Rep. Nancy Pelosi was emphatic. Mitt Romney’s refusal to release more than two years of his personal tax returns, she said, makes him unfit to win confirmation as a member of the president’s Cabinet, let alone to hold the high office himself.
Sen. Harry Reid went farther: Romney’s refusal to make public more of his tax records makes him unfit to be a dogcatcher.
They do not, however, think that standard of transparency should apply to them. The two Democratic leaders of the Senate and the House of Representatives are among hundreds of senators and representatives from both parties who refused to release their tax records. Just 17 out of the 535 members of Congress released their most recent tax forms or provided some similar documentation of their tax liabilities in response to requests from McClatchy over the last three months. Another 19 replied that they wouldn’t release the information, and the remainder never responded to the query.
The widespread secrecy in one branch of the government suggests a self-imposed double standard. Yet while American politics has come to expect candidates for the presidency to release their tax returns, the president isn’t alone in having a say over the nation’s tax laws. Congress also stands to gain or lose by the very tax policies it enacts, and tax records – more than any broad financial disclosure rules now in place – offer the chance to see whether the leaders of the government stand to benefit from their own actions.
“Senior public officials, especially members of Congress and presidential candidates, should be required to disclose their tax returns so that the public can monitor potential conflicts of interest,” said Craig Holman, government affairs lobbyist for Public Citizen, a nonpartisan watchdog group.
Every taxpayer has the choice either to take a standard deduction amount based on filing status or to itemize deductions, as the Obamas did. Two-thirds of Americans select the standard deduction, because it saves them the greater amount. That means only one third of Americans benefit from the myriad of deductions available in our tax code. That one-third tends to be among the highest-income Americans.
Itemized deductions often come with a hefty price tag. The Joint Committee on Taxation has estimated that for 2013 the amount of revenue lost because of the three deductions the Obamas took (which happen to be among the most popular deductions taken) will be: $90 billion for mortgage interest, $47 billion for charitable contributions, and $46 billion for state and local income taxes. Multiply that over a few years, and we’ve got ourselves a ballgame. If itemized deductions were instead repealed—not limited, as President Obama wants—then tax rates across the board could be cut. Although the rate cut would be modest, it should appeal to Republicans who generally support across-the-board tax rate cuts and to Democrats who seek fairness and equity. Yet no bipartisan repeal effort has occurred.
This raises the question of how we can have a system that disadvantages two-thirds of us. One answer might be special interest groups. Consider how powerful and successful the real estate lobby has been. Every time someone mentions limiting the mortgage interest deduction, that lobby comes out with gloom-and-doom predictions and beats back the effort. The same is true for charitable organizations. I want to posit another explanation: One part of the minority that benefits from itemized deductions is members of Congress.
Although Presidents have voluntarily released their tax returns for the last several decades, nothing could be further from the truth when it comes to members of Congress. McClatchy newspapers reported last July that of the 535 members asked to release their most recent tax returns, just 17 did. A few, like Senator Dick Durbin, have a longstanding practice of releasing their tax returns, but he is a rare exception. I suspect that if we looked at the tax returns of every member of Congress we would see something close to a 100% itemization rate. Compare that to only a third of the American public, and the numbers would suggest that repeal is the best way forward.
This Essay argues that current tax policies that include special tax rates, loopholes and deductions disadvantage most Americans in favor of income received by a select few – especially members of Congress.
Tax forms are too complex for members of Congress to fill out on their own, several lawmakers told The Hill.
In fact, when broached with the question, “Do you fill out your own tax forms?” most members burst out laughing before admitting it was just too complicated.
“I’m a former business lawyer,” Sen. Rob Portman (R-Ohio) said, adding that he’s served on tax-writing committees during his time in Congress. “I know a lot about tax policy as a result, but I would not dare to do my own taxes.”
Rep. Darrell Issa (R-Calif.) said: “I did taxes for other people for a long time. I could not possibly do taxes now for myself.”
. . .
It also noted that there are nearly 4 million words in the tax code and that, since 2011, Congress has made nearly 5,000 changes to it — an average of more than one a day.
Even the top lawmakers on the tax-writing committees, who write the laws that govern the code, admit they get outside help.
Most members of Congress are members of the 1%….
Unfortunately, it seems that the future Aldous Huxley predicted in 1932, in Brave New World, is arriving early. Mockery, truculence, and minimalist living are best, then enjoy the decline. However, we do need a Revolving Door Tax (RDT) and to prosecute politicians and staff and their “family and friends” who profit from insider trading.