How Do You Feel About the Head of the IRS being Someone Who Hasn't Paid His Taxes?

Taxes Have Been The Downfall of Many Cabinet Nominees

By this question I presume that you are asking for opinions on recent revelations that New York Federal Reserve President and current Treasury Secretary designate, Timothy Geitner, failed to pay Social Security and Medicare taxes on his income while working for the International Monetary Fund (IMF) between 2001 and 2004, along with the revelation that during the time the nanny, who took care of his children as an employee working for him, had her Green Card expired and went three months before renewing it. In addition I believe there was also something mentioned about his attempting to claim a deduction for his child's summer camp expenses even though such a deduction was not allowed under the tax code.

Mr. Geitner is not alone here and, since at least the election of Bill Clinton as President in 1992, we have had one or more Cabinet nominees being forced to withdraw their names from consideration because of tax problems usually involving the failure to withhold income, Social Security and Medicare taxes from the pay of nannies and other household help as well as not paying the employer portion of these individuals' Social Security and Medicare taxes. This has become so common that the employer portion of Social Security and Medicare taxes has now been dubbed the Nanny Tax.

Now that we have clarified the question do you think Mr. Geitner should be confirmed as Secretary of the Treasury?

  • No. Find someone else.
  • Yes. It is not that big a deal.
See results without voting

For opponents of an incoming President, such little scandals not only help them to overcome the disappointment of having their candidate lose, but also have the effect of diverting some of the new President's time and attention away from his promised programs - programs which those who voted against him usually oppose anyway.  However, since the nanny  tax scandals have affected both Republican and Democratic administrations the net effect is a wash.  Of course, for those of us who feel that we have too much government to begin with, anything that keeps politicians of either party from enacting more programs is good news regardless of which party is occupied with the current scandal. That being said, the real problem here is not so much the intelligence or character of Mr. Geitner as it is of a tax system that is so large and so complex that there is not one person on earth who can honestly claim to understand it.   Every year the Wall Street Journal and media organizations submit one or more fictitious, but representative, tax returns to three or four IRS agents and three or four professional tax accounts and ask each of them to review it and determine the amount of tax that should be paid.  They always get back as many different answers as forms sent out.  Each IRS agent and professional tax accountant calculates a different tax amount due.    

The U.S. Tax Laws are Unique Compared to Taxes in the Rest of the World

In Mr. Geitner's case it is simply a failure to pay part of his own taxes and not his share of those owed by his household help.  The taxes in question are somewhat unique in that, even though he lived and worked as an employee of the IMF in Washington, D.C., he was one of a minority of employees of that organization who actually had to pay taxes.  As I explained in my Hub entitled Rolling Stones Prove Tax Cuts Work, America is one of the very few nations which taxes the overseas income of its citizens. Regardless of how one feels about this, the fact is that international organizations, like the IMF, which employ citizens of all member countries including those of the U.S., have to make adjustments to pay scales to compensate American employees for the reduction in pay due to their having to pay U.S. Income, Social Security and Medicare taxes. The result is that Americans are paid more than their foreign counterparts but the extra is for Uncle Sam and not them personally. Of course they then have to act like a small business and complete additional required tax forms and submit a check for Income, Social Security and Medicare taxes due rather than filing for a refund like other Americans who are not employed by an international organization.

The Income Tax Started Out Complex

This is not new. I remember as a teenager listening to my Uncle Willard recount his experiences in the Army during World War I. As he finished his tale, he told how, at the end of the War, he had been nominated for Officer Candidate School, a process that required, among many other things, a review by a panel of Army psychiatrists. I can still remember my Uncle saying, And the officer in charge of the Board turned to the panel and said, "now gentlemen, Mr. Smith here claims that he worked as a bookkeeper before the War so if you have any questions about your income taxes now is your opportunity to ask them." At which point one of the doctors replied, "Mr. Smith can you explain why if you give a tax return to three different IRS agents each one comes up with a different amount due?" My uncle then proceeded to explain how three different people could arrive at three different tax amounts due from the same tax return.

The event my Uncle related took place right after the war in 1919, a mere five years after the Federal Income Tax was enacted. When enacted, the tax was supposed to be a simple tax on the rich and, according to the mythology preached ever since by left wing politicians, the income tax only became complicated as our modern society became complicated. But here we have Army Officers who were not highly paid in those days (especially compared to the incomes of wealthy captains of business like the Rockefellers, DuPonts, etc. who the liberal progressives had claimed the tax was aimed at when they proposed it) already concerned not only with the tax itself but with its complexity - and the Federal Income Tax had only been in existence since 1914!

Members of Congress Routinely Pass Laws Without Reading Them

As Rich Dad, Poor Dad author Robert T. Kiyosaki observes on page 171 of his book Cash Flow Quadrant - Rich Dad's Guide to Financial Freedom, the Federal Tax Code alone consumes over 100,000 pages of the the 1.2 million pages worth of Federal laws currently in force. According to Kiyosaki it would take the average reader 23,000 years to read the entire U.S. Code.

Worse still, every year Congress not only enacts thousands of pages worth of additional laws but regularly takes a simple, straight forward piece of proposed legislation and loads is up with hundreds of pages of totally unrelated legislation that no one, other than the individual authors of each additional item, would dare vote for individually, and then passes the entire mess, without ever bothering to read it in its entirety.

