(Tom Brenner/For The Washington Post )
Opinion writer

We’re now one step closer to seeing President Trump’s tax returns, a revelation that, if and when it eventually occurs, will be both a short-term and long-term problem for the Republican Party.

A federal judge in New York has dismissed a lawsuit Trump filed in order to prevent his accounting firm from turning over eight years of his tax returns to New York District Attorney Cyrus Vance Jr. (D), who is investigating the matter of Trump’s hush-money payoffs to women during the 2016 campaign. Trump’s former attorney Michael Cohen is in jail in part because of his role in the hush-money scheme, which violated campaign finance laws.

The fact that Trump has not been prosecuted for his part in that scheme is only because according to a Justice Department opinion, the president cannot be prosecuted while in office. Yet it’s even possible that he committed crimes Cohen did not; given his record of tax cheating, I’d bet anything that Trump deducted the hush-money payments as a business expense, which would be yet another form of fraud.

Trump’s lawyers made a stunning argument in their bid to quash Vance’s subpoena: Not only is the president immune from prosecution, they said, but law enforcement officials should be barred from even investigating him, for anything he did at any point in his life.

In his decision, the judge seemed almost stunned by the sweeping implications of that claim, saying that the assertion of “virtually limitless” immunity was “repugnant to the nation’s fundamental structure and constitutional values.”

Naturally, Trump’s lawyers immediately asked the U.S. Court of Appeals for the 2nd Circuit to step in and put a halt to the case. After all, as they had said before, if his tax returns were given to the district attorney, Trump would suffer “irreparable harm.”

Would he ever. Everyone — Democrat, Republican, Trump friend or foe — is united in the belief that the information contained in Trump’s tax returns is so scandalous that if they become public, it will be a political cataclysm for him.

But this isn’t just about what appalling or even criminal doings the returns reveal. It’s also about the conflicts of interest Trump faces right now. His financial entanglements are an ongoing concern, constantly raising new questions about how the decisions he makes about American policy are influenced by his financial interests.

Trump’s new Syria decision

For instance, Trump has just decided that the United States will be withdrawing troops from an area along Turkey’s border with Syria, which many are justifiably arguing is an abandonment of Kurdish forces there to be overrun and even slaughtered by the Turkish military, our lengthy alliance with the Kurds notwithstanding. Trump apparently made the decision after a phone conversation with Turkish President Recep Tayyip Erdogan.

So one might reasonably ask: How much income does Trump derive from Trump Towers Istanbul? Does that play into his thinking as he tries to balance the interests and desires of two U.S. allies that are in conflict? At the very least, we should know the extent of his financial interests in Turkey.

As to the long-term implications of Trump’s tax returns, they will likely offer the public one of the most vivid possible illustrations of how America’s wealthy avoid paying taxes. In effect, they will be nothing short of an advertisement for the campaign of the Democratic nominee for president in 2020, especially if that nominee is Elizabeth Warren or Bernie Sanders, both of whom want to impose wealth taxes and make it harder for people such as Trump to cheat, remaking the tax code so that the wealthy pay something resembling their fair share.

And right now, they don’t. As David Leonhardt details, in recent decades the combined rate of taxes paid by the ultra-wealthy (he uses the richest 400 families as an illustration) has fallen down and down: In 1950, their combined federal, state, and local taxes were 70 percent; today, the figure is only 23 percent. The result is that despite what you might think, we don’t actually have a progressive tax system but something more closely resembling a flat tax.

At their second debate in 2016, Hillary Clinton suggested that Trump was hiding his tax returns because he didn’t want the public to know that he doesn’t pay any taxes. Trump interrupted her, leaning into his microphone to say, “That makes me smart.”

And when the New York Times reported that during the 1980s and 1990s Trump declared over $1 billion in losses, he insisted that the losses weren’t real but were just a way to avoid paying his taxes. Apparently, he would rather be known as a tax cheat than as a failed businessman.

But Trump doesn’t get away without paying taxes because he’s smart. He gets away without paying taxes because he’s rich. That’s just the problem: While people like him can avoid contributing to the society that enables them to amass enormous wealth, the rest of us have to pay.

That’s the system that Republicans are so desperate to maintain. And if the public ever gets a look at Trump’s returns, they’ll see in vivid detail exactly how it works. They might even decide to elect someone who thinks the system isn’t fair and wants to change it.

Read more:

Catherine Rampell: There’s another whistleblower complaint. It’s about Trump’s tax returns.

Paul Waldman: Even Trump’s own aides know how corrupt he is

Catherine Rampell: We don’t know what Trump’s tax returns are hiding. But the hints are troubling.

Paul Waldman: The clock is ticking on Trump’s tax returns

Alexandra Petri: Some math problems for Donald Trump’s tax returns