So let me get this straight — Joe “the Plumber” Wurzelbacher was found to have delinquent taxes, and suddenly he was deemed the bad guy and vilified for, as a prospective business owner, voicing concern about an increased tax burden designed to advance a socialist agenda, but Barack Obama’s pick for Treasury Secretary, Timothy Geithner, is found to have had similarly unpaid taxes, yet everything is kosher because he merely “forgot” to pay?
How exactly does that work?
For those who haven’t heard over the media’s coverage of the new First Family’s canine conundrum, we have learned that prospective Treasury Secretary Timothy Geithner, by all means a fairly pragmatic pick by the Obama administration, has nonetheless failed to pay tens of thousands of dollars in taxes from 2001 to 2004. So, again, for the benefit of comparison and perspective, let’s review:
- Joe Wurzelbacher, a plumber and prospective small business owner, owed $1,200 in back taxes and was run across the coals for daring to ask a difficult question of the media’s frontrunning candidate for president of the United States and his harmful plans for small business.
- Timothy Geithner, former director of the Policy Development and Review Department at the International Monetary Fund and current president of the Federal Reserve Bank of New York (where he makes $398,000 each year), owed and paid $42,000 in back taxes and penalties yet will nonetheless be confirmed as Barack Obama’s Secretary of the Treasury, where he will be charged with revitalizing our lagging economy and will oversee several departments, including the very Internal Revenue Service which he stiffed.
The American people, as misguided as they may have been, voted Barack Obama into the White House because they were by and large sick and tired of the same Washington politics. Since then, we’ve watched his Commerce Secretary stepped down because of a looming pay-to-play scandal, we’ve learned that his Secretary of State’s husband has accepted nearly a half billion dollars from governments and politicians and dictators overseas, and now his Treasury Secretary disclosed that he–oops!–forgot to pay back taxes. Am I missing anybody?
The idea that this whole debacle is being dismissed as merely an oversight on Geithner’s part, absent other information, blows my mind. Geithner, as Byron York points out in a great National Review column, actually accepted reimbursement from the International Monetary Fund for taxes which he did not pay. From the piece:
Documents released by the Senate Finance Committee strongly suggest that Geithner knew, or should have known, what he was doing when he did not pay self-employment taxes in 2001, 2002, 2003, and 2004. After his failure to pay was discovered, first by the IRS and later during the vetting process, Geithner paid the federal government a total of $42,702 in taxes and interest.
The IMF did not withhold state and federal income taxes or self-employment taxes — Social Security and Medicare — from its employees’ paychecks. But the IMF took great care to explain to those employees, in detail and frequently, what their tax responsibilities were. First, each employee was given the IMF Employee Tax Manual. Then, employees were given quarterly wage statements for the specific purpose of calculating taxes. Then, they were given year-end wage statements. And then, each IMF employee was required to file what was known as an Annual Tax Allowance Request. Geithner received all those documents.
The tax allowance has turned out to be a key part of the Geithner situation. This is how it worked. IMF employees were expected to pay their taxes out of their own money. But the IMF then gave them an extra allowance, known as a “gross-up,” to cover those tax payments. This was done in the Annual Tax Allowance Request, in which the employee filled out some basic information — marital status, dependent children, etc. — and the IMF then estimated the amount of taxes the employee would owe and gave the employee a corresponding allowance.
At the end of the tax allowance form were the words, “I hereby certify that all the information contained herein is true to the best of my knowledge and belief and that I will pay the taxes for which I have received tax allowance payments from the Fund.” Geithner signed the form. He accepted the allowance payment. He didn’t pay the tax. For several years in a row.
Even if we can take Geithner at his word, even if he actually was confused and misunderstood his specific obligations, what does that say about our tax code in America if this man, with his credentials and considering the job he is about to undertake, cannot comprehend it? Why are we normal, everyday folks expected to understand it? Last time I checked, I.R.S. agents don’t take very kindly to “oh, I was confused and didn’t know I was supposed to pay that.”
Nevertheless, I do happen to agree with Sen. Orrin Hatch — Geithner is indeed qualified, and most importantly, he may be the best we’ll get from Barack Obama. Still, the double standard is unmistakable. Had this been a Republican selection, after all, it would be dominating the 24-hour news cycles for days to come, and would certainly pollute the new administration’s waters during the first 100 days, if not more.
Because it’s Democrats vetting Democrats, however, because it’s Saint Barack Obama the Wise and Bare-Chested and not some evil, war-mongering neo-con, instead of hearing nearly enough about Geithner’s tax problems or Hillary Clinton’s possible conflicts of interest, no matter how much we want to pay attention to the construction of Barack Obama’s new administration, we’re still finding ourselves limited to the debate between Labradoodles and Portugese Water Dogs.