Search
Donald Trump Holds News Conference In Jupiter, Florida
Republican presidential candidate Donald Trump speaks during a press conference at the Trump National Golf Club Jupiter on March 8, 2016 in Jupiter, Florida. Photograph by Joe Raedle—Getty Images

Here’s Why Delaying His Taxes Could Be Disastrous for Trump

Mar 18, 2016

While Donald Trump has somewhat toned down his fiery persona and promised to emerge as a “unifier” who appeals to mainstream voters, the real estate tycoon isn’t reneging on what’s arguably his most rebellious stance: His refusal, at least so far, to release his tax returns.

Trump argues that several years of his returns are being audited by the IRS, and that he won’t make any of the filings public until the review is completed. Since neither the public nor, apparently, The Donald have any idea when the authorities will complete their work, it’s possible that we won’t see the returns—and hence get the real story on Trump’s wealth and income—until after he’s anointed as the Republican candidate, as now seems likely, or not at all.

Waiting until post-convention to produce tax records proved a disaster for the last Republican nominee, Mitt Romney, who didn't release his tax returns until just weeks before the general election. Refusing altogether is unprecedented in modern political history. Trump will encounter intense pressure from both critics and backers to do what all his rivals have already done.

Indeed, it’s hard to see how Trump can keep marketing himself as the truth-speaking hero to the working folks if he balks at letting those same voters compare his grandiose financial claims—a pillar of his campaign—to the financial facts.

Presidential candidates have no legal obligation to make their tax information public. But the tradition is so strong that every nominee, and virtually every major contender, in recent decades has complied. The practice of presidents’ regularly publishing their tax returns started with Richard Nixon in 1969. Not all followed suit: Gerald Ford never provided his IRS filings.

presidential-tax-releases

Since 1980, though, every party nominee has produced a tax return, and all but three have released their returns well before the balloons descended at the convention.

An early exception was Ronald Reagan, who didn’t comply until after winning the nomination that year. Subsequently, it became standard practice to act much earlier. In 1988, both President George H.W. Bush and Michael Dukakis published their returns before their conventions. Four years later, President Bush and frontrunner Bill Clinton made their 1991 filings public right around tax time, April 16 and 18 respectively, starting a long-standing tradition that's been followed to this day. In fact, the only major candidate who refused to release his return was maverick billionaire H. Ross Perot. But if he had, perhaps he would have done even better than the 18.9% of the vote as an independent.

In 2012, Obama released his return for 2011 at the customary time, mid-April. But Mitt Romney didn’t follow suit. In January, he’d made his 2010 filing public, and furnished an estimate of his expected income and tax bill for 2011. But his apparent stonewalling on the 2011 return hobbled his campaign, providing an opening for Senate Majority Leader Harry Reid to wrongly accuse the candidate of failing to pay any taxes for years.

Romney finally provided the return in late September of 2012, three weeks after he was nominated. The Democrats assailed his privileged portfolio of private equity and derivative investments, and pounded Romney for paying just 14% of his gross income; even his rate on taxable income was slim for presidential candidate, at 21%. The damage was done. The delay heightened scrutiny of the returns when they finally appeared, and the narrative of Romney as an out-of-touch rich guy kept rolling.

This election year, all the candidates have followed the longstanding custom of tax transparency, except Trump. Hillary Clinton released her 2014 return last July, and Bernie Sanders submitted his a month earlier. On the Republican side, Ted Cruz and John Kasich provided their returns in late February and early March respectively.


It's remarkable that since the Romney onslaught, the tax issue has pretty much disappeared. At the early March debates in Detroit and Coral Gables, Trump faced no questions whatsoever about why he’s defying decades of standard protocol. This interlude won’t last. The audit excuse is just that—an excuse. Any taxpayer can release returns whether he or she is under audit or not. And if he doesn't, suspicions will grow that Trump is really hiding something.As for Trump, when challenged on his delay in the Houston debate on February 25, the mogul replied, “I will make a determination over the next couple of months.” On March 3, Romney, among complaints about Trump, turned to a tactic that was used effectively on him, castigated the current GOP frontrunner for hiding a “bombshell” in his unseen filings. In a CNN interview, Trump strongly suggested that his returns will bolster his claims of “massive” wealth. “There’s no bombshell,” he declared, “except that I pay a lot of taxes and the government wastes the money.”

It will be a tough choice for Trump: Keep playing the rebellious outsider and refuse, or comply and possibly unmask that he’s worth a fraction of what he’s been saying, and is really guilty of what Romney wasn’t, paying little or no federal income taxes. Maybe Trump can convince his loyalists that tax secrecy is part of skewering the “establishment.” The argument will be a harder sell with the independent and mainstream Republicans who pay a lot of taxes, and want proof their leaders do the same.

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: http://www.djindexes.com/mdsidx/html/tandc/indexestandcs.html. S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions