History of Presidents and Federal Income Tax: What’s Normal?

Sharing tax returns with the public was the modern norm until Donald Trump

Reviewed by Michael J BoyleFact checked by Daniel Rathburn

From temperament to professional background, former President Donald Trump didn’t exactly fit the mold when it came to occupants of the Oval Office. One other area where he defied presidential norms: refusing to release his federal tax returns to the public. Prior to Trump’s presidency, the tradition of presidents sharing their tax filings with the public dates back to former President Richard Nixon.

The veil was lifted when The New York Times published a report detailing two decades’ worth of filings in September 2020. The story revealed that Trump had paid a paltry $750 in taxes in 2016, the year he was elected, and again in 2017, the year he assumed office; these amounts were in part due to massive business losses and controversial write-offs.

Here’s a look at the history of presidents and their Internal Revenue Service (IRS) filings since the federal government started collecting income taxes back in the early 1900s.

Key Takeaways

• No law requires a sitting president to release their tax filings, although doing so is usually seen as beneficial to their image.
• Except for Gerald Ford, who released a tax summary, every president from Nixon to Obama has released his full tax returns to the public.
• Because Donald Trump refused to hand over his tax returns, it took extensive research by The New York Times for Americans to find out what was in the president’s returns.
• President Joe Biden has continued the tradition of public disclosure, releasing his and his wife’s tax returns through the 2020 tax year.

A Tradition of Transparency

While the United States has had various forms of wage-based taxation, the modern income tax didn’t emerge until the passage of the 16^th Amendment in 1913. For decades, the leaders of the executive branch kept their returns close to the vest.

Nixon: The First President to Release Tax Returns

That all changed during the Nixon administration when a series of press leaks indicated that the president had taken several questionable deductions to reduce his tax liability.

Media reports suggested that Nixon paid only $792 in federal income tax in 1970 and $878 in 1971, even though he earned more than $200,000 in each of those years. To allay public concerns, Nixon subsequently released his tax returns for every year between 1969, when he entered office, and 1972. The incident led to his infamous remark to the press pool: “People have got to know whether or not their president is a crook. Well, I am not a crook.”

From Ford to Obama

Nixon’s successor, Gerald Ford, didn’t release his full tax returns, but he did provide a summary containing a decade of personal tax information when he ran for president in 1976. That round-up included his gross income, taxable income, major deductions, and taxes paid.

Starting with Jimmy Carter, every president up through Barack Obama voluntarily disseminated their tax returns for every year they were in office. While there’s no law requiring them to share that information with the public, doing so has been seen as a way to build trust with the American electorate.

The amount of taxes paid fluctuated widely from one president to the next. On the low end, Bill Clinton paid $62,670 in federal income taxes during 1993, his first year in the White House. Most of his $293,757 of income came from his annual salary as president, although he also generated $40,000 in capital gains that year from assets in a blind trust, according to the Associated Press.

Obama paid by far the largest amount during that four-decade span, forking over $1.79 million to the Treasury in 2009. The lion’s share of his $5.5 million adjusted gross income that year came from royalties on books he had written, including his 1995 memoir, Dreams From My Father. Below are the federal income taxes paid by each of the last seven presidents during their first year in office.

The Trump Tax Saga

The presidential tradition of voluntarily airing one’s tax history ended with Donald Trump’s bid for the White House in 2015 and 2016. Given his extensive business dealings around the world and self-portrayal as a uniquely skilled entrepreneur, critics argued that public need for transparency was particularly important in Trump’s case. 

However, Trump did not release any returns. Repeatedly, the real estate mogul asserted that an ongoing audit precluded such a release. Whether such an investigation was underway was difficult to verify because IRS audits are confidential. Even if one was ongoing, there’s no legal impediment to making one’s returns public. In addition, the tax collection agency has had a long-standing policy of analyzing the sitting president’s yearly filing—scrutiny that hadn’t affected releases from prior holders of the highest office in the U.S.

$792

The amount of federal income tax President Nixon reportedly paid in 1970, which led to his releasing his tax returns for 1969 through 1972.

The New York Times’ Revelations

In September 2020, The New York Times reported findings from more than two decades of Trump’s tax returns that the publication had obtained. Details from The New York Times’ reporting hint at why the president may have resisted releasing his returns: years of allegedly paying little or no tax, tens of millions of dollars of debt, and a string of contentious tax deductions, such as $747,622 in “consulting fees” given to his daughter Ivanka and more than $70,000 in hairstyling expenses while he hosted “The Apprentice” on NBC. While Trump has called the newspaper’s revelations “totally fake news,” he has yet to dispute any of its specific findings.

President Joe Biden’s Tax Filings

President Joe Biden, elected in 2020, has continued the tradition of public disclosure. In April 2023, he released his 2022 tax return, which indicated that he and his wife Jill paid $169,820 of federal and state income taxes on $579,514 of adjusted gross income.

Do Presidents Get Paid for Life?

Former Presidents of the United States get a pension for life. The amount is equal to Executive Level 1, which is $219,200 per year.

Do Presidents Have to Publish Tax Returns?

The president does not have to publicize tax returns; however, every president since Richard Nixon has voluntarily done so. Former President Donald Trump refused to publish his tax returns.

What Is Donald Trump’s Net Worth?

Donald Trump has a net worth of $3 billion. An oft-reported $10 billion figure attributed to the former president is said to have been overinflated.

The Bottom Line

For decades, sharing tax returns with the public has been one way for presidential candidates to allay fears about any conflicts of interest and show that they’re playing by the same rules as other taxpayers. While there’s no law requiring this step, former President Trump’s insistence on keeping his filings confidential has sown doubt about his actual wealth and how much he’s paid to the IRS.

Read the original article on Investopedia.