Democrats Promised to Go After Trump’s Taxes. Why Are They Dragging Their Feet?

There were plenty of scandals among the presidencies before Richard Nixon and Watergate, but probably the most serious was the Teapot Dome scandal in 1924. It was a bribery scheme involving government officials taking payoffs to lease oil on public land. One of the ancillary scandals that emerged from that investigation was the suspicion that Treasury Secretary Andrew Mellon, who did not divest himself of his vast private holdings, was benefiting from his position. Congress was rightly concerned that the tax legislation Mellon was proposing was designed to benefit his personal interests So it demanded to see Mellon’s tax returns and also determine if the IRS had given him special treatment.

Presidents had long had the right to access any citizen’s tax returns, but as these scandals unfolded, Congress realized that this allowed for a cover-up. This led to the passage of a law that allows the House Ways and Means Committee, the Senate Finance Committee and the Joint Committee on Taxation the ability to demand any tax returns from the Treasury Department. The idea was to equally match the power the executive branch had to access this information. There were some slight modifications to the law two years later but other than that it has remained on the books ever since.

The most significant use was during Watergate when the Joint Committee investigated Nixon’s taxes and released them to the public. He had been suspected of substantially underpaying by wrongfully claiming charitable deductions after the law had been changed. The press turned up more suspicious tax evasion schemes as the months went on, with questions over whether he’d paid capital gains taxes on a land deal. Finally, the Providence Journal-Bulletin got hold of Nixon’s returns for 1970 and 1971, which showed he had barely paid any federal taxes at all.

Knowing that Congress was going to evoke the law and obtain the rest of his tax returns, Nixon voluntarily turned them over and asked the Joint Committee to audit them and tell him how much he owed. He ended up paying back $465,000 in 1974. Failure to pay taxes was one of the two articles of impeachment against Nixon that didn’t pass out of committee after nine Democratic members voted against it.

Since the Watergate investigations had revealed the president grossly abusing his power with the IRS, shortly after Nixon’s resignation Congress passed a law that severely limited the president’s access to IRS information and barred him from disclosing it to the public. But it left the 1924 law untouched.

All presidents and major party nominees since Nixon have released their tax returns. That is, until now. President Trump has still not released his, sporadically claiming that he will do it as soon as the IRS is finished “auditing” them. This is, of course, nonsense. Every year would not be under audit and, in any case, there is no law against releasing a tax return that’s being audited. It’s very likely that Trump is lying about this, since he lies about everything.

All presidents should be required to release their returns, but especially one who claims to be vastly wealthy and has refused to divest himself of his private family business. It’s an outrage that he has refused to do it and for any number of reasons, it’s in the public interest that they be released.

Trump’s overseas financial dealings have such clear appearances of conflicts of interest that they could be compromising regardless of whether they actually are. The Moscow Trump Tower deal alone raises alarms that Trump is still secretly involved in business deals in places that put him at risk of being leveraged. The national security threat of a president hiding foreign financial business from the public is obvious.

There are numerous reports of possible money laundering and other nefarious financial dealings with organized crime. He is currently benefiting from the profits of his company despite the constitutional prohibition against the acceptance of foreign emoluments. And the blockbuster New York Times exposé of the Trump family’s decades-long tax evasion scheme downright requires that his current taxes be reviewed. If there has ever been a case where oversight was more necessary, I haven’t heard of it.

So why aren’t the Democrats moving on this? I think most people who voted them into the majority last fall expected it would be one of the first things they did. They have the power to do it. Certainly, Trump’s financial shenanigans are no less suspicious that Nixon’s were. And Republicans demanded confidential IRS information during the Obama years in their quest to prove bias against conservative groups — and they got it, even releasing some portions to the public.

So far, there has been no movement from the House Ways and Means Committee under its new chair, Rep. Richard Neal, D-Mass. According to Politico, Neal is worried about exercising this congressional prerogative without a firm legal rationale and has asked numerous committees to provide one. Evidently he’s very concerned about the fact that the Trump administration will fight the release so he’s slow-walking it, telling people that it might not be done until after the 2020 election.

This is nuts. As the Center for American Progress points out, there is no legal recourse for the administration. The law is clear. George K. Yin, professor of law and taxation at the University of Virginia and a former chief of staff of the Joint Committee on Taxation, says that the committees can review the returns and — if they deem it in the public interest — can release them to the House and Senate, which would be tantamount to making them public. Neal’s excuses make little sense.

Greg Sargent at the Washington Post observed that this may be a case of Neal being intimidated by the ambiguous conclusion of the Mueller report and falling for the absurd narrative being pushed by the Republicans that it’s time to “move on.” That would be sadly typical but, as Sargent says, it’s the opposite of what must happen. Indeed, other House committees are moving forward at a brisk pace, knowing that oversight has been nonexistent for the last two years.

I also suspect that Neal, and the leadership that’s letting him drag his feet, are concerned that whenever Republicans are back in the majority they will use this power to release the tax returns of Democratic lawmakers and wealthy donors. (This is the same lame logic that compels Democrats to defend the filibuster despite the ongoing bad faith of the Republicans.)

If that’s so, it just makes the argument for people to be transparent and lawful with their finances. All public officials should release their tax returns, not just the president. And who knows? Maybe forcing wealthy donors to be transparent with their finances might be the best way to get big money out of politics.

There is no excuse for this delay. If Richard Neal won’t do the job, Nancy Pelosi should find someone who will.