Reviewing tax returns can reveal a lot of information about a political candidate. But many tax experts caution the average voter may not be knowledgeable enough to know what all that information means – and they argue that any conclusions based upon a tax return can often be traced back to a voter’s pre-existing political position.
“As a company, 20/20 reviews a lot of tax returns. It’s our job to dispassionately review a tax record and determine what steps need to be taken to resolve any tax issues,” said Brian Biffle, president of 20/20 Tax Resolution. “Voters review tax returns with a more subjective approach. So, before they pass judgment based on a candidate’s financial history, a ‘tax return primer’ might be in order to understand what they are reviewing.”
According to 20/20, here’s what voters can learn from a candidate’s tax return:
- Sources of a candidate’s taxable income
- Clues to business failures in losses or the overall fiscal health of business endeavors
- Information on charitable deductions (not simply how much but where it’s distributed)
“For some voters this information can, in essence, become a test of character,” Biffle said. “They’re interested in where a candidate’s income originates and what types of charities the candidate supports.”
Other information revealed often causes voters to compare a candidate’s tax history to their own, said Biffle, and make judgments about how “in touch” a candidate is with voters, as well as the candidate’s ability to serve in the Oval Office. For example:
- The effective tax rate paid by a candidate
- Information on investments and loans
- Real estate taxes (abatements, for example)
- Real estate holdings
- Information about the existence of offshore accounts, household employees and other holdings
“Voters sometimes view this information almost as a question of transparency,” Biffle said, particularly since candidates are not required by law to release their tax returns. “But in reality, none of these things provide a complete analysis of a person’s ability to lead. It’s only become an important factor to voters in recent elections.”
Although candidates are required to file Public Financial Disclosure Reports since the passage of 1978’s Ethics in Government Act, these reports don’t provide the detailed examination many voters have come to expect, Biffle said.
“We have clients from every walk of life, income level and background,” Biffle said. “At no time does a tax return provide an exact portrait of a person’s character. It simply offers a glimpse into their finances.”