presidential harassment

GOP Warns That Releasing Trump’s Taxes Could Lead to More Transparency

Democracy dies in sunlight? Photo: Jose Luis Magana/AP

Every president since Jimmy Carter has allowed the public to inspect his tax returns. The principle behind this practice is simple: Voters deserve to know what their leaders’ financial interests are, so that they can recognize when said leaders are putting those interests above the public good.

No modern president has ever had more potentially compromising financial interests than Donald J. Trump. The mogul owns a business that profits off the commercial value of his own name, which he licenses to real-estate developers the world over, many of whom have direct ties to foreign governments and political parties. And yet, he has nevertheless refused to share his tax returns with voters — even though he promised to do so, repeatedly, before they made him their president.

Federal law gives the chairman of the House Ways and Means Committee the power to request tax information on any filer, and then to release it to the public, if a majority of the committee approves. The statute holds that the Treasury Department “shall” provide the information upon request (establishing that the “request” has the legal force of an order). Recent polls have found that upward of 60 percent of Americans want the Democratic Party to use its control over Ways and Means to release the tax returns that their president had promised to show them.

All this puts Republican lawmakers in an unenviable position: They must find a way to argue (with righteous indignation) that the president’s finances should be concealed, in defiance of popular opinion and his own campaign promises. At a Ways and Means committee hearing in D.C. Thursday, GOP lawmakers unveiled their case: If Congress gives voters insight into Donald Trump’s financial interests, what’s to stop it from giving voters insight into the financial interests of all who rule them?

The Democratic lawmakers faced stiff objections from congressional Republicans, who accused them of seeking to violate Mr. Trump’s privacy, setting a dangerous precedent for political retribution and abusing the power laid out in the law…

“Where does it end?” [GOP congressman Mike] Kelly asked. “What about the tax returns of the speaker? Members of Congress? Federal employees? Or, for that matter, any political donors? There is no end in sight for those whose tax information may be in jeopardy.”

There are multiple problems with this argument. One is that two can play at the “slippery slope” game — and the Democrats’ have a distinct advantage in that kind of contest. “If presidential candidates are allowed to conceal their tax information from the public, then one day an infamously shady businessman with globe-spanning financial interests could win the presidency and prioritize his own mercenary interests in ways that sow widespread distrust in the political system” is a decidedly more plausible (and alarming) “hypothetical” than the one Kelly cooked up.

But the more fundamental problem with Kelly’s line of reasoning is that the slippery slope he describes is very much worth sledding down. The case for making the tax records of all elected officials and political donors public is very strong; as is the case for making everyone’s tax records public.

Beyond exposing conflicts of interest, making all tax information publicly available is a cheap and easy way to increase compliance, as individuals who game their taxes will be susceptible to public shame. And such a policy would also help expose wage discrimination, and increase public awareness of inequities in the tax system; as the American people’s ubiquitous fascination with the private lives of celebrities has led them to peruse the finances of the rich and famous, many would notice for the first time just how profoundly regressive various tax loopholes are.

These aren’t new arguments. In fact, they were once conventional wisdom in an obscure little nation called the United States. As the New York Times observed in 2010:

According to a 2003 article in the National Tax Journal, privacy for tax filings wasn’t required when Congress enacted the federal income tax in 1861…It found that from 1861 to 1864, newspapers often published lists of taxpayers and their tax liabilities. In 1870, Congress prohibited the lists’ publication but allowed public inspection of individual returns.

… In the first half of the 20th century, Congress twice required tax disclosure. In 1923 and 1924, individual and corporate taxpayers had to make public their tax payments but not entire returns. Proponents of disclosure said the measure would encourage tax compliance and reduce improper business conduct.

“Secrecy is of the greatest aid to corruption,” Robert Howell, a Republican senator from Nebraska, said at the time.

Newspapers had a field day, publishing the names of famous people and big corporations, together with their tax liabilities. On Oct. 24, 1924, for example, The New York Times revealed that John D. Rockefeller Jr. topped the list of taxpayers in Manhattan, with more than $7 million in taxes in 1923.

In the present day, many foreign nations make all their filers’ tax returns publicly available.

When top earners’ tax returns are published in Finland, they call it “national envy day”. In Sweden, one phone call will get you your lawmaker’s tax bill. Norwegians’ fascination with each others’ taxes has been labeled “financial porn.”

… Many Scandinavians use openness on taxes to estimate salaries of co-employees, helping with wage negotiations … “It is obvious that openness is significant,” said Stein Reegard, chief economist of the Norwegian Confederation of Trades Unions. “At least for a better-informed public debate about the different levels of wages in society, whether it’s a question of leaders’ wages or equal pay.”

Anyhow, there isn’t actually any reason to believe that releasing the tax returns of a president — who promised to release his tax returns — would set a precedent for releasing the tax information of any and all ordinary American citizens. But even if it did, making America’s tax system and distribution of income more transparent would strengthen its democracy; keeping its president’s financial interests obscure, in the name of keeping political donors’ financial interests obscure, most certainly doesn’t.

GOP Warns Releasing Trump’s Taxes Could Lead to Transparency