Tax Day 2011: Why do presidents release tax returns? Hint: 'I am not a ...'(Read article summary)
The modern tradition of presidents, vice presidents, and other politicians releasing their tax returns dates back to a non-Watergate Nixon scandal: tax evasion.
Dennis Brack / Newscom / File
Tax day is almost upon us, so today we have a question about taxes and politics. Why do US presidents â and presidential aspirants â release their tax returns to the press?
Yes, we know itâs a sunshine thing. Itâs supposed to prove theyâre paying their fair share. But why taxes, specifically? Is the publication of presidential financial data, like so many Washington political rituals, the result of some particular scandal?
Why yes it is, and thanks for asking! It lets us open the gift to journalists and historians that is the life of Richard M. Nixon.
His 1974 resignation over Watergate makes it easy today to forget that by late 1973, President Nixon was in big trouble over how little he was paying in federal taxes.
He himself first steered attention to his taxes by boasting at a September press conference that heâd been audited by the IRS and found clean. Reporters started digging and, long story short, he had paid Uncle Sam less than $6,000 on an aggregate income of $790,000 from 1970 through 1972.
Heâd taken big deductions for donating his vice-presidential papers to charity and for interest on the mortgage for his San Clemente house, among other things. The public was outraged.
âNixonâs taxes were an issue that average citizens readily understood as compared to the constitutional issues raised by the Watergate investigation,â concluded University of Alabama tax professor William Samson, in a 2005 analysis of the returns.
Upon further consideration, the IRS decided that Nixon owed $465,000 in back taxes, which he paid. This penalty cut Nixonâs personal wealth in half.
After Nixonâs resignation, President Gerald Ford faced the task of restoring citizensâ faith in government. The US tax system is largely voluntary, after all. Few taxpayers are audited. If voters think the person at the top is cheating, they will, too.
So in April 1976, at the start of his own reelection campaign, Mr. Ford publicly released his 1975 return. Heâd paid $94,569 in taxes on an income of $204,606. After he was elected, Jimmy Carter followed suit, and so has every president since, as well as numerous vice presidents and other top US politicians.
Tax Day 2011:
Part 2: What's new for homeowners?
Part 8: âI am not a ... tax evaderâ: Why politicians publish their tax returns