Geithner's Taxes

So what do people make of Treasury Secretary-nominee Geithner's difficulty calculating and paying his taxes?  The NY Times correctly flags the thorniest issue - Geithner tripped up on a tricky Social Security issue from 2001 to 2004.  In 2006 an IRS audit noted the problem but, due to a three year statute of limitations, only insisted on a correction to Geithner's 2003 and 2004 returns.  Geithner complied but did not volunteer to correct his 2001 and 2002 returns until last November, during the vetting process for his Treasury appointment.  Thus, Obama's assertion that Geithner made "an innocent mistake" is not wholly accurate - the mistake may have been innocent (or a non-innocent aggressive tax interpretation) when made but stopped being innocent when Geithner amended his 2003 and 2004 returns in 2006:

The more serious questions surround the previously unpaid taxes. The bulk of them were detected in 2006 after an audit by the Internal Revenue Service for 2003 and 2004, and Mr. Geithner paid back taxes and interest then for those years.

In November the Obama vetting team found other unpaid taxes for 2001 and 2002, and Mr. Geithner immediately paid those plus interest when the matter was brought to his attention, transition officials said.

The underpayments all involve Mr. Geithner’s income as a senior official at the International Monetary Fund from 2001 to 2003, including a small payment in 2004 after he had left. Mr. Geithner worked there after leaving the Treasury, where he had risen to under secretary for international affairs in the Clinton administration, and before becoming president of the New York Fed, a post that has put him at the center of the economic crisis.

The I.M.F., as an international organization, does not withhold payroll taxes for Social Security and Medicare from its American employees’ paychecks. Those workers are required to pay the roughly 15 percent tax themselves, as if they were self-employed.

However, the I.M.F. does pay its American workers an amount equal to an employer’s half of the payroll taxes, with the expectation that they will use that to pay the I.R.S. The organization also gives them quarterly wage statements that include United States tax liabilities.

Mr. Geithner fully paid his state and federal income taxes. In failing to pay his payroll taxes, he in effect kept the money the I.M.F. had contributed toward his liability. However, Mr. Geithner’s accountant told him he was exempt from self-employment taxes, according to Obama transition officials.

As Obama officials pointed out, and I.R.S. documents attest, the failure to pay Social Security and Medicare taxes is common among Americans who work for international organizations, including foreign embassies. A 2007 I.R.S. notice reported that up to half of such employees incorrectly file their tax returns.

The I.R.S. waived penalties for Mr. Geithner in 2006, according to an account provided by the transition office and the Senate committee. A three-year statute of limitations had precluded the agency from auditing the 2001 and 2002 tax returns, a committee aide said.

Mr. Geithner volunteered to amend the earlier returns and pay the taxes and interest, a total of $25,970, after Mr. Obama indicated that he wanted to nominate him for the Treasury job, according to the account. Mr. Obama announced the nomination in Chicago on Nov. 24, three days after the issue had come to Mr. Geithner’s attention.

That chronology raises the question, however, of why Mr. Geithner did not voluntarily correct the earlier nonpayment of self-employment taxes after the 2006 I.R.S. audit identified the problem for 2003 and 2004.

Fine, it was tricky and he got bad tax advice - not a real resume boost for a former Under-Secretary of Treasury aspiring to the top job, but there it is.  However, as of 2006 he knew he had a liability for 2001 and 2002 - where was his check?  Was his conscience unruffled by his non-compliance?  Or does Geithner have a "Don't ask, don't tell" policy on back taxes?

The housekeeper is much less vexing:

he issue involving a former housekeeper of the Geithner family is separate. The woman was in the country legally and was authorized to work when Mr. Geithner and his wife hired her in 2004, but her employment authorization expired three months before she quit working for them. The issue was discovered by the Senate Finance Committee, not by the Obama team, and it came as news to Mr. Geithner, according to a Democrat who was briefed on the situation.

She was legal when he hired her!  Workplace enforcement is an ongoing compliance challenge.

Comments

[Depressed Atlas]

Give me a freakin break. I worked for a Bermuda based finance outfit that paid us in the same manner. We all knew about and griped big time about having to pay both halves of FICA - shocked as we were at the size of the tax. Everybody knows about it; "overlooking" it is almost always willful.

