كتب : Sherif Tarek
At San Siro, Kaka converted two penalty kicks either side of the interval on 10 and 56 minutes, while Filippo Inzaghi notched the second goal in between.
The Rossoneri are now on 67 points, two ahead of Juventus who were demoted to third spot after failing to register a win over strugglers Reggina.
Brazil playmaker Kaka opened the scoring for Milan after Massimo Ambrosini was granted a spot kick.
Inzaghi, who bagged a striking hat-trick in last Sunday's 5-1 drubbing of Torino, headed home Ambrosini's cross on 19 minutes.
Kaka then completed the rout after earning a second penalty, while Palermo completely lost hope after Cesare Bovo received his marching orders on 48 minutes for two bookable offenses.
Elsewhere, Juventus failed to defeat bottom-of-table Reggina, who were ousted from the Italian Cup semi-finals by Lazio in midweek.
Antonino Barilla fired the home side ahead three minutes from the half-hour mark with a nice header, shortly after Vincenzo Iaquinta squandered a clear-cut opportunity for the Old Lady.
Right after the restart, Alessandro Del Piero brought the score level from a spot kick that striker Iaquinta gained.
Reggina regained their one-goal cushion on 69 minutes, thanks to an Emil Hallfredsson long-range shot, before Cristiano Zanetti restored parity four minutes later.
Defending champions Inter Milan, who are now seven points clear on top of the table, will face Napoli later on Sunday.