In his excellent reporting, Byron quotes senators who are uncomfortable about the fact that Geithner basically had no satisfactory explanation for his failure to pay part of his tax bill while he worked at the IMF, even while he accepted the reimbursements for those taxes. I would submit that, “I don’t know why I did it,” is as good an answer as he can possibly offer. He can’t very well say, “We had plenty of uses for that 40 grand, since life is expensive and I wasn’t making a Wall Street salary, and, anyway, I assumed that no one would notice. Frankly, I never dreamed that I would be nominated for a government position that required confirmation–especially not one so high that people would scrutinize my tax returns for a decade back.”
No one really wants the truth in these matters: “Because I was more comfortable with the illegal nanny candidate than the legal one, she was better with my kids, better educated, and willing to clean, and it saved me $250 a week in taxes–which, frankly, was the difference between barely affordable and prohibitive.” “Because I am a powerful man, and I like sex, and, frankly, after 20 years and 4 kids you get bored.” ”Because I am a senior Congressman from Harlem, and I knew nothing would happen if I never paid taxes on my bargain/bribe resort properties. And I was right. No one would have known but for the divorce filings . . . And see, I’m still head of the nation’s tax writing committee. Pelosi can’t touch me because the Black Caucus won’t stand for it.”
I don’t know how many equally qualified, usefully experienced people there are for the Treasury job. If there are a lot, it’s fine to make the president find another one. If there aren’t, let the tax cheating go–after making a big deal of it. If there is anything that is clear it is that the U.S.’s self-reporting system–an honor code, more or less–is in trouble. Tax experts estimate that compliance has been sinking steadily. Audits are statistically rare. Mostly people do get away with it. That number will only increase as the percentage of citizens required to pay taxes decreases; and the taxpayers find the system increasingly unfair and onerous.
If you happen to think that the fewer than 50% of citizens who actually pay income taxes are both over-taxed and burdened by a complicated regulatory mess, then it is potentially useful to have, as overseers of our tax system, both as Secretary of the Treasury and head of the House Ways and Means Committee, men who either are not quite bright enough to fully comply with the tax code as written, or tax cheats–however you happen to see it.
Given what is about to happen to spending, higher taxes–on the minority of Americans who pay federal income taxes–are going up. That much is clear. Those who want to fight that policy will benefit from having these posterboys for non-compliance in charge of raising taxes. Democrats would know how to make it work for them.