R.I. pols make a point with release of tax returns

PROVIDENCE — In Washington, President Donald Trump's tradition-breaking refusal to make his tax returns public has led to headlines such as these:

"House Democrats give IRS hard deadline of April 23 to turn over Trump tax returns ... Trump hires new legal team to fight release of tax returns ... Trump’s unreleased tax returns leave everything to the imagination."

But in Rhode Island, it's no biggie.

Gov. Gina Raimondo. Attorney General Peter Neronha. State Treasurer Seth Magaziner. Secretary of State Nellie Gorbea. Last week, without blinking, they all made public the top pages, at the very least, of their state and federal income tax filings for 2018 and, in Neronha's case, the whole shebang. 

U.S. Rep. David Cicilline and U.S. Sen. Jack Reed offered to do the same. U.S. Sen. Sheldon Whitehouse's office sent word the senator and his wife have received an extension, but "reporters will have an opportunity to review the returns after they are filed this summer."

What's to see?

In Democrat Raimondo's case, her tax returns reflect a huge payout last year — $888,743 — from the Point Judith Capital holdings she placed in a blind trust when she first won public office.

Point Judith was the venture capital firm that Raimondo co-founded and ran before winning office as state treasurer, first, and then governor. The state has been locked into its own unseen, $5-million investment agreement with Point Judith since 2007, which has only recently begun to show significant gains. Because Raimondo's shares were in a blind trust, her spokeswoman Jennifer Bogdan said: "They don't know what was sold ... [but] I think this is the first year they've seen anything of this significance." 

With the payout, Raimondo and her husband, Andy Moffit, saw their adjusted gross income soar from $432,827 in 2017 to $1,495,829 last year. 

They paid $435,709 in federal taxes and $82,540 in Rhode Island income taxes last year. They paid another $2,762 to Massachusetts and $2,217 to New York in non-resident taxes on the First Gentleman's $89,427 income from his role as a "senior solution leader" at an arm of the McKinsey & Co. management consulting firm and a teaching gig at the Harvard Graduate School of Education where he taught a class on "Workplace Learning & Leadership Development."

In Senator Reed's case, the filings reflect life changes.

In 2018, Reed’s gross salary was: $174,000. "After over 30 years working in the federal government, Mrs. Reed is retired and earned a federal pension of $54,669,'' according to spokesman Chip Unruh.  The Reeds also earned $36,788 in Social Security. Of note, portions of pension and Social Security income are not taxable.

When all was said and done, the senator, 69, and his wife, Julia, paid $42,104 in federal taxes and $13,493 in state taxes on their family’s $265,127 AGI. They had $27,818 in itemized deductions on their federal tax return (including $16,677 in home mortgage interest) and a reported $22,256 in capital gains. They were due a $1,436 federal tax refund. 

Other highlights

Cicilline: A $7,500 electric-vehicle tax credit helped the R.I. congressman reduce his 2018 federal tax bill on his $163,277 AGI from $20,718 to $13,218. (He drives a Tesla.) He paid $6,642 in state income taxes.

Magaziner: Filing as a married couple for the first time, the state treasurer and his wife Julia McDowell — who works for CVS in business development — paid a total of $41,624 in federal taxes on their adjusted gross income of $247,021. They paid a total of $12,408 in state income taxes and $115 in "sales & use taxes" to Rhode Island.

Gorbea: The secretary of state and her husband, Dr. Steven L. D’Hondt, who is a professor of oceanography, marine geology and geophysics at URI, paid $49,608 in federal taxes and $15,706 in state income taxes on their adjusted gross income of $302,571, including her $118,638 salary. They took the new $24,000 standard deduction and a $6,000 child tax credit. The couple has three daughters ages: 15, 13 and 8.

Neronha:  The attorney general and his wife, Dr. Shelly Johnson, owed $39,525 in federal taxes on their adjusted gross income of $243,215, that included his wife's partnership income from Coastal Care Medical Management LLC. They so overpaid over the course of the year they were entitled to a $15,602 federal tax refund. They paid $12,180 in state taxes. 