[Thomas Collins]

Geithner probably relied on an expiring statute of limitations to avoid paying the early aught-aught taxes.

This is a close call. Taxes are complex, but today we need a Treasury Secretary who is squeaky clean. My feeling is that Geithner should receive a public humiliation, which will do the cleaning, and then be confirmed.

I know it won't happen, but putting him in "the stocks" during an inaugural ball would be a good idea. :-))

[Depressed Atlas]

"overlooking' it is almost always willful."

I mean among the folks I worked with at least (maybe those rocket scientists at the IMF are different)...we loved the higher takehome pay until the tax bills had to be paid.

[clarice]

I agree onthe housekeeper--for heaven's sake, it is impossible to know when there's been a status change and she was here legally and could work.Enough.
But the taxes is a different issue, As for this:
"As Obama officials pointed out, and I.R.S. documents attest, the failure to pay Social Security and Medicare taxes is common among Americans who work for international organizations, including foreign embassies. A 2007 I.R.S. notice reported that up to half of such employees incorrectly file their tax returns.
"

The suggestion that this is because it's too complicated, is hogwash. They evade these taxes because they can and as a general rule employees of international organizations feel no obligation to pay for much out of their own pockets even their fair taxes.

[bad]

...the failure to pay Social Security and Medicare taxes is common among Americans who work for international organizations, including foreign embassies. A 2007 I.R.S. notice reported that up to half of such employees incorrectly file their tax returns.

Mr Geithner would have made money on the deal had he not been a cabinet choice. I'll bet others choose similarly, hence th 50% figure.

[bgates]

A three-year statute of limitations had precluded the agency from auditing the 2001 and 2002 tax returns
If I were inclined to avoid paying taxes, that would be good to know. As it is, I'm just as inclined to believe anything I read in the NY Times.

Like I asked Glenn, could this lead to the ugly spectacle of the Vice President questioning the Treasury Secretary's patriotism?

[bgates]

In failing to pay his payroll taxes, he in effect kept the money the I.M.F. had contributed toward his liability.
sbw, you're the newspaper guy. Can you tell me what "in effect" contributes to that sentence?

[jean]

I hate to be ugly,but I,m getting really tired of Ivy League types.They are the ones who by being too smart by half got us in this financial mess.Now they can't even remember to pay their taxes.I think we should turn all this over to graduates from Big 12 schools.I would rather a Sam Walton than a Paulson or Geathner

[MayBee]

the failure to pay Social Security and Medicare taxes is common among Americans who work for international organizations

The failure to register guns is common among Americans who work for criminal organizations.
Is that because filing registration papers is just so darn tricky?

[bad]

Ha Ha Maybee

[jimmyk]

It's conceivable that in normal times this could be a deal-breaker, especially if it were a Republican administration. It does seem pretty dubious, especially for a Treasury Secretary. But it's extremely unlikely that the Republicans, cowardly as they generally are with these things in general, would upend the nomination given the state of the economy and the fact that the financial markets seemed to approve of the Geithner selection. I can just imagine the scenario of the Republicans derailing the appointment and being blamed for any decline in the stock market that results. Ain't going to happen unless something more serious comes out.

[Depressed Atlas]

"would upend the nomination given the state of the economy and the fact that the financial markets seemed to approve of the Geithner selection."

because the war on rich people and nationalizing the private sector is so much more important than Scooter's war on jihadists trying to kill us was.

[Stephanie]

Jean, it's just a continuation of the "too smart by half" syndrome. He figured he was too smart to get caught. It is a calculated risk and he risked, and it bit him in the ass.

The too smart by half reminds me of my brother when he was a a teenager. Teenagers take the short term pleasure of a risk and think they won't get caught. Always comes back to bite em in the ass.

Case in point... parents go out of town. Brother has a party (older sis warns he's gonna get caught) and cleans up all traces of it before parents return - then gloats that he didn't get caught. A month later, parents go behind bar to use blender for drinks for friends and discover it is affixed to the bar from a strawberry daiquiri overflow. They don't drink strawberry daiquiris. Brother is busted.