After voting to enact one of these book length pieces of legislation, the members of the House and Senate, who voted for the law, have to wait a few weeks while reporters from the Wall Street Journal, the New York Times and other publications and media have had chance to read, digest and report on the new legislation before the members of Congress discover what they really voted for. This is what passes for government in Washington, D.C. today.

So, while one should expect those enforcing the law, such as Mr. Geitner, who as Secretary of the Treasury will not only oversee the IRS but, as a member of the Executive Branch, be responsible for enforcing it as well, to be both honest and obey the law including paying their taxes, as well as being sufficiently knowledgeable about the laws they are responsible for enforcing.  However, punishing Mr. Geitner by denying him the nomination because of this infraction, will accomplish nothing other than ruining the career of one man.   Even if it develops that Timothy Geitner knowingly and intentionally cheated on his taxes this character flaw in him is dwarfed by the institutional character flaw in the U.S. Congress in which the institution, as a whole, routinely puts forward a bill, or single proposed law, which a large portion of the public supports and understands and then proceeds to secretly load it up with numerous, totally unrelated and totally unwanted by the public, bills benefiting microscopic constitusancys and then votes it into law without even reading it!   Instead of wasting time on Mr. Geitner's past income taxes, we should be demanding that President Obama push for a real change by vetoing every piece of legislation that he doesn't have time to read in its entirity and explain in full to reporters in time for the evening news.    

Do you think Mr. Geitner should be confirmed as Secretary of the Treasury?

  • No. He is unfit. Please take a moment to explain in the Comment Section why you feel this way.
  • Yes. This is no big deal. He is unfit. Please take a moment to explain in the Comment Section why you feel this way.
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Comments 65 comments

JEAN DANIEL 3 years ago

IT IS TIME WE THROW ALL THESE CROOKS OUT OF OFFICE AND TAKE OUR COUNTRY BACK. THE IRS IS A JOKE AND DO NOT KNOW WHAT THEY ARE DOING, THEY HAVE PEOPLE DOING AUDITS THAT DO NOT KNOW HOW TO AUDIT. tHE ARE ALSO DENYING PEOPLE THAT PAID INTO SOCIAL SECURITY FROM RECEIVING THEIR REFUNDS THAT THEY ARE ENTITLED TO.


iamageniuster profile image

iamageniuster 4 years ago

That person is doing a constitutional and moral thing since the income tax, corporate tax, social security, and medicare are unconstitutional and immoral.

The income tax didn't exist before 1913 and was the primary reason we had the Revolutionary War. The government just wastes so much money on wars and welfare programs that they started collecting these taxes.

However, this person is a hypocrite for helping the government collect our taxes but not paying theirs.


wba108@yahoo.com profile image

wba108@yahoo.com 5 years ago from upstate, NY

Making the tax code complex only benefits politicians and their special interests. It also empowers the government to threaten its citizens. I don't believe in income taxes because it enables the government to redistribute wealth. Our government violates the Constitution with impunity. There must be a way to hold them accountable, maybe a trial to remove them from office would do the trick! I was just reading that Thomas Jefferson warned against a complex tax code because the taxing power was dispersed among so many different bodies that it was destined for mischief by the government!


Amandamic21 6 years ago

Watch who the IRS is going after for taxes. The little guy,the fading middle class, the poor...Why is that? Perhaps this leader of the IRS has the initials NWO stamped on his forehead.


GeithnerGate 7 years ago

I think it stinks big time, but that's politicians for you, just look at the mess in the UK at the moment where politicians have been fiddling their expenses. It is also why I set up my site http://www.geithnergate.com - please drop by and vote in my poll !


Joe Blow 7 years ago

So far, not so good. Geitner will make this world a darker hell. And Obama is, unimaginably, allowing it. I love Obama. He is breath of fresh air, but his plans are not much different than BUSH. In addition, ever since Obama took office, we are in deeper s***. I hoped that Obama's taking office would make things easier for everyone, but in fact, economy is diving straight to hell!

They all got paid good sums of BRIBERY MONEY from AIG/Goldman Sachs. Remember that all this economic crisis is continuing and getting worse is because Obama/Geither/Dodd/Pelosi, etc got paid CONTRIBUTION(bribery) money! You see this has global implications? And Obama is out to Europe G20 Summit to preach 'BAILOUT"! I hope that Obama was better than that. "sigh". Another sad chapter in OUR lives continues.

We shouldn't just sit and take this CORRUPTION in the government of all levels and their true constituents, the CEOs and wealthy. Look at it this way. While 3rd world countries are getting a grasp on governmental CORRPUTIONs, USA is already DEEP in the core of it. Other countries has no respect for USA, and treats us as such. Remeber food poisoning, dangerous products? When have we seen this magnitude of dangerously living our lives? Huh? Imagine the people of China up till about 20 years ago...we will end up like them - in dark ages, thanks all to our government.Do you want to wait till it's too late?


Audrey 7 years ago

I heard this morning where there is another Obama apointee with tax problems.

