Donald Trump likes to compare himself to Ronald Reagan, especially when trying to explain how a former Democrat finds himself at the top of the GOP ticket. But Reagan and Trump have something else in common, too: The Gipper, just like The Donald, wanted to keep his tax returns private.
Trump shouldn’t take much comfort in that shared penchant for tax secrecy. Reagan managed to keep his tax returns under wraps during his failed bid for the GOP nomination in 1976. But four years later, he caved to media pressure and released his 1979 tax return.
When Reagan challenged President Ford for the Republican nomination in 1976, he came to the race with an unhappy history of tax disclosure. While governor of California, information from his tax returns had been leaked to the press, revealing that he had paid no income taxes to the state for at least one of the years he spent in office. (Business losses had offset his other income to leave him owing nothing.)
The whole episode left Reagan frustrated – and deeply committed to his financial privacy. As he ramped up his campaign for the GOP nomination, he consistently refused to disclose his tax returns. "Ronald Reagan, now in the final stretch of his party's nominating process, continues to resist the post-Watergate pressure on Presidential candidates to make broad disclosures of the personal financial affairs," noted The New York Times.
But by February 1976, Reagan felt compelled to provide a brief snapshot of his finances, pegging his net worth at $1,455,571 and his 1975 income at $282,253.18. "Reagan is philosophically opposed to such personal disclosures but was more or less forced into it because President Ford, his rival for the GOP nomination, already has disclosed his personal finances," observed the Los Angeles Times.
In his February disclosure, Reagan did not provide details on the sources of his income, and he lumped tax payments into an aggregate that included federal, state, and local levies. Indeed, the disclosure raised as many questions as it answered. "Mr. Reagan has chosen not to make public his tax returns nor to supply complete tax return information, nor to disclose his full income before 1975," said The New York Times.
Reagan lost his race for the GOP nod in 1976, but when he ran again in 1980, he continued to insist on his tax privacy. In April 1980 President Carter released his return-- continuing the practice he observed throughout his presidency. But Reagan declined to follow suit. Reagan told reporters that he was willing to make any and all disclosures required by law. But tax returns, he pointed out, were not included in that description. Reagan did, however, also tell reporters that he had "paid the biggest income tax I've ever paid" in 1979.
By summer, however, Reagan's resolve was starting to crumble. During the Republican convention in July 1980, he promised to make a comprehensive tax disclosure, and on July 31 he gave reporters a 23-page 1979 tax return, showing $230,886 in federal income taxes and $32,050 in California state income taxes on a total income of $515,878.
"The release marks the first time in Reagan's career that he has given the public a detailed look at his personal finances," noted the Associated Press. "The return gives no indication of Reagan's net worth, except to reconfirm his status as a millionaire.”
The Wall Street Journal had a somewhat more colorful take. Reagan's return "showed him to be a wealthy man who pinches pennies," concluded reporter Brooks Jackson. Especially notable were Reagan's itemized deductions, which included $15 in depreciation for a fan used on his California ranch and $12 in finance charges for credit accounts. Reagan also declined to allot $1 of his tax payment to the presidential election campaign fund.
The prosaic nature of many items on the return served as a reminder of why candidates sometimes resist tax disclosure. "While the returns didn't seem to contain much of anything politically embarrassing to Mr. Reagan, they did reveal some glimpses of his personal life," the Journal noted.
Reagan, for instance, seemed to be supporting his son Ron Jr., because he was claimed as a dependent. Reagan had also loaned money to his daughter, evident on the return thanks to the $481 in interest she had paid him. Perhaps most irritating, Reagan's return included a medical expense deduction of $3,540, compelling his campaign to issue a reassurance that the 69-year-old candidate was not being treated for any particular ailment.
Ultimately, Reagan's reluctant release had no political fallout. While unpleasant for the candidate, it seemed to escape the notice of most voters.
But Reagan's disclosure underscores how difficult it can be to keep a lid on personal tax information, at least for a major candidate seeking the nation's highest office. On the one hand, nondisclosure can lead to leaks. It happened to Reagan while serving as governor of California, and just two years later, it happened to Nixon while serving as president.
Today, penalties for illegal disclosure of taxpayer information are more severe. But information and the walls protecting it are also more porous, as WikiLeaks and similar episodes make clear.
Reagan's capitulation also demonstrates the power of persistent public demands for personal tax information. Voters don't seem to care much about the details of a candidate's tax return. But they care quite a bit about gaining access to those returns -- just to be sure.