(MONEY Magazine) – You might figure that George and Barbara Bush have three reasons to join in the rising anger over state and local taxes -- the properties they maintain in the three places shown above. But the First Family doesn't share in the pain. If you had had the Bushes' $452,732 adjusted gross income for 1990 ($200,000 in salary, the rest from investments) and had lived in the District of Columbia, you would have owed about $30,000 in D.C. taxes. Or if you had resided in Kennebunkport, Maine instead, your state tax bill would have been approximately $29,000. By contrast, the First Family paid only $3,596 in 1990 state taxes, less than 1% of their AGI -- a mere 0.8%, to be exact. State income taxes range from zero to as high as 12%. Ironically, the Bushes have been keeping their state taxes low, while most other Americans have been seeing theirs soar largely because of Reagan and Bush Administration policies that have steadily shifted federal expenses like health-care costs and environmental cleanup onto the states for more than a decade. The Bushes' tiny state-tax burden has done wonders for their fiscal bottom line. While their federal income tax including Social Security ($103,165, or 22.8% of AGI) and local property tax ($26,468, or 5.9%) were more in line with their financial standing, all three taxes amounted to only 29.5% of their AGI. The typical U.S. household, with an AGI of $52,011, paid 37.7% in 1990. The Bushes' tax savings are quite legitimate, of course. The President, who files a joint federal return with the First Lady, has managed to trim his tax bill while staying well within the U.S. tax code and its counterparts in D.C., Maine and Texas. Here's how he does it: -- Bush enjoys a special exemption from the District of Columbia's income tax. Presidents, Vice Presidents, senators, representatives, presidential appointees who must be confirmed by the Senate and their immediate staff -- about 6,100 people in all -- who maintain permanent homes outside of the District pay no D.C. income tax; for those who do call the District home, the top rate is a stiff 9.5% on income above $20,000. The current exemption, which has been in place since 1947, will cost D.C. about $10 million this year. But the District does not suffer. Congress pays back the money out of the federal revenues collected from ordinary taxpayers. -- Bush maintains his legal voting residence and domicile in Texas. The state is one of only seven that have no personal-income or capital-gains taxes. (Most of Texas' revenues come from sales taxes.) By contrast, if Bush called Kennebunkport his domicile -- a legal term meaning permanent home -- he would pay Maine's top rate of 8.5%. The bill: around $29,000 a year. -- Bush tries to take full legal tax-cutting advantage of breaks. As with many taxpayers, the President's rule of thumb seems to be as follows: take the break, even in gray areas. For example, in 1981, shortly after he was elected Vice President, the Bushes sold their longtime Houston home for a $596,101 profit and tried to establish their principal residence in Maine -- at Kennebunkport. The move would have allowed them to defer the capital-gains tax on the Houston sale. But the Internal Revenue Service ruled against the shift to Maine, thereby forcing the Bushes to pay about $177,600 in capital-gains tax and interest. At that point the couple declared that low-tax Texas would remain their permanent home after all. That decision made political sense too. Texas is a powerhouse with 32 of the 270 electoral votes Bush needs for re- election. The Bushes' Texas ties are, in fact, the key that unlocks the door to the low state taxes they've been paying. Texas' domicile law is solely concerned with intent. To confirm the state as the First Couple's legal domicile, Bush simply signed a declaration stating that he intended eventually to return to Texas permanently. The Bushes are not required to spend even a minimum number of days in the state. Nor do they need to own a home there. And they do not. Their only Texas property is an unimproved Houston lot of 33 feet by 160 feet, about the size of two tennis courts. The few nights a year they sleep in Houston, they rent a three-room suite at the Houstonian, a hotel that is their official Texas residence. Nor does it matter under Texas law that the Bushes' 26-room mansion at Walker's Point in Kennebunkport is clearly more than a vacation home to them. (The house was worth $2.2 million before a freak storm swept through this past autumn, causing $1.1 million of damage.) Nor does it matter that, since moving to the White House in 1989, the Bushes have spent far more time in Maine than in Texas: 103 days at Walker's Point, vs. 14 at the hotel suite in Houston. Although the Bushes' residency arrangements are perfectly