Carly Fiorina may be trailing in the race for the Republican presidential nomination, but she’s leading the pack when it comes to financial disclosure. Last week, the former Hewlett-Packard CEO released a personal financial disclosure statement, buttressed by two years of tax returns. You can see them here and here.
Fiorina deserves credit for this disclosure, since transparency is hardest for those with the most to hide. Fiorina may not be the richest person in the race, but with a net worth of approximately $59 million, she’s certainly one of them.
Tax disclosures are hard for rich candidates because they tend to have complicated tax returns. These returns raise eyebrows even when they reveal nothing illegal or even unseemly. Complex tax minimization techniques can be hard to justify to people who don’t (or can’t) exploit them.
But tax disclosures are also most important for these same rich candidates. Modern politics demands extraordinary transparency from every candidate, especially in an era when populist rhetoric rings loudly on both sides of the aisle. Any candidate who hopes to avoid full disclosure is delusional. Mitt Romney is the most obvious case in point, but hardly the only one. Many candidates have tried to resist the call for a financial full monty, but few have managed to stave off prying eyes.
Decry that if you want, but it remains a fact. And ultimately, financial disclosure probably isn’t even the worst of it. Candidates for the presidency know from the get-go that every aspect of their lives will be on public display. Personally, I would find the nonfinancial aspects of this scrutiny much more invasive than the tax element.
Even when it’s highly distasteful, however, tax disclosure is important. Candidates invariably have a lot to say about the current tax system – none of it good. But personal returns can reveal these candidates to be exploiting certain elements of the law that they denigrate on the stump.
There’s nothing necessarily wrong– or even politically toxic – about that sort of inconsistency. I don’t think Americans expect their candidates to be chumps, as long as they stay on the right side of the law. Everyone tries to minimize their taxes – even tax experts. How many homeowning economists, for instance, decline to claim the mortgage interest deduction on their personal returns, even when they oppose it on policy grounds? Not many, I suspect.
For some candidates, moreover, tax disclosure is not about self-sacrifice but strategic advantage. That seems to be true in Fiorina’s case. In the statement accompanying her financial release, she didn’t call anyone out by name, but still managed to differentiate herself from more opaque opponents.
“I've taken hundreds of questions -- whether about hot dogs or my personal finances -- and I think it's all fair game," Fiorina said. "I think leadership of any kind requires trust and transparency and voters should demand no less from their political leadership in government."
Many reporters took this as a veiled attack on Hilary Clinton, and some made the comparison explicit. “While Hillary Rodham Clinton is hiding her e-mails and financial information, Republican rival Carly Fiorina has filed an 87-page financial-disclosure form that goes beyond anything required by law — listing assets down to the penny,” noted the New York Post approvingly.
If Clinton is the immediate target, however, it’s safe to say that the pressure to disclose will soon be directed at Fiorina’s colleagues in the GOP nomination race. Eventually, most of them will follow her lead and release at least some of their returns.
For many, that disclosure will be unpleasant. But I suspect most candidates have learned a lesson from the Romney debacle: Tax disclosure can hurt, but nondisclosure can be deadly.