It appears, if anyone is going to go against the grain about disclosing personal income tax returns, Donald Trump may be the one to say, “Enough is enough.”
American politics already delves into every aspect of a candidate’s life. Do we really need to pry into personal tax returns as well? And what do we really learn when we do? Not much. Rather, transparent disclosure requirements are a far superior way to identify potential conflicts of interest.
Candidates usually have to make disclosures of their assets and liabilities. But personal tax returns are deemed confidential by federal law for all U.S. citizens. That is why any disclosure must come from candidates voluntarily.
Unfortunately, the public has been grossly misled about what tax returns reveal. In a recent editorial by a major U.S. newspaper, a number of false arguments were made. Here are some examples.
Trump’s “boasting ought to be tested against hard information about how his companies performed, how they were managed and governed, how shareholders and bondholders were treated, how Trump was compensated, how he managed his tax burden, and to what extent he has been a philanthropist” opined one publication.
Yet a personal income tax return may provide little or no information about how a person’s companies performed or how they were managed or governed or even where they were located nationally or internationally. Very little of this information goes on a personal tax return; rather, it would be on corporate returns and other documents. And if overseas entities sent funds to U.S. corporations who paid Trump, his tax returns would not show this trail anyway.
A personal tax return almost never will have information about how shareholders and bondholders were treated. That information is likely to be completely confidential for privately-held companies so, again, claims that personal tax returns will provide such transparency are likely to be false.
In one of the most deceptive statements disseminated by a number of publications, former Republican presidential candidate Mitt Romney stated, “the potential for hidden inappropriate associations with foreign entities, criminal organizations, or other unsavory groups is simply too great a risk to ignore for someone who is seeking to become commander-in-chief,’ despite the fact Romney knows a personal income tax return is highly unlikely to reveal any of this kind of information..
While a personal tax return may show some of Trump’s compensation, it likely would not show the vast majority of it, which probably is in the form of stock and various rights. If Trump’s assets rose by $1 billion last year, it is likely that came in the form of asset appreciation rather than cash payments to Trump. And do we really care? Isn’t it obvious Trump makes far more money than the rest of us? Do we need a tax return to show what a pittance most of us earn?
How Trump manages his “tax burden” seems immaterial. Either he pays his taxes or he doesn’t. If he doesn’t, the IRS ultimately will file public liens against him but these will not be on his tax returns.
To use a tax return as a measure of Trump’s philanthropy could be terribly misleading. Someone such as Trump, who controls many different business entities, could be donating goods, services, and space through his businesses and none of this would show up on his personal tax returns.
Furthermore, no one has proven a relationship between elected officials who are generous with their money and elected officials who govern well. Simply because a person is philanthropic does not mean he or she will serve the public better. Perhaps a parsimonious candidate might be better suited for government service today.
Those who argue the release of candidates’ tax returns is an important part of the disclosure process because the returns will reveal a person’s financial relationships do not understand what most tax returns include. A majority of financial relationships will not be reflected on personal tax returns.
The answer to the public’s need for transparency is to improve disclosure requirements and have them cover a reasonable period of time. If we did that, we could skip tax returns altogether.
If he wants, Trump is positioned to lead a needed pushback against demanding too much of candidates and elected officials. There are enough disincentives for those considering running for office. Let’s remove unnecessary personal intrusions so more people will consider public service.
And most importantly, who needs to see Trump’s tax returns to come to conclusions about his candidacy?
Aaron Harber, a graduate of Princeton’s Woodrow Wilson School of Public & International Affairs, and Harvard’s Kennedy School of Government, was the President of the Colorado Accounting & Tax Services, and is the host of “The Aaron Harber Show,” seen on Channel 3 KCDO-TV, ION Television (KPXC-TV), and COMCAST Entertainment Television. Go to http://www.HarberTV.com to watch programs 24/7. Send e-mail to Aaron@HarberTV.com. © Copyright 2016 by Aaron Harber and USA Talk Network, Inc. All rights reserved.