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Joseph J. Thorndike

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Let's Require the Full Monty for Candidate Tax Returns

Posted: 03/29/2012 4:50 pm

Enough already. It's time to stop begging, pleading, cajoling, and threatening. If we want our presidential candidates to release their tax returns, let's make it a legal requirement.

Over the next couple of weeks, all the candidates running for president will release their 2010 personal tax returns. Or maybe they won't. Tax disclosure is optional for candidates, just like it is for the rest of us.

Since the 1970s, sitting presidents have made a tradition of releasing their returns. And increasingly, aspirants for the Oval Office have followed suit.

But disclosure isn't required, and it isn't always easy. Some White House hopefuls -- like Mitt Romney -- have only coughed up their returns after endless hectoring from the media.

In January, the New York Times made the political and moral case for candidate tax disclosure. "It is not too much to ask someone seeking the nation's highest office to sacrifice some personal privacy to reassure voters that they have no hidden entanglements," the paper wrote in an editorial.

The Times stopped short of demanding that candidate disclosure be made mandatory. Instead, the editors invoked the tradition of disclosure that has prompted most candidates to release their returns.

But traditions are meant to be broken. Or at least they can be. And this one has been, especially during primary season. PolitiFact has concluded that "many, but not all" primary candidates have released their returns in recent decades. But seven of 34 presidential and vice presidential candidates running since 1976 have refused to follow this informal practice.

There's no reason voters should have to rely on guilt or political self-interest to prompt return disclosure. It would be fairer -- and less hypocritical -- for Americans to abandon the pretense that candidates have the same privacy rights as the rest of us. We should embrace our curiosity and simply require that candidates release their returns.

Existing Requirements

We already demand a lot of personal financial information from our White House hopefuls. When they register to run, candidates must file a personal financial disclosure report with the Federal Election Commission. That report (Form 278 from the Office of Government Ethics (OGE)) requires candidates to disclose assets and liabilities in broad categories.

Form 278, which is also required of presidential appointees, doesn't force candidates to give us the full financial monty (to borrow a phrase from Arizona State Law Prof. Marjorie Kornhauser). But it's still notoriously invasive and occasionally embarrassing. Indeed, it's widely considered an obstacle to staffing the executive branch.

Reportedly, the disclosure requirements of Form 278 have dissuaded some potential White House candidates from throwing their hat in the ring. The problem, apparently, is the spotlight it throws on wealth, as opposed to simply income. "Keep in mind, a tax return is not at all tied to net worth," lawyer Jason Torchinsky told Politico last year. "The OGE form really gets at net worth."

Which raises the question: If tax returns are less invasive than Form 278, then why not require them? Why not tell candidates to simply staple their latest return to the back of their financial statement? (Well, stapling might be hard for someone filing a 500-page return like Mitt Romney's, but you get the idea.)

Some Precedent

In the not-so-distant past, a variety of politicians endorsed mandatory tax disclosure, both for candidates and officeholders. The 1970s were the heyday of the disclosing impulse. Prompted by President Nixon's release of his personal tax returns in 1974, a few lawmakers made a dash for the moral high ground.

Former Rep. Jerome Waldie was probably the most outspoken. Having inserted his own tax returns in the Congressional Record every year since 1969, Waldie proposed legislation to require similar disclosures from all federal elected officials and anyone aspiring to such a position.

Several lawmakers considering a run for the White House endorsed return disclosure in 1974, albeit with varying degrees of enthusiasm. Former Sen. Henry (Scoop) Jackson indicated that he would support "any good tax returns disclosure law," reported Los Angeles Times columnist Nick Thimmesch. Former Sen. Charles Percy also indicated his willingness to release returns, although he didn't join Waldie in the call for a legal requirement.

During his successful bid for the White House in 1976, Jimmy Carter released his returns, as did President Ford. And when Carter began staffing his administration, he considered requiring appointees to disclose several years of tax data.

Asking Is Not Enough

The trend toward mandatory tax disclosure seems to have petered out quickly. Candidates for president kept releasing their returns, as did Oval Office occupants. But calls for a legal requirement seem to have largely disappeared, replaced instead by reverential genuflection to the tradition of voluntary disclosure.

To my mind, voluntary disclosure is a lot like voluntary taxpaying. When confronted with rich liberals who say they aren't taxed enough, conservatives are fond of pointing out that the rich guys are free to pay more. But of course that's not the point. The fiscal responsibilities of American citizenship shouldn't be optional.

The same is true of tax disclosure requirements. It's great that some candidates are willing to disclose their tax returns (after all sorts of hectoring and moralizing from the media). But it shouldn't be a choice; it should be the law.

And before anyone starts complaining about the hardship this would impose on candidates -- or better yet, the chilling effect it will have on the willingness of rich people to run for office -- let's acknowledge that we essentially require this disclosure anyway.

And seriously, is it really that bad? In a world where candidates have shed every vestige of personal privacy, this last remaining shred of financial privacy is trivial. It's time to let it all hang out.

Joseph J. Thorndike is a columnist for Tax Notes magazine, where this article was originally published. He is also a director of the Tax History Project at Tax Analysts, which includes an archive of presidential and candidate tax returns. He blogs at tax.com.

 

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