By Zach Brown
While the recent New York Times exposé detailing Trump’s sordid financial history would have shook the country in any year of his presidency, 2020 provides a truly harsh contrast for the unequal treatment of taxpayers in this nation. As the COVID-19 pandemic has pushed so many Americans into economic instability, it was especially discouraging to learn that President Trump may have been avoiding paying his fair share of taxes for years, leaving the rest of us to pick up the tab for needed government services.
As the Times reporting showed, Trump paid an egregiously low $750 in 2016 and 2017 and zero taxes at all for 11 of the 18 years covered in the paper’s analysis. Luckily, Congress has begun to focus its oversight lens on Trump’s gross tax avoidance—for example, the House Committee on Ways and Means Committee’s Oversight Subcommittee held a special hearing on “Taxpayer Fairness.”
In the first hearing since Congressman Lewis’ passing, new Oversight Subcommittee Chair Bill Pascrell (D-N.J.) and subcommittee members heard from various experts in the tax space who shed much needed light on both the dangers lurking behind the Trump tax revelations as well as the inherit inequities of our current tax system.
One of the main takeaways from the Taxpayer Fairness hearing is that it’s clear that Trump’s attempts to keep his tax returns hidden is only a small piece of his financial conflicts of interest and ethics shortcomings. Norm Eisen, Senior Fellow of the Brookings Institution, detailed that throughout his presidency, Trump has failed to sufficiently divest from his companies and properties and improperly profited from his position by directing international business to his many vacation properties and hotels (even charging the Secret Service for visiting his properties while protecting him)—painting the picture that he’s been using the presidential position as his own personal tax payer-funded advertising agency.
Of course, all of this observed impropriety comes into fuller view when considering them in concert with his many financial liabilities some of which were also exposed by the Times. Trump’s expansive debts, hundreds of millions of which will become due in the next few years, puts the U.S. in a decisively dangerous position, both opening up the country to improper foreign influence while simultaneously leaving the American public without the full picture of the financial stability of the man who has ostensibly been leading our nation for the last four years.
As we’ve seen from the last four years, Presidential “norms” are simply not enough, and we must work to create firm rules to ensure that future Presidents are not allowed to take advantage of our nation’s lack of concrete provisions. a law professor of Washington University, provided suggestions to plug the current holes in our financial disclosure regime. For one, Congress must pass legislation that explicitly requires that the U.S. President release his or her tax returns and that the Internal Revenue Service (IRS) must disclose the results of any related audit of the President’s finances. Professor Clark also suggested that since the Office of Government Ethics has interpreted the financial disclosure statute to require the open record of “personal debts,” Congress should pass legislation to clarify that financial disclosures be required for “business debts” as well, since these debts present just as much, and potentially even more, risk to national security. Last, Prof. Clark pointed out that our current disclosure system does not require that officials disclose the identity of their business partners, a glaring omission Trump has surely taken advantage of as his business ties span the globe.
In addition to covering the ethics issues related to Trump’s tax returns, the recent Taxpayer Fairness hearing also took a critical look at the blatant inequities of a tax code that allows a multi-millionaire business magnate to pay just $750 in taxes, an amount lower than even the average tax liability of individuals in the lowest income brackets. And, although it’s abundantly clear that America is in desperate need of a more progressive tax code, the disparities in IRS tax enforcement must also be tackled. While it’s true that President Trump’s taxes are currently being audited, a large percentage of IRS audits are actually conducted on the lowest income Americans. And as the budget cuts to the IRS have continued over the years, the rates of the audits of wealthy Americans have drastically decreased over time. If Congress does not address the needs of our underfunded, understaffed Internal Revenue Service, our tax system will remain vulnerable to evasion schemes by the wealthy, allowing them to hoard dollars, starving government programs and services across the nation of much needed funding.
As the the fight for the full public release of Trump’s tax returns wages on, Public Citizen will continue to advocate for ethics and conflicts of interest legislation that will bring true transparency to the financial dealings of our elected officials. We will also fight for an equitable tax enforcement system that no longer unfairly targets low income Americans over the very wealthy, and a progressive tax code that ensures that our country has the resources it needs to bring about the safety and prosperity of all Americans.