Nixon's tax returns go public

I had a letter a few days ago which, for a moment or two, I thought of framing for its rarity value. It was a letter of apology from the Bureau of Internal Revenue from what some countries call the Federal Tax Bureau and others the Inland Revenue. Everybody at some time or other, whether he earns three million dollars a year or three thousand, is subject to an audit, an official check on his own calculation of what he owed the government.

In America, the procedure is standard. You get a note saying the Bureau wishes to look over your federal income tax return for, say, 1969 – I keep saying 'federal' income tax because most states have their own separate income tax and in New York City, I'm sorry to say, we pay also a city, personal, income tax. The state tax is usually a set percentage of whatever you'd paid to the federal government and, in turn, the city income tax is a stated percentage of that. 

Well, I was saying, you get a note – the bureau wants to audit your 1969 tax returns. They propose a date when the two of you, the federal agent and the tax payer, should get together. If you're sick or away, they'll courteously put it off. But sooner or later the day arrives and if your records are portable, you're required to go downtown and appear at a desk and start the process of riffling through bills and cheques and charitable contributions and all the rest of it. The main idea is to go through the deductions that you've claimed and see if they're allowable. There's a popular superstition to the effect that the examiner puts his job in peril if he doesn't find some item he can disallow. I am happy to say, with my fingers well crossed, that so far this has not been my experience. 

My records are so widely filed I'd have to carry my study downtown. Many of them are piled into what I call my W. C. Fields filing cabinet. This is a closet and whenever something is missing – a book, a gramophone record, bills, newspaper clippings, a golf magazine, photographs, you name it – like Fields, I say, 'Hold it a moment, it's in here!' and open the door and a blizzard of papers and a clatter of books tends to come whooshing out of the closet. 

So, anyway, the last few audits, the examiner has kindly visited me. He or she is greeted warmly. There's a shy suggestion that, perhaps a cup of coffee? There's a menacing amount of courtesy for a while and then the man – I well remember the last one, he was a very trim gentleman who'd been at this for years and all the coffee and the sweet talk in the world weren't going to keep him from his appointed task. He glanced in a bored way through my calendar and stopped at a random date. 'OK!' he said. 'Let's see the bill for this business lunch in Chicago, April 27th! Uh huh...' he said, looking it over, 'now how about the airplane fare to San Francisco September 22nd?' The bill is whipped in front of him. 'Show me,' he says, 'your cheque for the third quarter instalment of your state income tax!' That is burrowed for and produced. He leaps around the calendar in this easy way and finally he goes through the listed personal deductions. It took that time, I remember, about three hours and at the end of it he leaned back and rolled his eyes like Groucho Marx – that's a bad sign that – took out a long cigar and said, 'Handsome little study you got here!' After a few pleasantries and the offer of more coffee, tea maybe – you'd be out of your mind if you dared to suggest the demon rum – he said, 'Well, sir! I'm reporting no change'. Those are magic words, the most beautiful words you will ever hear from a tax auditor. The government has decided that your own calculation was fair. It has pronounced you an honest man. 

Well, a month or two ago, I got this note and, again, following the modern style, it wasn't a personal letter, it was a form declaring in print that you, I, was in error in claiming as a deduction 'the fee you had paid your lawyer'. The only thing in writing was the amount they were disallowing which they ordered me to cough up and stapled to the form was another form with a number that ran on with many strokes, on and on. It said, 'Provision for disallowance of legal fees: no legal fees may be deducted which represent payment for services in connection with wills, bills of divorcement, inheritance taxes etc., but only for work done in connection with the direct acquisition of income by the tax payer.' Well, I had made no will lately. I have not lately been divorced and nobody ever left me anything except a couple of cufflinks once worn by the British Minister to St Petersburg whose initials happen to be the same as mine. The claimed deduction was, in fact, an agent's flat percentage of the income (to) which my lawyer had contracted for with an employer and that deduction, moreover, represented his direct income from me. It's the way he pays the grocer. So we sent off a brisk and properly righteous letter and a few days ago the reply came back from the bureau saying, in effect, 'So sorry, our mistake'. 

Now, we all know that avoiding taxes is a legitimate, even a healthy, occupation of anybody who has not taken a vow of poverty in some religious order. Tax avoidance is legal. Tax evasion is criminal; that is, the deliberate attempt to hide or escape taxes that you well know you ought to pay. Former Vice President, Spiro Agnew – remember him? – quit his office because he pleaded guilty, he chose, rather, not to contest the government's charge that he'd deliberately evaded a part of his federal income tax. 

