Outside the Beltway

California Lawmakers Pass Bill Requiring Candidates To Release Tax Returns

California's legislature has passed a law purporting to require candidates for President to release copies of their tax returns, but it's likely to face legal challenges if it becomes law.

Doug Mataconis · Thursday, July 18, 2019 · 12 comments

In a move clearly aimed at President Trump, California legislators have passed a bill that purports to require candidates for office to make copies of their tax returns public as a price of gaining access to the ballot, but it is most likely unconstitutional:

The California State Assembly and Senate has passed legislation mandating that all presidential and state gubernatorial candidates release their tax information in order to appear on that state’s primary ballot.

The bill, passed overwhelmingly in the State Assembly with a 57-17 vote Monday. It passed with a 29-10 vote in the state Senate on Thursday. The legislation will require candidates to share income tax returns for the previous five taxable years with the California state government. That information will then be available to voters on the state’s secretary of state website.

Lawmakers also included an “urgency clause” in the legislation, meaning it would take effect immediately and force the candidates running for president in 2020 to share their financial disclosures.

President Trump has long refused to disclose his tax information. Last week, House Democrats filed a federal lawsuit to obtain Trump’s tax returns with a complaint against the Treasury Department and the IRS intended to get a judge to order the administration to respond to requests and subpoenas for the documents.

“Presidential candidates need to put their own interests aside in the name of transparency,” California state Sen. Mike McGuire (D), who co-authored the legislation, said in a written statement, according to ABC 7 News.

“So far, our current President has done the opposite and it’s time that President Trump steps up, stops with the obstruction, and follows through with 40 years of time-honored tradition that has made this nation’s democracy stronger. This commonsense legislation applies equally to all candidates, from all political parties, including the Governor of California.”

More from the Sacramento Bee:

California lawmakers approved a bill on Thursday to force President Donald Trump to publicly release his tax returns ahead of the 2020 election, setting the stage for another legal showdown between the state and the Trump administration.

The proposal dubbed the “Presidential Tax Transparency and Accountability Act” passed both chambers of the Legislature on a party-line vote. Democrats say the measure will serve as a model for providing voters with information about candidate’s finances, while Republicans argue it is unconstitutional.

The bill by state Sen. Mike McGuire, D-Healdsburg, now heads to Gov. Gavin Newsom, who released six years of his own tax returns during his 2018 run for governor and is expected to sign it.

It would require Trump to file the last five years of his tax returns with the Secretary of State to get his name on the 2020 primary ballot. The information would then be published online, with contact information, Social Security numbers and medical information redacted from the public.

Tim Murtaugh, director of communications for Trump’s 2020 campaign, said California has no standing to pursue the president’s tax records.

“The Constitution is clear on the qualifications for someone to serve as president and states cannot add additional requirements on their own,” Murtaugh said in a statement. “The bill also violates the 1st Amendment right of association since California can’t tell political parties which candidates their members can or cannot vote for in a primary election.”

Former Gov. Jerry Brown, who declined to release his own tax returns, vetoed a proposal similar to McGuire’s in 2017, warning that it “may not be constitutional” and could establish a “slippery slope” precedent.

“Today we require tax returns, but what would be next?” Brown wrote in his veto message. “Five years of health records? A certified birth certificate? High school report cards? And will these requirements vary depending on which political party is in power?”

California Republican Party Chairwoman Jessica Patterson agreed with Brown.

“I urge Governor Gavin Newsom to veto this bill, just as Jerry Brown did when he was governor,” she said.

McGuire has previously called Brown’s veto “hogwash,” insisting the state has the authority to administer ballot procedures.

He said the bill goes beyond Trump, given it also applies to Democrats running for president — many of whom have already released recent years of tax returns.

Jessica Levinson, a professor at Loyola Law School, said she is torn on the issue of the measure’s constitutionality and that the outcome of a potential legal fight would largely depend on the judge who hears the case.

She said the Trump administration could present compelling arguments in court to strike down the law by claiming the Constitution created a firm set of eligibility requirements related to age and citizenship. On the other hand, California could successfully argue it has administrative jurisdiction over its ballots.

Levinson said political motives could also be a factor worthy of consideration.

