Trump disarmed a political landmine in refusing to release his tax returns

Former President Donald Trump was once harshly criticized for failing to release his tax returns, but no one seems to care much anymore.

Neither he nor his running mate JD Vance have disclosed their filings, and there’s no sign they intend to, though they could shed light on potential conflicts of interest and personal stakes they have in legislation before Congress.

In past years, that would have been a big deal — it was a major issue in Trump's 2016 and 2020 campaigns. But it’s barely come up in this year’s contest or in the news media, though the race is a toss-up and lawmakers will take up next year a sweeping debate over the fate of trillions of dollars in tax cuts.

President Joe Biden and Vice President Kamala Harris released their returns in April.

Trump's steadfast refusal, and the dog-that-didn’t-bark nonresponse to that nondisclosure, amounts to yet another blow to the decades-old tradition of presidential contenders in both parties volunteering their returns.

It's also a victory for Trump, says Steve Rosenthal, a senior fellow at the Tax Policy Center, since Trump has outlasted his critics.

“This issue, which was one of the largest in the 2016 campaign, is now one of the smallest,” said Rosenthal. “Trump has been successful, by and large, at taking tax-return disclosure off the table of the political debate.”

The Trump campaign did not respond to a request for comment.

Trump could personally benefit from some of the issues that will be before lawmakers next year, like what to do about a lucrative, but controversial, tax break for unincorporated businesses — such as the ones that comprise much of Trump’s financial portfolio. That deduction set to expire at the end of next year.

Both Trump and Vance have released other disclosure forms showing they own substantial amounts of cryptocurrencies, another issue lawmakers will likely wrestle with next year.

It’s hard to know what other potential conflicts of interest Trump might have because, while some of his old returns have emerged, nothing has been seen of his filings since he left the White House.

It’s a curious addendum to all the attention that used to swirl around the question of Trump’s returns.

The New York Times rocked the 2020 campaign with a damning report on Trump’s filings, mostly from years before he took office, after winning a Pulitzer in 2019 for an expose of Trump’s and his dad’s tax maneuvers during the 1980s and 1990s.

A former IRS contractor, incensed at Trump’s stonewalling, is now in prison for leaking his tax data to the newspaper and other wealthy people’s information to ProPublica.

And House Democrats fought in court for more than three years to seize Trump’s returns before releasing filings from 2015 to 2020 in December 2022.

Harris spokesperson Joseph Costello said: “Vice President Harris has voluntarily released two decades of tax returns. Why won’t Trump?”

His nondisclosure hasn’t gotten much attention this year perhaps partly because there’s so many other controversies surrounding him. Previous reporting demonstrated a clear pattern of Trump paying little or nothing in tax, thanks in part to aggressive planning.

But without more recent returns, people like Rosenthal are left to wonder what sort of conflicts of interest Trump may have developed since leaving the White House.

“What happened after he left office? What new opportunities arose for him?” said Rosenthal.

Trump and Vance released required financial disclosure forms showing, in broad strokes, where their money is, though they say nothing about taxes. Trump listed a number of limited liability companies, such as Mar-a-Lago Club LLC, that benefit from a special 20 percent deduction for non-corporate businesses, known in tax circles as 199A, that he signed into law in 2017. Extending it for another decade would cost almost $700 billion.

Trump also reported holding between $1 million and $5 million in cryptocurrency, and Vance as much as $500,000 in bitcoin, which critics say benefit from loopholes in the tax code that ought to be closed. People who own virtual currencies, for example, have more freedom to manipulate losses to erase their tax bills than do those selling stocks.

Trump has large holdings in individual stocks too, and some want him to unilaterally cut capital gains taxes by indexing them for inflation, something his administration had seriously considered.

It’s conceivable, should Trump win election and Democrats retake the House, that Democrats could force the disclosure of his returns again, using an arcane law allowing the head of Congress’ tax committees to see anyone’s filings, though there’s no sign that could be in the offing.

Democrats introduced legislation last year to legally require presidential contenders to produce their returns but it has gone nowhere.

All of that leaves tax historian Joseph Thorndike wondering about the future of the tradition of voluntary disclosure.

It used to happen in both parties without much fuss, but, increasingly, he says, releasing tax returns has become a partisan issue.

“Maybe it’s like that line from 'The Princess Bride' — it’s not dead, it’s only mostly dead,” said Thorndike. “It’s anybody’s guess at this point how this plays out.”

“But we have to recognize that voluntary traditions are fragile.”