In spite of what some may think, the following is apolitical. It represents the views of a “tax guy” who has practiced and taught tax law for 35 years and who has also dabbled in research literature on tax evasion.
Every candidate for the office of president of the Unites States should release full and complete tax returns. I’m not that concerned with how many years, although it should include at least the three most recent years.
I don’t care if the candidate is Donald Trump or Donald Duck. While there is no requirement to release tax returns, there are very sound reasons for the electorate to expect such disclosures from anyone running for POTUS.
I do not care if someone running for Congress discloses their tax returns. The presidency is different. We need to have confidence that the leader of our country properly discharges his (and perhaps, in the future, her) responsibilities under the tax laws.
Tax evasion literature supports a higher incidence of evasion when people believe that others are cheating. When driving on the interstate in Houston unable to keep up with traffic at 70 mph (OK, other than at rush hour), it is natural to increase your speed because “everyone is doing it.” Fudging on tax returns is no different (see Greece).
To support my point, let’s travel back in time to the first disclosures by a POTUS and a candidate for POTUS. In 1952, Richard Nixon was running as Dwight Eisenhower’s VP choice. Nixon challenged Adlai Stevenson, the Democratic candidate, to release tax returns.
Stevenson and his running mate, John Sparkma, did so. Nixon did not, nor did Eisenhower. Nixon, as we know, later had bigger problems while in office.
In October of 1973, Spiro Agnew resigned the Office of Vice President and also pled guilty to tax evasion. Gerald Ford replaced him. Ford, of course, became POTUS when Nixon resigned the office in August of 1974.
The Wall Street Journal ran many stories about problems with Nixon’s tax reporting issues. Nixon released several years of tax returns during this period in a (futile) attempt to save his presidency.
There were some very curious items reported on Nixon’s return – items that had no basis in the tax laws. The House Judiciary Committee considered investigating Nixon for tax evasion. He was never audited. Many tax experts speculated, as that was all they could do, that the IRS was afraid to take on the POTUS.
On April 20, 1976, President Gerald Ford released his 1975 tax return. He was the first sitting president to do so. He did it because he understood the mood of the country that had been betrayed by its political leaders.
Ford understood that the average American had to believe that the president took his tax-filing responsibilities as seriously as was demanded from the average person. Nixon and Agnew made clear that they did not take their obligations under the tax laws seriously.
Ford did the country a service. His service should be a model for candidates for president. Prove, before you take office or even before you are the party nominee, that you model good citizenship.
Based on past studies, we lose more than $500 billion each year from noncompliance with the tax laws. There are several explanations for this “tax gap,” but it is clear the gap is positively correlated with the belief that others are cheating.
If your neighbor or coworker cheats, that’s bad. If the president of the United States cheats, it’s worse. Much worse. I am not charging any current candidate with cheating on his or her taxes. I am saying that we need to see the returns to develop confidence that our leaders do themselves that which they ask of us.
The first two pages of a return (see Cruz and Rubio) is not a tax return. It’s a start. I don’t want to publish my tax returns, but I’m not running for president.
When I worked at the universities of Oklahoma and New Mexico, I didn’t want my salary made public, but it was. It was a “cost” of my position. Tax return disclosure should be a cost of running for president. Voluntary is fine, but do it.
James R. Hamill is the director of Tax Practice at Reynolds, Hix & Co. in Albuquerque. He can be reached at firstname.lastname@example.org.