I think he should have not the job. He obviously isn't very bright. That doesn't seem to matter in the new administation. I think we are in deep trouble


Firebird 500 profile image

Firebird 500 7 years ago from Hudson

incredible example of blatant hypocrisy from an organization that acts more like Hitler's SS, when it comes to squeezing every dollar from every slavishly obedient citizen that no longer has a represented voice in Washington.

yes washington that 21st-century cesspool of total corruption who sets one standard for themselves, and a lower standard for us peasants. Now this comes as no surprise to me, because this jerk of a president is going to hire all his crooked comrades in his number one quest to destroy the last great superpower on the face of this earth.....


Rochelle Frank profile image

Rochelle Frank 7 years ago from California Gold Country

Yes, I use turbo tax-- and it asks me about child care. My children are grown and care for their own.


Hub Love profile image

Hub Love 7 years ago from United States

This has been a hot topic among the people I normally spend time with, excellent post. I'll be showing them all this hub this weekend!


lowwinds profile image

lowwinds 7 years ago from Atlanta GA

Funny the people who complain the most about government overspending are the ones who don't pay their taxes anyway, or avoid them, or get HUGE writeoffs and end up with almost zero tax liability anyway. Joe the Plumber anyone?


Chuck profile image

Chuck 7 years ago from Tucson, Arizona Author

Rochelle - thanks for visiting and for your comment.

Having just had two of his nominees for Cabinet level positions withdraw their names due to tax problems (one specifically for the nanny tax) I think that you are probably right about him having trouble finding someone who does pay their taxes. He could probably find plenty of them among average citizens like you and me but, even with Diogenes' lantern, I doubt he will have an easy time finding such a person among the political class.

On another matter, I don't know if it was a result of Tim Geitner's experience or that of his predecessors but while doing my son's taxes on Turbo Tax last night I noticed that when you click on "other taxes" that the Nanny Tax is listed by name along with the AMT and other specialties of the Federal Tax Code - this was on the cheap Basic version which I now use to simply get the data together and get an estimate on my and my children's situation before giving the material to our tax preparer.

Thanks again

Chuck


Rochelle Frank profile image

Rochelle Frank 7 years ago from California Gold Country

I think he's perfect. Obviously he has the solution for the average taxpayer. I'm looking forward to the time he implements the same policy for all of us-- just don't pay.

Actually i'm a little scared. If the President is looking for people who dactually DO pay their taxes (for filling cabinet posts), maybe I'm the only one left-- and I don't want to go into politics.


theCL profile image

theCL 7 years ago from Royal Oak, MI

Chuck,

Great article! I look forward to reading more of your thoughts. Anyways ... since this topic has been well discussed throughout the comments, I just wanted to add something to this comment you made:

"Frankly, I don't think four or eight years without passing a new law would be that bad and think that any President who accomplished this deserves a place on Mt. Rushmore."

I laughed when I read that, because it reminded me about how happy I was, despite hearing all the doom and gloom, back in the '90's when the government "shut down," due to grid-lock.

I heart government grid-lock. :-)


Scott757200 profile image

Scott757200 7 years ago from Somewhere New Everyday!

Great article Chuck! This is one of the worst choices for a cabinet position that I have ever seen. The fact that Geithner only paid and fessed up 1 week before the nomination was made public is the worst part!


Tilly Holiday profile image

Tilly Holiday 7 years ago

I feel it is oddly appropriate and hope that the IRS offers the same kindness to tax defaulters as they do their cheif :)


Sexy Health profile image

Sexy Health 7 years ago from Portland, OR

I can't believe this! This just goes along with all of the other corrupt things that are continually going on in BIG business. I hope this changes...can't wait to see what Obama is going to do with this.


Rick Answer Analyst Review 7 years ago

I cannot believe that he can even keep the job he had before with the knowledge of his misdeeds.

Obama we have a solution for the budget deficit...

Double the size of your cabinet and nominate more Rich Democrats for the post. The highest rate of non payment of taxes? Democratic leaders...

Most of us would go to Jail for this kind of thing. Oh ya friends in high places.

Rick


flread45 profile image

flread45 7 years ago from Montana

sets a presidence for any one to cheat at taxes


GaryLeeVilleneuve profile image

GaryLeeVilleneuve 7 years ago from Cheyenne

The 'real' reason Geithner was appointed is that he will push for the implementation of a world-wide 'regulatory body' (a one-world bank) and that he will further the consolidation of international currencies into cross-border units. He was an IMF guy. He is a Bilderberg guy. That's why he was appointed. That's why they're all appointed.


blangrehr profile image

blangrehr 7 years ago from Spartanburg SC

I really enjoyed this article. It was informative and well written. I guess, you didn’t really need me to point that out considering your score. I really just wanted to say thanks and openly marvel that Mr. Deeds and I seem to be on the same side of an issue.


lindagoffigan profile image

lindagoffigan 7 years ago from Phoenix, Arizona

What else is new?


Kelley Eidem profile image

Kelley Eidem 7 years ago from Panama City, FL

Geithner didn't get "ensnared" in a complicated tax question. As was pointed out previously, he received repeated notifications that he owed the money. he ignored them time and again.

The fact that he ended up paying the taxes on the day before he was nominated tells all we need to know. he knew it all along.

The real reason he was appointed is that the head the 2nd district of the Federal Reserve and was responsible for overseeing the regs on the $50 TRILLION financial intstruments that have now blown up and pushed the economy into the crapper.

