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Editorial Board Memo: All Presidential Candidates Should Release Their Tax Returns Support a U.S. Senate Vote on the Presidential Tax Transparency Act

As Congress returns from its summer recess, it has about three weeks to finish its work for the American people before the November election. Senator Ron Wyden (D-OR) hopes to get a vote on his Presidential Tax Transparency Act, which would require all major presidential candidates to make public their tax returns for the last three years.

Next week the senator will ask for a unanimous consent (UC) request to have the bill voted on. This measure should be bipartisan and non-controversial, but it is not clear that Senate Majority Leader Mitch McConnell will support Wyden’s efforts absent significant public pressure. If the UC request is denied, Sen. Wyden hopes to offer the bill as an amendment to must-pass legislation.

Every major presidential candidate from both parties has voluntarily released his or her tax returns for the past 40 years, with the exception of Donald Trump. Doing so is not about gaining political advantage. It’s about giving the voters an objective record to evaluate how the candidates have earned their money, what conflicts of interest they would face between their business holdings and their governing responsibilities, what charities they’ve supported, how they’ve conducted their finances, and how they have interacted with the government they hope to oversee as president.

But this exercise in transparency is only a campaign-season tradition.  It may now be the expectation of the public, but there is no law or regulation requiring candidates to allow voters to know what is in their tax returns.

In the next week or two, U.S. senators may have an opportunity to put politics aside and codify this good government practice to make it the law.  But it needs help.

Americans for Tax Fairness requests that you editorialize in favor of the Presidential Tax Transparency Act and pressure your senators to vote for it if it gets to the Senate floor.

The Presidential Tax Transparency Act

The Presidential Tax Transparency Act would amend the Federal Election Campaign Act of 1971 to require any major party candidate for president to file the three most recent years of his or her federal income tax returns with the Federal Election Commission.  If a candidate does not file with the FEC within 30 days of being nominated, the Department of the Treasury shall provide the returns to the FEC.  After any necessary private information is redacted by the FEC, the tax returns would be made available to journalists and the general public.

Sen. Wyden introduced S.2979 in late May.  He has the support of the Democratic Senate leadership and he will be pushing for Republicans to allow a vote on the bill as an amendment to another legislative vehicle, like a spending bill to keep the federal government through the end of the year.

Rep. Anna Eshoo (D-CA) introduced the companion bill, H.R.5386, in the House in early June.

The History of Tax Return Disclosure

According to the FEC, the first federal campaign finance legislation became law in 1867, banning federal officers from requesting political contributions from Navy Yard workers.  Additional regulations and campaign finance disclosure requirements were added over the years, culminating with the Federal Election Campaign Act of 1971, which required the full reporting of all campaign contributions and expenditures by candidates for federal office.

While these laws regulated campaign activity, candidates’ personal financial behavior was not regulated until the Ethics in Government Act of 1978. These new rules of conduct for federal officials were the result of calls for greater transparency and openness of government following the Watergate scandal. Among other requirements, it required personal financial disclosures for the first time and imposed strict limits on gifts and financial activities acceptable to federal public officials and high ranking federal staffers.

But, today there still is not a requirement that public officials or candidates for federal office release their official tax returns.

Since the 1970s, every president has voluntarily made his tax returns public and every major party nominee since 1980 has volunteered to publicly release his or her tax returns before the election. Almost all of those returns are made available by The Tax History Project, a public archive.

In 1973, Richard Nixon was the first president to publicly release his tax returns, but it was only after serious questions were raised about his tax history between 1968 and 1972.  Damaging information about the president’s tax habits had begun to leak out to the public, prompting Nixon to release his returns to defend himself.

In response to accusations of questionable charitable contributions, creative accounting methods, unpaid income taxes and alleged bribes from lobbyists, Nixon infamously said, “People have got to know whether or not their president is a crook.  Well, I’m not a crook.”

The rest, as they say, is history.

The tradition of voluntary disclosure is strong, but once the first presidential candidate refuses, it will set a damaging precedent.

