Tim Geithner
Tim Geithner, Treasury Secretary, leads the Treasury Department at the White House,
He is responsible for the IRS and plays a big role designing and executing the administration's
economic policies. As a confirmed cabinet official, Tim Geithner reports directly to President Obama.
As head of the IRS, one of Tim Geither's primary responsibilities is enforcement of tax law and execution
of IRS policy, and perhaps one of the biggest issues the IRS manages is tax evasion. In 2002, testifying
before the House, former IRS commissioner Charles Rossotti estimated the "tax gap",
the amount of tax owed that will never be collected, at a whopping $30 billion
PER YEAR
(read the article regarding tax evasion |
view the PDF).
Geithner is charged with tackling this challenge, but there's one problem:
Tim Geithner has repeatedly cheated on his own taxes
(read the entire article about Tim Geithner |
view the PDF).
As documented in the Wall Street Journal report, Tim Geithner's moral authority to lead
the IRS and conduct himself honestly on behalf of the public must be questioned
amid these facts: "On Dec. 5, Obama's transition team told Finance Committee
staff that Geithner hadn't paid social security or self-employment taxes on income
received from the International Monetary Fund from 2001 to 2004...
Three years ago, the IRS audited Geithner for tax years 2003 and 2004, which
resulted in him paying back taxes and interest -- but no penalties --
totaling $16,732." The Senate Finance Committee characterized these errors as
"honest mistakes", but only an IRS audit compelled Tim Geithner to pay taxes owed
from 2003 and 2004.
Why was Tim Geithner not compelled to pay taxes from 2001 and 2002? The statute of
limitations had expired, and the IRS did not have the authority to enforce
any policies in these years. However, from the same article, "Geithner
voluntarily amended his 2001 and 2002 returns only after Obama expressed
interest in nominating him to the Treasury post. The total bill this time:
$25,970."
The two primary takeaways from these events are that
- Tim Geithner repeatedly failed to adhere to tax law, inadvertently or
purposefully, from 2001 through 2004. An IRS audit is all that compelled
him to pay taxes for the latter two years, and only When the opportunity to
become Treasury Secretary surfaced (i.e. only when it suited him for his own
purposes) did Mr. Geithner pay his back-taxes from the former two years.
- Barack Obama, upon learning of these indiscretions, chose to
ignore Mr. Geithner's tax failures and pattern of misleading behavior and
nominate him, with the Senate's consent, to the cabinet post anyway.
Bottom line: Tim Geithner's nomination and confirmation
represent a willingness for the President to install folks in his administration
who clearly lack the moral authority to do their jobs.
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