Tax Analysts Blog

We’re Still Waiting for Clinton’s 2015 Tax Return, Too

Posted on Aug 11, 2016

Most Americans are still waiting for Donald Trump to release his tax returns. But he’s not the only one dragging his feet. Hillary Clinton, who has generally been very forthcoming with her tax disclosures, hasn’t divulged her 2015 return, either.

Presumably, Clinton filed for an extension, which means the clock is ticking. And she has promised that a release is coming “soon” – maybe even this week.

Maybe so. But Clinton’s delay is still puzzling. A well-funded, well-organized presidential candidate should be able to get her ducks in a row quickly – maybe by April 15, but certainly before mid-August. All but three of the last 19 major party nominees have managed the feat. Only Jimmy Carter, Mitt Romney, and George W. Bush have been slower off the mark than Clinton. (Trump, of course, is in his own category.)

On the other hand, Clinton’s delay isn’t really very puzzling after all. It’s clearly a political contrivance, designed to maximize Trump’s discomfort and embarrassment. No doubt Clinton will release her 2015 return when it seems likely to inflict maximum damage on the Donald.

To expect otherwise would be naïve. But in an ideal world, return disclosure wouldn’t be used as a political weapon. Transparency is not a competitive sport – or at least it shouldn’t be. It’s a responsibility that candidates have to the electorate. Clinton and Trump owe their returns not to each other, but to voters.

I’ve explained elsewhere why I believe this responsibility is morally binding, even though it’s legally optional. But I also believe that the Trump tax fiasco of 2016 – following the Romney return fiasco of 2012 – will finally prompt Congress to do something simple and entirely obvious: make return disclosure a legal requirement.

Tax returns are private documents, legally shielded from unauthorized disclosure. That’s true for presidential candidates, movie stars, titans of industry, and everyone else who files a return.

That doesn’t mean, however, that we can’t make an exception for White House hopefuls. We already demand that candidates for federal office release copious information about their personal finances. Some of that required disclosure is substantially invasive – arguably more so than a tax return. And yet we require it still, forcing candidates to file financial disclosure statements with the Federal Election Commission. (Recent forms filed by Clinton and Trump are waiting for your inspection.)

It’s time to expand the scope of required financial disclosure to include tax returns. There is, after all, nothing particularly sacred about tax information. In some other countries, notably Norway, personal income tax information is a matter of public record -- and searchable online (if you can read Norwegian).

Even here in the United States, property tax records are routinely open to public inspection; log into your local government website and you can see exactly what your neighbor’s house is worth and what he paid in taxes. And while they’re private now, income tax records, too, used to be open to public view (though only for a few brief periods in the now-distant past).

The point is, tax records are considered private, but there’s nothing written in stone about that treatment. And when it comes to candidates, we already demand numerous privacy sacrifices, so adding one more seems reasonable. Especially when that sacrifice is already a routine, if technically optional, part of running for president.

One person who seems to agree is Democratic Sen. Ron Wyden, ranking minority member on the Senate Finance Committee. Back in May, Wyden introduced legislation that would require candidates to disclose their most recent tax returns. Citing the 40-year tradition of return disclosure by presidential candidates, Wyden defended the Presidential Tax Transparency Act as a blow for transparency.

“Tax returns deliver honest answers to key questions from the American public,” Wyden said. “Do you even pay taxes? Do you give to charity? Are you abusing tax loopholes at the expense of middle-class families? Are you keeping your money offshore? People have a right to know.”

The Wyden bill would require candidates to disclose three years of tax returns within 15 days of becoming a party nominee. If the candidate refused, the Federal Election Commission would be empowered to retrieve the returns from the Treasury Department and make them public.

Let’s be honest: The Wyden bill is designed to embarrass Donald Trump. Its motivation is transparently partisan, especially given its timing. (Wyden introduced the bill while Trump was being pilloried in the media for his refusal to make a return disclosure.)

But the Wyden bill has one very important virtue: It would put an end to this sort of politicization by making return disclosure a routine part of candidate transparency.

To minimize the current political fallout, the law should apply only to future candidates, not to Trump, Clinton, or anyone else running in 2016. Yes, I think it’s important for Trump to release his returns right now. But it’s even more important that we avoid having this argument ever again.

No one spends much time agonizing over the routine financial disclosures already required of federal candidates. If we simply added tax returns to the list of required documents, we could stop arguing about them, too.

And wouldn’t that be a relief.

 

Read Comments (3)

Edmund DantesAug 11, 2016

" Are you abusing tax loopholes at the expense of middle-class families? "

What does that even mean? When does a legal tax technique become "abusive" exactly? And why would that be at the expense of middle-class families? Answer: When a politician says so.

Wyden's comment shows a disappointing level of ignorance for a Senator, even allowing for the fact he is a Democrat. His casual politicizing of this issue is exactly why I believe the better course is to leave tax return disclosure voluntary. Let the public draw whatever inferences they like from what each candidate chooses to disclose.

I have zero interest in the tax returns of any candidate. On the other hand, the official correspondence of public officials, including former Secretaries of State, really ought to be fully and promptly disclosed.

Mike55Aug 12, 2016

I'd be fine with a law requiring tax return disclosure. If people think this is important and plays a big role in who they vote for, then by all means the financial disclosure law should be expanded to capture federal tax returns.

What I find distasteful is the attempt to enforce "unwritten rules" in competitive situations where the rules are, in fact, very clearly delineated in an objective fashion and known/understood by all participants in advance. Sanders supporters were outraged by the lack of debates leading up to the California primary and "super delegates." Trump supporters are mad they can't get Clinton's "Wall Street" speech transcripts. Clinton supporters are apoplectic they can't get Trump's tax returns. None of them cared about these issues one bit until they understood the impact on their favored candidate.* All will shamelessly flip positions in the future should the opposite rule favor their chosen candidate.

So Trump shouldn't disclose his returns now, and Clinton shouldn't disclose her paid speech transcripts. But if people are so sure they really care about this stuff and are not just playing favorites then fine, we should change the law so future candidates will be required to disclose such things. Hopefully next time around a Democrat will have something embarrassing on his/her returns and a Republican will have made some awkward statements during a paid speaking engagement.

*This statement excludes Thorndike, who was been pushing the return disclosure issue with something approaching religious fervor (disclosure is now a "morally binding" responsibility? yikes!) well before it was obvious which party would most benefit/suffer the most. I might disagree with his outlook, but have no doubt his position is sincere.

Edmund DantesAug 15, 2016

Now that Hillary has released her return, we learn that 90% of her charitable contributions consist of moving money from her left pocket to her right pocket. That is, she gives almost exclusively to the Clinton Family Foundation.

I would call that abusing a tax loophole, at the expense of the middle-class families. But somehow, the press doesn't see it that way.

Because the press hasn't even looked at the tax return. They only want Trump's, which they will go over with a fine tooth comb. He should not release his returns, it is pointless.

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