Palin's Wardrobe, care of RNC

Updated 10/22/08 2pm and 10/31/08 4:12pm (to add link to video)

My colleague Francine Lipman at Chapman points out an interesting campaign tax-related tidbit on Politico.com by Jeanne Cummings, RNC Shells Out $150k for Palin Fashion, Oct. 22, 2008.  There are apparently about $150,000 of expenditures for clothing, hair and accessories for Palin and members of her family at the likes of Saks Fifth Avenue in New York and other stylistic addresses. 

Two interesting points about these expenditures--one directly tax related, the other more remotely so.

1) What does it say about a party's choice of candidate to sit a heartbeat away from the presidency if they are so unhappy with that candidate's actual personality that they have to completely "re-costumize" her for her new identity as a national representative of the party? 

Answer: It appears that Sarah Palin is pretty much an RNC commodity with no genuine substance of her own.  Take one small-town ambitious woman who wears her fundamentalist faith like a nametag and spouts appropriate right-wing lines.  Stuff with the same old Bush positions --on the economy (tax cuts are the solution to every economic situation; tax cuts for the wealthy are smart policy, not welfare for the wealthy; tax cuts for those at the bottom are socialism, etc.); on war (we can "win" in Iraq, and Afghanistan, and Iran.....); on religion (God is on our side); and on patriotism (right-wing America is pro-America; liberals are unpatriotic).  Package this volatile mess with the correct wrapping of red-state attire and hairdos.   Voila-- a ready-made one-heartbeat-away-from-the-presidency, self-proclaimed-vp-qualified, base-invigorating, liberal-bashing, facts-distorting, accent-fakin' candidate is ready to be sprung on the public.

There are some revealing statistics hidden here that might be of interest to the "Joe Six-Packs" and "Joe the Plumbers" that the McCain-Palin team are so often purporting to empathize with (while they generally disregard the financial distress of the Jane Plumbers, as noted by the National Council for Research on Women, here).  The SC Southpaw blog notes that

Palin's fashion budget for several weeks was more than four times the median salary of an American plumber ($37,514). To put it another way: Palin received more valuable clothes in one month than the average American household spends on clothes in 80 years. Her clothes were the cost of health care for 15 or so people for one year.

And a video game makes the point even more dramatically.

Note that the governor's "expensive, designer fashions have been the topic of fashion pages and magazines."  Id.  Don't ya think it would have been much more honest, ya know, for the Governor to have let people know before that this wasn't really her stuff they were writing so much about?  You betcha'.

2)  What does it say about the tax compliance norms of the Republican Party and the Palin family? 

Answer:  There are potential tax issues for both the Palins and the campaign.

We've already seen that the Palins are willing to accept "reimbursements" from the state for expenses that most of us think one shouldn't seek reimbursement for even if it is available--per diem for meals and incidentals while "traveling" to their long-time home in Wasila (for "business", maybe--at least some of those times there seem to be periods when she is just "working out of the Anchorage office" without official business there).  Even assuming that the per diems are legitimate under Alaskan reimbursement policies, some of us think that a conscientious person would not request such per diems, though another result of the Friedmania freemarketarianism is that more people these days seem to think it's appropriate to grab whatever is available for the taking.  And it may be that at least some of those per diems (not to mention husband and children's travel reimbursements) should have been included as income in Palin's federal income tax returns.  See earlier ataxingmatter campaign tax items discussing that issue.

Now we find that Sarah Palin has apparently accepted $150,000 of personal accessorizing from the RNC.  First to note about this "extreme makeover" is that it is clearly  personal.  If Sarah had paid for them, the amount paid wouldn't be deductible (all of these items are wearable in normal life and worn in normal life, even if they are "required" by Palin's new boss, the RNC and McCain campaign).  So, without more, the cost of the makeover would be income to the Palins that will need to be included in their 2008 tax return.  IRS, be forewarned to be on the lookout for this one (unless the story below unfolds as now stated it is intended to do)! 

But there's a potential campaign finance issue here, too.  The Federal Election Commission has long advised that it is inappropriate to use campaign funds to purchase items for personal use.  Originally, the campaign refused to say anything about the expenditures and refused to say whether the expenditures were ongoing or not, according to the Politico posting.  After Politico.com made the story public, however, the campaign says that "It was always the intent that the clothing go to a charitable purpose after the campaign."

