Why is There So Much Interest in Candidate Tax Returns?

November 22, 2011 | By: Charles P. Corsello, EA

Candidate Tax ReturnsIt’s become almost a matter of course: If you are running for public office, you are expected to release your tax return each year. This is especially true if you are running for “higher” offices. Most mayoral candidates aren’t expected to release their tax returns, but if the candidate is running for a federal position (Congress, President), many citizens want to see what their finances look like.

Not too long ago, Texas governor Rick Perry called on candidate Mitt Romney to release his tax return information – something that Romney has never done before, and continues to refuse to do.

But, why do citizens care? Why is there so much interest in candidates’ and public officers’ tax returns?

Learning More about a Candidate

One of the reasons that a tax return is so intriguing to many citizens is that it provides helpful insight into the habits of a person asking to be placed in a position of public trust. It’s not just about managing finances. Consider the criticism that Joe Biden received when it was discovered that he is somewhat stingy (relative to his income) when it comes to charitable donations. Many people expect certain things from their elected officials, and looking at where they spend their money can be quite telling.

Another concern, especially in the current climate, is appearing too wealthy. Many people approved of the fact that President Obama’s income was fairly modest when the royalties from his best-selling books were taken out of the running. While Americans certainly admire the wealthy, there is also an underlying concern that someone who has too much money might be out of touch with his or her fellow citizens.

A tax return can provide information about how much a candidate donates to charity, how expensive his or her house is, whether he or she is taking advantage of loopholes in order to avoid paying what is owed to the government, and a number of other issues that citizens really do care about.

When a Candidate Refuses to Release Tax Information

In truth, a candidate is within his or her rights to refuse to disclose tax information. Some candidates refuse simply on principle: They have the right to a certain degree of privacy; their money is theirs to spend and it’s no one’s business how they spend their own income. While this is a valid justification for not sharing tax return information, the strategy can backfire. Voters might think that the candidate is deliberately hiding something. The idea that the candidate is not being forthright weighs heavily on some people, and a candidate might be accused of trying to hide something unsavory when he or she refuses to unveil applicable tax records.

In the end, every candidate has to decide whether or not releasing the tax records will be more damaging than refusing to. In some cases, a candidate is better served by releasing records, and in others, it might be better to keep them private. Of course, what most politicians do depends on how voters are responding, and whether it is becoming a big deal.

What do you think? Should candidates release their tax return information?