Well, the other day, who should feel obliged to make a clean breast of his tax troubles and dispel what he called the 'myth' that he had sought to evade taxes but the President of the United States? Now you know an awful lot of things have happened in the past year that have never happened before in this country. I don't remember in our time or the time before that a president ever laying out before the public all the details of his personal finances and his tax returns. Mr Nixon put out fifty documents after months of saying, what I must say sounds fair enough, that a President of the United States should enjoy the same privacy about his bank account and his taxes as any other citizen. 

This was the same protest that Mr Nixon made for so long about releasing the tapes of his White House conversations. The phrase he used was the 'principle of confidentiality which a president ought to be jealous to preserve not in the main for himself but for all future presidents.' And before we start ogling Mr Nixon's tax returns, may I say that whether in this instance, in both these instances, the president was justified or not, he does have a point. Once a president is obliged to release to the public or the Congress or the courts his private papers and the records of conversations he had in the White House and how the details of his income taxes and investments, and so on, came about, a suspicious Congress, any time, would be able to demand that any succeeding president should do the same. Maybe he should. 

But it will only mean an elaborate extension of the habit of Congressional investigation and, as we've seen in the Watergate matter alone, the habit of investigation has involved such armies of lawyers and investigators ploughing with their microscopes through a forest of allegations and rumours and documents and letters and affidavits, that while they may identify the species of every leaf and flower and bush and tree they're so overcome with a myopic passion for detail that they cannot say for sure whether they are walking through a wood or a bunch of pantomime stage sets. 

If every president has to exhibit every transcript of a talk, every memo he writes, every tax entry, it will not be difficult for a later Congress to bring a president down. Political prosecution, I think, is the danger. But there is another principle which seems, in Mr Nixon's case, to have overwhelmed the principle of confidentiality. It is the principle that a president, not only like Caesar's wife but like Caesar himself, should be above suspicion. And there's been so much smoke around the White House about the taxes that an actual majority of Americans suspect a fire. Anyway, the rumours and suspicions, the figures and records stolen or leaked but somehow acquired by the press, these suspicions have mounted intolerably so that the president had to do what he's done. 

It must have been very galling for him because his own account shows that on an income of $1 million over four years, including the $200,000 tax-free expense account, he paid only $79,000 in taxes, that he didn't spend $200,000 on expenses, only a $110,000 and pocketed the rest, that in the past three years, '70, '71 and '72, on an income each year of more than $200,000 he paid respectively $792, $878 and just over $4,000. Now $792 is about what an ordinary citizen would pay on an income of, say, $4,000 not $200,000. 

The ordinary citizen pays, as I said earlier, a percentage of his federal tax in state taxes. Mr Nixon, though he claims California as his home state and has a residence there, paid no state taxes at all. If the ordinary citizen sold some of the land surrounding a country house, as Mr Nixon did at San Clemente, he would pay a capital gains tax on the sale and the going rate for that is 25 per cent. Mr Nixon admits that he made a profit on his land sale of $117,000 in 1970. You'd expect he would have paid a tax of about, oh, $29,000. He paid none. Naturally, the ordinary citizen says, 'How come?' The president, who sometimes seems not to hear very well the voice of the ordinary citizen and sometimes seems to hear it very well indeed, has hastened to say that if he was in error, in any way, he's willing to pay up his unpaid taxes to the extent, he alarmingly suggests, of $250,000. I don't know who asked him but he has asked a Congressional committee on taxation to go over his returns and this offer, by the way, seems to me to be a dangerous precedent too, for a Congressional committee is a politically loaded body whereas the Director of Internal Revenue is an independent official outside the political parties. Once again, it appears the president has said 'Who shall judge him?' 

But, a week or so from now, the Congress will go home for the holidays and they will be listening as rarely before to how the grass roots bristle. Ultimately, the president's judges are the ordinary citizens and if they feel he has merely cut a few corners he will survive. If they bellow loud enough about a president growing rich at the taxpayers' expense, nothing, I should guess, in the New Year, could save him.

This transcript was typed from a recording of the original BBC broadcast (© BBC) and not copied from an original script. Because of the risk of mishearing, the BBC cannot vouch for its complete accuracy.

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