Thursday, January 15, 2009

"Tim the Tax Cheater" is Obama's Answer to "Joe the Plumber"

During the final days of the 2008 Presidential campaign, Sen. John McCain was finally able to steal some of Barack Obama's thunder with a guy in Ohio who was later known as "Joe the Plumber." Samuel Joseph Wurzelbacher of the city of Holland became something of a rock star(and even shortened his name to "Joe") after he casually encountered Barack Obama walking through his neighborhood and held the Senator accountable on his views of taxation. Essentially, Obama told Joe that a little wealth redistribution is "a good thing."

Well, Obama survived Joe and was elected President by a solid number and is well on his way to appointing his new Cabinet. His choices have been surprisingly conventional. Most have strong academic credentials and big business backgrounds, although few have any experience making payroll for employees (something that I think most Americans would like to see in their governing leaders).

The President Elect's choice for Treasury is Tim Geithner, who was considered some what of a moderate choice and was even a George Bush appointee for another office. Most considered him a "shoe in" until it was discovered that Geitner didn't pay his self-employment taxes for four years. According to Time.com: "Before becoming President of the Federal Reserve Bank of New York, Geithner worked for the International Monetary Fund in 2001 and 2003. While he had paid all of his income taxes on his IMF earnings, he failed to pay self-employment taxes. (Geithner had initially done his tax returns himself, but an accountant preparing an amended return in 2002 also failed to catch the mistake.) Geithner voluntarily corrected that mistake upon discovering it on November 21, 2008, during the Obama transition vetting process, and paid an additional $25,970 as a result."

The story isn't that simple. Geithner did not pay these taxes for four years, was caught in an audit for two of those years, and only paid those two years at first. He didn't pay the last two years until he was appointed Treasury Secretary. You would think he would have remembered the other questionable years during the audit. This, and the questionable immigration status of one of his domestic servants, makes a "sure bet" a little less sure.

The down side to this situation is obvious -- a man who oversees our economy and the IRS, but does not pay taxes is certainly an issue of concern. But maybe there is an upside. Millions of Americans have complained about how complicated our tax code is and now we have a Secretary of Treasury designate who has been confused about it also. He is a sympathetic character. And like millions of Americans who are tempted to avoid full disclosure when caught, it appears he actually succumbed to the temptation. The extreme Right might love this guy as a tax defector.

My instincts tell me it isn't going to spin that way for Geithner. Instead it will likely be seen as part of the hypocrisy and elitism that is so common in government. Politicians telling us to "do as we say and not as we do." With the withdraw of the Commerce Secretary designate and the battle over the Transportation Secretary designate (because of his love of earmarks while in Congress), the Obama transition has gone from one of the smoothest to one that could be called the Titanic.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

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