A couple of President Obama's cabinet nominations have recently run into tax problems. Secretary of the Treasure Geithner was confirmed despite the fact that he had unpaid self-employment taxes. Secretary of Health and Human Services nominee Tom Daschle recently ammended his tax returns to report over $100,000 in unpaid taxes.
The public will never really know if these were unintentional mistakes or purposeful acts. In either case, they are a call to action. Clearly if a cabinet nominee intentionally attempted to evade taxes, his (or her) nomination should be retracted.
So what if it was an honest mistake? In some ways, an honest mistake actually calls for more drastic measures. Secretary Geithner has extensive financial experience. Not only was the President of the Federal Reserve Bank of New York, but he also served in the Clinton administration as the deputy assistant secretary for international monetary and financial policy. Geithner also worked at the International Monetary Fund.
Tom Daschle served as the Senator from South Dakota for eighteen years, and was twice the majority leader of the U.S. Senate. As a Senator, he spent time on the Finance Committee. His role as Senate leader meant that he was very involved in determining the federal budget, including tax policy.
So here we have two men who have a level of financial sophistication head and shoulders above the average American. They have both wielded influence over U.S. financial policy. So, if they honestly made a mistake or unintentionally failed to pay the proper amount of taxes, what does it say about our system? Is it so complex that even individuals with the experience of Geithner and Daschle often get it wrong? If so, then what hope do the rest of us have to get it right? In Turbo Tax we trust?
Maybe this should be a call to seriously reform our tax structure. Let's face it, the tax structure is not complicated because it has to be. Its complicated because our Congress uses it to reward and punish certain behaviors. You might give your child a cookie for cleaning her room, while the government provides a tax break if you purchase a home. Both rewards are to encourage the behavior that the authority deems desirable.
My opinion is that we should either get rid of Daschle and Geithner or our tax system. The later would certainly change Washington.
1 comment:
For the record, I don't believe that Daschle made an innocent mistake. He knew about the issue for a while, and only paid the back taxes after he was nominated.
I think it would be a big mistake to stand behind the Daschle nomination. It goes against his campaign pledge to change Washington. This is just the first test, and it looks like he is a politician, just like the rest. Don't tell anyone in the media though, they still have chills running down their legs after hearing his speak.
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