As Secretary of the Treasury, he wil be the last person to pursue prosecutions. He'll keep his mouth shut.

It's a sordid chapter in government from top to bottom.


denisewrtr37 profile image

denisewrtr37 7 years ago from Philadelphia

I look at it this way. If he didn't know he had to pay the taxes, then it makes me think he's not knowledgeable enough to head up the Treasury. If he did know, then it shows dishonesty. Either way it doesn't look good.

Denise Hubbing It Up!


SweetiePie profile image

SweetiePie 7 years ago from Southern California, USA

Hypocritical for sure, but I am not surprised at all.


blackbass 7 years ago

sounds like organized crime . whats next?


Chazman80 profile image

Chazman80 7 years ago from USA

I think it is totally WRONG....The IRS I mean, its need to go. We need to get rid of 75% of the fed and state governments. Completely shut down the dept. of human services and let people actually be FREE again.

ps-I stole some snipets of your hub and linked to you from my blogzine. You can add more of your stuff...its like a social network where you can get more traffic for your hubs!


anime_nanet profile image

anime_nanet 7 years ago from Portugal

A forums thread title but not a forum thread in content.

Good hub.


Shaun Lindbergh profile image

Shaun Lindbergh 7 years ago from Cape Town, South Africa

The US needs the best minds on the job, now and at all times, and that should be balanced against the seriousness of a candidates enfringment of a law. If you smoked pot as a student you wouldn't be harshly penalised today but if you had been a drug dealer the story should be different.


Chuck profile image

Chuck 7 years ago from Tucson, Arizona Author

Go Writer - good point. Except that something as simple as that removes opportunities for Congress and the bureaucracy influence people's economic activities by rewarding them with tax breaks for engaging in activities that the government wants to encourage (such as buying homes (the mortgage interest deduction) or going to college (the Hope credit and tuition deduction) as well as penalizing them for things the government wants to discourage by not allowing the tuition deduction unless the person is persuing a degree, taxing gambling winnings but not allowing deductions for losses in excess of winnings). It would also remove the opportunity for Congressmen to give tax breaks to special interests who provide big campaign contributions (of course, they have to be discrete about this). Then there is the class warfare angle whereby liberals for the past century have cammpaigned to "soak the rich" and punish the rich for being successful (of course every time they raise taxes on the rich pay for their grand schemes they have to quietly redefine "rich" to include most of the middle class in order to raise the revenue they are seeking. Finally, in addition to the vast IRS bureaucracy that runs and enforces the tax system, there is also a huge industry consisting of tax consultants, tax advisors, book and software writers, etc. all of whom make a living helping people deal with the complex tax code. This makes for a rather large special interest group inside and outside of government that will lobby hard to oppose any simplified system that would eliminate the need for the industry in which they have a vested career interest.

But you make a great point, and the more opposition to the present system and the more alternatives offered the better the chances that this blob that has grown over the past century will be halted and cut back. Change will be gradual and incremental just as the growth of this mess has been gradual and incremental.

Thanks again for the comment


Go Writer 7 years ago

Just goes to show who complex and complicated the tax system is. Why not have a flat tax of 10% all the way across the board, then you won't have to fiddle with refunds, exemptions, and all that ninny stuff. Just 10%. It's easy to calculate. It serves it's purpose. Government gets paid. We end up with more disposable income.


EYEAM4ANARCHY profile image

EYEAM4ANARCHY 7 years ago from Las Vegas, NV.

While I can get on board with your idea that keeping the government dormant is a good thing, I hardly think that dismissing any sort of corruption "Even if it develops that Timothy Geitner knowingly and intentionally cheated on his taxes," because other politicians are also corrupt is the proper way to construct a proper society. Should we just allow street gangs to rob people at will without any fear of punishment, because they come from a neighborhood infested with criminals and besides their robberies are dwarfed by the murders that some members of that neighborhood commit on a regular basis? We've got time to hold both Geithner and Congress accountable for their actions.

 

BTW, Let me know how things work out between you and Miss Kuburah.

 


Tom T profile image

Tom T 7 years ago from Orange County, CA

Great Hub Chuck. I'm not so much worried about the Nanny thing because the card expired and it was more bureaucratic. What is troubling about the IMF taxes thing is that he was audited one year and they notified him he need to pay these taxes for that year. He chose to try and get away with it the other 3 years prior... until it was time to be confirmed. That is worthy of scrutiny.

As to your point as a whole regarding an overly complex tax code, I agree. Put the tax lawyers out of business. If they began ripping up the tax codes it would take a few years but we'd all be better off. Keep up the good work.


worried in wa 7 years ago

Morever, however, whomever....I love to watch people after elections. There is harldy a person on this site who consistantly supports their own beliefs.

Could everyone please just believe in what they believe and then stand up for it. Isn't that what it's all about. We all have differing points of view but at least we can bring it out for discussion...Once in a great while you might get a thought, someone long ago tried to make. Are you too old. I'm pretty sure that the younger generation will love true freedom. I love the freedom I have, I am the oldest of eight people. Times that by 5 and thats not nearly as big as our family is. cheers


newsworthy 7 years ago

Maybe this TG guy is waiting to die before he pays what he owes. You know the saying...


