National tax day protests this past weekend focused on President Trump’s stubborn refusal to reveal his tax returns. His unsupported claim that he can’t reveal his returns because he’s under audit has been thoroughly debunked. The IRS is on the record confirming that Trump can make his returns public while under audit.
Trump’s spokesman Sean Spicer was peppered with questions about Trump’s tax returns on Monday. Following the massive tax-day protests the questions about Trump’s tax returns have resurfaced with even greater intensity than ever. Until now, Trump supporters haven’t seemed bothered by Trump’s refusal to show his tax history. Democrats attempted to make it an issue in the campaign, but failed. However, Trump and Congressional Republicans are planning on a major tax reform effort coming soon. Trump’s refusal to reveal his taxes leaves him vulnerable to attacks regarding how he has benefited from tax breaks.
The past few days Congressional town halls have erupted with constituents demanding Trump make his returns public. Arkansas Senator Tom Cotton was booed by a boisterous town hall crowd on Monday when he defended Trump’s refusal to reveal his taxes. On Thursday a Florida Republican Congressman, Matt Gaetz reversed his previous stand defending Trump’s refusal to release his returns. He ended his town hall by calling on Trump to make them public.
Both Senator Ernst and Grassley have run into irate town hall voters demanding they take a stand and call on Trump to make them public. Congressman Young attempted to have it both ways. He called for Trump to release his taxes but then flip-flopped and voted against forcing him to make them public when it came up for a vote. Young claims no American should be required to make their returns public.
As Congress prepares tax reform legislation the pressure on Trump is certain to build. Democrats can claim any changes in tax laws will likely benefit Trump and his billionaire friends. There have been numerous articles written suggesting Trump paid little or no taxes for nearly two decades. The implication is that tax laws were written to benefit mega-wealthy billionaires like Trump. The speculation about why Trump refuses to reveal his tax returns centers on the belief that he used the tax code to avoid paying his fair share of taxes.
In the first debate with Clinton, he said, “I’m smart for paying no taxes.” Are American taxpayers going to be comfortable with Trump remaking the tax code after he bragged about using the tax code to pay no taxes? Will Republican lawmakers be able to pass sweeping tax reform that could be manipulated to benefit super rich Americans like Trump?
Democrats are benefitting from the massive public outpouring at these town halls. Republican’s attempt at Obamacare repeal was blocked largely as a result of the public outcry. The elevation of Trump’s refusal to reveal his taxes puts Republicans on the defensive in doing anything on tax reform. It will be much more difficult for Republicans to move tax legislation while the public is demanding Trump come clean on his taxes. Recall it was the 2009 tax-day protests by the Tea Party that set the stage for flipping of Congress in 2010 by Republicans.
Trumps refusal to make his taxes public may doom any meaningful tax reform. Much of the Wall Street and business enthusiasm for Trump is based on their hopes for lower taxes. If Republicans are immobilized on tax reform due to Trump’s tax dodging, that Wall Street enthusiasm could quickly evaporate. The bullish market is based on that anticipation by Wall Street of lower taxes and greater profits. Will Trump be forced to buckle and reveal his taxes if the business community revolts? Will Republicans force him to come clean on his taxes if Wall Street abandons them.
by Rick Smith