Five things to watch as 2020 Dems release their tax returns
September 9, 2020
Democratic presidential candidates are starting to release their tax returns, drawing a deliberate contrast with President TrumpDonald John TrumpSenate advances public lands bill in late-night vote Warren, Democrats urge Trump to back down from veto threat over changing Confederate-named bases Esper orders ‘After Action Review’ of National Guard’s role in protests MORE, the first major party nominee in decades who refused to do so.
In the past week, Sen. Kirsten GillibrandKirsten GillibrandWarren, Democrats urge Trump to back down from veto threat over changing Confederate-named bases Warren, Pressley introduce bill to make it a crime for police officers to deny medical care to people in custody Senate Dems press DOJ over coronavirus safety precautions in juvenile detention centers MORE (D-N.Y.) and Washington Gov. Jay InsleeJay Robert InsleeInslee calls on Trump to ‘stay out of Washington state’s business’ Seattle mayor responds to Trump: ‘Go back to your bunker’ Trump warns he will take back Seattle from ‘ugly Anarchists’ if local leaders don’t act MORE (D) became the first two 2020 candidates to release their 2018 returns, and each have now given the public more than 10 years of documents. More candidates are likely to follow in the near future as the April 15 filing deadline approaches.
Democrats releasing their returns argue they are being more transparent than Trump, and the filings can reveal information about their finances that may be of interest to voters.
Here are five things to watch as the 2020 Democratic candidates disclose their tax returns:
How much do they release?
So far only a few of the Democratic candidates have made a large amount of their documents public.
Besides Gillibrand and Inslee, Sen. Elizabeth WarrenElizabeth WarrenWarren, Democrats urge Trump to back down from veto threat over changing Confederate-named bases OVERNIGHT DEFENSE: Joint Chiefs chairman says he regrets participating in Trump photo-op | GOP senators back Joint Chiefs chairman who voiced regret over Trump photo-op | Senate panel approves 0B defense policy bill Trump on collision course with Congress over bases with Confederate names MORE (D-Mass.) has also released 10 years of tax returns, though she has yet to release 2018’s.
Others in past years have released summaries of some of their documents or only shown some of their tax returns to selected news outlets, according to the watchdog group Citizens for Responsibility and Ethics in Washington (CREW). A number of candidates have said they will release their returns but haven’t provided specific timetables.
Any candidate who requests an extension would have until Oct. 15 to file their 2018 returns with the IRS, so some may not have theirs ready to release for several months.
Given that Democratic politicians have spent a considerable amount of time blasting Trump for failing to release his tax returns, candidates would be expected to make their own documents public and would likely be seen as hiding something if they do not do so.
CREW and others monitoring tax-return disclosures are urging Democratic candidates to release full returns from at least a decade. The House has passed legislation that would require presidents, vice presidents and major-party nominees for those offices to do so, though the measure stands little chance in the GOP-controlled Senate.
Those tracking candidates’ tax returns also encouraged candidates to release tax returns of their businesses, if applicable. Lawmakers have expressed an interest in viewing Trump’s business tax returns as well as his personal filings.
How much money do the candidates make?
Many of the candidates are senators, and senators receive an annual salary of $174,000, though the returns will also lay out other forms of income.
Candidates’ tax returns could report total income that’s considerably above their government paychecks if they also have income from investments and book deals, and if they file jointly with spouses who have their own incomes.
Candidates’ income information can be used to get a sense of how their financial situations resemble those of voters. While the candidates are generally expected to be high-income taxpayers, those who are exceptionally high-income or have a lot of investment income may particularly have a different financial profile than most Americans.
Additionally, candidates’ income information could provide clues about any potential conflicts of interest they could have.
While tax returns are different from financial-disclosure forms and don’t necessarily provide information about every asset a candidate has, returns can provide information about partnership income, where someone has received dividends and interest, and whether someone has any foreign accounts.
How are the candidates affected by the GOP tax law?
Voters can get a sense of how presidential candidates have been personally affected by the GOP tax law if they are able to compare the candidates’ 2018 returns with their returns from previous years.
The returns that are being filed this year are the first to reflect many of the changes made by the law, including lower tax rates, a larger standard deduction, a cap on the state and local tax (SALT) deduction, a higher exemption amount for the alternative minimum tax and a new deduction for income from noncorporate businesses.
Most taxpayers are getting a tax cut for 2018 because of the new law, and that is likely to be the case for the presidential candidates as well, though they may benefit in different ways from each other.
Inslee and Gillibrand’s returns both show lower effective tax rates for 2018 than for 2017.
All of the Democratic candidates who served in Congress in 2017 voted against the law, and many of the presidential candidates have said they would roll back parts of the law that benefit the wealthy and corporations. The tax returns can give voters a sense about how the candidates might personally be affected by any roll-backs they propose, as well as by other tax legislation they might offer.
How much are candidates donating to charity?
If presidential candidates itemize their deductions, their tax returns will provide information about the amount they have donated to charity.
Voters may be interested in seeing what percentage of their income candidates have given to nonprofits.
Fewer candidates may be providing information about their charitable contributions on their 2018 tax returns. Because the GOP tax law substantially increased the size of the standard deduction, fewer taxpayers in 2018 will be taking itemized deductions such as that for charitable contributions.
Gillibrand itemized her deductions on her 2017 federal tax return and took the standard deduction on her federal return in 2018. But she still disclosed that she and her husband donated $3,750 to charity in 2018, because she also released her New York state tax return and itemized on that form.
Will the public see any of Trump’s tax returns before the 2020 election?
It’s not out of the question that Trump’s tax returns will become public prior to the 2020 election, though the president is unlikely to disclose them voluntarily.
Trump has said he won’t release his tax returns while under audit by the IRS, though the tax-collection agency has said that audits don’t prohibit people from releasing their own tax information.
House Democrats are taking steps to try to get Trump’s returns, but it’s unclear how successful the attempts will be.
Ways and Means Committee Chairman Richard NealRichard Edmund NealOvernight Health Care: US showing signs of retreat in battle against COVID-19 | Regeneron begins clinical trials of potential coronavirus antibody treatment | CMS warns nursing homes against seizing residents’ stimulus checks CMS warns nursing homes against seizing residents’ stimulus checks Nursing homes under scrutiny after warnings of seized stimulus checks MORE (D-Mass.) is expected to try to obtain Trump’s tax returns by requesting them from the Treasury Department, though he is expecting that effort to lead to a lengthy court case, so it’s unclear how quickly he’d be able to get the documents, if at all.
Some state lawmakers across the country have proposed legislation to require presidential candidates to release tax returns to appear on their ballots. Legislation on the subject passed the Washington state Senate earlier this month.