Full transparency, or class-warfare voyeurism? In my column for The Fiscal Times today, I take the contrarian position that Mitt Romney and Newt Gingrich shouldn’t disclose their tax returns — and neither should Barack Obama, Rick Santorum, Chris Christie, or Ralph Nader, who by the way never did release them:
This tradition of presidential 1040 disclosures only goes back to the post-Watergate era, and it is not universal. According to Politifact, seven out of 34 candidates between 1976 and now refused to disclose their tax returns, the latest being Mike Huckabee and Rudy Giuliani in 2008. None of these men won the nomination, but it could hardly be said that the failure to release their returns was a major factor in their losses. Income tax returns don’t tell much about financial assets and potential conflicts of interest that can’t be gleaned from their FEC-required disclosures, and so the lack of that data hardly matters.
Tax returns offer no further protection against public corruption, but do offer a voyeuristic peek into the private lives of candidates. What tax breaks do they seek? How much do they contribute to charity? What is their precise income level and their effective tax rate? No one really believes that they will find a crime that the IRS somehow managed to miss, like some sort of financial Sherlock Holmes, and almost everyone who reads them wouldn’t have the expertise to catch one anyway.
So why do we have this tradition at all? It appears to have been a reaction to Watergate, as implied by Politifact, and a form of playing “doctor” among political opponents, as in you-show-me-yours-and-I’ll-show-you-mine. It is a surprising tradition in a country that values personal privacy, and especially in a political party that expresses so much resentment over the IRS prying into the very same areas of most other taxpayers. Many conservatives want to get the federal government out of the business of income tracking altogether by moving to a consumption tax instead. Culturally, many of us still consider a question even from friends or family to disclose our income as at least gauche and perhaps positively rude.
Even if we put aside the MYOB factor, the tax releases don’t tell us anything we need to know that the disclosures don’t — and lead to a lot of bad assumptions and reporting. One need look no further than ABC’s faulty headline on Romney’s supposed tax shelters in the Caymans that turned out to be for clients of Bain and not Romney himself. Ask yourselves this question: when was the last time that a tax return offered anything remotely germane to an evaluation of a candidate? Demonstrated a violation of the law? In the nearly 40 years since this hair-shirt practice began in earnest, the answer is never.
But even apart from the bad reporting, the tax returns are nothing more than a vehicle for class-warfare resentment. Everyone who runs for President has significant wealth; that’s true of the current President as well as all of his current challengers. This nine-day wonder of tax-return fever has liberals and even some conservatives hyperventilating over Romney’s 15% effective tax rate, when it’s pretty clear that Romney pays that on capital gains, not income. If he draws more than the high five figures for income — remember that he hasn’t been employed in the traditional sense since being governor of Massachusetts — I’d be shocked. Unless conservatives want to argue for a massive hike in the capital-gains tax rate, what exactly did they expect Romney’s effective tax rate to be?
That said, Romney has utterly botched this issue for the last week. Surely he had to know that the other candidates would eventually make this an issue, especially after Gingrich and the soon-to-exit Rick Perry decided to play a little class warfare over his private-equity experience at Bain. If he wanted to keep his tax returns private, he should have made this argument. Instead he equivocated at the debate, said he’d get around to releasing them in April, which doesn’t do much for South Carolina voters, and essentially ceded the legitimacy of the demand. If Romney thinks it’s legitimate, then he should have just released them well before Iowa and let the nine-day wonder of it play out before voters started casting ballots in earnest.
So no, I don’t need to see tax returns from anyone running for President. Their financial disclosures should be enough. But since I’m pretty sure I’m in the minority, let’s take a poll:
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