Alarmed by President Trump siding with Russian President Vladimir Putin over U.S. intelligence agencies in Helsinki, California lawmakers have vowed to bring back a tax transparency bill that failed last fall.
There is no law that says a presidential candidate must release his or her tax returns to the public, so legislators in at least 23 states have drafted at least 40 bills to create one, an effort that could keep Trump off the 2020 ballot.
While opponents say such a law could be onerous and illegal, proponents argue that tax returns provide essential information to voters about a candidate’s financial dealings, political connections, and conflicts of interest.
“These laws would hinge access to the state presidential ballot on voluntary disclosure. It’s our position that these ballot access measures are constitutional,” said Corey Goldstone, media strategist at the Campaign Legal Center, a nonpartisan nonprofit in Washington, D.C., that advocates for strong campaign finance laws.
Despite efforts in California, New York, Maryland, and Rhode Island, none of the transparency bills have become laws.
Democratic Maryland Del. Jimmy Tarlau (Prince George’s County), who spearheaded one such effort, told Rewire.News the bill was “very popular in the community—I got lots and lots of emails supporting it,” but not so much among fellow legislators.
“Some of them felt that it might soon ask legislators to release tax returns and some people didn’t want to do that; some people felt it was the opening up of Pandora’s box and maybe they’d ask for other things, but I think they were wrong,” said Tarlau, who lost re-election bid this year.
“For many, many years presidential candidates without exception have released their tax returns until 2016, and Donald Trump refused to do that. Tax returns are very important for people to know what kind of connections and income people have, possibly through other countries, other sources, for voters to have a clear view of who the candidates are, what they have done, and how they’ve made their living,” he said.
Maryland state Sen. Paul G. Pinsky, a Prince George’s County Democrat who supported the bill and is considering filing a new one, told Rewire.News this is important legislation and a constitutional issue in light of the foreign entanglements and secret meetings with Russians in the run up to the 2016 election that kept Jared Kushner, Trump’s son-in-law and senior adviser, from obtaining high-level security clearance.
“Some people shrug it off as a gimmick, but, as we have learned over the past year, there are efforts by other countries [that] are using financial considerations as leverage particularly over the United States,” he said. “I think knowing the foreign financial entanglements, who the partners are, and how much is invested, is growing in import. So I think this is becoming not just a political issue but a security issue. For the president of the United States, I think we should know particularly where their investments are specifically around the globe.”
The Maryland bill would have required candidates to share tax returns going back at least five years. Similar bills have passed in legislative houses in California, Hawaii, Illinois, and New Jersey. California and New Jersey governors vetoed tax return transparency last year.
New York, where Trump is a resident, has dubbed its measure the Tax Returns Uniformly Made Public Act (or TRUMP Act). S26 passed afte a 4-4 vote in the Senate Elections Committee last month and is now in the state rules committee. It would require any candidate for president or vice president to file the five most recent years of federal income tax returns with the state Board of Elections in order to appear on the ballot.
State Sen. Brad Hoylman (D/Working Families Party-Manhattan), who was the first to author a tax returns disclosure bill, recently forced a discussion on it. “On the day Donald Trump says he can pardon himself for criminal wrongdoing, the state senate should pass my bill, S26, to force presidential candidates to release their taxes and expose potential conflicts of interest to the voters,” he said in a statement. As of June, “28 state legislatures are considering similar bills that would enshrine the four-decade long tradition of presidential tax transparency into law. This measure must be brought to the floor for a full vote before the end of the session. Nothing less than the integrity of our democratic institutions is at stake.”
S 2612A passed 34-3 in the Rhode Island state senate but did not get to the floor for a house vote before the session ended. State Sen. Gayle Goldin (D-Providence), who sponsored the bill, told Rewire.News it received overwhelming and bipartisan support.
