'Defining deviancy down': How Trump may spell the end of politicians' tax returns

'Defining deviancy down': How Trump may spell the end of politicians' tax returns·CNBC

Donald Trump 's refusal to release his tax returns is beginning to seem less an aberration than a prelude. And that has open-government advocates worried that a decades-long standard of transparency is at risk of extinction.

This week, two Republican governors, New Jersey's Chris Christie and Illinois' Bruce Rauner, broke with their own past precedent in declining to release their returns ahead of Election Day.

In a statement to Politico, a Christie spokesman was duly dismissive: "The Governor and Mrs. Christie will release their taxes when they are ready to do so." Christie did release his returns last October, following his announced run for president.

Rauner, meanwhile, is insisting that he wants to wait until his family foundation files it returns, before he releases any information. In an email exchange with CNBC.com, Rauner's spokesman ignored questions about whether Rauner was behaving any differently than his party's frontrunner when it came to financial disclosure.

"I am afraid that this is [a] case of defining deviancy down," said Trevor Potter, the former head of the Federal Election Commission who served as chief counsel to Sen. John McCain's presidential campaign. "Once the tradition is broken and someone effectively gets away with it, other people look at it and say they can do the same thing."

Despite rounds of polls confirming the American electorate's expectations for tax returns, watchdogs concede that Trump has paid little price for his resistance. And they only expect that other politicians are taking note.

"There has been enormous pressure on Trump to release his tax returns," said Anne Weismann, executive director of the Campaign for Accountability. "He has gotten away with it with seeming little ill-effect on his campaign and it doesn't surprise me if other candidates say: Why should I release mine?"

Following the resignation of Richard Nixon, Congress passed laws requiring presidential nominees, members of Congress, and other federal officeholders to reveal certain personal financial information each year. Although those have never required income tax returns, every presidential nominee and most major party candidates since Nixon have nonetheless provided them. Many gubernatorial and congressional office-seekers likewise followed suit.

Beyond the information and revelation of the documents themselves, open-government advocates argue, this nonlegal standard of disclosure has represented a rare example of political compromise.

"Democracy doesn't work if the attitude of people running for leadership is 'I will get away with whatever I can get away with and what the law doesn't specifically prohibit,'" said Yochai Benkler, a Harvard Law professor and advisor to the Sunlight Foundation. "That is a barely acceptable way for people who work in the private sector."

House members are required to annually file statements of their personal finances. In addition, all but three states — Idaho, Michigan, and Vermont — require state legislators to file financial disclosure statements, although the extent of those disclosures can vary widely. (You can see the disparities in this table provided by the National Conference of State Legislatures). But while these statements do reveal certain information about public officials' assets, investments, and liabilities, they do not provide the same nuance and detail that can be found on a common IRS Form 1040, which might show offshore investments, charitable contributions, specific debts and how taxes are paid or avoided.

In response to Trump, Sen. Ron Wyden of Oregon, the ranking Democrat on the Senate Finance Committee, proposed legislation in May called the Presidential Tax Transparency Act. The moonshot bill would authorize the IRS to release presidential nominees' tax returns in the event the nominee declined to do so voluntarily. The legislation has only nine co-sponsors; A twin bill in the House has 33, including two Republicans.

Potter said that if Hillary Clinton wins the presidency, the dynamic in Washington might be right to pass this kind of legislation. "I could see the [Clinton] administration and Congress say we ought to put this standard into law, but if that doesn't happen, I think Trump has defined the standard down."

Other reformers argue that a legislative recourse would be far-fetched no matter who is in the White House. The best hope, they say, is for voters to punish nondisclosers.

And that has advocates turning their attention to the Missouri governor's race, which has been seized in recent weeks by a cat-and-mouse game over Republican nominee Eric Greitens' refusal to release his returns. In response, his opponent, Democratic Attorney General Chris Koster, has refused to participate in debates until those returns have been made public. A St. Louis Post-Dispatch poll released this week found that 68 percent of registered likely voters in the state want their office-seekers to release returns. Polls show the race in a virtual deadlock.

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