He thought he was too smart by half and thought he got away with it. Not. Same here.

It's just that we who are grown ups and act as such, don't take the too smart by half risk. Experience has shown us that it never pays.

Geithner thought that with the 2006 audit he had gotten away with the prior stuff and was scot-free. And probably was gloating to himself that he had risked and partly won...

Do we want a high school level risk taker in charge of treasury or a grown up...

[MayBee]

jimmyk- I don't know if his nomination should be derailed because of this.
I would like to see it discussed honestly by the people still supporting him, though.

The Obama people have told the absolute falsehood that he fixed this as soon as it came to his attention. I want them called on that.
He did it because he has the very human instinct to pay not one more dime of tax than he can get away with. Admit that, then make the case for why he should be Treasury Secretary anyway.

[MayBee]

In failing to pay his payroll taxes, he in effect kept the money the I.M.F. had contributed toward his liability.
sbw, you're the newspaper guy. Can you tell me what "in effect" contributes to that sentence?

Ha!

[Anarchus]

Maybe I'm out in left field, but I'd like to see his nomination derailed by his failure to voluntarily correct his 2001 and 2002 tax returns. Underpayment of taxes owed is a form of white collar theft and stealing is stealing from a moral perspective regardless of the statue of limitations.

Just because it isn't something he can be audited or prosecuted for doesn't mean he should get a free pass.

Besides, there's way to much free money being tossed the way of Ivy League financiers these days. Stiff him.

[clarice]

Well, it's a pity Stephanie and MayBee aren't on the committee because they nailed it. In effect.

[Danube of Thought]

The one about the guns was great, MayBee.

I come out agnostic on this one. If he withdraws, fine. If he gets confirmed, we'll know from the get-go that Obama was willing to have a tax cheat as his Treasury Secretary.

I'm far more concerned about the serial, wilful and varied transgressions of Charlie Rangel. But again--come 2010, it's just another arrow in the culture-of-corruption quiver.

[E. Nigma]

Well, consider the consequences.

If Tim Geithner is de-railed, who's next on the list of Huckelberries that Obama would nominate to be head of Treasury?
Remember that Kimba Wood and Zoe Baird got de-railed for AG because of Nanny SS non-payment, so we ended up with.....EL RENO! (crack of whip)

It could get worse (and probably will). To quote Samuel Jackson from "Jurassic Park"; "Hold onto your butts."

[Baba Ganoush]

IANAL, so I have a question for other readers who might be tax attorneys. Isn't the limit 3 years for a "mistake" but 7 years if there is a suspicion of possible fraud? And doesn't the time limit toll backwards from the date of discovery, which means that once the "oversight" was discovered by the IRS, if there is a pattern of possible "tax avoidance" brought to the IRS's attention, wouldn't they be entitled to extend their audits of his returns back to his filings for 2000 or 2001?

[bad]

As president of the New York Federal Reserve Bank, Timothy Geithner often preached that gargantuan financial firms like Citigroup should be held to the highest regulatory standards to make sure they couldn’t take on too much risk.

Once again I ask the question: Geithner, too stupid or too dishonest?

LUN

[Stephanie]

Geithner hearing is postponed...

Unintentional irony of the day quote:

Sen. Orrin Hatch (R-Utah), the second-ranking GOP member of the panel, said Geithner had made "mistakes" but said, "If we want perfection around here, we'll never have anyone for any one of these positions."

LUN

[Thomas Collins]

While we are on the subject of taxes, I thought JOMers might be interested in the thoughts of the National Taxpayer Advocate. See LUN.

[bgates]

If he gets confirmed, we'll know from the get-go that Obama was willing to have a tax cheat as his Treasury Secretary.
We knew that already.

[Chester White]

"it was tricky and he got bad tax advice "

It was NOT tricky, for God's sake. You have self-employment income, you pay FICA (both ends, unless you are over the limit) and Medicare. Period. Clear as glass.

Anybody who has ever fired up Turbotax knows that.

Sheeeesh.

[David Cohen]

I love this sentence: Mr. Geithner immediately paid those plus interest when the matter was brought to his attention, transition officials said.

