There is no law that says that a Presidential candidate must release their individual tax returns to the public, but at least one member of Congress thinks there should be. Senate Finance Committee Ranking Member Ron Wyden (D-OR) has introduced a bill which would require presidential nominees to release recent tax returns.
The bill, called the Presidential Tax Transparency Act, would require a Presidential candidate to release the most recent three years of filed tax returns (I think that it should be a minimum of the most recent ten years of their filed tax returns; but I digress) to the Federal Election Commission (FEC) within 15 days of becoming the nominee at the party convention (I would like to see this apply to all Presidential candidates who throw their hat into the ring, not just nominees at the party convention). This bill, as currently written, would apply to ‘Major Party’ candidates (Per the Internal Revenue Code Section 9002(6) a ‘Major Party’ is actually defined as “a political party whose candidate for the office of President in the preceding presidential election received, as the candidate of such party, 25 percent or more of the total number of popular votes received by all candidates for such office”). If the candidate refuses to comply, the Treasury Secretary would provide the tax returns directly to the FEC for public release.
Hmm……..just let that last part sink in for a minute.
Sen. Wyden said, about the bill, “Since the days of Watergate, the American people have had an expectation that nominees to be the leader of the free world not hide their finances and personal tax returns.”
I happen to agree with him.
Sen. Wyden went on to say, “Tax returns deliver honest answers to key questions from the American public. Do you even pay taxes? Do you give to charity? Are you abusing tax loopholes at the expense of middle-class families? Are you keeping your money offshore? People have a right to know.”
I happen to agree with him on that, too.
When presumptive GOP nominee Donald Trump suggests that the public has no interest in what’s in a candidate’s tax returns, saying “there’s nothing to learn from them,” I disagree. I believe that there is much that can be learned from a person’s tax returns.
So, why the secrecy? Because a tax return is not just a bunch of numbers. It’s a snapshot of your financial life. Not only do you have a better understanding of where taxable income comes from (like Warren Buffett, I suspect much of Donald Trump’s income is tax favored), you can see potential failures in losses and worrisome positions with investments and loans. You also have a picture of what a taxpayer might find important. When it comes to taxpayers who itemize, you can learn about charitable deductions (not simply how much but where it’s distributed), real estate taxes (abatements, for example), real estate holdings and more. You can also gather information about the existence of offshore accounts, household employees and other holdings.
That’s why we tend to keep our own returns private – we don’t want our neighbors knowing our business. But Presidential candidates play by a different set of rules. We want to know what’s important to them, where their money is coming from, and whether they are linked to or beholden to other people or entities. Under the Ethics in Government Act and Federal Election Campaign Act, certain disclosures are required for candidates for federal office (as well as other high-ranking officials and staff). Those disclosures include information about income, gifts, assets, liabilities, outside employment, trusts, and more (downloads as a pdf).
I do think that Trump’s refusal to release any of his income tax returns sets a dangerous precedent. Once one candidate refuses, I think it will embolden future candidates to do the same. And I think that’s very bad for the process.
But, I also understand why he is refusing to make his tax returns public (even though I don’t agree with his refusal). I think it’s clear that once the returns are made public, they’ll be picked apart by Trump’s competitor(s) and by the voters he’s currently seeking; it’s the equivalent of millions of armchair auditors.
Trump has also said about his tax rate: “It’s none of your business.” Again, I disagree with him. Voters want to know as much as possible about their candidates. That’s why, since the 1970s, most presidential candidates have voluntarily released their tax returns to the public.
By the way, if you are interested, you can see an archive of candidate and presidential tax returns right here.
Compelling the release of those tax returns by statute will be interesting. Currently, we have incredibly strict privacy laws when it comes to our individual tax returns. Those privacy protections extend to all taxpayers – even presidential candidates. I don’t see the value in changing those rules. Voluntary disclosures “should” be enough. But Donald Trump has shown that by not “volunteering” to release his tax returns that can lead to a very slippery slope for future elections.
To be clear, I don’t want a police state but neither do I want a President with secrets.
So stay tuned boys and girls.
If you are really ‘geeky’ you can read the text of this Senate bill here.
Do you think this bill has a chance? Is Donald Trump is concerned about this bill?
Bruce – Your Host at The Tax Nook
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