Nixon's Failed Effort to Withhold His Tax Returns
Aug 2, 2016 3:04 PM EDT
By Stephen Mihm
In 1952, when he ran as Dwight D. Eisenhower’s vice-presidential candidate. Nixon, then a congressman, got into trouble for a secret campaign fund and divulged detailed information about his family’s finances in response.
In his famous "Checkers speech," in which he painted himself as an American everyman struggling to make ends meet, Nixon called on the Democratic candidates for president and vice president -- Adlai Stevenson and John Sparkman -- to “come before the American people, as I have, and make a complete financial statement as to their financial history." He added: "And if they don’t, it will be an admission that they have something to hide."
Stevenson and Sparkman matched Nixon’s disclosures, but upped the ante. They released 10 years of returns, far more information than Nixon provided, and demanded that the Republican candidates do the same. In response, Eisenhower grudgingly released a summary of his tax returns, but refused to release the actual forms. Nixon, however, refused to release anything related to his taxes, renewing suspicions.
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But then things unraveled. The best account of Nixon’s tax travails comes from the historian Joseph Thorndike. Thanks to a deposition in a civil suit connected to the Watergate burglary in 1973, reporters learned that Nixon had taken a rather unusual tax break in 1969.
https://www.bloomberg.com/view/articles/2016-08-02/nixon-s-failed-effort-to-withhold-his-tax-returns
Thorndike's account:
JCT Investigation of Nixon’s Tax Returns
Joseph J. Thorndike
February 2016
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In the summer and fall of 1973, Nixon was engulfed by a controversy over his personal taxes. An outsize charitable donation was the proximate cause, but the scandal expanded to include numerous issues with the returns Nixon had filed between 1968 and 1972. The returns were private, of course, but a series of leaks, combined with informed speculation, gave critics plenty of ammunition. Nixon, it seemed, had played fast and loose with the revenue laws, exploiting his position to minimize taxes and avoid scrutiny from the Internal Revenue Service (IRS).
Nixon’s tax scandal actually prompted one of his most famous public statements, generally thought to refer to Wartergate. "People have got to know whether or not their President is a crook,” he told reporters in November 1973. “Well, I am not a crook."
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Swayed by such arguments, Congress had begun developing legislation in 1969 to limit the value of official paper donations. Attorneys for both Nixon and his predecessor, Lyndon Johnson, urged lawmakers to leave the window open just a bit longer. Nixon and Johnson even discussed the pending legislation directly with one another. Ultimately, however, the Tax Reform Act of 1969 nearly eliminated the deduction, providing specifically that donations made after July 25, 1969 would be limited to the cost of the paper on which the documents were produced.
As Congress moved toward limiting the deduction, Johnson chose not to make a gift before the deadline. Nixon, however, did rush one through. According to “a high White House official” speaking with The Washington Post
, the president had donated 1,176 boxes of papers on March 27, 1969. He subsequently claimed a deduction of “somewhat over $500,000” on his 1969 tax return.
The complete paper is at:
http://uschs.org/wp-content/uploads/2016/02/USCHS-History-Role-Joint-Committee-Taxation-Thorndike.pdf
In the end it was determined that Nixon had not made a "valid gift before the July 25, 1969 deadline." The penalties and interest cost Nixon over half his net worth by the time he paid them.
Despite his own advice to politicians to be upfront with financial information, Nixon could not help but to be a crook.
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