The Case Against Disclosing Candidates’ Tax Returns

I have previously expressed very substantial reservations about Donald Trump’s candidacy, but decline to join in the criticism about his refusal to release his tax returns. While a norm has developed suggesting that citizens have a right to see tax returns of presidential candidates and indeed candidates for some other offices, it is a bad norm.  It invades privacy, discourages some people from entering politics, distracts from policy issues, and harms the prospects of those with complex financial affairs.

The secrecy of our tax returns from prying eyes is itself a valuable social norm that reflects the overriding fact that our earnings are our own, not the government’s. The government can scrutinize our tax returns but only for the purpose of showing what we owe. Strong laws protect the secrecy of our tax returns, showing the strength of privacy norms in this area.

Thus, countervailing factors would have to be strong enough to overcome this basic norm.  But in fact there are issues peculiar to political campaign that also militate against a norm for disclosure. First, some tax returns can reveal information about businesses that will help competitors or harm family relations. As result, some people from whose candidacy the nation may benefit will not run for president or any other office where this norm takes hold.

Second, the release will hurt people with complex financial affairs, who take advantage of various tax preferences. Catherine Rampell, an economic columnist, who approves of the norm of disclosure, believes Trump’s tax rate may be very low because of real estate depreciation. But Trump is not responsible for the real estate tax depreciation advantages of the tax code. Congress is. Yet, of course, his opponents will not note this salient fact, and many, if not most, citizens, blissfully ignorant of the complexities of the tax code and rationally disinclined to learn more about it, will attribute the fault to Trump.

And of course that is why Clinton (and perhaps Rampell as well) want Trump to release his tax returns. They are a weapon for political combat. This actually reflects the origins of this norm.  Richard Nixon was the first national candidate to release his taxes returns in effort to distract from the claims of scandal that led to the Checkers speech.  We would be better off focusing our fight on policy issues.

In contrast, the winners from this norm are those, like Bernie Sanders, who have what he terms “boring” financial affairs and pay tax at average rates. We should not give an advantage to such candidates over entrepreneurs.

The only consideration favoring disclosure is that tax returns will allow us to better evaluate the honesty of the candidates. But in this day and age, with intensive scrutiny by the press of the candidates, there are  other  ways of helping citizens make this assessment.

Perhaps Trump should release his taxes as matter of political strategy. I have no insight there. But if he refuses and helps kills this political norm,  at least something good will have come out of his candidacy.

Reader Discussion

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on May 18, 2016 at 15:17:17 pm

What brought down the demagogic self-congratulatory billionaire Silvio Berlusconi? A tax fraud conviction.

'Nuf said.

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Image of nobody.really
on May 18, 2016 at 18:48:38 pm

What will bring down the demagogic self-congratulatory Clinton foundation (and with it Madam Hillary)? A tax fraud investigation.

oops, I forgot, they are Deomcrats and are not subject to the same strictures as the rest of us. After all, they are "well intentioned" - or are they?

A rather salient omission on the part of Prof. McGinnis with his assumption that there will be intensive scrutiny by the press.

Ever notice how local newspapers (Seattle times, etc) TRULY become *local* whenever a potential scandal among or by a Democrat arises. Front page headlines have to do with "safe spaces" local art museums, bike trails - all the glories of subsidiarity in communications may be enjoyed.

And yet, where are these local joys to be found when a GOP / conservative type has the faintest whiff of wrongdoing. Buried in the back pages by the 50 point headlines lambasting those *corrupt* stinkin' , reactionary conservatives.

As for taxes, who cares? who understands them? and they will only be used for character assassination anyway!

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Image of gabe
on May 25, 2016 at 05:18:48 am

Of course I understand his right not to publish them but Trump has a credibility issue, whether he likes it or not. It's another rubber bullet to fire at him in a debate, and a candidate (even one as seemingly indestructible as he) can only take so many of them

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Image of Sarah @ Stringer Mallard
Sarah @ Stringer Mallard

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