From temperament to professional background, Former President Donald Trump didn't exactly fit the mold when it came to occupants of the Oval Office. One other area where he defied presidential norms: refusing to release his federal tax returns to the public.
That veil was finally lifted when The New York Times got hold of two decades’ worth of Trump’s filings, showing paltry $750 tax bills in 2016, the year he was elected, and in 2017, when he assumed office, in part due to massive business losses and controversial write-offs. Given Trump’s unwillingness to release this information, it’s ironic that the whole tradition of sharing tax filings with the public started with another president who got into hot water over his generous deductions: Richard Nixon.
Here’s a look at the history of presidents and their IRS filings since the federal government started collecting income taxes back in the early 1900s.
- No law requires a sitting president to release their tax filings, although doing so is usually seen as beneficial to their image.
- With the exception of Gerald Ford, who released a tax summary, every president from Nixon to Obama has released his full tax returns to the public.
- Because of Donald Trump's refusal to hand over his tax returns, it took extensive research by The New York Times for Americans to find out what was in the president's returns.
- President Joe Biden has continued the tradition of public disclosure, releasing his and his wife's tax returns through the 2019 tax year.
A Tradition of Transparency
While the United States had various forms of wage-based taxation before, the modern income tax didn’t emerge until the passage of the 16th Amendment in 1913. For decades, the leaders of the executive branch kept their returns close to the vest.
Nixon: The First President to Release Tax Returns
Media reports suggested that Nixon paid only $792 in federal income tax in 1970 and $878 in 1971, even though he earned more than $200,000 in each of those years. In order to allay public concerns, Nixon subsequently released his tax returns for every year between 1969, when he entered office, and 1972. The incident led to his infamous remark to the press pool: “People have got to know whether or not their president is a crook. Well, I am not a crook.”
From Ford to Obama
Nixon’s successor, Gerald Ford, didn’t release his full tax returns, but he did provide a summary containing a decade of personal tax information when he ran for president in 1976. That round-up included Ford’s gross income, taxable income, major deductions, and taxes paid, according to Tax Analysts.
Starting with Jimmy Carter, however, every president up through Barack Obama voluntarily disseminated their tax returns for every year they were in office. While there’s no law requiring them to share that information with the public, doing so has been seen as a way to build trust with the American electorate.
During that time, the amount of taxes paid has fluctuated widely from one president to the next. On the low end, Bill Clinton paid $62,670 in federal income taxes during 1993, his first year in the White House. Most of his $293,757 of income came from his annual salary as president, although he also generated $40,000 in capital gains that year from assets in a blind trust, according to the Associated Press.
Obama paid by far the largest amount during that four-decade span, forking over $1,792,414 to the Treasury in 2009. The lion’s share of his $5.5 million adjusted gross income that year came from royalties on books he had written, including his 1995 memoir, Dreams From My Father.
|Federal Income Taxes Paid During First Year in Office|
|George H.W. Bush||$101,382|
|George W. Bush||$250,221|
The Trump Tax Saga
The presidential tradition of voluntarily airing one’s tax history ended with Donald Trump’s bid for the White House in 2015 and 2016. Given his extensive business dealings around the world and self-portrayal as a uniquely skilled entrepreneur, critics have argued that the public need for transparency is especially important with this president.
Trump did not release any returns. Repeatedly, the real estate mogul asserted that an ongoing audit precludes such a release. It's hard to know whether such an investigation is underway because IRS audits are confidential. But even if that were the case, there’s no legal impediment to making returns public.
In fact, the tax collection agency has a long-standing policy of analyzing the sitting president’s yearly filing. If audits impede the ability to release 1040 forms, it hasn’t affected previous holders of the highest office in the U.S.
Trump has also argued that the annual financial disclosure forms that presidents are required to submit provide a better picture of his wealth. That argument has fallen flat with many of his critics, who say such forms—while listing a president’s assets—only provide a very broad range in terms of the value of any holdings. And they don’t mention how much tax the president has paid that particular year.
The amount of federal income tax President Nixon reportedly paid in 1970, which led to his releasing his tax returns for 1969 through 1972.
The New York Times' Revelations
Trump’s refusal arguably became a moot point when The New York Times reported that it obtained more than two decades of his tax returns in a surprise, late election-cycle twist. Details from The New York Times’ reporting hint at why the president may have resisted for so long: years of allegedly paying little or no tax, tens of millions of dollars of debt, and a string of contentious tax deductions, such as $747,622 in “consulting fees” given to his daughter Ivanka and more than $70,000 in hairstyling expenses while he hosted “The Apprentice” on NBC.
In many cases, the tax returns obtained by The New York Times bear no resemblance to the yearly disclosure documents Trump has repeatedly pointed to as a good picture of his finances. The disclosure showed, for example, that the former president made more than $434.9 million in 2018, while the tax forms revealed a loss of $47.4 million for that same year. While Trump has called the newspaper’s revelations “totally fake news,” he has yet to dispute any of its specific findings.
President Joe Biden's Tax Filings
Meanwhile, President Joe Biden, elected in 2020, has continued the tradition of public disclosure, releasing tax returns through the 2019 tax year, when he and his wife Jill paid $299,346 of federal income tax on $985,233 of adjusted gross income.
Of that income, $517,334 came from wages, including Joe Biden’s $135,166 salary as a professor at the University of Pennsylvania and Jill Biden’s teaching post at a community college. An additional $308,932 of wages came from two companies owned by the couple: CelticCapri Corp and Giacoppa Corp.
The Bottom Line
For decades, sharing tax returns with the public has been one way for presidential candidates to allay fears about any conflicts of interest and show that they’re playing by the same rules as other taxpayers. While there’s no law requiring this step—although it is required of many Cabinet and sub-Cabinet nominees—Trump’s insistence on keeping his filings secret has sown doubt about his actual wealth and how much he’s paid to the IRS. The recent revelations from The Times indicate some reasons the former president may have chosen this strategy.