For months, reports have circulated that Richard Nixon's net worth has increased dramatically during his years in the White House, and that in two of those years he paid virtually no federal income taxes. In his own defense, the President last week ordered the release of a mass of information on his private finances. What it revealed was hardly reassuring to his remaining supporters.
While he may have fulfilled the letter of the tax law—and not even that is certain—his deals and deductions raised disturbing questions about propriety.
Release of the material followed an extensive audit by White House officials and outside advisers, including Philadelphia Lawyer Kenneth Gemmill, Cleveland Lawyer H. Chapman Rose, and accountants from the firm of Coopers and Lybrand. Highlights of their authorized report on the President's intricate business activities between Jan. 1, 1969, and May 31, 1973:
During the four-year period, the President paid less than $79,000 in federal income taxes on a total income of more than $1. J million.
In fact, in 1970 he paid only $792 on a total income of $262,942; the following year he paid $878 on earnings of $262,384. His total taxes for 1970, 1971 and 1972 amounted to $5,968—the equivalent of what a family whose income was $15,000 would have paid during those years.
These low tax bills were made possible by four categories of deductions:
» Interest payments on his properties ($257,376); » Property taxes ($81,255); » Miscellaneous deductions for items ranging from "unreimbursed official expenses as President" to the use of his property at San Clemente and Key Biscayne for official purposes (total: $142,700).*
» Most important, deductions for the donation of his vice presidential papers to the National Archives ($482,019). The voluminous papers, which date back to Nixon's years in the Senate and include his experiences as Vice President, had been privately evaluated at $570,000. The evaluation was done by Ralph Newman, a presidential papers scholar, whom Nixon paid $12,783.
It is the last item that has stirred the sharpest criticism and inspired an investigation by Republican Senator Lowell Weicker of Connecticut, who has promised to forward the results of his investigation to the Internal Revenue Service and to demand action on the case this week. The White House claims —without substantiation so far—that the President merely followed "the tradition of his six predecessors" in giving his private papers to the Government.
Later the White House explained that the six predecessors had also given papers to the Government, not that they had profited by doing so. But Nixon reaped a tax windfall of almost $235,000, by White House estimate.
Beyond the question of whether it is ethical for a President to charge the Government such a huge amount for his papers, there is also a legal problem for Nixon. In December 1969, Congress amended the tax law to forbid such deductions and made the amendment retroactive to July 25 of that year. The White House claims the gift was made on March 27, 1969, but a serious doubt exists over whether a transfer of the property took place before the deadline.
During the four-year period, Nixon's net worth increased from $307,141 to $988,522.