Because a less punctilious nominee for Treasury Secretary would have ignored being told that he failed to pay taxes due by the Presidential transition team.

[Jane]

"If we want perfection around here, we'll never have anyone for any one of these positions."

The same can be said for ethics - on both sides of the aisle. Let's just declare right now, out loud - that a different set of laws, rules, ethics and everything else applies to the ruling class.

[glasater]

And what's up with the IRS "waiving the penalties" that should have been incurred"

[clarice]

I know he's well regarded and it is a very important position right now, nevertheless I haven't changed my position--it appears he willfully tried to evade paying his taxes and under the circumstances he should not be confirmed.

[Depressed Atlas]

what jane said...

[Appalled]

It would be the Treasury nomineee with this kind of problem. *sigh*

Given the terrible state of things at the moment, I would not derail this guy. He knows the situation and its history, and trying to find someone else could leave a vacuum at the top just when its not needed.

But I think the guy was trying to avoid paying his taxes, and when he was caught, he tried to use the statute of limitations to avoid paying all of his delinquent amounts. If he was in another department -- this should derail his nomination. If we had known about this in early December -- this should have derailed his nomination.

Basically, Obama has drawn heavily on his "benefit of the doubt" account. I hope the Republican really sweat this guy, and large number of them vote no.

[Rick Ballard]

Madoff stays out of jail

I found this interesting: "He left the courthouse and returned to his $7 million Upper East Side penthouse, where he has been under house arrest and under the watch of armed guards around the clock."

Is he afraid of the Russian mafia or Democrat pols? Did he hear about Chuckie putting out a contract?

I'm a little ambivalent about Geithner - currency with a confessed Dem tax cheats signature on it may become a collectors item. He might also be the most honest appointee to the cabinet in 2009.

[clarice]

If I were Sarah, I'd make a point of this..Joe the Plumber asks an inconvenient question of Obama and gets slammed for a tax lien he didn't even know existed; a rich elite economist knowing full well he had an unpaid tax obligation fails to pay it and get nominated for Secy of the treasury.

While a lot of populism is nonsensical demogagoguery this kind is not--He has not the character for the post which requires an exemplar of far more probity than he's demonstrated.

[bad]

I would not derail this guy. He knows the situation and its history...

Yeah he does because he helped create it.

[bad]

sorry

[MayBee]

He knows the situation and its history, and trying to find someone else could leave a vacuum at the top just when its not needed.

I find myself realizing I don't necessarily trust those telling us he is the only man for the job. This may sound crazy, but I'm beginning to think they'll say anything for the "right" person.

[bad]

Under the new Hope and Change regime of Openness and Transparency, I am disappointed that this info was known weeks ago but was given to the people only yesterday.

Looks like they were Hoping we wouldn't notice he Changed his tax filings.

[grimmy]

"and it came as news to Mr. Geithner, according to a Democrat who was briefed on the situation."

Riiiiight. That clears it up!

Question authority much?

[Chris]

I mentioned this on a thread last night but it should be asked of Geithner. Who paid his housekeeper's taxes? Did he 1099 her or get her through an agency? Or did he do what 90% do and pay her a flat rate in cash/check? My guess is her taxes weren't paid, but it's just a guess. If he was paying her FICA how could this not trigger knowledge that he wasn't paying his own?

Rick is right. It's small fry. The more important question is how did he allow Citi to get into such a mess while overseeing the NY Fed?

[bad]

Politico:

Geithner’s tenure at the New York Fed – which bore the major responsibility for supervising Citigroup – covers a tumultuous span in which the sprawling conglomerate spiraled from the country’s biggest banking company to one of its largest welfare cases.

Someone made an awful lot of money off Geitner's error while at the helm of the New York Fed. Was it an honest mistake like his tax issue?

[MayBee]

Citi to get into such a mess while overseeing the NY Fed

Because Rubin was his old boss?

[clarice]

As Drudge and Sweetness & Light remind us of the coverage of the claims that the Bush inauguration was too expensive and the security too tight--in contrast with the coverage of this far more expensive, far more security minded one--i can happily report that Gannett and UNA Today are broke and furloughing workers for a wek.