Now, designer clothes, even used, are not worthless.  But used clothes are not the same as new clothes.   Especially when we are talking about designer clothes.  And using the new clothes is a perc to the person that gets to use them.  All of that seems to suggest that, even if the RNC donates the used designer clothes to some charity, the clothes weren't bought for donation to charity--they were bought for Sarah Palin to wear.  For the campaign, then, are they just costumes, a legitimate expense of the campaign in outfitting its VP candidate for the show?  Or are they an illegitimate personal expense, providing a candidate with the use of an expensive wardrobe beyond the reach of all but the very rich?  For Palin, even if she doesn't get to keep them, hasn't she had the personal benefit of them--like renting a tuxedo without having to pay the rent, except that this is the clothes she's being seen in every day during the campaign, much more than just an outfit donned for a rare special event?  Under that light, it appears that the fair use value, at the least, should be income to her, and that might well amount to a considerable portion--maybe as much as ninety percent or more-- of the original cost of the outfits.  (This is my surmise, having several times bought in New York used designer clothing for $5, when it was in perfectly good "like-new" condition, that cost multiple hundreds of dollars when new.  It's the early user that gets the value.....)

An ongoing free-flow of discussion on the TaxProf listserve has thrown out a number of interesting ideas.  Riffing on them, I'll add the following.  Perhaps the use by Palin is just like actors who wear wardrobes provided by the producers, so not income at all, based on an arguably relevant analogy in the Ozzie Nelson case (a deduction for wardrobe expenses for the family's outfits on their pre-reality-shows reality show, for clothes that they claimed were too hot to be suitable for their real California lifestyle).  Maybe it is like actresses who are loaned fancy designer gowns to wear for the Oscar festivities.  But hey--shouldn't the use value be income to them, though?   If there's no tax consequence when the boss buys you the clothes that make the man that is the man that the boss wants to hire and the man wears the clothes anytime when not in his own home sanctuary, what's to stop all the company executives and law firm partners from having their firms buy their clothes and letting them wear them on loan, taxfree?  Surely that would be one boondoggle for the wealthy too many for American taxpayers to stomach.

Assuming that the RNC spokeswoman's statement about future donation to charity is accurate, I guess if Sarah gets too attached to that saucy red leather jacket, she'll just have to shell out some of that extra moolah from Todd's snowmachine racing "business" or from her per diem "reimbursements" to buy herself one.  I bet she buys a new one, rather than going to the local "second life" designer clothing resale shop.

Comments

[Diane]

Can't you find something else to talk about other than Sara Palin's apparel;like maybe how gas has went down. Oh I forgot Liberals just talk a bunch of Rhetoric without saying much versus as opposed to what it actually going right. But then again, that's just the media supporting your party !

[Diane]

No further comment

[Trexler's Take]

In small defense of Palin, she would probably be hammered in the media if she didn't get new duds. I could see all the articles in US Weekly and even real magazines about how "unfashionable" her outfits are or how she keeps wearing the same things over and over again. Just think how much attention Hillary's wardrobe got. You never (or very rarely) see Men treated in the same manner.

It is a symptom of the culture, the outer appearance, and not the real issues.

[LindaMBeale]

Yes, the sexism in the press pays attention to women's dress more than men's, though Edwards' expensive haircut certainly proves that media go after whatever is seen as excessive attention to superficial looks rather than basic wardrobe choices.

But the wardrobe expenditures for Palin reflect poorly on both the candidate and the party, nonetheless.

[LindaMBeale]

Diane,
Your comment is an ad hominem attack of the kind I generally do not permit on my blog.

Sarah Palin's wardrobe would not be an issue at all for me if she had purchased it herself. She is certainly well off and capable of doing so. Since she accepted this expenditure by the RNC and has enjoyed the use of the clothes and the fashion coverage that use has gotten her, it is a very acceptable subject for discussion. The fact that she accepted this kind of expenditure by the RNC on her behalf speaks volumes about her lack of concern for the ordinary folks who would find that kind of expenditure an outrage in light of the widespread lack of health insurance, employment, or child care, for a few examples. The fact that her supporters claim the mainstream media has been unfair, by the way, is downright silly, in my view, since the mainstream media--even PBS-- is much too careful about not offending the right-wing establishment.