I think that transparency could make for a more fair process and also level negotiation since the compensation would then be about the role and how good someone is actually rated, rather than about how much they happened to have been paid in the past or how good they are about lying about it.
Secrecy is good in many places, but I can't think of why it is good for tax returns, asides from perhaps allowing criminals to more easily target those with high incomes?
In some poor communities, there's a strong ethic of sharing good fortune. That's good in many ways, but also makes it hard to climb out of poverty. More generally, lots of people have unbounded spending habits, and some will put a lot of pressure on friends/family if they find out they have any savings.
The downside in the private sector is that employees will find out how much they are getting screwed around with. Double downside when those employees figure out why.
I prefer for every random passerby to know full details of everything I do.