind of follows that they’d be better dressed to begin with; I suspect the Alaskan governor’s residence is not a hotbed of professional style (although I may be doing Alaskans a disservice here).
And there’s more… (italics added by me):
It’s almost as if she’s a celebrity or something.