Trump should disclose income tax basics
If you are undecided about who you should vote for to be our next president—especially if you are supporting or maybe leaning toward Donald Trump, but want to be sure you haven't been conned or deceived—this column is written mainly for you.
Before you decide, you deserve to hear Trump at least finally answer the fundamental question a young journalist once asked of a famous president four decades ago. And you deserve to know Trump has always been able to give you the answer you need without hurting his own tax audit problems, according to a former Internal Revenue Service commissioner who was an appointee of both Ronald Reagan and George H.W. Bush.
So, let's let our Time Machine whisk us back to the night of Feb. 25, 1974—to discover the essentials we need to know by November 2016. We are at President Richard Nixon's primetime press conference in the White House East Room. Newsday newspaper's young Washington bureau chief (yes, me) is asking a question that has nothing to do with Nixon's Watergate scandal—but everything to do with how you can measure the trustworthiness of your prospective leaders.
“Mr. President … April 21, 1969, was a significant day for you in taxes and for the country, too. That is the notary date on the deed that allowed you to give your (pre-presidential) papers to the government and pay token taxes just for two years. On that same date, you had a tax reform message in which you said, and I quote, ‘Special preferences in the law permit far too many Americans to pay less than their fair share of taxes. Too many others bear too much of the tax burden.'
“Now, Mr. President, do you think you paid your fair share of taxes?”
Nixon didn't really answer the question but, in replying, he dug himself into an even deeper tax-hole than the one he was already standing in. Nixon had saved himself more than $250,000 by taking a federal income tax deduction for donating his pre-presidential papers to the government. As president, Nixon paid only $792.81 in 1970 federal income tax, and $878.03 in 1971.
It gets worse: Nixon had claimed his 1970 tax deduction using a tax break that expired in July, 1969; no problem, he just illegally backdated his deduction deed to Apr. 21, 1969. (The IRS eventually caught on and disallowed Nixon's deduction; a Nixon aide took the rap for his boss, plead guilty and got four months in jail for criminal conspiracy.)
And Nixon's news conference answer created new illegalities: After insisting his Democratic predecessor Lyndon Johnson (who was conveniently dead) urged him to take the deduction, Nixon named several prominent Democrats who'd claimed the same tax break— whoops! It's a crime to reveal other people's tax records; also, aides conceded some of Nixon's assertions were inaccurate.
But today, our central takeaway is this: Did our next president at least pay her or his fair share in taxes? Trump has broken his old promises and now refuses to release his tax returns. Hillary Clinton has given us 20 years of hers. Every presidential candidate has done similarly since the 1970s.
Trump says he can't show us his tax returns because he is under IRS audit. But that's not true, says ex-IRS Commissioner Fred Goldberg (who Reagan appointed as IRS counsel and Bush named as IRS commissioner). He says IRS rules don't prevent Trump from releasing all his tax returns—and there's a more basic step “Trump has no excuse for not taking.”
“He can and should immediately release the first two pages of his Form 1040, along with his Schedule A, for the past 20 years,” Goldberg wrote in an article for CNBC. “This would tell us how much he makes, how much he pays in taxes, and how much he contributes to charity.” That's how we know the Clintons made $10.6 million in 2015, gave $1 million to charities and paid federal taxes of $3.6 million (a 34 percent effective tax rate).
“Releasing this information would have no impact on any pending or future IRS audit of Trump,” said the former IRS official. “Zero. None. It is a riskfree first step with no downside.”
Unless, that is, Trump knows he's been lying to Americans every time he bragged about being a multibillionaire who gives generously to charities.
Trump's only excuse for not releasing his income tax basics is being afraid we'll discover he didn't even pay his fair share.