Gives hoit by their oen petard a specially delicious meaning.

[Stephanie]

Wildlife officials said a rhesus monkey known to throw feces when mad is on the loose...

OK... who left the door to Reid's office open again?

Just a little levity since the markets have closed down again...

LUN

[Rick Ballard]

Clarice,

We just need to reword the Hatch formulation: The odds of finding an honest Democrat willing to work for this thief are so small that acceptance of a tax cheat as the man designated to sign our currency is necessary.

Sure, Geithner is a cheat with low to no ethical standards but this is the Obama Administration - what did you expect?

[clarice]

**USA Today**

I expect that the Republicans on the committee will recognize a moral position and a politically sound one and refuse to vote for him--Let those Dems willing to risk their necks---and they will be because people will be furious---on the Dem side do so. Use up whatever favors Obama can ask of his party fast.

[Danube of Thought]

I'm not sure I follow either the reasoning or the standard set forth by Appalled.

Off-topic: Some enterprising soul ought to start collecting the cries of outrage from various media sources over the cost of W's 2005 inaugural, then examining the costs of this one. And follow that up, of course, with a vain search for today's cries of outrage.

[MayBee]

Hmmm. Check out Politico right now.

Is Geithner going to step aside and Summers step in?

[bad]

Maybee, IIRC, Summers was O's first choice but pissed off the fembots while at Harvard so he was a nogo.

[creepy dude]

hardcore Obama voter here.

It's just me, but I think the guy should NOT be confirmed and will lose massive respect for Obama if he is.

I can't be the only one.

[Rick Ballard]

"I expect that the Republicans on the committee will recognize a moral position and a politically sound one and refuse to vote for him-"

That's a great lede - and one that Hatch may be really wanting and waiting to see in print. I think his initial remarks were a set up asking for just such a public outcry.

I still maintain that Camerot is chock full of much worse thieves and liars though. RW has peddled herself like a dockside dolly working a troopship for contributions to Bubba's playpen and she's not getting much flack.

[Danube of Thought]

Unambiguously marvelous news about Gannett and USA Today. But here is what bids fair to be the sweetest story of the new century, should it come to fruition. It's from on Kelly McParland at the National Post, quoting from The Atlantic:

"What if The New York Times goes out of business—like, this May?

"It’s certainly plausible. Earnings reports released by the New York Times Company in October indicate that drastic measures will have to be taken over the next five months or the paper will default on some $400million in debt. With more than $1billion in debt already on the books, only $46million in cash reserves as of October, and no clear way to tap into the capital markets (the company’s debt was recently reduced to junk status), the paper’s future doesn’t look good.

“'As part of our analysis of our uses of cash, we are evaluating future financing arrangements,' the Times Company announced blandly in October, referring to the crunch it will face in May. 'Based on the conversations we have had with lenders, we expect that we will be able to manage our debt and credit obligations as they mature.' This prompted Henry Blodget, whose Web site, Silicon Alley Insider, has offered the smartest ongoing analysis of the company’s travails, to write: '"We expect that we will be able to manage’? Translation: There’s a possibility that we won’t be able to manage."'”

DOWN goes Frazier! DOWN goes Frazier! And DOWN goes the New York Times! Wahoo!

[Danube of Thought]

From AP:

"WASHINGTON - President-elect Barack Obama says he expects Timothy Geithner to win Senate confirmation as treasury secretary revelations of tax problems.
Obama told reporters Wednesday that Geithner had 'corrected' his tax situation, which Obama said was the result of 'innocent mistakes.'

"The president-elect said, 'My expectation is that Tim Geithner will be confirmed.'"

In short, knowing what he now knows about the man, he still stands by him. But my expectation is that Geithner will decide he wants to spend more time with his family, and that will be that. And Summers would be a fine choice.

[Chris]

From the Politico article which bad mentioned;

“With great respect to Mr. Summers and the other distinguished members of President Elect Obama's economic team, I really do not see a scenario where Tim Geithner’s voice is not a fundamentally powerful one with in the decision making process,” said Rob Nichols, president and chief operating officer of the Financial Services Forum. “He has been just one of a handful of individuals who’s been pulling the levers and who knows what works and doesn't work.”

