Oh, by all means, let’s nominate a tax cheat to run the Internal Revenue Service!
The Senate Finance Committee said Wednesday that it plans to hold confirmation hearings for Treasury nominee Timothy Geithner by Jan. 21, prompted by Republican objections.
Mr. Geithner didn’t pay Social Security and Medicare taxes for several years while he worked for the International Monetary Fund, and he employed an immigrant housekeeper who briefly lacked proper work papers.
Mr. Geithner’s tax matters were the subject of a closed-door meeting Tuesday between the nominee, currently president of the Federal Reserve Bank of New York, and members of the Senate Finance panel, in whose hands his confirmation lies.
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The tax issue relates to Mr. Geithner’s work for the International Monetary Fund between 2001 and 2004. As an American citizen working for the IMF, Mr. Geithner was technically considered self-employed and was required to pay Social Security and Medicare taxes for himself as both an employer and an employee.
The IMF and World Bank reimburse employees, including U.S. citizens, for their U.S. income taxes. They don’t, however, make contributions toward Social Security and Medicare taxes, which individuals are expected to pay on their own.
In 2006, the IRS audited Mr. Geithner’s 2003 and 2004 taxes and concluded he owed taxes and interest totaling $17,230, according to documents released by the Senate Finance Committee. The IRS waived the related penalties.
During the vetting of Mr. Geithner late last year, the Obama transition team discovered the nominee had failed to pay the same taxes for 2001 and 2002. “Upon learning of this error on Nov. 21, 2008, Mr. Geithner immediately submitted payment for tax that would have been due in those years, plus interest,” a transition aide said. The sum totaled $25,970.
The Obama team said Mr. Geithner’s taxes have been paid in full, and that he didn’t intend to avoid payment, but made a mistake common for employees of international institutions. That characterization was contested by Senate Finance Republicans, who produced IMF documents showing that employees are repeatedly told they are responsible for paying their payroll taxes.
So here’s a guy who was told by the IMF that he needs to pay these taxes, and for many years refused to do so. And, the reality is, the only reason he wound up paying them at all was because he was audited, otherwise the taxes would never have been paid. And so once again Barack Obama has nominated an ethically challenged individual to an important cabinet level position, and we’re being told by the Senate Democrats that it’s just no big deal. I’m still waiting for that hope and change I was promised, because so far I’m not seeing any of it.
