Tax Returns of Presidential Candidates: 5 Things You Need to Know

man holds income tax sign

Even presidential candidates find time to file tax returns | Joe Raedle/Getty Images

As Benjamin Franklin once put it, we’re only guaranteed death and taxes. No American is immune to Uncle Sam taking a cut of their paycheck, even presidents and hopeful candidates. Some states might charge more for living there, and you might understand the tax code as much as you understand string theory, but rest assured that everyone – regardless of political office – needs to fill out a return before Tax Day.

Filling out taxes provides a window into your financial well-being and practices, which is why many presidential candidates choose to release their tax returns as they’re running for office. In most cases, it’s a sign of good faith and transparency – proving candidates (and presidents themselves) are operating on the up and up.

We take it for granted that most presidential hopefuls release their tax documents. But when they do, it offers us a wealth of financial information. Here’s a few things to know about the 2016 presidential candidates and their tax returns.

1. All tax returns are private information

By law, the Internal Revenue Service cannot release the tax returns of any person on a whim, whether or not they’re a public figure. This goes for presidents and candidates alike – even if the current status quo is to release that information. Instead, candidates and those in office choose to release the documents themselves.

History tells us that presidential candidates didn’t begin releasing their tax returns en masse until the late 1960s. In 1968, George Romney, then the governor of Michigan and Mitt Romney’s father, was pressured by the press to release his tax return documents. Romney did so, releasing 12 year’s worth of tax returns. “This set the precedent for presidential candidates to release their tax returns and almost every president from Nixon onward has made their tax returns public,” explains the tax site efile.com. PolitiFact states the practice became cemented under Jimmy Carter’s presidency in 1976.

Regardless of which year it became common, we’ve now come to expect presidents and candidates to turn in their tax homework. However, because it’s simply standard practice and not law, candidates choose how and when they release their information. Some, like Gerald Ford, decline to provide any information. Others release summaries (like former Vice President Dick Cheney), while most tend to release the full 1040 form. The Tax Analysts website includes the filings for each of the documents released, for most presidential candidates past and present.

2. The most transparent candidate: Jeb Bush

Jeb Bush, Source: Andy Jacobsohn/Getty Images

Jeb Bush | Source: Andy Jacobsohn/Getty Images

In July 2015, Jeb Bush released his tax returns for 33 years. (He would later make that 34 years, released 2014’s return as well.) Bush used it as a talking point several times, bragging up his willingness to divulge such a wide history of financial information.

In fact, Bush now claims the bragging rights for the largest number of tax returns released during a presidential campaign. That replaces the previous record set by former Senator Bob Dole, who released 30 tax returns during his campaign to unseat President Bill Clinton in 1996. What was perhaps the most surprising about Bush’s tax dump was that he chose to release the documents almost a full year and a half before the election. Many candidates choose not to make their tax returns public until the year of the election, as PolitiFact points out.

Good intentions – at least in terms of tax disclosures – didn’t get Bush to the top of polls, however. Of the candidates who remain in the race, Hillary Clinton has the largest number of released tax returns – a total of 15 years.

3. The least tax-transparent candidate: Donald Trump

Donald Trump solemn expression

Donald Trump | Ethan Miller/Getty Images

In the 2012 election against President Barack Obama, Mitt Romney faced criticism for not releasing his tax returns quickly – and then received even more flak for paying a tax percentage that was far less than most middle class Americans, and for using off-shore tax shelters. Now, any feet-dragging on Romney’s part has been overshadowed by the stalling of Donald Trump, who thus far has refused to provide any tax returns.

In October 2015 during an interview with ABC’s George Stephanopoulos, Trump said he would think about releasing his tax returns when Hillary Clinton released the emails from during her time as Secretary of State. “I’m thinking about maybe when we find out the true story on Hillary’s emails,” he said. We’ve now had access to about 50,000 pages of messages to and from Clinton, but haven’t seen any signs of Trump’s tax returns.

Now, Trump sings the same song as he stalls releasing his tax returns – just a different verse. Now, he won’t release them because the businessman said he’s been audited by the IRS for the past 12 years or so. “I will absolutely give my return, but I’m being audited now for two or three [years’ worth] now so I can’t,” Trump said during a debate in February. But as many experts have pointed out, it’s not against the law for Trump to disclose his initial tax filings, even if they are under official review. The uber-wealthy tend to be subject to tax audits more often, but even so Trump’s tax filings up until 2008 are no longer under an IRS audit. Trump has yet to agree to disclose any of those earlier tax returns, either.

If Trump does decide to release any paperwork, however, Democratic candidate Bernie Sanders would likely take this title over, as he’s only released his tax return from 2014.

4. Tax returns are the litmus test for candidates

Law-concept-statue-gavel-scale-and-books.jpg

Scales | Source: iStock

In the same debate mentioned previously, Trump also said, “You don’t learn anything from a tax return.” Trump might want you to believe that, but it’s just not true. On top of learning a candidate’s income from the previous year, it’s also a way for the general public to measure their truthfulness about how they manage their money.

For example, Trump has claimed that he’s an “ardent philanthropist” and that he’s given more than $102 million away to charitable causes in the past five years, Inquisitr reports. Seeing as how he’s also said he “fight[s] like hell to pay as little as possible,” we can assume Trump is reporting his charitable giving toward tax credits. Taking a look at his tax returns would tell us exactly how much he and any other politicians actually give toward benevolent causes. (The Clintons gave more than $3 million in 2014, for example.)

It’s also a way to discover any tax strategies Trump might be using that aren’t commonly used at your local tax preparer’s office. As Slate points out, Romney’s tax returns in 2012 showed that he paid a much lower tax rate than most middle class Americans, because most of his income came from capital gains. The same could be true in Trump’s situation.

5. Some do their own taxes, and wait until April to file

Source: iStock

Some candidates file their taxes in April | Source: iStock

If you’ve put off filing your own taxes until now, you’re not the only one – even among the country’s political elite. And you’re also not the only one filling out the 1040 on your own. While most candidates choose to have a tax preparer handle the bulk of the tax paperwork, Senator Bernie Sanders did his own taxes in 2014, according to the return he released.

In addition, most candidates choose to release their tax documents before they’re signed, or at least white out the signature boxes at the bottom of each tax return. However, tax returns for 2008 and for 2014 show that even President Barack Obama waits until April to file his taxes. For the 2008 filing, the paperwork was signed on April 12, and for 2014 the Obamas signed their returns on April 6. Others like Jeb Bush likely filed for an extension in some years, since Bush’s 2013 return wasn’t signed by his tax preparer until October 2014.

Follow Nikelle on Twitter and Facebook

More from Money & Career Cheat Sheet:

More Articles About:   , , ,