Pulling levers. I could think of a few other euphemisms. Flying blind?

LUN

[Danube of Thought]

*one Kelly McParland*

[MayBee]

A GREAT take by Dean Baker at Politico:
Dean Baker, Co-director, Center for Economic Policy Research:

If Geithner's story is taken at face value, then there does not appear to be much there. On the other hand, the management at the IMF should then be publicly flogged.

If it is really true that all their highly paid employees do not pay taxes owed to the government, then this is an astonishing failure of management. Did they not know that their employees are not paying their taxes? If not, why not? (How stupid are these people?)..

Alternatively, do the honchos at the IMF think it's cute that high level officials fail to pay tens of thousands of dollars of taxes to the government (more than many workers earn)?

Congress should demand accountability. It is incredibly galling to see high level people act like these are trivial sums, when the money involved is in fact quite large relative to what most workers earn. The cost of Geithner being clean is that the IMF boys and girls are dirty. This story is not funny and someone should feel pain because of it.

[MayBee]

Here is the next man for jane if Mr Right does something dastardly. Again, from Politico:

Joel Kotkin, Author:

This suggests what will be a problem for Mr. Obama's economic team. He is drawing on the Rubin wing of the Democratic Party, which was complicit in the entire Wall Street collapse. Rubin is already disgraced (yet of course not remorseful) and Geithner is one of their guys. But the real issue is not that they have been wrong - so were many Republicans and others - but an attitude that somehow the rules do not effect the people at the top. Go to Harvard, get an MBA, work on Wall Street (either directly or indirectly like Rep. Rangel) and you can avoid the mundane obligations of mere plebes. This may not derail the nomination, but it points out an attitudinal problem of our elites in both parties.

Rubin lobbied for Bush to bail out Enron. I wonder what dominoes that might have set in motion, and what we avoided then.

[bad]

Given Obama's house deal with Rezko and Michelle's big raise after he was elected, he may be genuinely surprised at the hubbub over Geithner. After all, both O's deals netted a whole lot more cash.

[clarice]

Politico is full of it. The IMF like the World Bank does not pay the taxes for any of their employees--over compensated as they are. It galls US workers but the foreign hires generally pay no national taxes and --yet-*sob* we expect ours to pay them here.

I think the IRS does so little to check up on our people in those institutions Geithner's move is very common..they've been pulling this off for decades.

I hope this weekend brings a storm of outrage.

Rush has summed it up in his Rush in a Hurry email today:
"Pearl of Wisdom: "Bill Richardson had to withdraw. Obama's education nominee cannot speak proper grammar. The Treasury nominee doesn't pay taxes. The nominee for attorney general worked in the pardon office, and he didn't know anything about pardons. Obama's top terrorism advisor was involved in a security breach. We've got more scandals here during the transition than most presidencies have in one term!"

[Appalled]

DoT:

My standard is that I would really like to vote the guy down, but I am unwilling to risk the market crash to do so.

[Rick Ballard]

"Flying blind?"

Chris,

I read "pulling the levers and who knows what works and doesn't work.” and immediately thought "because every damn lever he's pulled has put the plane into a death spin". It's part of what makes the Geithner pick so good - he's as clueless as Obama.

[Appalled]

MayBee:

Dean Baker needs to read the tax code. The IMF does not have the responsibility to see to it that their employees pay FICA.

Blame Congress and the folks who saw an opportunity to dodge some taxes, and took it.

[bad]

I would really like to vote the guy down, but I am unwilling to risk the market crash to do so.

What will we do if he dies in a car crash, or has a heart attack, or stroke, or is killed by a pissed off Citi investor?

Do you really want to take the position Geithner is the only thing between us and the next great depression?

[Danube of Thought]

Concernning the Education nominee, please fill me in. Sounds delicious.

[jean]

Byron York has up at NRO that Mr. Geithner recieved money from the IMF to cover the taxes Mr. Geithner didn't pay

[Danube of Thought]

If voting one particular guy down would create any significant increase in the risk of a market crash, we are all doomed anyway and I'd just as soon the guy go to jail instead.

