Timothy Geithner may be a really, really “brilliant” guy. As such, he is perhaps — perhaps — qualified to be an analyst or some other kind of adviser in the Treasury Department. But his 15-year history of persistent tax “problems” disqualify him to lead it. For that matter, they disqualify him to go back to his former job as head of the New York Federal Reserve.
I am confident that no other president in my lifetime — not Bush 43, not Bill Clinton, not Bush 41, not Reagan, not Carter, not Ford, not even Nixon, not LBJ, not JFK, not Ike — would have submitted Geithner’s nomination upon learning what we have learned.
Clinton pulled the Attorney General nominations of Zoe Baird and Kimba Wood over possibly unpaid self-employment taxes on domestic employees. Though the AG is the nation’s chief law enforcement officer, Baird and Wood could at least somewhat credibly claim ignorance; many attorneys, particularly trial lawyers and prosecutors, are not well-versed in tax matters, and aren’t expected to be. Geithner doesn’t have that excuse, and his unpaid tax issues and history of tax evasion dwarf the problems of Clinton’s withdrawn nominees.
(Sidebar, with credit to a commenter at either Michelle Malkin’s place or Hot Air — Why is the male Geithner still standing, while females Baird, Wood, and Linda Chavez were all abandoned at the first sign of trouble? What does that say about Washington’s supposedly gender-friendly political culture?)
Yes, I said “tax evasion.” The big, big point that no one seems to be making is that Geithner’s payment of his past-dues does not change the fact that he engaged in evasion.
Even after the IRS forced him to pay up for 2003 and 2004, Geithner did not pay his 2001 and 2002 payroll/”self-employment” tax liabilities until shortly before he was nominated. I speculated a couple of days ago that this was because the normal statute of limitations for the IRS to question a return, which is three years after the date a return is filed, had expired. Subsequent press reports have confirmed this to be the case.
The statute of limitations tactic, while perhaps defensible for ordinary, tax-ignorant filers of limited means, doesn’t fly with Geithner. For him, it amounts to a “Nyah, nyah, you didn’t catch me quickly enough” taunt.
Much more important, the normal statute of limitations cop-out should not have applied. That’s because, as I noted on Wednesday, “The statute of limitations does not apply in the case of a false or fraudulent return with intent to evade any tax.”
Intent is often difficult to determine. But if leaning on the statute of limitations is a valid defense, why did Team Obama force Geithner to pay up before his nomination?
Answer: They must have concluded that a guy with Geithner’s background, experience, and history of IRS “discrepancies,” should have known, and indeed probably did know, that he was required to pay self-employment tax on his International Monetary Fund salary at the time he filed his 2001 and 2002 returns.
Of course he knew. The IMF frequently reminded him of his obligation to pay the employer and employee portions of Social Security and Medicare payroll taxes. He applied for, and received, partial “reimbursement” for the taxes he told the IMF in writing that he had paid. Beyond that, Geithner’s problems with unpaid payroll taxes on wages paid to domestic help go all the way back to 1993. If anyone in America should have been familiar with the fact that Uncle Sam demands an extraction of 15.3% for Social Security and Medicare on the vast majority of wages paid (the only exception being earnings above a certain level that are exempt from Social Security but not Medicare taxation), it’s Timothy Geithner.
Thus, Geithner’s forced payment, instead of being a necessary step for smoothing the path to his nomination, is really the reason it should be rejected. It is a backhanded admission that his reliance on the ordinary three-year time frame of the statute of limitations was invalid, and that he engaged in tax evasion at the time he filed those returns.
I don’t know whether Barack Obama is aware of the full extent of his nominee’s self-evident tax evasion, up to and including the IMF notifications, the IMF reimbursements, and Geithner’s false attestations that he had paid these taxes. But if he is, his ringing defense of Geithner should cause the American people to question the president-elect’s fundamental judgment and capacity to lead.
The incoming Obama administration is telling us that evading taxes is okay as long as you’re “brilliant,” as long as you have a compatible economic philosophy, and as long as you’re a guy (take that, “sweeties” Baird, Wood, and Chavez). While Obama drones on about how everyone has lost faith in Washington’s capacity to govern, he and many senators who should know better are still backing a person whose confirmation would leave the American people wondering if anyone in Washington knows or cares about the difference between right and wrong. Why? Because this guy is supposedly the only person in a nation of 200 million adults who can do the job? Stop insulting our intelligence.
This is a pre-presidential tipping point. We’re looking at four years of farce if this nomination succeeds. We can’t afford that.
Geithner should withdraw. If he won’t, Obama should tell him to (you know the line by heart already — “This isn’t the Tim Geithner I thought I knew”). If Obama persists, Senators from both parties must chuck the feel-good festivities, take the blinders off, and stop him.
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UPDATE: Michelle Malkin has the related column title of the day — “A government of the goofs, by the goofs, for the goofs.” Some enterprising and talented Photoshopper (that would NOT be me) needs to incorporate a certain Disney character into a cartoon or two.
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Previous Posts:
- Jan. 15 — Tax ‘Goof’ Update: Geithner Was ‘Reimbursed’ for Taxes He Didn’t Pay; AP Story Buries, Then Deletes
- Jan. 14 — Geithner Update: AP’s Early-AM Revision Flushes Many Details, Calls His Tax Problems ‘Goofs’
- Jan. 13 — Treasury Nominee Geither’s Persistent Tax Problems Getting the Glossover Treatment; AP Coverage ‘Forgets’ at Least Chavez, Baird
Wow.
