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Analysis

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.

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)