Tuesday, February 19, 2019

The curious case of House Dems' inaction on Trump's tax returns

Where are Trump’s tax returns? Why is he not releasing them given his promise to do so? The House has the legal authority to compel their release, so why haven’t the Dems now in control of relevant committees not taken action?

Unfortunately, here is the answer: “By retaking the House, Democrats gained the ability to bring some accountability and transparency to the Trump administration. But they are proceeding with inexplicable caution.” Judd Legum (popular.info) elaborates in Taxing Our Patience. Here are snippets and some commentary.

Trump explicitly promised to release his tax returns during his presidential campaign. But he reneged, making him the first president in 40 years to keep his tax returns secret.

Not only is he keeping his tax information secret, but Trump is also the first president in modern history to maintain ownership over his business ventures as president. Who is paying the President of the United States? We have no idea.

Trump regularly breaks his word, lies about everything, and stiffs his contractors. So his refusal to provide his tax returns should be no surprise. What can/should the House then do?

The Democrats now control the House Committee on Ways and Means. Under Section 6301(f)(1) of the tax code, the chairman of the House Committee on Ways and Means has an unqualified right to request and receive the tax returns of any individual:

Upon written request from the chairman of the Committee on Ways and Means of the House of Representatives… the [Treasury] Secretary shall furnish such committee with any return or return information specified in such request…

The information must initially be kept confidential but, upon a vote of the committee, can be submitted to the full House of Representatives, making it public.

But 47 days after Ways and Means Chairman Richard Neal (D-MA) took control of the committee, he still has not requested Trump’s returns. What gives?

Among those voting in favor of forcing Trump to turn over his taxes in 2017: Congressman Richard Neal (D-MA).

But now that Neal is chairman of the Ways and Means Committee, he’s taking a markedly different approach. “This has to be part of a carefully prepared and documented legal case, and it’s not subject to just whim and the emotion of the moment,” Neal said earlier this month, brushing aside calls for him to move swiftly.

As a legal matter, Neal is wrong. The law does not require a “documented legal case.” It says the Treasury Secretary “shall” hand the returns over to the Committee upon request.

Some legal scholars argue that the power of the Committee is subject to the “implicit condition found by the Supreme Court that any congressional inquiry must relate to a legitimate legislative purpose.” But that bar is easily met in this case. Congress has a clear interest in knowing who is paying the President and how he might be benefiting from legislation and executive actions.

Time is on Trump’s side.

Treasury Secretary Steven Mnuchin reportedly plans on refusing to comply with any request from Democrats based on “a quagmire of arcane legal arguments.” He may not be able to prevent the release of his tax returns, but he would like to delay the release until after the 2020 election.

Will these legal arguments work? Probably not. According to George Yin, a law professor at the University of Virginia, the authority of the Ways and Means Committee is unconditional:

Section 6103(f) does not place any conditions on the exercise of the authority to obtain tax return information by the Ways and Means Committee. Moreover, it provides no basis for the Treasury Secretary to refuse a request. I believe both features were intentional. Since the president at the time had unconditional access to tax returns, Congress wanted to give its committees the same right.

But all legal proceedings take time. The longer Neal waits to request the tax returns, the better chance Mnuchin’s reported strategy of delaying the release of the returns until after 2020 will work.

Neal has also not said how many years of returns he might request or whether he would also request returns from Trump’s businesses.

And contrast this reluctance with a clear mandate from 63% of the voters - the American public wants those returns released. Along with our elected representatives, we the people have a right to know who is paying Trump and for what.

I have a suspicion that there might be some maneuvering behind the scenes. Suppose that Trump threatens retaliation by getting his new AG Barr to stop Mueller. Suppose that Neal holds off on the tax return action in order to let Mueller finish the investigation. That would explain Neal’s “inexplicable caution.” However, it leaves dangling the House’s responsibility under the law. If they have to fight two battles, one to protect Mueller, and one to get Trump’s tax returns, so be it. Speaker Nancy Pelosi promised that the House can walk and chew gum at the same time. They should start walking.

If you don’t think my explanation is correct, then consider an alternative, more ugly explanation. Who is paying Neal, how, and for what?

Write to your representative in the House and demand that they get off their asses and move!

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