I don’t think Treasury Secretary Nominee Timothy Geithner needed a payday loan to repay the $42,000 he owned the IRS — but he did pay it back. Geithner, currently president of the Federal Reserve Bank of New York, made mistakes on his taxes when he was working for the International Monetary Fund from 2001-04.
President Barack Obama recently nominated Geithner for the position. The Obama team is defending Geithner, saying the tax discrepancies were “an honest mistake.”
The errors
Because the IMF is an international organization, it does not withhold employees’ wages for Social Security and Medicare. But those employees are responsible for paying those taxes on their own. Just as payday loan recipients are responsible for paying their loans back.
The Senate Finance Committee’s official statement says he “failed to pay self-employment taxes for money he received while he working for the International Monetary Fund.” The IRS found errors in 2006 when they audited Geithner for 2003 and 2004, for which he owed $16, 732 in taxes and interest.
Geithner’s response
After the 2006 audit, Geithner promptly paid the amount owed in full. After Obama nominated him for the Treasury Secretary position, he voluntarily amended his 2001 and 2002 taxes. He found that he owed $25,970 in taxes and interest and paid that amount in full.
Obama spokesman Robert Gibbs says that Geithner’s errors are a common mistake. Geithner discussed his tax mistakes with the Senate finance committee, and he said the errors were unintentional. He also emphasized the fact that he repaid the full amount of taxes and interest that he owed.
Support and dissent
Democrats are fully supporting Obama’s nomination of Geithner.
“He’s the right person to help lead our economic recovery during these challenging times,” Gibbs said.
Republicans have not specifically said that they believe his tax errors should prevent Geithner from being appointed. However, at least one Republican Senator objected to holding the nomination hearing on its originally scheduled date, Friday. The hearing is currently scheduled for Jan. 21.
The numbers game
The consensus among both parties seems to be that Geithner made an honest mistake. He’s human, after all. Messing up on his tax forms doesn’t make him a bad person or a dishonest person. I’m sure most of us have done the same thing.
So if average Americans can mess up on their taxes and then simply be forgiven if they pay it back, should Geithner receive the same courtesy? Well, I just have one thing to point out. The average American is not in charge of the entire nation’s money. I’d be lying if I didn’t say I was concerned that the would-be Treasury Secretary doesn’t know the nation’s tax laws.
Room for growth
In his defense, the errors happened several years ago. He was intelligent enough recently to re-do his own taxes and discover the amount he owed on his own. To me, that shows he is good with numbers. It also shows that he believes in doing the right thing. He could have saved 25 grand, but instead he basically turned himself in.
It is disconcerting that the possible future Treasury Secretary has had problems with money and numbers. However, it is possible that he has learned from his mistakes and grown as a politician and an itellectual since then.
What about that other thing?
Those of you who have already read the news reports about Geithner know there is another issue being discussed. For a short time, Geithner’s housekeeper, an immigrant, worked for him after her work eligibility had expired.
To me, this is a non-issue as far as Geithner’s appointment is concerned. The woman he employed was married to an American citizen, and thus should have been considered a citizen herself. I don’t think this is an issue of whether Geithner made a mistake, it’s an issue of flaws in immigration policy. And that is all I have to say about that.
You decide
What do you think? Should Geithner be appointed? You can leave your comments here on your payday loan source’s Money Blog.
The man paid his dues, for goodness sakes. It wasn’t like he tried to run and hide or argue his innocence. He found out he made a mistake and did what he could to make amends. If anyone has a problem with him becoming the nation’s Treasury Secretary, they had better come up with something far more convincing than this one.
Didn’t we just get trough 8 years of an unaccountable administration, I think Geithner should be prosecuted just like all the rest of us would be (Wesley snipes to name one), and paying his dues should be decided by a court of law, this shows us that it’s politics as usual with no accountabilty.
There is a difference between making a mistake and trying to avoid paying what you owe. Form what I have read it was not an honest a mistake but an attempt to avoid paying the self employment tax. From the Senate papers I read it also appears he applied for reimbursement from IMF on the tax he did not pay. I know about the self employment tax because I had to pay it when I was self employed and guess what no body reimbursed me. There is also a question of an improper child care deduction he took. No way should he be confirmed. I question why he did not get a heavy fine or jail time on that.