Is Nomination of Tax Cheat Turned Treasury Sec Geithner Really Essential?

Timothy Geithner’s nomination as Treasury Secretary is in a spot of trouble given the irony of the man who would be charged with enforcing our tax laws being himself a documented tax cheat.

I’m willing to look at the domestic employee being illegal issue is not that big of a deal – which makes me FAR more non-partisan than Democrats who exploded the nominations of Bush cabinet picks Bernard Kerick and Linda Chavez over the same issue.

But the tax issue ought to be a real thorn in the side of an administration that preached openness and honesty.

The Obama team is depicting Geithner’s under- or non-payment of taxes for six years as some minor oversight, but it is anything but.  The facts are: 1) Geithner had to sign a document for the IMF saying he knew he was responsible and would pay the taxes in question, and he even accepted money from them to pay the taxes; and 2) shouldn’t the man in charge of the nation’s treasury and taxes at least understand his own finances and taxes?

As a McClatchy article notes:

The circumstances raise eyebrows. From 2001 to 2004, when he was mainly employed by the International Monetary Fund, taxes for Social Security and Medicare weren’t deducted from his pay. Geithner signed a document saying that he was aware this was the case, but he never paid them until it was called to his attention later. Americans who work at the IMF are treated as self-employed for tax purposes, and Geithner was given a guidebook on how to address this tax matter.

Obama’s team is making it sound as though the tax system is so complex Geithner couldn’t have known what he was supposed to do.  A typical victim of big bad government neglect.  But Geithner signed a document that made sure he DID know what he was supposed to do.  And shouldn’t the guy who we put in charge of our economy have a clue about these things?

How many other IMF employees made this same mistake?  All of them?  Most of them?  Maybe we should consider the nomination of a former IMF employee who understood his or her responsibilities and complied with them instead.

Furthermore, Geithner’s IMF issue was neither his only one, or his most egregious tax issue.  The McClatchy article goes on to say:

One of the more egregious errors was that Geithner, over three different tax years, claimed that expenses for the summer camps he’d sent his children to qualified for the child and dependent-care tax credit. This credit is for working parents with children younger than 13 who send them to preschool or after-school care. IRS documents and commercially available tax software clearly define what qualifies.

“That’s one anyone who has kids and has filled out that form knows that it’s wrong. That’s really odd,” said Paul Caron, a prominent tax-law expert and associate dean at the University of Cincinnati College of Law.

Yes, it’s odd.  Maybe my mom should be made Treasury Secretary instead.

And there’s still more:

Documents that the Senate Finance Committee released suggest that Geithner also failed to pay a penalty tax for withdrawing money early from a federal retirement account.

There’s a 10 percent penalty for doing that, and it’s advertised up front for tax-deferred retirement accounts. This is as basic as it gets in the world of personal finance.

“I don’t understand how the 10 percent withdrawal penalty could have fallen through the cracks. That’s just a red flag,” said Peter Sepp, spokesman for the National Taxpayers Union, a group that lobbies for simplifying the U.S. tax code.

So, to put it as politely as possible, Timothy Geithner – the man who would run our economy and administer our tax policies – has some serious ‘splainin’ to do.

Now, in addition to the Obama position of, “Our tax code is so, so complex that no one can be expected to understand it – at least, until this nomination business is over and our IRS can get back to its business of holding every taxpayer responsible for every single “i” being scrupulously dotted and no “t” being left uncrossed” – the argument is that we HAVE to confirm Timothy Geithner because our economy is in peril and we’re doomed without him.

Is that really the case?

In a word, no.  Timothy Geithner is the star protege of Robert Rubin, whose “genius” in all things economic have been beaten in a way that make even rented mules cringe.

As The New York Post writes:

There’s no shortage of blame, but if a vote were taken for mayor of the Citi of Fools, Robert Rubin, the most prominent member of the bank’s board of directors, would almost certainly win hands down.

Rubin, a former treasury secretary, played a key role by leading Citi into a risky strategy of gambling on the weirdest and most exotic investments – like securities backed by subprime mortgages that probably would never be paid.

As long as the money and bonuses kept rolling in, who cared if no one really knew what all these strange securities were worth?

Certainly not Rubin, who was paid an astonishing $62.2 million between 2004 and 2007 – or his fellow bozos on the board.

And, to put it in Star Wars terms, why should a failed strategy work any better for the apprentice than it did for his master?

If you’re Barack Obama, the answer is, “Of course it should.”  That’s why Obama has filled his cabinet positions with Rubin clones.  As the International Herald Tribune pointed out back when Geithner was first announced:

WASHINGTON: It is testament to the star power of former Treasury Secretary Robert Rubin among many Democrats that as Barack Obama fills out his economic team, a virtual Rubin constellation is taking shape.