RDHayes profile image

RDHayes 7 years ago from Denver

I think he knows the truth about tax laws and we don't. = )


earnestshub profile image

earnestshub 7 years ago from Melbourne Australia

Maybe he was too busy helping his buddies out at the banks. Geitner is a fox in the hen-house, get him out of there.The Obama Treasury looks like another version of the same old stuff. Let the bankers decide what the bankers get and to hell with the American public..


surviveprison profile image

surviveprison 7 years ago from New York

Hi Chuck - great Hub! What I see coming is when the US needs cash (like now and the past 2 years) they send out their agents to collect - we will start to see even more aggressive collection practices, regardless of what they just spun in the press. My suggestion is to keep all your receipts, put thme in a shoebox, whatever. With the country looking for more ways to pay for others greed - it has to come from somewhere adn I think the Chinese are getting bored with buying our Boardwalks and Park Places when Nigeria is cheaper.

My other suggestion is checking out http://www.fairtax.org


Dee S 7 years ago

If Geitner doesn't understand how to pay HIS taxes, why should he be appointed to oversee the IRS, who enforces MY taxes? That's outlandish and insane.


ocbill profile image

ocbill 7 years ago from hopefully somewhere peaceful and nice

excellent hub and what you write does not surprise me why this country is in a mess. Nobody really reviews laws, the checks abnd balances suystem does not work as someone is always above the law. The older a country gets, the more corrupt it becomes with multipel intrepretations of the law


pgrundy 7 years ago

Well, yes. I mean, that's the hell of it, you know? We'd all like to pay less, and why should Geithner be any different? But what passes for discourse on the matter is indeed a charade--plenty of hypocrisy to go around on all fronts, liberal, conservative, whatever. I don't disagree with you at all. But in the meantime, while our government plays these games, most of the rest of us are suffering a lot and live in constant fear of the IRS and random personal economic catastrophe, and now our tax money IS going to support the very rich on top of all that. Would I feel better if tax laws were less vague and the money I pay to support things I don't believe in was more fairly collected? I don't know--maybe. You make a good point, but right now, the systemic problems are so huge and relentless, it's kind of like calling a plumber because the toilet in a burning building is backed up. Like, OK, yeah that's a probem, but...

Thanks for writing this. I appreciate you sharing your expertise.


Chuck profile image

Chuck 7 years ago from Tucson, Arizona Author

Pgrundy - thanks for your comment.

As I have stated in other comments above I am not so much defending Tim Geitner as trying to get across the bigger issue that we have so many laws and they are so complex that anybody can be snared by them.  In the past few years we have had a growing number of Cabinet nominees forced to back off due to tax problems and now NBC.com and others are saying that the nanny tax and other tax irregularities played a role in Caroline Kennedy's decision to drop her bid to replace Hillary Clinton in the Senate. http://www.msnbc.msn.com/id/28798605/

Also, from both the tone of the comments above, as well as at least two editorials in the Wall Street Journal in the past couple of weeks (first 3 weeks in Jan 2009) a double standard is emerging here with Democrats, especially Democratic Senator Max Baucus, rushing to Geitner's defense and dismissing this as a minor mistake on Geitner's part while, at the same time Senator Baucus, according to the Wall Street Journal, has been the leader of like minded liberal Democrats in the Senate calling on the IRS to crack down hard on ordinary people who make similar mistakes or try to cut corners as Geitner appears to have done in order to boost tax revenues collected.  In Kennedy's case she apparently has the state's Democratic machine against her, and without a strong champion, like Bacus is for Geitner, she loses just as previous Cabinet nominees in the past were forced out when the opposition party in Congress was strong enough to cripple them.  Ordinary citizens, of course, without strong political allies have to cough up the fines and penalties and often legal fees to stay out of jail.

It was either in Anne Ryand's classic novel "Atlas Shrugged" or its predecessor "The Fountainhead" where a top politician explains that numerous vague laws are the best way of controlling people as you can always find some law to prosecute anyone with thereby using that threat as leverage to either control them or, if they resist the pressure, to get rid of them by throwing them in prison. 

It is giving the government this power to take away our freedom in their efforts to achieve their goals that concerns me.  We are already seeing the government going to great lengths to get more revenue from us despite the strong opposition to tax increases.  Senator Baucus has demonstrated this with his strong insistence on having the IRS aggressively go after people to try to squeeze out more revenue by interpreting the vague provisions of the tax laws in the IRS's favor (and then giving a pass to Geitner because he is a current Democratic favorite).  Another example is Arizona's current governor (nominated to be Homeland Security Secretary but not yet confirmed) who, when the legislator and taxpayers refused to allow taxes to be increased, went out and hired 100 additional state troopers for the sole purpose of setting up speed traps to generate the additional revenue she wanted through traffic fines by strictly enforcing speed laws. 

Frankly, I agree with the comments above that Tim Geitner probably knew what he was doing and took a chance that he wouldn't get caught.  But then, I have always considered the term "honest politician" to be the perfect oxymoron and seriously doubt that Diogenes would have considered doing his searching in a place like Washington, D.C.


pgrundy 7 years ago

What floored me was Geithner's admission before Congress that he used TurboTax to file his return the year he didn't pay taxes on his IMF income. Rilly? TurboTax? LOL! I don't know, that just cracked me up. Here's this bazillionaire high finance Wall Street insider and he's all about, duh, TurboTax never prompted me...it was an honest error. LOL!

