Thursday, May 08, 2008

Release of candidates' spouses' tax returns

Cindy McCain is refusing to release her separately-filed tax returns as part of the disclosure process generally demanded in a Presidential campaign. In 2004, Teresa Heinz Kerry similarly refused to release her returns for most of the campaign, although on October 16 of that year she released the front two pages of her 2003 tax return.

Perhaps all this focus on candidates' tax returns is a bit over-blown. I remember the big hoodoo when Hillary Clinton released her returns earlier this year, which turned out to be no big deal except that it provided interesting background on just how much the Clintons have earned (and a bit on the general details of how Bill earned some of it). But if disclosure is the norm, it strikes me as quite illogical to provide an out for spousal income simply by reason of separate filing. If it's germane to understanding the candidate's overall financial circumstances (assuming that's one reason for the norm of releasing the returns), separate filing seems likely, in most actual marital situations, to be quite irrelevant.

A further point of interest is that separate filing is usually a bad idea from a tax planning standpoint. So, if the McCains get away with this (as the Kerrys, admittedly, largely did), then effectively spousal disclosure is required unless the candidate is especially motivated to want to avoid it. Not exactly an ideal filter.

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