by Linda Beale
More on Trump’s Tax Returns
The New York Times Op-Ed by Mitchel Zuckoff (a journalism prof at Boston University), titled “Why We Ask to See Tax Returns” (Aug. 6, 2016), at A19, goes beyond my list of reasons taxpaying voters may learn items of interest from reviewing presidential candidates’ tax returns. Looking at the history of the tax return disclosure precedent and the way it adds value “as a measure of character”, Zuckoff says outright what I merely hinted at in talking about tax scams–a presidential candidate could be a crook and taxpayers deserve to know!
It started with Richard M. Nixon, and Congress’s July 1969 decision to eliminate what seemed like a gigantic tax-avoidance loophole that allowed sitting presidents to take large tax deductions for donating presidential papers to an archive. (For his historical information, Zuckoff references Joe Thorndike‘s paper for the Capitol Historical Society, JCT Investigation of Nixon’s Tax Returns (Feb. 2016).) Congress observed, notes Zuckoff, that “a president’s papers already belong to the public.” As for Nixon, his 1969 tax return claimed a half million dollar deduction (quite a huge sum 47 years ago) for donating presidential documents 4 months before the law change.
When Nixon’s deduction became public in 1973 (in connection with a Watergate-related lawsuit), it turned out that the donating deed was dated before the 1969 law change was enacted but was signed months after the change had come into effect (i.e., it appeared to be a backdated document intended to game the system to get the big tax deduction). At first, Nixon refused to release his returns and opposed any audit. The IRS at first “bowed to his wishes.” But then someone leaked information to a reporter about how much Nixon had actually paid in taxes in 1970 and 1971, when he had income of almost half a million–less than a thousand dollars both years. As Zuckoff puts it, “He paid the equivalent of a family of three earning about $8000 in 1970 dollars.”
This sounds a bit like the story of Warren Buffet paying a higher rate than his secretary, but worse. Or Mitt Romney, with his millions in income, paying at a rate of less than the preferential capital gains rate of 15%, but worse.
Eventually, the IRS did audit Nixon’s returns. Eventually, too, Nixon gave in to the pressure from the press and released 5 years of returns in December 1973 and asked a congressional committee to review his gift of presidential papers. Eventually, Nixon resigned from office under threat of impeachment because of the Watergate coverup, and had to pay a considerable amount to the IRS.
And taxpaying voters lived happily ever after (until now), since every nominee since has released tax returns (except Ford, who released only a summary). So, says Zuckoff, “Nixon got it right: The American people need to know if their president is a crook.”
cross posted with ataxingmatter