As the Watergate scandal unfolded, the American people learned that among other illegal activities, President Nixon had avoided paying over $440,000 in taxes. In response to mounting public pressure on the issue, Nixon famously said, “People have got to know whether or not their President is a crook. Well, I'm not a crook.” After initially refusing to allow his tax returns to be scrutinized by the IRS or the public, he soon relented and made his returns public.
Nixon, of course, resigned less than a year after claiming he was “not a crook,” but he came to understand that the American people expect those who hold our country’s highest office to be open and transparent about their finances. By releasing his tax returns, a precedent was established for future presidents to do the same. While Gerald Ford released only a summary of his tax returns, every Democratic and Republican nominee for president between 1980 and 2012 released at least one year of their tax returns. No doubt many Americans assume that this disclosure is mandatory, but this bipartisan tradition has been voluntary and never been required by law.
In 2016, the bipartisan tradition was ditched. Donald Trump refused to release his tax returns, falsely claiming he could not do so because the IRS was “auditing” his taxes. Sen. Bernie SandersBernie SandersUnder pressure, Democrats cut back spending The Memo: Cuts to big bill vex Democrats Democrats say they're committed to reducing emissions in Biden plan MORE (I-Vt.) only released his 2014 return in April of 2016. As a result of the tradition being ignored, I introduced the Presidential Tax Transparency Act in June, 2016 to make disclosure a requirement by law.
Tax returns contain vital information such as whether a candidate or a president has paid any taxes; what they own; what they’ve borrowed and from whom; whether they’ve made charitable contributions; whether they’ve taken advantage of tax loopholes or offshore tax shelters; and whether they have foreign bank accounts. Only a full release of tax returns can provide the public with clear information as to potential conflicts of interest and whether there could be potential entanglements with foreign governments and foreign businesses.
What we know about the current president’s finances are instructive as to the importance of tax returns. Last year, a stunning New York Times investigative report revealed that President TrumpDonald TrumpTrump announces new social media network called 'TRUTH Social' Virginia State Police investigating death threat against McAuliffe Meadows hires former deputy AG to represent him in Jan. 6 probe: report MORE received the equivalent of $413 million in today’s dollars from his father but avoided paying millions of dollars in taxes through complex financial arrangements and questionable tax loopholes which experts say could constitute tax fraud. In light of these revelations, it’s more important than ever that this president release his tax returns and that Congress takes action to ensure future presidents and candidates do the same.
The Presidential Tax Transparency Act requires the sitting president and vice president to release 10 years of prior tax returns and requires all future presidents and vice presidents to release their tax returns annually. It also requires candidates for these offices to release their tax returns for the previous ten years within 15 days of receiving their party’s nomination.
Congress has the authority to request a president’s tax returns, however, the Presidential Tax Transparency Act is critical to ensure that all future presidential nominees’ tax returns are part of the vetting process of the American people before an election. In a democracy, truth and transparency should be the gold standard. Presidential candidates should be held to the highest standards of transparency to establish confidence that he or she will work solely for the interests of the American people, not their own financial gain.
Eshoo represents California’s 18th District.