[Appalled]

bad:

No. I expect there are others. But they are hard to come by, and there is not a ton of time to find them, vet them, and confirm them.

This is a risk I don't think it's prudent for the country to take.

I put this "pass" though in the same category as the Nixon pardon -- something necessary, but not just.

[Appalled]

DoT:

It's not quite that simple, as I think you know. You got to find the guy, make sure he does not have the same sort of garbage in his past, and then get him confirmed. And the second choice may be someone who thinks Barney Frank is the font of economic wisdom.

[MayBee]

Dean Baker needs to read the tax code. The IMF does not have the responsibility to see to it that their employees pay FICA.

Agreed.
But if using a W-2 rather than a 1099 so "complicates" things that employees can't figure out they need to pay SE taxes....couldn't they at least switch to the other form?
If the whole tax ambiguity thing is seen as a problem rather than an employee benefit, that is.

[MayBee]

jean- the NYTs said the same thing, but as bgates hilariously pointed out, they cloaked it with an "in effect"
he in effect kept the money

[clarice]

jean:"Byron York has up at NRO that Mr. Geithner received money from the IMF to cover the taxes Mr. Geithner didn't pay"
It's in the portion of the NYT article quoted by TM at the head of the thread.

[Rick Ballard]

"You got to find the guy, make sure he does not have the same sort of garbage in his past, and then get him confirmed."

Boy, ain't it the truth. Toss in "finding an honest, ethical Democrat, willing to work in this sewer will be almost impossible" and all the bases would be covered.

[clarice]

OK Break time though it is somewhat relevant:

By son and his wife keep a chart in their three year old daughter's room , giving her a star for each night that she stays in her own bed.
Last night when my son went to mark the chart, he noticed my grand daughter had had made an elaborate grid chart of her own with some markings on it.
He asked her what this chart was..She said she was recording every time her mama was good.

[Danube of Thought]

"You got to find the guy, make sure he does not have the same sort of garbage in his past..."

So let's just waive the part about garbage in the past...

Seems to me this is what was called a "vetting problem" in the not-too-distant past.

[boris]

unwilling to risk the market crash

Don't seem to recall a similar concern about the risk of losing a war with terrorism in Iraq. Oh wait that's right ... the war was "already lost" before anybody reneged on "support".

Okay, the market has "already crashed". Screw 'em.

[Chris]

Rick,
I read that and cringed immediately. Maybe he needs to get to chapter 2 of financial crisis management.

Ch. 2
When pulling levers continues having deleterious effects, commence "pushing buttons". Disregard Chapter 1.

Both are highly technical procedures and should only be attempted by those who can navigate basic IRS regulations.

[MayBee]

Hilarious, clarice!

Appalled- Obama knew about this in November. I don't like if he held back this information so he could hold the stock market hostage.
In November there was plenty of time to find someone else.

[jiimmyk]

he willfully tried to evade paying his taxes and under the circumstanced he should not be confirmed.

I agree completely. Beyond that, the notion that he's the only guy for the job is preposterous. As others have pointed out, he bears some responsibility for the mess we're in. This is a bit like computer security departments hiring hackers to help them improve their software--worse really, because I doubt Geithner has a better understanding of what went wrong than any of a dozen other people I could name who'd be better for the job, including Summers.

[C.R.]

For those of you that predicted that Pres. Bush would be missed quickly:

From the Corner:

"Things Are Looking Up [Byron York]

In the last Gallup poll of his presidency, George W. Bush's job approval rating is 34 percent, with 61 percent disapproval. The 34 percent approval figure is the highest for Bush in a year. Among Republicans, Bush's approval is 75 percent, up from its low of 55 percent in October. Among Democrats, Bush approval is six percent — it's been in single digits for a very, very long time. Among independents, Bush approval is 28 percent. By the way, Laura Bush closes out the White House years with 76 percent favorable rating, 15 percent unfavorable."

[C.R.]

Clarice,

That is hilarious. I bet the daughter has waaaayyy more stars than the mom!

