Among the various Democrat electoral strategies that involve attempts at damaging President Trump with the hope of preventing a win in 2020, we have the tax-return strategy. Now that Mueller has failed to come up with the goods, and given that most people realize that Nadler and company in Congress will be going over the same ground as Mueller with not nearly the same resources (neither financial nor in terms of expert prosecutors) in order to try and score political points, we have the spotlight turning towards Trump’s tax returns.

The language being used, as usual when it comes to the Trump opposition, is both apocalyptical and self-righteous. Here’s Steve Rosenthal at the Urban-Brookings Tax Policy Center, as quoted in The Hill:

[The] request tests Mnuchin’s oath of office: whether Mnuchin will faithfully execute the laws of the United States, or whether Mnuchin will bend to the will of the president.

Which also sets up the narrative of Mnuchin the faithful loyalist who’s breaking the rules for evil President Trump. But, Rosenthal’s over-the-top assertions aside, is the Secretary of the Treasury actually breaking any rules by declining to release the president’s tax returns?

House Ways and Means Committee Chairman Richard Neal of Massachusetts is reportedly using U.S. Code Section 6103 (f) as a way to try and force the IRS, and therefore Mnuchin (given that the Internal Revenue Agency is part of Treasury), to disclose President Trump’s tax returns from the past few years. Here’s what U.S. Code Section 6103 (which deals with disclosure of tax information by the IRS and which in most cases stringently prohibits it) subsection (f) in part states:

Upon written request from the chairman of the Committee on Ways and Means of the House of Representatives, the chairman of the Committee on Finance of the Senate, or the chairman of the Joint Committee on Taxation, the Secretary shall furnish such committee with any return or return information specified in such request, except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure.

In closed executive session. How reassuring, right? No problem with leaks from those sessions if it ever actually happens that President Trump’s lawyers accede to Chairman Neal’s written request.

While Section 6103 (f) provides the technical loophole that Democrats have been looking for, is it constitutional to force disclosure of a president’s tax returns?

Let’s start with the fact that income tax was nowhere in the constitution and income taxes didn’t appear until Lincoln needed to finance the Civil War and Congress established a tax in 1861 for that purpose. Then early in the 20th century, more income taxes on corporations followed. However, as David Herzig, a tax expert, outlines in Forbes the presumption was that taxes were public information:

When enacting the country’s first federal income tax to finance the Civil War, in 1861, Congress provided that all returns should be “open for examination.” Likewise, when Congress came up with the first income tax for corporations, in 1909, the law provided the returns “shall constitute public records and be open to inspection as such.”

But, by the 1920’s and 1930’s, the pendulum had shifted to privacy. These rules and norms were memorialized by the 1970s and 1980s in IRC section 6103.

In other words, U.S. Code Section 6103 was enacted by Congress some 30 to 40 years ago to push back against IRS disclosure of private tax information and to provide a wall of privacy. So, what we have is a tension between freedom of information and privacy. Here’s Herzig again:

IRC section 6103, protects taxpayers from forced disclosure and trumps the primary legislation for disclosure, the Freedom of Information Act. FOIA enables the public to inspect rulings and many other IRS documents, files, and memoranda, but it does not encompass “matters [that are] specifically exempted from disclosure by statute,” e.g., IRC section 6103.

Mnuchin is caught in this crossfire between administrative state regulations and Congress which of course enacted those very regulations in the 70’s and 80’s.

President Trump, as a political choice, should have been more amenable to releasing his returns. His refusal seems to reflect his thinking as a businessman rather than as a politician, which is part of why he was elected. But now we have a tactic that Democrats are going to use to hint darkly that Trump must have debts with Russian banks or goodness knows what else and this compromises him.

The problem is changing key norms dealing with taxes because Trump is president. This is something Congress should legislate if they truly believe they should make it law that any nominee for President has a legal obligation to release their tax returns. As Herzig writes:

By amending IRC section 6103 for presidents, vice-presidents or some subset (i.e., party nominees), Congress can rebalance the rules. But approaching legislation in a knee-jerk fashion is problematic. It is no fun to say we should weigh and contemplate such a change, but it is necessary.

Americans value privacy.

Or do they?

In answering that question, it is interesting to note that the two New York legislators who are pushing for a law obliging the release of tax returns for top officials in New York State, have themselves reportedly not yet done so.

If we’re going to return to a presumption that individual tax returns are public information at least for certain offices in government, then the Federal Government (rather than individual states) may be the way to go. But would that mean that private taxpayers are next?

Tax returns as instruments of shaming private citizens and not just politicians in the public square? Think about that as you consider what AOC tweeted:

We didn’t ask you.

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