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Friday, January 27, 2023

Donald Trump Is the First President to Have Tax Returns Forcibly Released. He Might Not Be the Last

Since the 1970s, U.S. presidential candidates have voluntarily released their tax information, as a way to show voters they paid taxes and let voters evaluate how their personal finances may influence their decisions in office.

Donald Trump broke that tradition when he ran for office in 2016. Now, for the first time, the American public will have access to Trump’s tax returns from 2015 through his presidential term, after a years-long legal battle culminated in a House committee vote on Tuesday to release the records.

When he was a candidate in 2016, Trump told reporters would release his returns, but never did it. He repeatedly said that his returns were under audit while he was running, which the House Ways and Means Committee, in a report released Tuesday night, says wasn’t the case. In fact, the committee found that Trump’s returns weren’t under audit until years later, in 2019, and that the IRS during Trump’s first two years in office failed to follow its own manual which requires auditing the President and Vice President’s tax returns each year. Only one year of Trump’s taxes was selected for audit, the report found, and that audit wasn’t completed until after Trump left office.
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The committee also released summaries of what it learned about Trump’s tax returns after the Supreme Court allowed the IRS to hand them over to Congress in November, after three years of Trump’s objections in court. The summaries showed that Trump declared millions of dollars in losses in 2020, 2017, 2016, and 2015, and paid just $750 in taxes in 2017 and 2016. The committee voted on Tuesday night to release redacted versions of six years of Trump’s taxes, and those documents may be made public in the coming days.

It was the first time that a presidential candidate forcibly had tax information released by Congress; the previous releases had all been voluntary. Trump’s refusal proved it was politically possible to buck tradition and still get elected, and may have deeply politicized the practice.

Presidential candidates from both parties releasing their tax returns began in the 1970s, when Richard Nixon decided to release his tax returns in the wake of press reports about his tax filings. Nixon encouraged Congress to look at whether he’d misused public funds. A joint congressional committee in 1974 determined Nixon owed back taxes. When that news came out, Nixon delivered the now-iconic line, “I am not a crook.”

Since then, every major presidential candidate and sitting President except Trump has made tax information public. (Gerald Ford issued summaries of his taxes, but not the actual returns.)

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Already, at least one other Republican candidate has shown signs of following Trump’s lead. Florida Governor Ron DeSantis, who is widely seen as a potential challenger to Trump in the 2024 presidential race, released his tax returns in 2018, but hasn’t for other years, even when other candidates in Florida’s governor’s race did so. DeSantis did release a financial disclosure form including less detail than a tax return that shows a summary of his financial holdings in 2021.

“President Trump’s unwillingness to abide by the norms that all of his predecessors since the late 70s have respected, has brought us to this point,” says Timothy Naftali, a presidential historian at New York University and a former director of the Richard Nixon Presidential Library and Museum. “Donald Trump felt he was above it all.”

Trump’s norm-breaking refusal to voluntarily release his tax information launched the process into the political arena, and already lawmakers are warning of the implications. The House Ways and Means Committee decided to release Trump’s returns by a party line vote on Tuesday, just two weeks before Republicans are set to take control of the chamber. Texas congressman Kevin Brady, the top Republican on the committee said he was concerned that releasing Trump’s tax information “will set a terrible precedent” and it would unleash “a dangerous new political weapon.”

While the imminent release of Trump’s tax returns will end that battle for now, new investigations into the matter could begin next year. The IRS manual requires that the President and Vice President’s tax returns are audited each year. The presidential audits are an internal agency requirement and not codified in law. House Ways and Means Committee Chairman Richard Neal, a Democrat from Massachusetts, has written a bill that would put more legal force behind the IRS’s mandatory audits of sitting Presidents. Not even starting an audit into Trump’s taxes for the first two years of his presidency was “a major failure of the IRS under the prior Administration,” Neal said.

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Figuring out exactly how those lapses happened could be taken up by the Senate, which will stay in Democrats’ hands next year. Senate Finance Committee Chair Ron Wyden, a Democrat from Oregon, has also written legislation that would require presidential candidates to make their tax returns public. Wyden has indicated that his committee could take up the investigation into the decision by Trump’s Treasury Secretary Steven Mnuchin to not comply with a request from Congress for Trump’s tax returns.

-With reporting from Mini Racker/Washington

from TIME
via Time.com

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