Z15) Financial Transparency: The Pros and Cons of Trump’s Tax Returns Disclosure

 Financial Transparency: The Pros and Cons of Trump’s Tax Returns Disclosure

Donald Trump, President of the United States from January 2017 to January 2021, controversially refused to release his tax returns after being elected president, although he promised to do so during his campaign. In 2021, the Manhattan district attorney (DA) obtained several years of Trump's tax information, and in late 2022, the U.S. House Ways and Means Committee obtained and released six years of his returns.

Trump repeatedly and falsely claimed that he could not release the returns while they were under audit by the Internal Revenue Service (IRS). After Democrats won a majority in the House of Representatives in 2018, Trump sued to prevent his returns from being released by the IRS or his accountants, which were being sought by certain state officials and congressional committees. The Manhattan DA's request for records as part of its criminal probe of the Trump Organization (regarding a hush-money payment made during the 2016 presidential campaign and alleged tax fraud) was appealed to the U.S. Supreme Court, resulting in a 2020 decision rejecting Trump's claims that the president holds absolute immunity from criminal process. In February 2021, Trump's accounting firm Mazars provided the DA eight years of Trump's tax returns.

In May 2019, Ways and Means Committee chair Richard Neal requested six years of Trump's tax records; after appeals were exhausted, he received the documents on November 30, 2022. Four weeks later, the committee voted 24–16 along party lines to release the returns to the public, which was done on December 30. The committee found that the IRS failed to audit Trump's taxes during the first two years of his presidency and that the only audit conducted during his tenure was never completed.

In 2019, the U.S. House Oversight Committee subpoenaed Mazars for tax and other records related to an investigation into Trump's conduct; an appeal to the Supreme Court resulted in a decision outlining circumstances Congress can request presidential records without violating separation of powers. Also in 2019, California temporarily enacted legislation to require presidential candidates to release tax returns to be allowed on the primary election ballot, and New York State passed a law allowing the release of state tax returns to congressional committees for valid purposes.

History of controversyIn 1999, while Donald Trump was considering whether to run for president under the Reform Party, he said he "probably wouldn't have a problem with" releasing his tax returns if he ran.

In April 2011, Trump said that when President Barack Obama produced "his birth certificate ... I'd love to give my tax returns." Obama's birth certificate was released a week later, resulting in Trump's saying his tax returns would be released "at the appropriate time".

An undocumented immigrant housekeeper from Costa Rica working at Trump National Golf Club in Bedminster, New Jersey, earned $26,792.90 and paid more in federal income taxes than Trump did ($0) in 2011.

In 2012, Trump sought to have Republican presidential candidate Mitt Romney's tax returns released on April 1, which "historically is the time that everybody gives them".That year, Trump also said that not seeing a presidential candidate's tax returns would lead people to think there was "almost, like, something wrong. What's wrong?"

Trump's former political adviser Sam Nunberg said in 2013 and 2014 that Trump had considered the possibility of releasing his tax returns as part of a presidential campaign, believing that showing how little he paid in taxes would make him appear to be a savvy businessman. Nunberg said by November 2014, he had persuaded Trump to reverse course and withhold his tax returns, as Trump decided he "wanted to look rich rather than smart". In May 2014, Trump said in an interview: "If I decide to run for office, I'll produce my tax returns, absolutely and I would love to do that."

2016 campaign

In February 2015, Trump said he would release tax returns if he ran for president. On another occasion that month, he declared: "I have no objection to certainly showing tax returns."Later in February 2015, Trump warned: "I will tell you upfront ... I want to pay as little taxes as I can as a private person".In May 2016, Trump voiced similar sentiments, stating that he tries "very hard to pay as little tax as possible". In 2015, Trump criticized corporate executives and "hedge fund guys" for paying zero or negligible taxes. He also alleged in 2011 and 2012 that half of all Americans do not pay income taxes, stating, "It's a problem," while alluding to "crippling" government debt. In 2012, Trump criticized President Obama for "only" paying a tax rate of around 20%. Trump announced his candidacy for president in June 2015.

In January 2016, Trump was asked by Chuck Todd if he would release his tax returns, to which Trump answered: "We'll be working that over in the next period, Chuck. Absolutely. ... at the appropriate time, you'll be very satisfied." In February 2016, Trump said he would release his tax returns "probably over the next few months. They're being worked on now."Later that month, Trump falsely claimed that he could not release his tax returns while under audit. Nothing prevents a taxpayer from releasing his own tax returns; the IRS has confirmed that individuals are free to share their own tax information. Every president from Richard Nixon onward has voluntarily released his tax returns annually, and the IRS automatically (since the 1970s) audits the tax returns of presidents and vice presidents.

In May 2016, Trump said he would not release his tax returns before the November 2016 election. Trump also said in May 2016 that "there's nothing to learn from" his tax returns, and said on ABC News that his tax rate is "none of your business".Trump's refusal broke with tradition, as all major presidential nominees from 1976 onward have released their tax returns.

Trump was criticized for his refusal to release tax information. Mitt Romney called Trump's refusal "disqualifying" and said the only logical reason for Trump was that "there is a bombshell in them." John Fund of National Review feared that the returns contained an electoral "time bomb" and called upon Republican convention delegates to abstain from voting for Trump if he did not release the information.

During the presidential debates, Trump's opponent Hillary Clinton criticized Trump for not disclosing his tax returns, saying that only "a couple of years" of Trump's tax returns were publicly available, "and they showed he didn't pay any federal income tax." Trump responded: "That makes me smart." Clinton went on to suggest that Trump might not have "paid any federal income tax for a lot of years"; Trump responded by saying that the taxes he paid "would be squandered" by the government.

2016 election and later

Fragments of information about Trump's taxes leaked multiple times around the time of his election as president. In 2016, The Washington Post reported a prior audit of Trump's tax returns for 2002 through 2008 by the Internal Revenue Service (IRS) which was "closed administratively by agreement with the I.R.S. without assessment or payment, on a net basis, of any deficiency."The audit centered on a potential failure to report cancelled debts as income by Trump, and whether he performed a stock-for-debt swap. Some tax attorneys speculate that the government may ultimately have reduced what Trump was able to claim as a loss without requiring him to pay any additional taxes. It is unknown whether the IRS challenged Trump's use of the stock-for-debt swap, which is a maneuver with questionable legality. Congress had previously banned equity-for-debt swaps by corporations in 1993 and by partnerships such as Trump's in 2004.

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