As Donald Trump is proving this year, despite public pressure from political allies, opponents and the media, some candidates may still feel the need to keep their tax returns hidden from the voters. Without The Presidential Tax Transparency Act, their financial secrets will remain hidden.

The Cost of Inaction

In a May 12 blog post on taxnotes.com, Tax History Project Director Joseph J. Thorndike cut to the core of why it is important for presidential candidates to release their tax returns:

“Don’t be confused: There is a vital public interest at stake. Refusing to release a tax return sullies the reputation of a candidate, prompting endless rounds of damaging speculation. Just ask Mitt Romney.

“But tax stonewalling also threatens something more important: The integrity of the tax system. That’s not something we can tolerate or excuse in any candidate – even one who has built his brand on breaking all the rules. …

“… every major party presidential nominee has also acknowledged the importance of social auditing, releasing at least a single year’s return, sometimes several, and occasionally dozens.

“These candidates have all recognized that social auditing is a way of demonstrating not just their personal integrity, but the integrity of the tax system itself. Public disclosure of personal tax returns ensures that every president – and every serious presidential aspirant – gets the same hard look that regular taxpayers get from the IRS.

Americans for Tax Fairness believes this is an extremely compelling reason for passing legislation to make the disclosure of candidates’ tax returns mandatory.

Dozens and dozens of editorials and columns urging this year’s candidates to release their tax returns have been published in news outlets of every political stripe.  They list all of the important information voters could learn about how the candidates conduct their personal finances – some of which are repeated in Thorndike’s post.

Most compelling, however, is the potential damage to voters’ faith in the American tax system – which Americans already believe has been manipulated to benefit the wealthy and powerful at the expense of everybody else.  Releasing their tax returns in the clearest way for the candidates to show voters they will not have conflicts of interest if they serve.  It is how candidates can prove they are running for president to serve the American people and not just to enrich himself or herself.

This may be why the most recent Quinnipiac poll (Q. 48) showed three-quarters (74%) of likely voters said “Donald Trump should publicly release his tax returns – including Republicans by a two-to-one margin (62% to 31%).

Research by Gallup (Q. 26) this past April found that only one-in-five Americans (21%) believes upper-income people pay their fair share in taxes, with three-out-of-five (61%) saying upper-income people pay too little.  Only one-in-six (16%) Americans think corporations are paying their fair share, with two-out-of-three (67%) saying they are paying too little.

The Pew Research Center (Q. 28) framed the question a little bit differently last year but found the same sentiments.  Four-out-of-five Americans (79%) say it bothers them that some wealthy people don’t pay their fair share in federal taxes.  Slightly more (82%) said they were bothered that corporations don’t pay their fair share.

Trump – or any candidate – feeds this narrative of the wealthy manipulating the tax system by cloaking his own tax returns in secrecy.

These impressions about our tax system inevitably bleed into Americans’ broader feelings about who our government is here to serve.  Pew (Q. 43) found that three-quarters (76%) of Americans believe “the government is pretty much run by a few big interests looking out for themselves,” while only one-in-five (19%) believe government “is run for the benefit of all the people.”

Even worse, the Pew research found that three times as many Americans believe “most elected officials put their own interests ahead of the country’s interests” (74%), as believe “most elected officials put the interests of the country ahead of their own” (22%).

Only 37% believe our elected officials are honest, compared with 56% who believe business leaders are honest or the 84% who believe “typical Americans” are honest.

And with confidence in our elected officials already so low, the potential for further erosion in voters’ confidence in our government is a strong argument for additional transparency – not the start of a trend where candidates for president can hide their own financial interests.

As the system becomes more opaque, credibility is lost, and American voters’ already shaky faith in government takes another hit.  Black-and-white facts are replaced by rumor and speculation.

If you think American voters deserve more – not less – information about their presidential candidates, please help put pressure on the U.S. Senate leadership to allow a vote on the Presidential Tax Transparency Act by publishing a supportive editorial or column in the coming days.