Democrats, whose party has dominated Republicans in recent elections, carved out an amendment to require gubernatorial candidates to release the last five years of their tax returns. Even so, they couldn’t get a single Republican to support the proposal.

“It is clear it’s Democratic lawmakers who are voting for this,” Levinson said. “It’s not a bipartisan effort. It’s a response to what Trump has done.

That doesn’t mean it’s bad policy, but the question is if a Democratic candidate failed to release his tax returns, would a Republican push for something similar?”

If Newsom signs the bill, California would become the first state to compel Trump to release his taxes in order to qualify for the state’s primary ballot. It might not be the last.

So far, Governor Newsom has not given any indication of what his position on the bill might be. If he vetoes it, then it would be up to the state legislature to attempt to override it. If he signs it, or it otherwise becomes law, though, then it is likely to be the signal to other states that have considered similar legislation to pass similar laws. Additionally, the fact that the California primary comes earlier than it previously has in the election cycle means that this is likely to be an issue quite early in the race. Before it gets to that stage, though, the law would likely face a legal challenge, and it’s chances of survival are by no means certain.

Specifically, it is unclear if the law would be a proper exercise of the power granted to the states to determine the “time, place, and manner” of elections. Advocates for the law argue that this condition is no different from any other ballot access provision such as the requirement that candidates gather a certain number of valid signatures from registered voters and, in some cases, to pay certain fees designed to offset the costs of the election. Opponents of laws such as this, though, have argued that a provision such as this is fundamentally different from a ballot access provision and that it effectively adds to the requirements necessary to run for and hold Federal Office as set forth in Article I, Section Two, Clause 2 for members of the House of Representatives, Article I, Section Three, Clause 3 for Senators, and Article II, Section 2 Clause 4 for the President and Vice-President.

Back in 2017, Harvard Law School Professor Laurence Tribe, who writes at CNN in a piece co-authored by Norman Eisen and Richard Painter of Citizens for Responsibility and Ethics argue that the states are in fact authorized to pass such laws:

Our federal Constitution allows states to create ballot access requirements that ensure that the ballots for every office, including the office of presidential elector, are comprehensible and informative.

A line must of course be drawn between permissible ballot access laws and impermissible attempts to add qualifications to those specified in the federal Constitution. But our research and analysis lead us to conclude that tax return disclosure laws such as the one proposed in California resemble ballot access laws in structure, impact, and purpose much more closely than they resemble laws imposing additional qualifications for presidential office.

As a result, we believe these laws comport fully with the U.S. Constitution.

Unlike prohibited qualifications, these laws do not impose substantive requirements on candidates beyond those imposed by the Constitution itself; that is, these laws do not limit which candidates may run for office based on any particular information in their tax return. Thus, they do not create an insurmountable barrier in advance to any set of individuals otherwise qualified under Article II of our Constitution. Instead, these laws require federally qualified candidates to comply with a relatively minor process of tax disclosure. That is something competing candidates can and should readily do in order to allow voters to make more informed judgments about those contenders’ characters or backgrounds.

The states have legitimate justifications for providing their voters with this important information. The proposed laws mandate transparency rather than interposing obstacles that some would-be candidates cannot overcome.

Tax returns provide information that is more broad, specific, and reliable than the candidate financial disclosure that is currently required. Candidate financial disclosure forms are generally designed to identify and prevent conflicts of interest — and tax return information could serve a similar function.

Indeed, this could be particularly important for a presidential candidate, as the president is exempt from some (but not all) federal laws governing conflicts of interest once in office. Prevention may be not just the best, but the only available medicine in some situations.

Pepperdine University Law Professor Derek Muller, meanwhile, responded with an Op-Ed in The New York Times that argues that such laws would unconstitutionally impose additional qualifications on those eligible to run for President beyond those prescribed by Article II of the Constitution, something not permitted by the general authority granted to the states regarding the regulation of ballot access:

The Supreme Court has repeatedly held that states can’t use the ballot as a political weapon. In 1964, for instance, Louisiana listed candidates’ race on the ballot. Louisiana maintained it was just providing truthful information to the voters of the state. The Supreme Court struck down the statute on the ground that the ballot was not a vehicle to direct voters to consider a candidate’s race.