legal, they have aroused criticism. ''It's outrageous how Bush gets away with paying so little in state taxes, given the properties he owns, the amount of money he makes and the fact that he has yet to buy a home in Texas,'' says Elaine Hoiska, director of the State and Local Tax Institute, a tax consulting firm in Boston. (The White House supplied MONEY with the Bushes' tax returns and financial disclosure forms but declined to elaborate on the President's taxes.) The Bushes' Texas roots go deep. In 1948, they left their well-to-do families in the Northeast to make their own mark in Texas oil. They lived there for most of the next 33 years -- until January 1981, when Bush became Vice President and they sold their five-bedroom home in Houston for $843,273. Later that same month, they bought Walker's Point for $800,000 from Bush's aunt, Mary Walker. When the Bushes filed their 1981 federal return in early 1982, they tried to defer tax on the capital gain in Houston by earmarking the money for the purchase and improvement of Walker's Point. Such a deferral is permitted only when the gain is used to buy or improve a principal residence. During a routine audit by the IRS two years later, Bush explained that he did indeed consider the Maine house his principal residence, since it was the only home he and his wife owned. His spokesman at the time, Shirley Green, was widely quoted as saying that the Walker's Point mansion was ''now his main or principal house.'' The IRS, however, rejected the deferral in March 1984. According to IRS documents obtained by MONEY, the office of chief counsel concluded that the Bushes ''did not use the house as their principal residence within a period beginning two years before the date of the sale of their residence and ending two years after, and therefore are not entitled to the gain, according to section 1034(a) of the code.'' Indeed, in 1979 and 1980 the Bushes lived in ! their Houston house, and for the years after that they resided at the vice- presidential mansion, Admiral's House, on Massachusetts Avenue in Washington, D.C. Soon after the IRS ruling, Bush declared that the agency was preventing him from doing ''what any other taxpayer'' could do. By keeping their domicile in Texas, the Bushes have averted a decade of Maine state income taxes, which would have come to about $165,000, according to estimates by tax experts. In all, those year-to-year savings have just about washed out the $177,600 they paid to the IRS in back taxes and interest on the Houston capital gain. Since March 1981, the Bushes' official Texas residence has been the 948- square-foot suite at the four-story Houstonian. Bush does not rent the suite the year round. Instead he pays only for the time he spends there -- $264 a day, a special price negotiated by the White House, as opposed to the regular $600 rate. Who actually pays depends on the President's mission. If he's in Houston on official business, the government pays; if he's in town for a fund raiser, the Republican National Committee picks up the tab. Sorting all this out is hardly onerous, since Bush spent all of three nights there during 1991, running up a bill of $792 plus tax. Not surprisingly in a state where politics rivals Friday night football as the leading spectator sport, the angry bellow of a Democrat was heard after the IRS rejected Bush's tax move. In October 1984, Austin attorney Clint Hackney, a former state representative, took Bush to court to prevent him from voting if he was only renting in Texas. ''It was plain to me that he planned to live in Maine instead,'' maintains Hackney. ''Why? Simple. He has a home in Maine, yet no place to live in Texas.'' The President settled the suit in April 1985 by signing an affidavit, obtained by MONEY, in which he swore under oath that he planned to return to Texas after leaving office. ''I do not claim the state of Maine as my legal domicile,'' Bush vowed. ''It is our intent to return to Houston permanently following completion of my public service in Washington.'' That suited Texas law just fine. Actually, the lenient Texas law is typical of nonincome tax states, where residency requirements tend to be easy-going, as opposed to income tax states, which generally back up their laws with detailed residency rules that they enforce rigorously. (To qualify as a Maine resident, for instance, you must live there for at least 183 days a year or , own a permanent home there.) On June 4, 1985, Carl S. Smith, the Democratic county assessor in Houston, formally accepted the President's use of the hotel as his primary residence. ''Based on the fact that he intended to vote here, I decided it was his intent for Houston to be his home,'' he told MONEY. ''He has to live in D.C. and has no choice in the matter, just like someone in the