“There’s nothing to learn from them.”
But once Obama released his birth certificate, Trump hedged. “At the appropriate time I’m going to do it,” he said. The appropriate time never came.
Then, in 2012, Trump criticized Republican presidential nominee Mitt Romney for being slow to release his tax returns. Trump was asked by Fox News whether he’d ever have a problem releasing his returns.
“No,” he said. “I actually think that it’s a great thing when you can show that you’ve been successful, and that you’ve made a lot of money, that you’ve employed a lot of people. I actually think that it’s a positive.”
But apparently, that was then. Trump now says he won’t release his taxes, citing a pending audit — not even back taxes from 2002 to 2008 that his lawyers claim have been cleared without penalty. Never mind that the first president to release his taxes, Richard Nixon, did so in the midst of an audit. (Nixon ended up owing about $500,000, the equivalent of about $2.5 million today.)
Trump himself also provided tax returns from 2000 to 2004 — while they were under audit by the Internal Revenue Service — to state gambling officials in Pennsylvania and New Jersey, as part of the process of seeking casino licenses in those states, CNN reported.
After Trump’s remarks to the AP, Romney posted on Facebook that “it is disqualifying for a modern-day presidential nominee to refuse to release tax returns to the voters, especially one who has not been subject to public scrutiny in either military or public service.”
Joseph J. Thorndike, director of the Tax History Project, says that Trump would be the first presidential candidate in 40 years not to release his tax returns. Former secretary of state Hillary Clinton has released all of her tax returns for the past 33 years; Sen. Bernie Sanders has released his 2014 tax return, with some attachments missing.
Trump told the AP “that he wouldn’t overrule his lawyers and instruct them to release his returns if the audit hasn’t concluded by November.” But after Romney’s post on Facebook appeared, Trump tweeted that he “would release my tax returns when the audit is complete, not after election.”
We’re not holding our breath. For the purpose of this fact check, we will examine Trump’s claim that there is “nothing” to learn from his tax returns. Is that really the case?
What Donald Trump is doing on the campaign trail
Trump in 2015 filed a financial disclosure form required of presidential candidates. The 92-page document did list assets and liabilities. But the form is not audited and may not be accurate. For instance, the Guardian newspaper reported that a Trump golf course is listed in the document as being worth $50 million — but in a lawsuit, Trump has claimed it was worth only $1.4 million.
By contrast, a federal tax return, especially for a business mogul like Trump, is a document that is carefully checked and rechecked by accountants — and it must be accurate, under penalty of law. Contrary to Trump’s claim, Thorndike says that there are many things that could be learned from a tax return.
First, the tax return reveals a person’s annual income. A person’s net worth is not disclosed, but voters would gain an understanding of a person’s cash flow.
Trump is highly sensitive about suggestions that he is not as wealthy as he claims. He sued Timothy O’Brien, author of the 2005 book “TrumpNation,” because O’Brien calculated that Trump was not worth the billions that he claimed. (O’Brien concluded Trump was worth just $150 million to $250 million.)
As part of discovery in the libel lawsuit, Trump had to turn over his tax returns. Trump lost the case, but the tax returns remain sealed, and O’Brien is not permitted to speak about them. “There’s reasons, I think, he doesn’t want to give up his tax returns,” O’Brien recently told Politico. “It’s because you see what his income actually is in those returns.”
O’Brien’s comment suggests that Trump’s income is much less than he has long suggested, even if he is associated with assets emblazoned with the “Trump” name all over them. Tax returns also might actually help experts make educated guesses about Trump’s true net worth.
(In the deposition in the O’Brien case, Trump famously said that his net worth fluctuates “with the markets and with attitudes and with feelings, even my own feelings.”)
Second, voters would understand the sources of a person’s income, such as how much comes from certain businesses, speeches, dividends, capital gains and so forth. Mitt Romney in 2011 earned most of his $13 million in income from investments, for instance, while Hillary Clinton in 2014 earned nearly $9 million from giving speeches, their tax returns show. (Hillary Clinton’s controversial stint as a commodity trader in the late 1970s was detailed in the Clintons’ tax returns.)
Third, a tax return would disclose how much a person gives to charity. Mitt Romney gave almost $2.3 million to charity in 2011. Bill and Hillary Clinton gave $3 million to charity in 2014; Bernie and Jane O’Meara Sanders gave $8,300. We know these figures because of information in their tax returns.
Trump claims he has given $102 million to charity in the past five years, but a Washington Post investigation found not a cent in actual cash — mostly just free rounds of golf, given away by his courses for charity auctions and raffles. Trump’s tax return would clear up exactly how much he has really given to charity — indeed, whether he has given anything at all.
Fourth, a tax return would reveal how aggressive Trump has been on his taxes. There is no black-and-white approach to taxes; there are many gray areas subject to interpretation, especially regarding deductions. Trump frequently suggests that he knows how to game the system, so voters would learn whether he takes the same approach to his taxes. That is relevant because the president, after all, is the nation’s chief law enforcement officer and would be in charge of the Internal Revenue Service.
Voters would learn whether Trump is taking advantage of certain tax shelters. Any overseas assets must be reported, so voters would also learn how much Trump has invested out of the country. Trump’s tax returns, examined by the New Jersey Casino Control Commission in 1981, show he paid no income tax in 1978 and 1979 as he reported negative income, likely because of tax shelters.
Finally, the tax returns would disclose what percentage of Trump’s income actually goes to taxes. Voters angry at “billionaires and millionaires” who are perceived to not pay their fair share would learn whether Trump has managed to keep his effective tax rate as low as some members of the 400 richest taxpayers in the United States.
The IRS every year discloses information on the taxes of the 400 richest taxpayers, and Trump’s numbers could be compared to this rarefied group. Voters would discover whether Trump even qualifies. In 2013, a minimum annual income of $100 million was required.
“I think there is a lot to learn,” Thorndike said. “This is why people don’t like to release tax returns.”
Romney, in his Facebook post, assumed the worst.
“There is only one logical explanation for Mr. Trump’s refusal to release his returns: there is a bombshell in them,” he wrote. “Given Mr. Trump’s equanimity with other flaws in his history, we can only assume it’s a bombshell of unusual size.”
The Pinocchio Test
Trump falsely claims that voters would learn nothing from his tax returns. To the contrary, voters would learn a lot of information that Trump has long tried to hide from the public. Tax returns would help lift a veil of secrecy about Trump’s finances — and let voters know whether his claims about his wealth and charitable giving are true, or if he’s just a bombastic man behind the curtain akin to the Wizard of Oz.
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