EDITORIAL: Trump taxed over returns

Donald Trump’s refusal to disclose his federal tax returns continues to put him on the defensive.

The New York Times revealed over the weekend that the Republican candidate reported a $916 million loss on state filings in 1995, leading to speculation he may have exploited that financial deficiency to legally avoid IRS liabilities in subsequent years.

The Clinton campaign jumped on the news, leaving “Republicans increasingly concerned” that Mr. Trump is “ceding momentum” to the Democrat, the Wall Street Journal reported Monday.

“Trump is a billion-dollar loser who won’t release his taxes because they’ll expose him as a spoiled, rich brat who lost the millions he inherited from his father,” said Nevada Sen. Harry Reid with his usual class, decorum and elegance. With statesmen the caliber of Sen. Reid at the helm, is the sorry state of affairs in the nation’s capital any mystery?

Mr. Trump could have defused this issue many months ago by following recent precedent among major party presidential candidates and releasing the documents. Instead, he has apparently made a calculation that stonewalling will cause him less political damage than opening his records to scrutiny. Mr. Trump may have passed the point of diminishing returns with that strategy.

Sen. Reid now seeks to revive a measure that Sen. Ron Wyden, Democrat of Oregon, introduced earlier this year to require the Republican and Democratic presidential nominees to make public their tax returns. This is silly. Why not also make it illegal for them to conceal their health records or elementary school discipline histories?

There is no need for a new federal mandate. Voters can determine for themselves the importance of a candidate’s decisions in this regard.

The real issue here is federal tax law. If Mr. Trump took advantage of loopholes and deductions to limit or eliminate his tax burden, he did so with the sanction of sitting politicians such as Sen. Reid who created and now protect the monstrosity known as the Internal Revenue Code.

The complexity of a tax code packed full of special-interest favors and social engineering initiatives may keep thousands of attorneys and accountants fully employed, but it undermines perceptions of equity and fairness. Simplifying the rules would spur growth and investment while making it more palatable for millions of Americans to meet their annual obligations.

Mr. Trump vows to make tax reform a priority. So does his Democratic opponent. But Mrs. Clinton’s true goal when it comes to taxes is to raise them. During her quarter century in Washington, Mrs. Clinton has done nothing to indicate that real reform is high on her agenda.