Right!

You can't make this stuff up! It's too funny.

I'm with G-Ma--I want to know how I can avoid paying MY taxes, screw Geithner! I'm pretty sick of seeing my taxes shoveled into the pockets of the ueber-rich while the financial system melts down around our ears anyway. Why not eliminate the middleman? How about I just go find a ridiculously wealthy man and give him all my money and an IOU on my grandson's money and my grandson's  grandson's money? At least that would feel more honest.

Nobody is really dealing with this mess at all. They're all just rolling around in it, hoping some of the loose change that's left sticks to their bodies. It's obscene.


revveranna 7 years ago

Since I mentioned in the previous comment that Geitner is a member of the DEVIANT ELITE gang running things, and the truth was out there for the looking, I thought I would calrify one item: The IMF (i.e. the GubberMint) had given Geit money to pay his taxes owed as a result of his income from working at the IMF (this $ called a gross-up) - Geit took the money and signed a piece of IMF paper that said he agreed to use the money to pay his taxes. Geit pocketed the money and didn't pay his taxes. For 7 years. The IRS reminded him each year he didn't pay those taxes, he signed a piece of IRS paper saying "I know I know".

Now he says "I forgot and I'm sorry".

Change in Gubbermint - or - Corrupt GubberMint Bizness as Usual? You decide.


revveranna 7 years ago

If he keeps appointment - then the entire rest of the US population get to LEGALLY NOT pay our taxes - and ONLY IF CAUGHT - can get off by just saying " I'm Sorry". No penalties, and promotions all around!!! After all, most of the rest of the US do not have the spiffy jobs and corrupt connections - DEVIANT ELITE connections - to get the spiffy jobs that Geit did get - and if you want to see proof of all that, it's all right there for the looking. The US tax and others laws are about "legal and court precedent" not about what is actually written down - heaven forbid it should ever be about what is actually laid down in wrtiting - it's about who you paid to put in office.


Jennifer Bhala Hansen 7 years ago

The IRS accepts NO excuses from regular citizens even if they accidently miscalculated or made some mistake and they charge penalties and fees without even letting you know, then years later you find out you owe a fortune.

If we are shown no mercy, then the head of the IRS should be shown even less mercy.


six9k9 7 years ago

We should find someone who wants to be in charge of the most important part of the American society, our money. If the head of the department which prosecutes people daily for the tax fraud does not have the morals to handle the job, then replace him. Kick him out and prosecute him for tax evasion. Put him in prison for a few days. Just long enough so that he appreciates the ability to poop correctly.

It amazes me how government officials make all kinds of rules for us common folk, but yet think they are above the system. They all need to find out what it is like to live off 25K-40K a year. See what kinds of breaks they would be willing to provide their self at that point.


frank 7 years ago

send geitner to jail. he failed paying taxes just like al capone, capone went to jail,why can't he.


Erick Smart 7 years ago

Obama does for some reason seem stuck on this choice. Personally it does send a bad message that you can get away with not paying taxes and yet still succeed and get what you want. Of course this will not apply to the regular working Joe only to those upper elite who can afford to pay the taxes anyway.


SeanA profile image

SeanA 7 years ago from Utah, United States

I think it definitely sends the wrong message to our country and especially at the beginning of his presidency, Obama should set off on the right foot (in his case, on the left foot!)


barb 7 years ago

This sends a terrible message to "We the People" How can a man who is this inept or corrupt be put in charge of the IRS and the 350 Billion left to be dispensed at his discretion? He signed papers 4 years in a row stating that he would pay those very taxes and he still did not do it. THe IMF apparently is very efficient in reminding its workers of their obligations to pay those taxes and he still did not do it. He was audited and even then only paid the two years they caught. He apparently was hoping he could still get by without paying for the other 2 years. I for one am in utter grief. This man is not fit to be the Treasurer Secretary and should in fact be forced to step down from being the President of the New York City Federal Reserve Bank.

"You ever notice that whenever a politician doesn't pay their taxes, Oh, it's an honest mistake? You know what they call it when you and I don't pay our taxes? Exhibit A for the prosecution."Jay Leno


jkfrancis profile image

jkfrancis 7 years ago

Chuck,

Great hub!

Many people, especially those in higher tax brackets, have their taxes done by their accountants, tax preparers, etc. The tax code is so complex that it is difficult not to make mistakes. If you've ever been audited by the IRS (and I have been) you'll find that you might make a mistake or exclude an exemption every time you file. Geitner should have had his taxes done by a company that guarantees no mistakes. <:)


Steve McCormick profile image

Steve McCormick 7 years ago from San Angelo, Texas

Great hub.

This man has been nominated to head the IRS and he says he made a mistake on his taxes. I could accept this mistake were he nominated to head some other agency but he is not.

He knew better and still did not pay his taxes until he was audited. Then he did not pay for 2001 and 2002 until right before his nomination was announced. Come on, he <b>honestly</b> did not want to pay the taxes he owed.

By the way, Chuck, I was just on google looking at Timothy Geitner and this article is on page 1.


hcddbz 7 years ago

Tim Geitner has no excuse for not paying his SE Tax while at the IMF.

