The details in both Daschle and Geithner's cases are fairly weird:
Daschle's mistake was in not reporting a free car/driver as a gift (and hence not paying taxes on the value). There's a whole other conversation to be had about the culture of ex-Senators getting free stuff from rich friends "out of the goodness of their hearts", but it's not like the guy just decided not to pay a bunch of taxes.
Geithner screwed up by not paying his own SS/Medicare taxes while he worked at the IMF. The wrinkle is that unlike most private-sector or government jobs (which is where he was before and after his time at the IMF), international organizations (or at least those) don't do automatic payroll deduction of those specific taxes, so you have to deal with it yourself. Again, not a super-common situation.
So, yeah, these guys screwed up, were in positions where they should have known better, and it's fair to hold them accountable. But it's a little unfair to suggest that they were acting in bad faith when I'm not sure that I at least would know the arcana of those rules off the top of my head (though it makes a fabulous argument for simplifying the tax code...)
To look at it another way: Daschle underpaid by $140K while making millions, knowing full well that he may want to get back into government (which would involve vetting). Is it more likely that he: a) was knowingly risking his future career by not reporting the car service that he knew was a reportable gift; or b) being blissfully ignorant of how those rules worked?
You are right. Thinking that they are doing it purposely is a bit harsh.
But I do think it's fair to be worried that cabinet members are "blissfully ignorant" about other matters if they are about their own careers and matters with severe punishments.
These are really Fox News-caliber points we're making here. The exact same logic says that someone with a bad credit score shouldn't be qualified for a high-level government job. If you believe that, fine, but then I get to believe you're dumb.
Not paying taxes on time simply isn't a crime. We have an entire IRS with bookcases full of regulations dedicated to handling situations where people dispute or are delinquent with their taxes. In both the Geithner and the Daschle cases, the system worked: they paid their taxes and the interest they owed on them.
I suggest you look into the details. They all seem like mistakes I could have made by accident. And, like I said, lots of people fudge their taxes a little. Not outright fraud, but maybe not declaring something if they aren't sure if it's taxable or not.
Daschle's main problem is that he did not declare as income the limo and driver that was provided to him by the company he was consulting for. It's not like he was laundering money through shell companies in Antigua.
Geithner didn't pay taxes on-time because the IMF has a genuinely funky tax setup which made him liable for self-employment taxes. His tax status was disputed during his time at the IMF. He paid his back taxes with interest. He was liable for more taxes than a normal person, and he paid them. What's your point?
> Geithner didn't pay taxes on-time because the IMF has a genuinely funky tax setup which made him liable for self-employment taxes. His tax status was disputed during his time at the IMF.
There's no dispute. He was given an explicit and extra reimbursement for SS. He signed a letter every year acknowledging receipt of that money and that he owed the money.
And no, he wasn't "liable for more taxes than a normal person". For some reason, the IMF treats its senior staff as self-employed and all self-employed people pay both halves of SS in the US.
And, he had the penalties waived.
And, if he hadn't been nominated, he'd have never paid. He said as much during his confirmation hearings.
There's no dispute today. There was during his tenure at the IMF.
By "more liable than a normal person", I chose a confusing set of words to make the point that Geithner's tax situation was more confusing than my mom's: he was effectively self-employed, even though he held a long-term salaried full-time job.
As a businessperson paid in LLC distributions instead of W2 wages, I'm sympathetic to the complexity of self-employment tax. When you fail to pay taxes on time, you aren't a criminal. You simply incur interest and (in some cases) penalties. Penalties are frequently waived.
Like many other entrepreneurs I know, I'm also very sympathetic to the idea of not paying taxes until you have to.
Geithner didn't attempt to hide his tax liability. It was in plain sight. When it became more troublesome to avoid paying taxes than to square up, he simply paid them. I don't understand the political drama behind this. Geithner simply wasn't a tax cheat.
> There's no dispute today. There was during his tenure at the IMF.
No, there wasn't any dispute. Someone has to pay SS taxes on earned income. US employers can be forced to pay half and deduct the other half. The IMF thinks that it is exempt from following US law wrt withholding, but that doesn't eliminate the requirement.
More to the point, the IMF GAVE Geitner money specifically to pay these taxes AND had him sign a form saying that the taxes were his responsibility. IMF's position was that they weren't responsible for withholding, not that the taxes weren't owed.
> Geithner didn't attempt to hide his tax liability. It was in plain sight. When it became more troublesome to avoid paying taxes than to square up, he simply paid them. I don't understand the political drama behind this. Geithner simply wasn't a tax cheat.
Almost every "forgot to pay" person meets that template, and we call them tax cheats.
> Like many other entrepreneurs I know, I'm also very sympathetic to the idea of not paying taxes until you have to.
Except that Geitner wasn't an "entrepreneur", he was supposedly a public servant.
The Treasury department includes the IRS. You remember them - they're in charge of enforcing "voluntary" compliance.
As to "it's too complicated", he's supposed to be smart guy. They even told him the rules AND he signed documents yearly acknowledging that he understood those rules AND he accepted money to pay these taxes.
So people like me, entrepreneurs who have not always filed on-time, also disqualified from office. Got it.
Help me understand you, Andy. What are you getting at? That he owed back-taxes? I agree. He was given extra money at the time he incurred the taxes to cover the taxes. Agreed completely. Tim Geithner owed back-taxes.
Lots of people owe back-taxes. Plenty of Republican businesspeople think its their moral duty not to pay taxes as long as possible.
You're a tax cheat when you reorganize yourself as a shell S-Corporation, claim that a reasonable annual salary is $5,000, and then take your entire annual income as a distribution. Thousands of people do this, most will never get caught.
I have a hard time believing that simply not paying what you owe, or even filing an incorrect tax return, makes you a "cheat". Lots of people get audited. Many of them will owe. Most of those people are not cheaters.
Geithner did not pay $34,000.
Killefer seemed to have a reasonable mistake.
We all probably screw up our calculations, tax code is a mess, but 10's of thousands (by an individual) is likely not an honest mistake.