In the 1990s, Missouri asked congressional candidates to take a term limits pledge; if they refused to do so, the state would indicate on the ballot that the candidate “declined to pledge to support term limits.” The Supreme Court struck down that ballot provision, too.

Both those cases stand for the proposition that states cannot use their ballots to achieve preferred political or policy outcomes — such as burdening those who prefer to keep some, or all, of their tax information private.

The Supreme Court has, of course, permitted states to regulate access to the ballot for the purposes of separating out serious from frivolous candidates. (Common mechanisms include a modest filing fee or securing a sufficient number of voters’ signatures on a petition.) But the New Jersey bill isn’t intended to ensure that only serious candidates appear on the ballot. It’s intended to get Mr. Trump’s tax returns.

It’s understandable that many state legislatures now want presidential candidates to disclose their tax returns: Mr. Trump’s refusal to disclose was, and continues to be, an issue of concern to many voters in New Jersey and across the country. But the ballot is not a form of leverage that may be used to pressure political candidates to meet legislative demands. This issue is best addressed, as it has long been, by the political process.

Of the two arguments, it appears to me that Muller makes the far more persuasive case than Tribe and his co-authors and that any state law requiring candidates for President, or any Federal office, to release tax returns as a price for ballot access, would most likely be held unconstitutional.  

The most relevant case on this issue would appear to be US Term Limits v. Thornton, the Missouri case which Muller cites in the text above. In that case, Missouri purported to use ballot access laws as a backdoor to imposing term limits on Members of Congress by denying them ballot access if they have served more than the permitted number of terms, which in that case was three terms for Members of the House and two terms for Senators. Such candidates could still seek reelection via a write-in campaign, but they could not run as either the nominee of a particular party or an Independent candidate. The Court ruled that this provision, which actually became a provision of the state Constitution via a ballot measure, violated the Constitution because it imposed requirement for holding the office of Congressman or Senator beyond those set forth in Article One, Sections Two and Three, and the Seventeen Amendment, which set forth the residency and age limitations for holding those offices.

The majority opinion written by Justice John Paul Stevens goes through the history behind the qualifications clauses for Congress, the powers of the states to regulate ballot access and the Tenth Amendment argument that was made in favor of the law before ultimately concluding that the attempt to impose term limit by regulating ballot access was unconstitutional. The argument used by the majority in Thornton would seem to be equally applicable to a state law requiring candidates for President to

The argument used by the majority in Thornton would seem to be equally applicable to a state law requiring candidates for President to would seem to be equally applicable to a state law requiring candidates for President to release their tax returns. As with the Missouri term limits law, such laws would effectively impose qualifications beyond those set forth in Article II, Section One, Clause 5, which have been slightly amended by virtue of the 22nd Amendment to include a bar against a candidate from serving as President for more than two terms, in violation of the Constitution. The effort of Tribe and his co-authors to argue that such laws do not impose additional qualifications is quite simply unpersuasive. 

The proposed New Jersey law that Muller references, for example, would bar any Presidential candidate from appearing on the General Election ballot unless they have released tax returns for the five most recent years prior to the election in question. Clearly, this is something beyond a law governing ballot access, such as the requirement that a candidate for office submit a certain number of signatures to qualify for the ballot and is more analogous to the term limits that Missouri sought to impose in Thornton. Because of this, it seems clear that a law requiring a candidate for President to release their tax returns as a price for getting on the ballot would be unconstitutional.

These legal arguments are unlikely to put a stop to the political forces that continue to push for Trump to release his returns, of course, and while the protests and moves at the state level are unlikely to change his mind, we could still be heading for a confrontation over this issue before the 2020 election. Somewhere, these activists are likely to succeed in some state or another. At that point, lawsuits will be filed and the matter will head to the Courts and, eventually, the Supreme Court. Unless the Supreme Court rejects the central argument of Justice Stevens’s majority opinion in Thornton, though, the legal fate of such laws seems clear. In any case, the outcome of the 2016 election would seem to indicate that, while voters believe candidates for President should release their tax returns, they don’t necessarily base their vote on whether or not that has actually happened.