1. The IMF provides documentation so that US employees know their Tax liability

2. The provide quarterly wage statement telling them how much to pay for federal Social Security and Medicare

3. At the End of the Year Gietner signed for received extra money to pay his SE tax.

4. He used software that prompted him for the wages and ignored it.

5. With 27 pages of documentation and compensation to specific to SE tax he made a mistake for tax years 2001 and 2002.

6. He hires an accountant who makes the same mistake. (So he is incompetent and hires incompetent people)

7. When caught in 2006 for tax years 2003 and 2004 he does not pay up 2001 and 2002 because he want to use the statue of limitations. (now if had not received money for this a pass but this smell too close to fraud to me)

http://online.wsj.com/public/resources/documents/g...


joer4x4 profile image

joer4x4 7 years ago from Philadelphia, PA

On one hand Mr. Geitner is in criminal territory but won't be prosecuted. On the other hand, the less money the governments gets the less control it can acquire.

Is he criminal or hero?

Nicely done.


G-Ma Johnson profile image

G-Ma Johnson 7 years ago from NW in the land of the Free

I just don't get it>>>??? why doesn't the LAW apply to everyone? If I cheated on my meager income they would nail me before I could figure out I made a mistake...I live on SS only (not much) and took care of children for extra income...I had to pay into Social Security every year (because we did the 1099 form) plus get taxed on the SS money I received.  I already paid taxes on ...right?...they said well you are building up your account in SS...so each year I got 5.00 more then the last year.

First they give a bigger lump then take it away to go into medicare accounts...then they force you to buy into a prescription plan...if you don't do it right away you get a 10o/o charge for every year you didn't...

It is a tough thing for us elderly that didn't ever make a bunch of money...I am fine I have what I need they do take care of us...I am luckier then most...but to see these so called leaders get by with so much it is discusting...and again why isn't the LAW applied to all in the same way???

Nice hub and sorry for babbling on...Thanks though sweetie...G-Ma :o) Hugs & Peace


Ralph Deeds profile image

Ralph Deeds 7 years ago

Chuck, I wonder how many people in Tucson are guilty of not paying the nanny tax? Quite a few, I suspect. My attitude is colored by my own experience.  One legal Mexican immigrant in Tucson and her two undocumented sisters cared for my mother round-the-clock, as if she were their own mother, in the final months of her life until her death at age 89. I doubt that legally required taxes were paid on their well deserved earnings. I don't feel terribly guilty about that failure, but that's a far cry from Geithner's failure to pay taxes on his own earnings!


Camping Dan profile image

Camping Dan 7 years ago

It does not surprise me in the least. Would I like it, no. But good luck finding a politician that does not have skeletons in their closet. The others were only confirmed because the panel did not feel like really looking at them.


Chuck profile image

Chuck 7 years ago from Tucson, Arizona Author

Mike - thanks for visiting and for your comment.

First of all, I didn't mean to imply that Tim Geitner was guilty of not paying the "nanny tax" which generally refers to failing to withhold and deposit with the U.S. Treasury income and Social Security/Medicare taxes for nannies and other household help a person employs AS WELL as paying the employer portion of the nanny's Social Security and Medicare Taxes (as I explained in my recent Hub on how to file taxes on small business income  http://hubpages.com/business/How-to-File-Income-Ta... - the Social Security/Medicare tax applies to all employment income and is taxed at a rate of 15.3% with half the amount - about 7.65% - paid by the employee and the other half by the employer.  Self employed people pay the entire 15.3% while individuals who employ nannies and other household help are required, as employers, to pay the 7.65%  employer portion of this tax).  

In the case of Tim Geitner, his main crime appears to have been the failure to file and pay Social Security/Medicare taxes on HIS income from the International Monetary Fund. 

While headquartered in Washington,D.C., the IMF as an international organization, is not required to withhold and pay taxes to the U.S. government on its employees incomes.  However, American employees of the IMF are required to pay U.S. Income taxes including Social Security and Medicare taxes on the income they earn while working for international bodies like the IMF.  It is my understanding that they do get a break in that they only have to pay their portion (7.65%) of the Social Security/Medicare tax and not the employer's portion but to do this they have to file a special for with their taxes.  Geitner failed to file and to pay his Social Security and Medicare taxes but did pay the regular income taxes due on his IMF pay.

As to the legality of Geitner's actions, in the United States failing to pay Federal taxes is a criminal offense (the U.S. is about the only country in the world where a person can go to prison for failing to pay taxes - in most other nations failure to pay taxes is a civil offense in which the taxing authority has to sue for back taxes and penalties).  Generally, in cases like Geitner's where the amount is small and could eaisly be a mistake (remember he did pay his income taxes, but overlooked the additional form and Social Security/Medicare taxes which most Americans who are not self-employed never have to deal with as these taxes are collected in full from their paychecks by their employers) the IRS only requires that the individual pay the amount due plus delinquent penalties.  However, if the IRS believes that act was deliberate or if they feel that cheating in this area is becoming to common they can prosecute and seek fines and/or prison as well as the taxes and penalties. And the IRS has on occasion tried to instill fear in the hearts of people by trying an prosecuting a few randomly selected cheaters even though the amounts were small. Fear of the IRS is the main motivator to get people to pay their taxes.

