Grading the Candidates’ Tax Disclosure (Updated)

By Sam Brunson

Nearly two months ago, guesting on Prawfsblawg, I wrote about the state of the presidential candidates’ disclosure of their tax returns. Since then, they’ve gone through several more primaries, and we have a better idea of where each candidate stands in the electorate. So, as the semester winds up and my focus shifts to grading, I thought I’d warm up by grading the candidates on their level of tax disclosure.

A caveat before we begin: as tax historian Joseph Thorndike has noted (here and 150 Tax Notes 591 (2016)), while there’s a strong norm for candidates’ releasing their tax returns (consistently since 1980, and sporadically for at least a decade before that), they are under no legal obligation to do so. If we really care about seeing candidates’ tax returns, we should encourage Congress to make disclosure mandatory.

That said, my grades aren’t based on legal obligation. They’re based on some combination of the quality and quantity of the disclosure. 

And should we care about seeing candidates’ tax returns? I think we should. Certainly there’s voyeuristic pleasure in seeing how much some else makes, what her effective rate is, and all that, but there’s more than just voyeurism. A candidate’s tax returns can tell us how much she gives to charity, how aggressive she is with her finances, how compliant she is with the law. It gives us objective information that we can use in deciding whether that candidate deserves our support, and whether that candidate will represent us the way we want to be represented.

So, without further ado, the grades (in order of number of states won in Tuesday’s primaries):

Trump (five wins): F.

Trump has yet to release a single tax return. And, if that’s not bad enough, his excuses are specious. Honestly, he probably deserves an F-, only under Loyola’s grading scale, F is the lowest grade I can award.

Clinton (four wins[fn1]): A.

You can find Clinton’s tax returns, dating back to 2007, on her campaign website. (You can find her returns dating back to 2000 [update #2] 1992 (she files jointly with her husband; pre-2000, they’re under Bill Clinton) at the Tax History Project.) And they’re her full returns, not just the Form 1040. That means you can see not only that she had about $5 million of itemized deductions in 2014 (p. 2, line 40 of the Form 1040), but you can see that her itemized deductions comprised $2.9 million in state taxes, $42,000 in mortgage interest, and $3 million in charitable donations (from Schedule A, p. 3). And yes, that adds up to more than her $5 million in deductions; because the Clintons’ adjusted gross income exceeded $152,525, some of their itemized deductions were reduced.

Sanders (one win): D+.

I debated whether to give Sanders a C- or a D+; the fact that he has only released one year’s return, combined with how hidden that return is, though, led me to drop his grade.

Two months ago, when I first looked at the returns, Sanders had only released his Form 1040 from 2014. That’s the first two pages, that give a summary look, but don’t provide any substantive information (like, for example, the breakdown of itemized deductions). The three big things the Form 1040 tells us are how much a taxpayer earned, how much the taxpayer paid in taxes, and whether the taxpayer itemized or took the standard deduction. (I mean yes, you can glean a couple other things too, but those are the big things.)

Since then, Sanders has released his full 2014 return. But while it’s technically on his campaign site, there’s no direct link to it—originally, I had to click through a couple news stories to find it; eventually, it showed up in my Google results. But it’s decently hidden—you have to know you’re looking for it.

And, like Trump, his reason for not releasing more is pretty specious: his wife says they won’t release more until Clinton releases transcripts from her Wall Street speeches. That may be a legitimate request/challenge, but it doesn’t have anything to do with Sanders’s tax returns. So, to the extent his return was on the border between a D+ and a C-, his excuse dropped it down.

Kasich (0 wins, but 5 delegates): C.

On March 1, when I last addressed the candidates’ returns, Kasich had not yet released his returns. Since then, he’s released his Forms 1040 dating back to 2008. I don’t consider releasing Forms 1040 real tax disclosure, but it’s better than not releasing anything, and seven years is seven years. So a C seems about right.

Cruz (0 wins, but 1 delegate): C-.

Cruz has released four years of his Form 1040. He did it before Kasich did, but ultimately, Kasich outdid him by a little. Very little; seriously, Form 1040 isn’t good enough. But four years of 1040s is good enough for a C-, I guess.

Jeb Bush (no longer running): A.

I want to make clear that this isn’t meant to be a partisan exercise. While he’s not running anymore, if Bush were still in the race, he’d get an A, plus all the extra credit I could give him (Loyola’s system doesn’t let me award an A+). Bush released all of his tax returns dating back to 1981. And they’re all (or, at least, mostly all—there may be one exception in there) the full tax return. I mean, Bush is clearly the gold standard for candidate tax return disclosure.

One Parting Thought

It should go without saying that tax return disclosure is only one facet of the candidates; it’s certainly not the sole criterion for determining who to vote for. Still, their disclosure necessarily tells us something about the candidates. But just in case it doesn’t go without saying, I’m saying it.

Also, fwiw, it’s fun to assign grades to presidential candidates.

Update 4/28/2016, 9:56 am:

I wrote and scheduled this piece at about midnight Tuesday night. And Wednesday, Cruz announced his VP pick: Carly Fiorina. It occurred to me this morning that I should probably grade her tax disclosures, too, but I thought of it just after the post went live.

Then Chris Walker called me out on it. So Chris, here you go:

Carly Fiorina (Vice presidential candidate): B-.

Fiorina released two years of her full tax returns. I assume they were on her campaign site; now they’re just available on the Tax History Project site. Unlike Sanders, though, she’s only been back in the race for a day, and her campaign site doesn’t seem to have been updated.

In addition to two years of tax returns, she also released a financial disclosure extensively listing her assets. (Yes, I get that that has nothing to do with her tax returns, but it’s still a pretty serious disclosure.)

Two years obviously isn’t enough. But she’s released more information about her taxes than any other Republican still in the race and, for that matter, more information about her taxes than any current candidate other than Clinton.

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[fn1] Yes, I know, the Democratic primaries all award delegates proportionally, and so it makes more sense to go with the number of delegates. That still puts Clinton ahead of Sanders in yesterday’s primaries, but it doesn’t allow me to compare Republican and Democratic candidates. So instead, I’m just going states one.