Why do they voluntarily make her tax return public?  Gorbea said she has been doing so since she first ran for office because she believes: “Every election should present an opportunity for voters to be hopeful about the future of our state. Hope can only exist if people trust their government leaders ... Office holders can build that trust by being completely open and accountable to the public about their finances."

Should President Trump do the same? "Anyone who holds public office should be completely open and accountable to the public about their finances ... It shows voters that you are not in office to simply benefit yourself ... He [Trump] should, as president, work to gain their trust and show that as our government’s highest national leader, his finances are beyond reproach."

Echoed Neronha: "Tax returns help paint a fuller picture of a person’s financial dealings, positions and interests. They can also illuminate potential conflicts of interest that are important for the public to know about ... Absent unusual circumstances, I believe that this is the preferable course for all elected officials and candidates for elected office, including the President of the United States and candidates for that office.”

The only top-level R.I. official unwilling to voluntarily make his tax returns public is Lt. Gov. Dan McKee. The reason, according to a spokeswoman for McKee — who is a heartbeat away from becoming Rhode Island's next governor and, in 2018, still listed himself as the VP of McKee Brothers Oil on his annual disclosure filings: "Lt. Governor McKee does not plan to release his tax returns out of respect for his family’s privacy."

U.S. Rep. James Langevin — who was left paralyzed by a shooting accident when he was a teenager — is the only member of Rhode Island's congressional delegation who regularly declines. "In order to keep the details of his medical expenses and personal care private, Congressman Langevin does not release his tax returns,'' his spokesman, Stuart Malec, explained.

Speaking of tax returns

Legislation to require presidential candidates to make their federal tax returns public to qualify for the ballot passed the R.I. Senate on a recent 28-to-10 vote after a lengthy debate that pitted the sponsor, Gayle Goldin, against all 5 Republicans and a smattering of Democrats.

Donald Trump is the only president in over the last 40 years to refuse to voluntarily release his tax returns.

 “We simply don’t know what financial conflicts the president has because he hasn’t disclosed them,'' Goldin said.

"Did he impose the Mexico City global gag rule, blocking federal funding to international nonprofit organizations that provide abortion referrals because he profits from that?'' Goldin asked.  "Is there a financial benefit to his stacking the courts with anti-choice judges?"

“While his tax returns might not tell us for sure, they certainly are a good place to start,'' she argued.

But Sen. Mark McKenney, a Warwick Democrat, agreed with Sen. Gordon Rogers, a Foster Republican, that states should not impose any additional restrictions on presidential candidates  beyond those spelled out in the U.S. Constitution, which include: a presidential candidate must be at least 35 years old and a natural born citizen of the United States.

Rogers said any new requirements would infringe on his right as a voter to decide for himself whether a candidate measured up. McKenney said he could not hate Trump more, but fears adoption of a tax return disclosure-requirement would create a "slippery slope'' precedent for what else individual states could require of candidates.

"I intensely dislike Donald Trump,'' McKenney told Senate colleagues. "I believe he will go down in history as the worst U.S. president of all time ... He is despicable. He is a pathetic excuse for a human being, let alone a president. I would love to see his tax returns."

But "it has been suggested that if states can add disclosure of tax returns as a requirement, they can add many other things,'' said McKenney, who voted against the bill.

"What would be next?" echoed Sen. James Sheehan, D-North Kingstown. "A race qualifier? Literacy?"

Sen. Louis DiPalma, D-Middletown, had this response: "We, in Rhode Island, decide if you're going to be on our ballot as a [presidential candidate], you need to have 1,000 signatures. If you are on the ballot in Delaware, you need to have 6,500 signatures.  Every state is different ... I know [what] was said with regard to the 'slippery slope.' We are here because of the president ... If President Trump was not President Trump, Sen. Goldin would not have submitted this bill."

Similar legislation has been introduced in at least 17 states this year. The R.I. Senate passed a similar bill last year. It died in the House.