Trump, Taxes, and the Choice of Law or Politics

August 18, 2016
posted by Bob Bauer

Mark Patterson observes that Donald Trump refuses to make the personal tax disclosure that is routinely and without exception expected of senior federal officials. He describes Congress’ strict enforcement of this obligation, which includes the deep probing of returns by the Senate Finance and other congressional committees that, in Patterson’s words, require “answers [to] dozens of detailed questions about sources of income, deductions, investments, tax treatment (and immigration status] of domestic employees and other topics.” Yet Trump says that in his case, it is “none of your business,” and so he is relying on the absence of any legal requirement of disclosure to deny the public what the senior officials he would appoint if President would have to provide. Patterson recommends that either the law be amended to compel presidential candidates to release this information or to provide it to congressional committees for review followed by a public assessment. (Note: Mark is one my colleagues at Perkins Coie.)

Why would presidential candidates, charged with reporting specific categories of financial information, not have to include their tax returns? The choice now is deemed to be theirs: a choice determined only by the pressures, or incentives or disincentives, of the political “marketplace”, or a personal sense of ethical obligation.

Committing this question to a purely political resolution represents a judgment that voters will set and enforce the transparency standard. They will either reward disclosure or punish candidates for resisting it, but one way or the other, voter will is what counts, and there is no need or place for a legal requirement. In fact, on this theory, it is better for the question to be referred to the voters, because they are the ones to ‘vet” the presidential candidate and to insist on what information they should have to meet their “vetting” function.

Of course, voters have a lot to consider and no clear judgment on financial disclosures can be read into their decision to vote for a candidate who refuses to release his or her tax returns. The candidate’s transparency commitments are one of a number of factors voters must consider in deciding for whom to cast their ballot. Voters also may not easily resolve these questions in the abstract. They have no way of knowing how information they don’t have might affect their voting decision.

Patterson is right, then, that if legislators have concluded that qualification for high Executive Branch office is assessed in part on the management and compliance with personal tax obligations, presidential candidates should have to give voters the same means of assessment. This does not supplant voter judgment; it respects it. They should have the same basis for a ‘vet” that Congress demands in discharging its advice and consent function.

To the extent that a Presidential candidate complains that he should not have to make these returns fully public, posted for all the world to see, Patterson has the answer: require release to the congressional committees that receive this same information from all senior appointments and these committees can review them in just same way, with similar thoroughness. The committees would then announce the results of the review, such as the determination and causes of overpayments or taxes owed, and the candidate could publicly respond.

It now appears that presidential candidates should be required by law to provide their tax returns. It is not fair to the voters to say that it is up to them, and the tradition of release is evidently not strong enough, and appeal to candidate ethical obligation not dependable enough, to leave the decision to the candidate and the political “marketplace.”

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