Ever since the story broke about President Nixon’s tax evasion, every major presidential candidate has released their tax returns. Up until November 2016 the public had access to more information about their president’s financial motives than we have now, Goldin said. “The public deserves to know if the president has been paying his fair share of taxes, or if he has been gaming the system. We deserve to know how much he benefits directly from his fake tax reform package. We deserve to know if his foreign investments are driving his foreign policy. The president is exempt from many conflict of interest laws. Without seeing his tax returns, how can we be sure if he is operating in our nation’s best interest or his own?”
While there is no law on the books requiring presidential candidates to release their tax returns, it has been the norm for most candidates and Trump has been widely criticized for straying from it. He is one of only two candidates to withhold the disclosure in the past 40 years. Trump’s opponent Hillary Clinton, on the other hand, released nine years worth of returns, according to Politifact.
A New York Times analysis of a few pages from Trump’s 1995 tax return revealed “extraordinary tax benefits” after mismanagement of several business ventures. He then filed a $916 million loss—a massive tax deduction that could have helped him legally avoid paying federal income tax for 18 years, the Times reported.
While there aren’t any rules about specific disclosures of information, different states do have different filing and petition requirements for candidates that have been upheld, said Stephen Spaulding, chief of strategy and external affairs at Common Cause, a nonpartisan government watchdog group.
“There is a very strong legal argument that it is permissible as long as it’s not done in a way that targets any candidates by name but is a facially neutral law that anybody can comply with,” he said.
Spaulding said it’s not surprising Congress hasn’t taken action since congressional Republicans have stood firm against any effort to hold Trump accountable. He pointed out that Trump is facing lawsuits about his refusal to disclose tax returns. The New York Attorney General recently sued the Trump Foundation for “sweeping violations,” and the state Department of Taxation and Finance is probing to see if the foundation violated state tax laws, according to news reports.
The practice of presidential tax disclosure reveals critical insights and potential conflicts of interests, and helps to instill public confidence in the honesty, integrity, and transparency of the administration, Danielle Lang, senior legal counsel at the Campaign Legal Center wrote in the UCLA Law Review.
Her 2017 paper, “Candidate Disclosure and Ballot Access Bills,” concludes that these state ballot access measures are constitutional. They are not unlawful presidential qualifications, as some argue, but rather procedural requirements similar to state laws requiring the petition signatures or filing fees.
“Our electoral and democratic system has relied a great deal on norms especially when it comes to ethics and conflicts of interest rather than hard rules and legal requirements, and has kind of demonstrated the need to replace some of those norms with legal requirements that will safeguard them for the length of our democracy,” she told Rewire.News.
The fact that Congress has taken no action on Trump’s refusal to be transparent about his earnings and spending, despite public outcry, is “disappointing,” Lang said.
“We have mechanisms to shore up our democratic and ethical systems, but they will not happen on their own. They will only happen if our legislators are willing to use them,” Lang said. “So it’s been disappointing to see our legislators, time and time again, being unwilling to use the checks and balances that our constitutional system provides.”
States already require some forms of financial disclosure like campaign finance reports. Additional checks can only help strengthen the democracy, she said.
Tarlau said that there is momentum on tax return transparency legislation and that supporters are waiting for at least one state to pass the law.
While traditionally Democratic-leaning states are largely the ones pushing for this reform, Lang said she doesn’t know if Trump would care about such laws as a president who has broken all sorts of norms, but that all states could pass laws to signal to voters that tax transparency really matters. It would be striking to have a sitting president who did not qualify to appear on the ballot in every state, she said.
“It’s one thing when a candidate accuses another candidate of not making as full a disclosure as they should, it’s quite another when a candidate cannot qualify to appear on the ballot in a state because of his refusal to comply with even disclosure requirements,” she said. “As we go into another election cycle, we’re just reminded how important it is that all of our candidates make fulsome disclosures about their potential conflicts of interests and that we increase our norms, laws, and requirements to make sure that voters, when they go to the ballot box, actually know who they are voting for and whose interests those candidates represent.”