The Debate Over Trump’s Tax Returns

Congress has the authority to obtain the president's tax returns — whether or not he chooses to make them public, argues Brennan Center’s Rudy Mehrbani.

April 10, 2019

The battle over President Donald Trump’s tax returns entered a new phase with the House Ways and Means committee chairman’s formal request for the IRS to turn over six years’ worth of the president’s personal and business returns by this Wednesday. But the controversy surrounding Trump’s tax returns dates back to the earliest days of his candidacy. Trump is the first president in decades not to release his tax returns since Richard Nixon started the practice. Rudy Mehrbani, senior counsel for the Brennan Center, spoke with staff writer Tim Lau about the significance of presidential tax returns, how the debate could unfold, and how Congress can take action.

This interview has been edited for clarity and length.
 
Tim Lau: Why should the president’s tax returns be disclosed?
 
Rudy Mehrbani: There is a long history, beginning with Nixon, of presidents disclosing personal tax information. Advocates typically emphasized that this practice furthered transparency and policy interests. It confirms to the public that the president is paying their fair share and following the same rules that apply to everyone else. It might also tell us what kinds of policies, particularly tax policies, the president might pursue.

In Trump’s case, there are many more reasons, arguably more pressing, that call for disclosure. There is substantial evidence already in the public record that Trump may have skirted tax laws for decades. He’s still profiting from his businesses while serving as president, which may run afoul of the Emoluments Clauses and make him susceptible to foreign influence. His tax returns would help shed light on these issues, which would be of tremendous benefit to Congress and to the public.

Additionally for Trump, there’s also a really shallow interest in maintaining a belief about how wealthy he is and how much he earns every year. That speaks to Trump’s truthfulness with the American public, as someone who was elected partially based on his supposed business acumen and his ability to accumulate what he claims is a massive amount of wealth. But a look at his taxes might actually undercut one of his main campaign arguments and one of the things that attracted some early supporters to his campaign.

Trump is the first president since Nixon not to release personal tax information. Why is this significant?

The first obvious question to ask is, “What is he trying to hide?” For President Trump, there are a number of outstanding questions tied to his finances. Another question to consider is, “What kind of precedent does this set for future presidential candidates?” This issue is not going away, with more wealthy business people from both major political parties expressing interest in running for president. The public’s interest in transparency will only continue to grow, as will the risk that candidates may have unknown national security vulnerabilities tied to their vast global business interests.

Presidents have been disclosing their personal tax information for decades. When I was in the White House, I led the process for finalizing and releasing President Obama’s returns. I doubt any president particularly enjoys this process, but it’s ultimately in the country’s best interest to make the president’s returns public.

For Trump, it’s also about trust. He actually said in the past that he would release his returns once he got the nomination or after an alleged audit was completed.

What should we know about the House of Representatives’ recent inquiry into Trump’s tax returns?

While the law does not mandate public disclosure, it does spell out clearly that the House has the authority to obtain the president’s tax returns. But in a letter issued by his personal attorney to the Department of Treasury, President Trump is making several claims that attempt to prevent the disclosure of his returns to Congress. The main argument that Trump’s attorneys make is that the request runs afoul of other constitutional constraints. He claims that Congress must have a legitimate legislative purpose and cannot simply retaliate against Trump’s constitutionally protected political speech.

But the law invoked by Rep. Richard Neal (D-MA), Chairman of the House Ways and Means Committee, does not require Congress to provide a justification for the request (though Neal did so nonetheless). And Congress clearly has a legitimate interest in reviewing the president’s taxes. Those interests include legislative proposals related to how the IRS audits and enforces tax laws against the president, and fulfilling Congress’ oversight function by ensuring effective and evenhanded administration of the law. Of course, if Trump had followed longstanding precedent of disclosure, there would be no need for this request. Congress should continue to emphasize this fact to push back against claims that they’re setting a dangerous precedent for retaliation against other political officials. Trump is a unique case.

It’s also important to note that this inquiry isn’t taking place in a vacuum, but rather amid other investigations by Congress (for example, ones pertaining to the White House security clearance process) where the president is likewise refusing to cooperate. In a way, the breadth of the president’s claims — concerning his taxes, White House security clearances, the Mueller report — undermines his own arguments. And even if these issues don’t get resolved before the election, they should raise significant questions in voters’ minds about why there is so much that this president is trying to hide and why he’s going to unprecedented lengths to do so.

What can Congress do to encourage greater transparency when it comes to the president’s tax returns?

The National Task Force on Rule of Law and Democracy, a bipartisan group of former public servants and policy experts housed at the Brennan Center, has urged Congress to standardize and codify the practice of sitting presidents, vice presidents, and candidates for those offices disclosing their tax returns. This task force includes former elected officials, governors, and members of Congress—folks who understand the consequences of disclosing financial information to the public.

Specifically, the task force recommends that all candidates for president and vice president disclose three years of their personal tax returns (and business tax returns to the extent they are relevant). They picked three years because under current law, the IRS mandates all taxpayers to maintain three years of tax records, available to audit. In recent years, a lot of candidates have actually disclosed many more than just three years of returns.

The Task Force’s recommendation is based on the history that we have since President Nixon first released his financial information. Presidents have also voluntarily committed themselves to following conflict-of-interest laws. This means presidents have typically divested any business interests. That long-standing practice has helped reassure the American people that their presidents were acting in the public’s best interest and not simply seeking to enrich themselves. It’s a pretty straightforward standard and hasn’t proven overly burdensome. Several candidates who have announced 2020 campaigns are already releasing much more financial information and many more years of taxes than the task force is recommending — which is further evidence that it’s not an impossible hurdle or standard to meet.

Are there already efforts in Congress around this issue? What’s the next step?

Yes — there are various proposals in Congress to mandate the disclosure of presidents’ tax returns, the most significant being H.R. 1, the For the People Act. We’re going to be working with members from both parties to explain the wisdom and benefits of such measures. Democrats and even some Republicans are receptive.  For example, Republican Senator Ben Sasse from Nebraska is on the record supporting disclosure of tax returns. So the momentum is building. I think this is going to continue to be a focus as the presidential campaign picks up — and not just on President Trump. For example, Senator Bernie Sanders (I-VT), a leading contender for the Democratic nomination, has drawn criticism because he has yet to disclose his taxes.

Moving forward, this issue will impact Democrats, Republicans, and independents alike, especially with the growing number of potential candidates who have significant wealth or have formerly run multinational companies. This trend raises an increasing number of questions for the public, which deserves transparency.

When President Nixon initially disclosed his financial information, he famously said that people have the right to know whether their president is a crook. And that’s part of what all of this comes down to: whether or not presidents are following the same rules that apply to everyone else and paying their fair share — just like all other responsible citizens should do.

(Image: Mark Wilson/Getty)