Perhaps the greatest mystery of President Trump’s tax returns is how he’s managed to keep them hidden for so long. Congress has the power to force them into view — only they won’t. And despite all the damaging leaks coming out of Washington, somehow this bit of information remains tightly guarded.
So desperate is the hunt that on Tuesday night Rachel Maddow seduced big audiences by tweeting “BREAKING: We’ve got Trump tax returns.” All the MSNBC talk show host really had were a few scant pages from his 2005 returns — with only the most cursory information.
Still, Trump’s strategy of concealment does have one big downside: it suggests there must be something to conceal.
Trump’s returns would potentially expose some well-guarded secrets, including what loopholes he exploits to reduce his taxes, whether he’s as charitable as he claims, how much money he owes, and to whom he owes it.
And Trump’s resistance to releasing his returns suggest these details might be more than just embarrassing; possibly, they’d be damning for Trump’s image. Now seems like an appropriate time to revisit a few of the big questions that his tax returns could answer.
To whom does Trump owe money?
Despite bipartisan pressure, Trump has refused to put his assets in a blind trust. Instead, he has handed his business over to his sons, who continue to operate in countries around the world. And the deals they oversee have enormous financial ramifications for Trump and his family.
That raises a troubling question. When Trump negotiates with a foreign country, how can we know whether he’s motivated — even in part — by concerns about the Trump business empire?
In the case of Russia, this potential issue seems particularly acute — because Trump has taken a relatively subdued stance toward the Putin regime without any realpolitik explanation. In the absence of Trump’s tax returns, it’s hard to know whether financial entanglements are playing a role, but it’s not crazy to wonder. Back in 2008, Trump’s son and business partner, Donald Jr., said that Russian investors made up a disproportionate share of their assets, adding, “We see a lot of money pouring in from Russia.”
How much does Trump give to charity?
This was one of the most bizarre stories of the campaign. For months, Washington Post reporter David Fahrenthold called charitable organizations to see whether they’ve received money from Donald Trump. Time and again, the answer has been no.
Over the past 25 years, it looks like Trump has donated about $5 million of his own money to charitable causes. That’s hardly nothing, but it’s a very small share of his total worth.
A look through Trump’s tax returns would help clarify whether these number are accurate, or whether Trump’s charitable giving has been underappreciated.
What’s more, because President Trump has promised to donate his salary and unused inaugural funds to charity, this issue persists. Are his charity pledges reliable? Or a rhetorical bluff to keep watchdogs at bay.
How much is he worth, really?
This is a sensitive issue for Trump. Years ago, when he agreed to participate in a roast on Comedy Central, he had but one rule: Comedians could make fun of his family, his hair, his failed products, but they could not question the extent of his wealth.
Truth be told, the tax returns wouldn’t necessarily reveal his true worth. They tell a much narrower story, following the thread of year-to-year income rather than the broad value of his buildings and brand. Still, if the income numbers look low, that might imply a lower overall level of wealth than Trump has publicly portrayed.
Take the documents released by Maddow Tuesday. They shows that Trump earned roughly $150 million in 2005. That’s a lot of money, to be sure. But if Trump is worth the $10 billion he claims, $150 million amounts to a 1.5 percent return on his total wealth. That’s pretty meager for an active businessman, especially during an economic boom year.
How much does Trump actually pay in taxes?
One thing Maddow’s documents show is that Trump does sometimes pay taxes. In 2005, he paid about $38 million, or 25 percent of his income.
That’s a different story than the New York Times told during the campaign, when they released a handful of pages from his 1995 returns, in which Trump paid no income taxes at all.
Not only would Trump’s tax returns settle the issue of which leak is more reflective of the general pattern, they’d show whether Trump uses any complex or controversial financial maneuvering to keep his tax rate down over the long term.
When Mitt Romney reluctantly released his returns in 2012, the public learned that a huge chunk of his earnings passed through the now-infamous “carried-interest loophole,” dramatically lowering his tax rate. That information opened him to criticism that he wasn’t paying his fair share.
Trump’s returns could have a similar effect, exposing the tax-avoiding power of some arcane loophole that helps the candidate lower his tax bill.
What does it all add up to?
In the end, it’s very hard to know exactly what we’d find in Trump’s tax returns, so a lot of this must count as speculation. But one thing we do know is that tax returns can be extremely revealing.
When Bill Clinton ran for president, he released tax records going back to 1980, which prompted people to ask: “What happened in 1979 and 1978.” Outside pressure eventually compelled the Clintons to release those earlier documents, which did in fact contain a remarkable revelation: Hillary Clinton turned $1,000 into $100,000 with bets in the cattle futures market, despite having no experience in that arena. No wrongdoing was ever proved, but a pair of academics pegged the odds of that good fortune at 1 in 31 trillion.
Perhaps the most telling example, however, comes from the last president who refused to release his tax returns: Richard Nixon. When Nixon declared “I am not a crook,” he wasn’t talking about Watergate. He was talking about his taxes.
Sources were suggesting that Nixon had exploited a lapsed tax loophole to significantly reduce his payments. Washington was outraged, and the IRS was about to audit the president of the United States.
The fuller version of Nixon’s response is especially revealing: “I welcome this kind of examination, because people have got to know whether or not their president is a crook. Well, I am not a crook.”
Words of wisdom from Richard Nixon. Every President since Jimmy Carter has shared their tax returns. Trump still can. And if he won’t, Congress can make him.
Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the U.S. He can be reached at firstname.lastname@example.org. Follow him on Twitter @GlobeHorowitz