The Tax Man Cometh

Posted Feb. 24, 2009, at 5:51 p.m.

To corrupt an old phrase, you can’t swing a dead cat in Washington these days without hitting a White House nominee who hasn’t paid all of his or her taxes. Two high level Obama administration nominees withdrew from consideration this month after it was revealed they owed back taxes. Another, Tim Geithner, was appointed treasury secretary despite his tax problems.

Nearly 90 percent of the taxes owed in the United States are paid. So why do high-level government officials appear to have such a hard time meeting their IRS obligations? At worst, says University of Maine public administration professor Ken Nichols, they think they can get away with it, a symptom of the hubris needed to inhabit the highest levels of government.

More likely, the people who rise to presidential cabinets have lifestyles and expenses that come with additional, and, sometimes confusing, tax liabilities, says Prof. Nichols, a former IRS administrator. How many mill workers have to worry about whether they owe taxes for hiring a driver?

Tom Daschle, the former Senate majority leader and President Obama’s choice to head the Department of Health and Human Services, had to pay $140,000 in back taxes and interest for using a car and driver. He withdrew from consideration for the post.

Mr. Geithner failed to pay $34,000 in Social Security taxes while he worked for the International Monetary Fund. He blamed the popular tax software TurboTax for the problem, although he’d signed paperwork at the IMF saying he’d owe additional U.S. taxes.

Beyond the negligence and hubris, Americans are outraged about the tax problems because of the large sums involved. Mr. Daschle’s back taxes far exceed the average annual income of the vast majority of Americans. The $5 million he collected for work he did after leaving the U.S. Senate just reinforces the notion that top-level government officials are out of touch with the concerns of working-class citizens.

David Sarasohn, a columnist with The Oregonian newspaper, sees another problem — sexism. The same day Mr. Daschle withdrew, Nancy Killefer, President Obama’s choice to head a new White House federal government performance review office, also stepped aside. She owed less than $1,000 in unpaid unemployment taxes for household help, which was paid in 2005. Mr. Geithner and Mr. Daschle settled their tax bills in recent weeks.

Female nominees in the Clinton and George W. Bush administrations also stepped aside after it was revealed they hadn’t paid enough taxes for their household help or that the workers (namely, nannies) had overstayed their visas. Men who committed the same sins were confirmed and got the jobs.

Whether you aspire to high office or not, the message is clear: Figure out what you owe and pay it.

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business

Similar Articles