The president-elect used the announcement Monday that he was appointing two Rubin protégés, Timothy Geithner as Treasury secretary and Lawrence Summers as senior White House economic adviser, to underscore his determination to step aggressively into a economic leadership vacuum in Washington while also maintaining continuity with the Bush administration before the transition of power Jan. 20.

So, no.  I certainly wouldn’t argue that Timothy Geithner is essential.  I wrote an article back when Geithner was first announced that pointed out that the media – which was all to quick to herald Geithner’s selection as “brilliant” due to the stock market going up was nowhere to be found when the same stock market immediately plunged again.  The media is dangerously biased and dishonest.  Don’t trust anything they say.

There’s a massive hypocrisy issue.  Liberals and the liberal-loving press were all over Joe the Plumber as a “tax cheat” because it turned out he owed $1200 in back taxes (I googled “Joe the plumber” and “tax cheat” and got over 38,000 hits).  The press dug through the man’s garbage.  Partisan liberal state of Ohio employees illegally used state resources to track down every infraction to further tarnish him.  And all he did was ask the question, “Isn’t that socialism?”  It wasn’t like he was trying to become our Secretary of the Treasury.  At some point people should get fed up with the massive double standards.

There IS one issue that should give anyone opposing Timothy Geither’s nomination pause: the realization that Obama could very well select a nut to replace him if his pick fails.

We’ve already seen it happen.  Barack Obama initially selected intelligence veteran John Brennan to run our massive intelligence apparatus as Director of Central Intelligence.  But after he stepped down rather than face the outrage of the left, Obama then filled the post with Leon Panetta – an ideological liberal political hack who knows virtually nothing about the intelligence world.

So Republicans are rightly shaking in their shoes.  Either support the nomination of an incompetent tax cheat or else risk someone to the economic left of Karl Marx and with absolutely no experience in the department he or she is supposed to run getting being selected instead.

I would argue that the country is pretty well screwed either way, so conservatives might as well stand on principle and oppose the tax cheat’s nomination.

4 Responses to “Is Nomination of Tax Cheat Turned Treasury Sec Geithner Really Essential?”

  1. Ethics Observer Says:

    Hey Michael, I would have thought you would recognize why it is indeed essential. I do, and I can see why he is the best for the job.

    Redistribution of wealth is essential to grow the economy but it must be done the right way if it is to work. The old Marxist ‘’trickle down’’ to the masses won’t work in the new global communication age. What is needed is upwards redistribution to the guys who handle the paper money. All Dem fellows handling Dem Junk Bonds, derivatives, packaged mortgage bonds, in other words all the Photostat money.

    Good way of doing this is for the guys at the top to have the real money [to protect it in the interest of the worker who gets the Photostat stuff] and this is where Geithner comes in. He is a handpicked proven loyal supporter and won’t fail the Master.

  2. gk Says:

    His tax evasion behavior is not nearly as dangerous as his criminal ties foreign associations and his foreign lobbying violation actions at the Fed.

    see video refercneces

    Tim Geithner Treasury Secretary Designee Linked to Foreign Criminal

  3. Ole Grandpaw Says:

    I am sticking my neck out because I believe it is good to do it in this instance. I know the guy who wrote the lone comment [Ethics Observer above] and also that he is worried that he might have offended you in the first paragraph, which he did not intend because he has a very high respect for you.

    He was just sarcastic about the Messiah and His choice for Treasury Secretary. I happen to share his viewpoint that the money people are lying to the public about the economic crisis and Obama selected Geithner to obfuscate for him. Geithner is therefore, necessary for Obama, though not for the Nation. And Photostat Money is such a nice way to describe the huge “house of cards” manipulation in World Stock Exchanges at this point in time. There was once a time to regulate but it is no longer so; the market and all it’s participants must now be left to the vagaries of a seriously distorted market. In the end it will cost everyone much less if the Treasury helps the people [workers, taxpayers?] that they say they want to help and let the crooks grovel in their own misery.

    Just want to help.

  4. Michael Eden Says:

    Ole Grandpaw,

    I didn’t take any offense, so I hope no one is worried. I recognized the comment for irony, but didn’t quite no how to respond at the time I first read it. So I left it alone at the time.

    Actually, when I DO get offended, you can count on my having a response! I figure that this blog is “my turf,” and I intend to defend it vigorously.

    The way I see it, Geithner is either dishonest or incompetent. One or the other. He essentially claims he’s the latter. It is amazing that we are going to put our entire economy in the hands of a man who doesn’t even know how to use Turbo Tax.

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