John McGinnis imagines a speech from President Trump on entitlement reform, and how he could win bigly.
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.