How Albany is going after Trump’s taxes

President Donald Trump during at a press conference in the East Room of the White House.
President Donald Trump during at a press conference in the East Room of the White House.
Nicole S Glass/Shutterstock
President Donald Trump during at a press conference in the East Room of the White House.

How Albany is going after Trump’s taxes

A state bill that could force Trump to release his tax returns is not the first effort
April 12, 2019

Democrats all over the country are still clamoring for a look at Pres. Donald Trump’s unreleased tax returns, but New York’s state Legislature may be better poised than Congress to actually unveil the long-sheltered documents.

Since the 2016 general election, when then-candidate Trump broke tradition by not releasing his tax returns – he said, falsely, that he couldn’t because he was under audit – some Democrats have viewed his tax returns and the financial information they contain as the holy grail in their quest to discredit and defeat Trump. Although control of the House of Representatives now gives Democrats more leverage in that pursuit, the Trump administration has still resisted attempts by House leaders to obtain the returns.

Now, with a Democratic-controlled state Legislature and governor eager to reveal potentially damaging information that those tax returns could contain, Albany has been working a bill that would allow the release of Trump’s state tax returns. The legislation, sponsored by state Sen. Brad Hoylman and Assemblyman David Buchwald, is actually one of a few attempts in Albany to obtain Trump’s taxes. City & State took a look at where those various attempts stand, and how likely they are to pan out.

What bills are targeting Trump’s tax returns?

Hoylman and Buchwald’s newest bill is aimed at uncovering Trump’s tax returns by amending state laws that prohibit private tax information from being released, in order to allow the commissioner of New York’s Department of Taxation and Finance to release any state tax return requested by leaders of certain congressional committees for any “specific and legitimate legislative purpose.”

Under the bill, leaders of three congressional committees – the House Ways and Means Committee, the Senate Finance Committee and the Joint Committee on Taxation – would be able to submit written requests for tax returns to the New York tax department and the U.S. Department of Treasury. The draft bill does not go into detail about what would qualify as a “specific and legitimate legislative purpose.”

This newest bill is one of three similar pieces of legislation introduced in New York since Trump’s election, each of them aimed at accessing the president’s long-sought returns, albeit by varying routes. Those attempts, however, could not pass the Republican-controlled state Senate.

The New York TRUTH Act, introduced Buchwald and Hoylman in 2017, would require the state Department of Taxation and Finance to release five years of state income tax returns of statewide elected officials, as well as the president of the United States. Others subject to the required disclosure would include New York’s U.S. senators, governor, lieutenant governor, attorney general and state comptroller. Short for “Tax Returns Uphold Transparency and Honesty,” the TRUTH Act is a not-so-veiled attempt to target Trump, as most of the statewide elected officials named release their tax returns voluntarily.

An even less subtle attempt is New York’s TRUMP Act, a bill introduced by Hoylman in 2017 that would require candidates for president and vice president to release their past tax returns if they wanted to appear on New York’s primary and general election ballots. More states – California, New Jersey and at least a few dozen others – have introduced similar state legislation that would tie ballot access to the release of tax returns.

Why are lawmakers picking up these fights at the state level?

Since Trump’s business is based in New York and he lived in New York City prior to his election, his state tax returns could show a lot about his finances.

The tax-return legislation introduced last week comes just after the House Ways and Means Committee Chairman Richard Neal requested access to six years of the president’s tax returns under a provision of the federal tax code. Trump has said that he would challenge the request due to the fact that he is still being audited.

The Internal Revenue Service missed the deadline Neal set for answering the request on Wednesday last week, and Treasury Secretary Steven Mnuchin said that more time is needed to look into the legality of House Democrats’ request. “The Committee's request raises serious issues concerning the constitutional scope of Congressional investigative authority, the legitimacy of the asserted legislative purpose, and the constitutional rights of American citizens,” Mnuchin wrote in a letter to Neal.

Hoylman and Buchwald’s latest bill is a sign that New York Democrats aren’t willing to wait for the Trump administration to cooperate with Congress any longer.

Who supports this legislation?

Last week, Gov. Andrew Cuomo stated his support of Hoylman and Buchwald’s bill, suggesting that the legislation would encounter few obstacles to passage with the support of the Democratic-controlled state Legislature and the governor.

The governor’s office, however, wants to avoid conspicuously targeting Trump and politicizing the process. “As long as it applies to everybody,” Cuomo advisor Richard Azzopardi told The New York Times, “we support it.”

With the recent failure of the House to access the tax returns, Hoylman says the time is ripe for Albany to take the lead. "Here you have a president who is stonewalling the U.S. Congress, a co-equal branch of government undertaking its important oversight responsibilities," he told NBC News. "Lo and behold, we have Donald Trump's tax returns here in the state of New York and we can provide them to Congress if the IRS, if the Treasury Department won't."

