I read this article in the WSJ and laughed out loud:
JANUARY 21, 2009, 2:44 P.M. ET
Geithner Apologizes Over Taxes
Treasury Nominee Supports Bold Government Action to Stimulate Economy
By BRIAN BLACKSTONE and MARTIN VAUGHAN
WASHINGTON -- U.S. Treasury Secretary nominee Timothy Geithner apologized Wednesday to members of the Senate Finance Committee for tax errors he committed earlier this decade that came to light during his nomination process.
"These were careless mistakes. They were avoidable mistakes, but they were unintentional," Mr. Geithner said. "I should have been more careful."
"I want to apologize to the committee for putting you in the position of having to spend so much time on these issues, when there are so many pressing issues facing the economy," he added.
Under questioning from lawmakers, Mr. Geithner said he initially failed to remit payroll taxes for his income from the International Monetary Fund in 2001, when he changed jobs twice during the year. That means Mr. Geithner had three sources of income: from the Treasury Department, from the Council on Foreign Relations, and from the IMF.
"When I made that initial mistake, and I failed to correct it initially, I repeated it, even when a tax preparer prepared my returns," Mr. Geithner said.
He said he used Intuit Inc.'s TurboTax program to prepare his return in 2001, and said he didn't recall the software prompting him for payroll taxes owed on his IMF income. But Mr. Geithner said the mistakes were his own, not the fault of the software.
Sen. Charles Grassley of Iowa, the committee's ranking Republican, called the errors "deeply problematic," and said they could have been corrected with "minor due diligence." In particular, he criticized Mr. Geithner for failing to amend his 2001 and 2002 returns, when an Internal Revenue Service audit uncovered the failure to pay Social Security and Medicare taxes on his 2003 and 2004 IMF income. IRS didn't demand payment for the earlier years because they were outside the three-year statute of limitations.
"The person ultimately responsible for tax policy must be credible on issues of tax reform and compliance," said Sen. Grassley.
- He failed to pay taxes which he was compensated to pay... this isn't some guy who forgot to send in a check. This is a guy who forgot to send in a check that he had been paid to write.
- Instead of apologizing to the Committee, he should be apologizing to the American people. He's a tax cheat and is seeking the very office responsible for investigating tax cheats.
- Nothing instills confidence in the financial system more than someone who is too stupid to pay his taxes correctly. And Geithner is in a Catch-22 here. If he claims that he made a stupid mistake, then why would we let him run the US Treasury? If he's intelligent, then he must be a tax cheat who's willing to skirt the law - and commit perjury at the same time.
If Bush had nominated Geithner (with this same economic situation), he would not be confirmed.
*** UPDATE ***
It would seem that I am not the only one who's concerned about Tim Geithner.
Congress is "all in a panic" and "really clueless" about this all-important member of Obama's cabinet, says Christopher Whalen, managing director and co-founder of Institutional Risk Analytics. "I'm just not sure Tim Geithner is the guy we should have driving the bus."
Beyond his tax gaffe, which will mainly serve to politically weaken Obama's pick, Whalen says Geithner is the wrong many for the job because of his decision-making as President of the New York Fed.
"I believe Tim Geithner only represents part of Wall Street - Goldman Sachs," he says, suggesting Goldman was the "primary beneficiary of the AIG bailout" and notes Goldman alum Stephen Friedman serves on the board of the NY Fed. (Hank Paulson and Robert Rubin, with whom Geithner had frequent meetings in the past year, are also Goldman alum.)
Whalen further questions the inconsistency of the Fed's decision to rescue Bear Stearns - in the end, their debt and shareholders got something - while letting Lehman Brothers "go to hell."
In the end, Whalen says he'll fully support Geithner if and when he's confirmed: "We have to be successful," he says. "This is not about personality."
ARC: St Wendeler