[Appalled]

MayBee:

I don't think this was known in November, but it was by early December. And I agree that there was a decision taken somewhere to keep it under the rug until it was too late to comfortably find someone else.

I think the fait is likely accompli here, but I think a lot of folks will remember the unecessary heat they will get, and give Obama less of the benefit of the doubt.

[glasater]

Regarding the Enron reference--I've been thinking on last Sunday's 60 Minutes segment on the run up on the price of oil last year.
Below is a quote from the transcript of that portion of the show.

"When Enron failed, we learned that Enron, and its conspirators who used their trading engine, were able to drive the price of electricity up, some say, by as much as 300 percent on the West Coast," he added.

"Is the same thing going on right now in the oil business?" Kroft asked.

"Every Enron trader, who knew how to do these manipulations, became the most valuable employee on Wall Street," Greenberger said.

[Depressed Atlas]

You really do need to read the NRO story. Says he applied for extra pay to cover these taxes and signed a promise that he would pay the taxes with the extra pay if the IMF gave it to him. They gave him the extra money, but he kept it.

No brainer here, folks. Listen to Clarice.

[clarice]

See, MayBee, it's on point though--the taxpayers keeping their chart on the govt.

[clarice]

Gosh, C>R> I bet you're right.

Apparently her chart was a very elaborate grid which suggests she'd been plotting this payback for some time.

[MayBee]

I don't think this was known in November, but it was by early December.

Yes it was. Obama announced him as nominee on November 24, and Geithner paid his taxes at their request a few days before that.

[MayBee]

oh, but
I think a lot of folks will remember the unecessary heat they will get, and give Obama less of the benefit of the doubt.

I don't think this will happen, but I hope it will happen. Obama wants to do big things, and we are better served if those that can question him directly don't have stars in their eyes.

[Topsecretk9]

Clarice and Depressed are right -- he pocketed the overage

The tax allowance has turned out to be a key part of the Geithner situation. This is how it worked. IMF employees were expected to pay their taxes out of their own money. But the IMF then gave them an extra allowance, known as a “gross-up,” to cover those tax payments. This was done in the Annual Tax Allowance Request, in which the employee filled out some basic information — marital status, dependent children, etc. — and the IMF then estimated the amount of taxes the employee would owe and gave the employee a corresponding allowance.

At the end of the tax allowance form were the words, “I hereby certify that all the information contained herein is true to the best of my knowledge and belief and that I will pay the taxes for which I have received tax allowance payments from the Fund.” Geithner signed the form. He accepted the allowance payment. He didn’t pay the tax. For several years in a row….

[Fat Man]

E. Nigma. is right. We could get a worse nominee. Let us just pass on this issue and use it to argue for tax simplification.

[boris]

Personally I prever "Let's Roll" to "Let's Roll Over".

[boris]

** prefer **

[MayBee]

Dana Bash is reporting the Obama transition team put pressure on the Senate leaders to whom they disclosed Geithner's tax problems not to disseminate that information.

[PeterUK]

Please look - Pass it on.

[centralcal]

Clarice: the granddaughter story is hilarious!

MayBee - Dana Bash reported that about Obama team pressure, really? Hhmmm - looks like the Senate is playing by Obama's rules already. snort.

[centralcal]

PUK - the link didn't work - some kind of Google Error.

[bad]

Dana Bash is reporting the Obama transition team put pressure on the Senate leaders to whom they disclosed Geithner's tax problems not to disseminate that information.

Thank goodness not every one is bending over...

[clarice]

Let's see --we have the big official transition team with which the Administration has been uniquely and strikingly cooperative and the hugely funded secret parallel transition team and we are still getting some really awful vetting and judgement.

I can't wait to see what's next..UGH

[bad]

Clarice, your granddaughter is amazing. I'd bet her IQ is higher than O's...

[Stephanie]

Obama transition team put pressure on the Senate leaders to whom they disclosed Geithner's tax problems not to disseminate that information

Is that like Brittany telling her friends that she played around on Biff only after getting them to pinkie promise that they wouldn't tell?

OH, goodie... the Valley Guy Presidency...

[clarice]

HEH--She is quite a character..