What are Republicans saying?

Republican lawmakers have denounced these efforts as a political stunt. Ed Cox, Chairman of the New York Republican Party, said that Democrats were still stuck in 2016. "They want to re-litigate an issue that's already been decided by the people of this country,” he said, even though Trump promised throughout the campaign to eventually release his returns. Assembly Minority Leader Brian Kolb added that Democrats in Albany have bigger tax issues to worry about, like the fact that New York has some of the “highest, most oppressive taxes in America.”

Are these bills constitutional?

Even if this legislation were to pass in New York – something that’s likely with Hoylman and Buchwald’s latest bill – it would face significant legal challenges. With New York’s TRUMP Act in particular, the question of constitutionality has been the source of heated debate for two years.

Richard Hasen, an election law expert and professor at the University of California, Irvine School of Law, said that the idea of restricting ballot access to only those who release their tax returns could go beyond the powers of state legislatures. “On the one hand, Article II of the Constitution gives state legislatures very broad powers to set the rules for conducting presidential elections,” Hasen said. “In fact, the Legislature could decide for itself – we were told in Bush v. Gore – that if it wants to take the power back and not even hold elections for who is going to get the state's presidential elector votes. So it's a very broad power. On the other hand, you can't impose additional qualifications on people running for office other than those listed in the Constitution.” The qualifications built into the U.S. Constitution include requirements that a candidate must be a natural-born U.S. citizen and at least 35 years old.

“Really the question is whether requiring someone to produce their tax returns in order to appear on the ballot is within the power of state legislatures to set the rules for choosing presidential electors, or whether it is adding additional qualifications to the rules for who can run for president,” Hasen said. “If it's the latter, then it's unconstitutional.”

There is also the fact that in a state as blue as New York, ballot access may not mean that much to Trump. Still, Hasen said that if the TRUMP Act passed and was found to be constitutional, New York Republicans wouldn’t take kindly to it, even if they know their state wouldn’t vote for Trump. “I think there would be quite an uproar among millions of Republicans who are New Yorkers if they couldn't vote for their preferred presidential candidate,” he said. “Even if that candidate's not a winner, they're still effectively being deprived of their choice.” (Trump supporters could, however, still write in his name on the ballot).

How does this backfire on Democrats?

Whether or not Albany Democrats’ attempts to get their hands on Trump’s taxes will be successful, it seems clear that their strategy is to go down every route possible, whether through restricting ballot access or changing state law to allow the release of private tax information. Three successive legislative attempts in New York alone may create the impression that local lawmakers have tunnel vision. “The problem with continually going after him on the taxes without a focus on the daily duties of government – it can be viewed as somewhat obsessive,” said political consultant George Arzt. “To spend this much time on his taxes may be a side effort, but it should not be the main effort in going against Trump.”

There is also the possibility that any of these bills that seem to be aimed directly at Trump could become weapons used against Democrats if control of the state Legislature shifts to Republicans in the future. The TRUMP Act, requiring the release of tax returns as a condition of ballot access – could set a dangerous precedent for Democrats.

“I think the issue would be, if the state can do this, what else might the state Legislature condition in order to get on the ballots?” asked Hasen. “Once you give states the power to require people to do certain things for purposes of running for president, you might be able to extract certain things that could politically harm one side or the other.”

Will these efforts succeed?

New York is better positioned than ever to pass legislation that would force the release of Trump’s tax returns, but that doesn’t mean that Democrats will see those documents anytime soon. As each of the three bills introduced by Albany Democrats over the past two years are vulnerable to legal challenges, and a protracted battle could follow New York’s passage of any of them. “I think it may pass,” Arzt said of the bill Hoylman and Buchwald introduced last week, “but it has to be looked at by the lawyers and the state in whether it's legal or not.”

And for the TRUMP Act, the constitutional question remains a sticking point that could result in a legal battle at the highest level. “I think someone would challenge it, and it's the kind of case that could end up before the Supreme Court,” Hasen said.

That doesn’t mean that nothing has changed over the past two years. With Democrats gaining more ground in both New York state and federal government, the public could at the very least get some answers as to whether these legislative attempts in Albany are constitutionally or legally viable. “This has been talked about for almost two years and now the issue seems to be finally coming to a head, because we're getting to a point where this legislation is going to pass, and the Democrats have demanded the tax returns in the House,” Hasen said. “I think we'll have a much better sense of where things are in a few months.”

Annie McDonough
is a tech and policy reporter at City & State.
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