military.'' The affidavit was only a statement of the President's intent at the time he signed it, according to Marsha Floyd, a lawyer in the Harris County Attorney's office. So there is no legal requirement that the Bushes move back to Texas when their sojourn on the Potomac ends. They are free to change their minds and move elsewhere without facing a tax penalty. As many avowals of loyalty as the President makes, Texans just won't stop having fun with the Bushes' local housekeeping arrangements. Clifford Pugh, a Houston Post reporter, spent a night in July 1988 in the suite that doubles as the President's home and found ''no mementos around, no family pictures, no vice-presidential cuff links. The room has absolutely no personality.'' Along with 99 volumes of Reader's Digest condensed books, there was one tome entitled Bush Baby, but it's a spy thriller about a Yugoslav robot. When the President does come to town, hotel employees break out the Bushes' box of framed family photos from a storage closet and place them around the suite. At other times, however, the suite's three rooms are available for receptions. ''We don't rent to just any individual,'' says Houstonian president Larry Selig. Not, at least, since the night in June 1988 when 200 local Democrats rented the rooms and served bologna sandwiches to mock the President's Texas residency as ''baloney.'' Whatever the Houston Democrats may think, the First Couple have tried to underscore their intention of returning to the city. The President, for instance, has publicly stated that they ''own property at 9 West Oak Lane South in Houston where we intend to build a house.'' The Bushes paid $1,006 in 1991 property tax on the lot, which is valued at $79,200. Oddly, however, the lot is less than an eighth of an acre -- enough for a modest bungalow with a patch of lawn. Another sign of the Bushes' commitment to Texas: from 1989 to 1990, they gave far more to charities there than to those in Maine or D.C. Of the $76,863 they donated to about 37 charities, $7,650 went to 12 charities in Maine, $10,500 to 13 in D.C. and $20,612 to 12 in Texas. * The one enigma in all the President's tax records is this: Who received the $3,596 in state tax that the Bushes paid last year? That amount was deducted on their 1990 federal tax return. The President is not required to disclose any of his state tax returns -- nor even to confirm whether he files them. In an attempt to help shed some light, MONEY consulted 10 tax experts. They included Frank Caratzola, tax attorney at Mahoney Cohen in New York City, and two specialists at Grant Thornton in Chicago -- Thomas Johnson, national director of state and local taxes, and Stephen Ryan, senior tax manager. Their working materials: the Bushes' blind trust, which is by its nature impenetrable, and the President's $200,000 salary. The experts noted that there was no state withholding tax listed on Bush's W-2. They went on to reason, by process of elimination, that since Texas has no income tax and D.C. exempts the President, Maine may have received at least some of the $3,596. Another piece of evidence: according to Jerome Gerard, Maine's director of income and estate taxes, the state could tax nonresidents like Bush on money earned while there. The amount owed is based on the number of days the nonresidents spend in the state working during the year. But Gerard would not say whether the state demands payment from the President. According to MONEY's tax experts, however, Bush may have filed a Maine return to avoid any disputes. Based on the 32 days Bush spent in Kennebunkport in 1990, he could have paid about $1,300 in Maine income tax on his salary. There was consensus among the experts that the balance of the $3,596 went to the state or states that taxed unearned income from the Bushes' blind trust. The White House would not comment on this speculation. But if it's true, it's hard to see what point is served by not saying so.

CHART: NOT AVAILABLE CREDIT: SUSAN PIZZO CAPTION: WHERE THE PRESIDENT SPENDS HIS TIME George Bush is the most traveled President of all. For his first 1,047 days in of fice -- Jan. 20, 1989 to Dec. 2, 1991 -- he was out of Washington almost half the time, surpassing even the restlessly peripatetic Rich ard Nixon. (The chart breaks down those 1,047 days, with each image equaling 14 days; totals are rounded.) President Bush has taken 148 trips by our count, touching down in 33 coun tries and every state except Arkansas. Last year's schedule: by Dec. 2, he had spent 176 days at the White House, 55 days at the presi dential retreat at Camp David, Md., 44 days on the road in the U.S., 18 days traveling abroad, 40 days at Kennebunkport, Maine and three days in Houston, the city in which his legal residence is a hotel where he rents by the night.