President-elect Barack Obama's choice to run the Treasury Department and lead the economic rescue effort disclosed to senators Tuesday that he failed to pay $34,000 in taxes from 2001 to 2004, a last-minute complication in an otherwise smooth path to confirmation.
Timothy Geithner paid most of the past-due taxes days before Obama announced his nomination in November, an Obama transition official said. The unpaid taxes were discovered by Obama's transition team while investigating Geithner's background, the official said . . .
Geithner failed to pay self-employment taxes for money he earned while working for the International Monetary Fund from 2001 to 2003, the transition official said. In 2006, the IRS notified him that he owed $14,847 in self-employment taxes and $2,383 in penalties from 2003 and 2004.
Transition officials discovered last fall that Geithner also had not paid the taxes in 2001 or 2002. He paid $25,970 in taxes and interest for those years several days before Obama announced his nomination, the transition official said.
Geithner also didn't realize a housekeeper he paid in 2004 and 2005 did not have current employment documentation as an immigrant for the final three months she worked for him, the transition official said.
Obama's spokesperson described these missteps by Geithner as "honest mistakes." Excuse me, if you don't report and pay taxes on income you earn for three years running, you are either a tax cheat or stupid, assuming you weren't financially broke. For ordinary taxpayers, the consequences of such "honest mistakes" can be dire: "DO NOT PASS GO, GO DIRECTLY TO JAIL!". We're suppose to have confidence in this guy running the Treasury Department when America's confidence in its financial system has reached an all-time low? Where's the outrage? Why isn't the media demanding the immediate withdrawal of this nomination? You can bet the reaction would have been entirely different if he had been nominated by a Republican president. What a joke.
UPDATE: The Senate Finance Committee members have known about Geithner's tax problem since December 5 according to Politico. Geithner didn't even bother to pay most of the back taxes until after Obama decided to nominate him. And Republican Sen. Orrin Hatch says he's still backing the nominee. This country is doomed. We don't even have a loyal opposition in D.C. any more.
UPDATE II: The Obama-loving Huffington Post is dismissing Geithner's failure to pay taxes as a "common error" made by self-employed persons:
"When one is self-employed you do owe self-employment taxes which are essentially the employee and employer portion of your taxes," said George Yin, a tax professor at the University of Virginia Law School and formerly Chief of Staff of the U.S. Congress's Joint Committee on Taxation. "If that is what they are referring to than yes, there are some people who serve as consultants and don't necessarily understand their obligations to pay self employed taxes. My guess is that it is not an infrequent error."
As a self-employed business owner, it's an obligation I've always understood, but I've never been president of the Federal Reserve Bank of New York or held high level jobs at the International Monetary Fund and the Treasury Department like Geithner so what do I know. Does anybody care that the Secretary of the Treasury is over the IRS?