[edited 020309 pm to add link and correct typos]
Most taxpayers think they have an obligation to pay taxes--and they don't like it when their representatives in Congress or administrative officers treat themselves as above the law. Accordingly, public figures--and politicians who vote on tax rules in particular--should have an even loftier compliance obligation than ordinary taxpayers. That is, they should go out of their way to make sure that they pay appropriate taxes, erring on the side of prudence to ensure that they do not fail to report income or fail to make appropriate payments.
Tim Geithner's tax problems were problematic in that regard, and yet the Senate confirmed his appointment--as Treasury Secretary, of all things--on the implicit understanding that he was so important for that job that he should be confirmed in spite of his carelessness (at least) in determining his tax obligations and his significant failure to pay tax on his substantial income. I don't buy that argument. It isn't really all that hard for someone in Geithner's position to determine that his income was taxable.
Now two other nominees for administrative positions have withdrawn over tax problems. That's the appropriate result. Tom Daschle looked like he was on the way to appointment as Health secretary, but significant tax problems finally stood in his way. He failed to report as income the in-kind benefit of a car and driver provided by a company for which he worked, saving about $140,000 in taxes. Today, he withdrew from consideration. See Zeleny, Tom Daschle Withdraws as Health Nominee, The Caucus, New York Times blog, Feb. 3, 2009. Also today, Nancy Killefer withdrew from consideration as White House performance officer because of a rather small amount of unpaid nanny taxes in D.C. For a good rundown on that, see Roni Deutsch.
These are appropriate responses to revelations of carelessness in tax filing, and hopefully will help put future candidates (and current politicians) on notice about the importance of paying up. Before giving people authority to write and enforce tax and other laws, we rightfully demand of them that they comply with the laws themselves. Maybe Congress should just pass a law requiring all successful candidates for federal office to disclose their full tax returns (with schedules) and requiring the IRS to conduct a full audit of them within one year of their taking office.
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