Every day we get a new headline on Donald Trump, each one more bombastic than the last, as reporters attempt to keep up with his latest provocation. But which headline wont fade away as we near November? His tax returns.
Or more to the point, his lack thereof.
Every U.S. presidential candidate since 1976 has released their tax returns. It’s a simple and straightforward tradition, one that sheds light on a candidate’s decision-making in personal finances, business dealings, and contributions to society.
Perhaps that’s why Trump himself said in May 2014, “If I decide to run for office, I’ll produce my tax returns, absolutely, and I would love to do that.”
Fast forward two years later, he now says he won’t release them before November.
Hillary Clinton, having been in the public eye for decades in and out of public office, recently released her 2015 tax returns along with previous years’ full returns. Perhaps most surprising was that she paid an effective tax rate greater than 40 percent on her $10.7 million income, which is more than her upper class piers.
That level of income puts her family firmly in the top 1 percent, a group that on average pays an effective tax rate of just 24 percent despite the country’s top income tax rate of 39.6 percent. Mitt Romney, you may recall, paid just a 14 percent rate on his millions in income due to the loopholes he took advantage of.
Trump’s says he won’t turn over his returns because the IRS is auditing him. Like many of his claims, this doesn’t hold water. He could still legally release his returns while the IRS audits them, there’s no law barring him from doing that.
So why not do it?
Perhaps it’s because there could be a lot of newsworthy tidbits tucked into the hundreds of pages that make up Trump’s returns. Perhaps the most front-page worthy is that he likely doesn’t pay any taxes at all.
David Cay Johnston, Pulitzer Prize winning journalist and author of The Making of Donald Trump, explains that Trump’s taxes would put a spotlight on the arcane rules the wealthy take advantage of to lower their effective tax rates.
Trump likely has a number of tricks to avoid paying his fair share. Depreciation, for example, is a rule that allows filers to subtract the value of their properties from their income regardless of whether or not the property actually goes down in value. This could enable a rich landlord like Trump to avoid paying taxes nearly indefinitely.
As Johnston reports, “The big story in Trump’s tax returns is that Congress has created two income tax systems, separate and unequal.”
It’s worth acknowledging that just about everything regarding taxes is boring. Filing them, worrying about them, and talking about them are all a pretty good substitute for Ambien.
Yet a fair and just tax system is an essential part of our social contract —we can point to some vitally important aspects of our society made possible by tax revenue. And nowhere in that contract does it say “billionaires exempt.”
At least one Trump supporter, former South Carolina Governor Mark Sanford, has said his support for the candidate rests on whether or not he releases his tax returns.
If more people take that pledge, we may see Mr. Trump change his position yet again. Either way, don’t expect his tax returns to fade from the public discussion as election day draws near.
Josh Hoxie directs the Project on Opportunity and Taxation at the Institute for Policy Studies.