Tom Daschle (Photo: Brendan Smialowski/The New York Times), Nancy Killefer (Photo: Doug Mills/The New York Times).So today is a two-fer: both Tom Daschle and Nancy Killefer will not be joining the Obama administration, as planned, as Health and Human Services secretary and chief performance officer, respectively.
They were both undone by failure to pay taxes.
Tim Geithner, meanwhile, the new Treasury secretary, was recently confirmed by the Senate despite his own tax failures.
Good God: what does it say about the U.S. tax code that people like Geithner, Daschle, and Killefer haven’t properly paid their taxes?
(By “people like” them, I mean people who are smart and accomplished, have been through many application and vetting processes in their careers, and above all have reason to comply with tax-paying.)
Here, we’ll make it a quiz:
A. If all three of them were intentionally cheating (and getting away with it until high-level scrutiny), then it’s much too easy to cheat on taxes.
B. If all of them made honest mistakes, then the tax code simply isn’t working.
C. If there’s some combination of cheating and mistakes, then it’s too easy to cheat and the tax code isn’t working.
I’d vote for C. We wrote a column about tax cheating a while back. It included this passage:
The first thing to remember is that the I.R.S. doesn’t write the tax code. The agency is quick to point its finger at the true villain: “In the United States, the Congress passes tax laws and requires taxpayers to comply,” its mission statement says. “The I.R.S. role is to help the large majority of compliant taxpayers with the tax law, while ensuring that the minority who are unwilling to comply pay their fair share.”
So the I.R.S. is like a street cop or, more precisely, the biggest fleet of street cops in the world, who are asked to enforce laws written by a few hundred people on behalf of a few hundred million people, a great many of whom find these laws too complex, too expensive and unfair.
Maybe the gross embarrassment over these high-profile tax failures will at least spur some tax-code sanity — like the Simple Return, promoted by Austan Goolsbee, who has Obama’s ear.
People like Daschle wouldn’t fill out the Simple Return, but it might free up the I.R.S. to catch tax cheats before the Senate confirmation hearings flush them out.
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I think the question has to be asked, did President Obama know these people had problems with their taxes.
The conspiracy theorist in me thinks that he nominated these people knowing they had tax issues, in an effort to bring the tax code reform front and center in his domestic agenda.
Only suckers pay income taxes in this country.
It pains me to say that, since it means I’m a sucker.
Dear Hmmmmm;
If we do, we may have to vote again for a `new’ bunch. What happened to their account managers.
Tax reform is at least a two-fer for Obama. It would both stimulate the economy and burnish his reformist credentials. Moving to a flat tax would do more to reduce the influence of lobbyists than any other single act.
I can see Nancy Killefer’s tax mistakes I really believe she made an error. Gosh is was less than $1,000 and it was concerning unemployment tax on a domestic worker. The other two (especially Geithner’s ) don’t seem to be in the same class of error. (either in magnitude or intent.)
I’m with chappy @5: “These people” don’t do their own taxes, they just write the checks. Their accountants have instructions to make the taxes as low as possible. If I thought a $400 trip to the accountant could save me $1000 (likewise, $10000 to save me $35000) over doing it myself in TurboTax, I’d be there in a NY minute.
A friend of the family was an H&R Block employee for years. The few times I asked her advice about possible deductions, she laughed at me. Clearly, I wasn’t paying her enough.
The unfortunate part of this is that our increasingly complex tax code has created an entire multi-billion dollar industry that’s not just going to say, “Yeah, let’s go the simple route.” Maybe if we just transfer the CPA’s who would be out of a job and move them over the IRS, then we can have more people to focus on tax compliance. The additional cost of those extra government workers is offset by more compliant taxpayers…everyone wins?
I think there is another more likely explanation beyond (a), (b) or (c).
(d) “Tax code and paper work is too cumbersome and I am already paying taxes close to 99% of my tax obligations and so IRS is not going to worry about my skipping the small taxes on household help or some freebies that received.”
This is the most common rationalization on this form of mild “cheating.”