As to the politics, I don't believe that this is an ancillary issue.  Like you, I believe that people should obey the law and that it is not ok to ignore laws simply because other people do.  However, in order to obey a law a person has to know and understand it and how can we expect citizens to do this when the members of Congress who enact these laws vote on them without even knowing what they contain?

Worse still, in my opinion, is the habit of Congress to load up bills with all kinds special interest favors and sneaky little laws and amendments to laws that would cause a large public outcry if offered openly on the floor as a separate bill.  I once tried to track down an amendment to the inheritance tax law that removed the spousal exemption in cases where the spouse is not a U.S. citizen thereby applying the inheritance tax to all property couple owned without any exemption.  After much effort I finally found it buried in the middle of a revision of the Medicare law and passed, without public knowledge or debate.  Since my wife is not yet a citizen, I was concerned about this but when I asked an estate planning expert with the company where I have our investments she was not only unaware of it but the bank's tax attornies whom she consulted also were not aware of this either. From my search on the Internet I knew that few financial planners knew of this and of the few that did, most admitted that they did not fully understand it due to its vague wording and lack of court decisions relating to it.

The most blatant example of the deceitfulness of members of Congress is West Virginia Democratic Senator Harry Byrd who has publicly stated on many occasions that no bill can pass his committee unless it contains some goody for one of his special interest supporters in West Virginia. Thus, the Homeland Security law enacted following the 9/11 attack on the U.S. and intended, according to the President and Congress, to protect the nation against future attacks, included an appropriation for the building of a new Amtrack railroad station in Wheeling, West Virginia.

In my Hub I suggested that President Obama veto every piece of legislation sent to him by Congress that he doesn't have time to read and summarize for reports in time for the evening news. As an alternative he might consider asking Congress for a simple law that extends existing truth in advertising and truth in labeling laws that currently apply to business to Congress.

I am not defending Geitner so much as comparing minor transgressions with the institutional deceitfulness of Congress who have produced a body of laws so large (1.2 million pages and growing) and complex that is seriously doubt we could find a single American who has not unknowingly violated one or more Federal laws.


Mike 7 years ago

I have 2 questions regarding the payment of income tax and the "nanny tax":1). Is it illegal to avoid paying the taxes, in the manner Geithner has admitted to?2). Could the ordinary citizen escape punishment or punitive action if he did what Geithner did?The politics is only an ancillary issue. I personally don't care if nominees since Clinton have had this problem, or if the tax code is complex. Those are arguments akin to saying it's ok to break the law because someone else did.


Elusen profile image

Elusen 7 years ago from Indianapolis, IN

Thanks for your post, Chuck!

I think Mr. Geitner's greatest transgression may be that it appears he had addtional taxes he did not pay and did not disclose.

As he becomes Treasury Secretary, I believe his mantra throughout his tenure should be "simplify the system and amnesty for (Joe Six Pack) tax delinquents". This could be a silver lining in his choice for the post.

Otherwise, the disconnect between the tax system and the American people is apt to widen, and our government will become even less efficient, and less relevant to our regular daily lives than it already is. Meanwhile gaining more power to arbitraily inject itself into our affairs with even less of a quality of fairness in the process than before.


Chuck profile image

Chuck 7 years ago from Tucson, Arizona Author

William - thanks for your comment.

Frankly, I don't think four or eight years without passing a new law would be that bad and think that any President who accomplished this deserves a place on Mt. Rushmore.

Thanks again for your comments.

Chuck


Chuck profile image

Chuck 7 years ago from Tucson, Arizona Author

Ralph - thanks for commenting and nice to hear from you again. Like you, I am not happy with the way Geitner and Paulson handled the bank bailout but, as I said in my Hub on the stock market, http://hubpages.com/money/Why-Sellers-of-a-Company... , nobody, inside or outside the government, seemed to be able to agree on a strategy for handling the crisis.

By the way, I like your new picture.

Chuck


William F. Torpey profile image

William F. Torpey 7 years ago from South Valley Stream, N.Y.

You make some good points, Chuck, but if Obama were to veto legislation on grounds that it's too long and too complicated Obama would be required to veto virtually every piece of legislation, and that would lead to total disaster. Cheating on taxes is as American as apple pie. Most people think that if you don't cheat on your taxes you're a real dummy. Geitner will do a good job at Treasury as long as Obama doesn't fall victim to the military-industrial complex, Madison Avenue and guys in the billionaires club. I agree with Ralph about his concern relating to the bank bailout, but I am hopeful that Obama will ensure that the funds are used to help the middle class -- and the poor (nobody ever thinks about the poor!) If anyone who ever cheated on their taxes could not serve in government, Washington would be a Ghost Town.


Ralph Deeds profile image

Ralph Deeds 7 years ago

I think Obama should find someone else. I can't imagine that Geithner is the only available person capable of doing the job of Sec. Treasury. Confirming him as Secretary of the Treasury would encourage others to cheat on their taxes. There is too much cheating already. Moreover, there is quite a bit of skepticism about the way Paulson and Geithner and the banks have been handling the $350 billion bailout to date. Geithner's failure to pay taxes won't help his credibility as Secretary of the Treasury.

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