April 18 (Bloomberg) -- John McCain, who has clinched the Republican presidential nomination, reported $405,409 in income last year and paid $118,660 in federal taxes, according to tax returns made public today. He gave $105,467 to charity, the records show.

His campaign didn't release tax returns for his wife, Cindy, who is chairman of the Phoenix-based Hensley & Co., one of the largest beer distributors in the U.S.

``My wife and I, we have separate incomes, we have a prenuptial agreement, and her business is her business,'' McCain said in an interview. ``I have never been involved in it since before I ran for the Congress of the United States, so I just feel that she has a right to a separate tax return.''

The disclosure of tax information has become an issue in the presidential campaign. Illinois Senator Barack Obama released his tax information in March and then pressured his rival for the Democratic nomination, New York Senator Hillary Clinton, to disclose her tax records. She did so on April 4.

Presidential candidates aren't required to release their tax information but typically do so voluntarily after they become their party's nominee.

McCain's income came from his $161,708 Senate salary, $23,157 in Social Security benefits, $176,508 in book royalties and a Navy pension. The remaining income comes from a share of his wife's income which, under Arizona's community property law, he must claim.

Children's Privacy

McCain spokeswoman Jill Hazelbaker said making Cindy McCain's tax information public would violate the privacy of their two children who are still claimed as dependents.

The Associated Press estimated this month that Cindy McCain is worth more than $100 million based on the value of her late father's stake in Hensley & Co.

In 2004, Democratic presidential nominee John Kerry disclosed a portion of the tax returns of his wife, Teresa Heinz Kerry, heir to a $500 million fortune, three weeks before the election.

Hazelbaker said Cindy McCain's situation differs from Teresa Heinz Kerry's because she asserted that Kerry's wealth helped fund her husband's campaign and Cindy McCain hasn't loaned her husband money. Federal Election Commission filings show that John Kerry, the 2004 Democratic nominee, loaned himself money by taking out a mortgage on the home he shares with his wife.

`A Signature Issue'

Melanie Sloan, executive director of the watchdog group Citizens for Responsibility and Ethics in Washington, said the failure to release Cindy McCain's returns shouldn't fly with voters because transparency has been ``a signature issue for John McCain,'' and not releasing her information smacks of hypocrisy.

``He should just release the tax returns and make it a non- issue,'' Sloan said.

Democratic National Committee chairman Howard Dean also assailed McCain -- ranked last fall by Roll Call newspaper as the ninth richest member of Congress -- for not releasing his wife's taxes and for making public only two years of returns. He said McCain was ``releasing less information about his tax returns than any other candidate since Ronald Reagan,'' continuing ``a troubling pattern of thinking the rules don't apply to him.''

The Clintons' tax information goes back three decades; the Obamas have released eight years.

Investment Income

McCain's tax return does provide some information about his wife's income. It reports she earned $432,991 from Hensley & Co. in 2007 from which she had $85,833 in taxes withheld. His return shows no information about her investment income. McCain, 71, an Arizona senator, reported a total of $48 in taxable interest, $74 in dividends, and no capital gains or losses in 2007.

According to the returns, the McCains paid $273,144 in 2007 and $183,554 in 2006, to household staff, which the campaign said included a ranch property manager, child care, Cindy McCain's secretary and nursing care for Senator McCain's mother. They paid $67,884 in 2007 and $47,944 in 2006 in employment taxes.

Tom Ochsenschlager, vice president of taxation at the American Institute of Certified Public Accountants, said releasing Cindy McCain's tax returns wouldn't violate the children's privacy because details of investments affecting them would be on forms filed by a separate trust.

Passive Income

``They're playing it both ways,'' Ochsenschlager said. ``They're splitting the income, income that you would have anticipated, but not showing you their passive income.'' Given Cindy McCain's wealth, he said, ``they have some passive income somewhere they're not showing.''

McCain paid $5,413 in alternative minimum tax, a levy he has proposed repealing. He also deducted the $12,000 cost of preparing financial disclosure forms for the Senate.

Obama's 2007 tax return showed he and his wife earned $4.2 million last year, more than the previous seven years combined. In March, he released tax returns for 2000-2006 that showed they gave less than 1 percent of their income to charity before he won his Senate seat and began running for office.

Hillary Clinton released seven years of returns on April 4 covering the years since she and her husband, former President Bill Clinton, left the White House. They earned $109 million from 2000 through 2007 and paid $33.8 million in taxes. They also gave away $10.3 million to charity, most of which was donated to their family foundation, which can disperse grants over time.

The McCain family foundation paid $78,250 to charities in 2007. The biggest gifts included $25,000 to Operation Smile, a charity that pays for surgery to correct facial deformities and $25,000 to the HALO trust, an organization that clears land mines.

To contact the reporters on this story: Ryan J. Donmoyer at e-mail rdonmoyer@bloomberg.net; Indira Lakshmanan in Washington at ilakshmanan@bloomberg.net.

Last Updated: April 18, 2008 18:23 EDT