Democratic Tax Goof Follies

It can't be pure coincidence that several of Barack Obama's top nominees have had embarrassing tax problems. The latest offender, Nancy Killefer, Obama's choice for the new job of chief performance officer, withdrew today because she hadn't paid DC unemployment taxes for domestic help. And now Daschle's out too.

Obviously, whether you are in public service or not, you ought to know the basics of paying taxes and ... pay them. But if you're in the vanguard of "change we can believe in," there's no excuse for such carelessness. One reason for these forehead-slapping errors may be the strange relationship most of us have with federal income taxes. For the most part, taxes are something we think about as little as possible. Once a year, we are forced to make an unpleasant reckoning with how much we make, how much we spend and save, and how much goes to various governments. Often at this juncture, a willful ignorance imposes itself, especially when it comes to taxes that aren't automatically withheld. Do I really have to pay this or this, on top of everything I'm already paying? Perhaps, if I don't pay it, it will just go away! And you know, most of the time it does go away. Odds are the IRS won't find out. Until, of course, the president needs your services.

This is a childish and borderline-dishonest way to conduct your affairs, and it's fascinating that a bunch of earnest Democrats seem particularly prone to it. Rather than straight-up cheating or gaming the system, or trying to dismantle it outright (as we've seen Republicans do the past eight years, with varying degrees of success) the Daschle-Geithner-Killefer tax goof is based on an almost-unconscious hope that the system they theoretically want to work ... won't.

Comments

[Daxster]

Now I understand why it's so easy for democrats to raise taxes. They have no intention of paying them.

[Sanity01]

Are we having fun yet??? It only been two weeks since inauguration and what an action-packed two weeks it's been. Although I'm not of his party, I really hope Obama is sucessful in pulling us out of this recession and that he is sucessful at keeping our country safe. (There are plenty of differences I have with many of his programs but I do hope that he suceeds without them or in spite of them). However, I can't help but enjoy the fact that in these first two weeks, he has had to learn how different the view is from the driver's seat.

[Daxster]

I heard about the "Rangel Rule" this morning on WLS in Chicago.

If you have to revise your return to pay more taxes, you write “Rangel Rule” at the bottom, and all interest and penalties are forgotten.

[JonShank]

Yeah, I heard about that the other day. It was patterned after an actual rule in Texas whereby a Governor there was caught drunk-driving and got some special treatment that others did not enjoy by getting out of jail early instead of spending the whole night, I believe. NOW, those who are caught drunk driving invoke that very rule, (I cannot remember the man's name), to get out early.

[JonShank]

Obama and co. screwed up. It happens, it will most likely happen again. He isn't perfect and only the far, far, far, far, left ever thought so. He admitted he messed up, he will work to do better, so let's move on.

[allamericanboy]

Randi Rhodes has brought up a good point. It seems very curious that, with our uber-complicated tax system (which, as McQuaid points out, Republicans would like to dismantle), the only people for whom embarrassing and possibly ethically challenged tax problems surface are Democrats. Perhaps we should know more about who controls individuals' tax information and how it seems so selectively meted out to the media.

[William1950]

not only democrats my friend... tax problems are endemic... the tax code is so complex that even tax professionals don't understand it... that is why we need a flat tax... with no deductions and no exemptions... a flat tax with a rate of ten percent on all income above $25,000 ... there would be no confusion and the government would get more money.

[AbraHP]

I bet 99% of middle class and above Americans would owe taxes with a thorough audit.

In California one owes taxes on purchases from out of state, for on line purchases from Amazon and the like. This is true for many other states too.

How many Americans, members of congress or journalists pay taxes on ALL out of state purchases?

If one sells some thing on Craigslist, a garage sale, to a brother, or through newspaper want ads, one owes sales tax. Again, how many people pay all or any of those taxes.

Some gifts require paying taxes. How many people know which ones? If I give you a gift of a car and driver for your anniversary, is that taxable? For a week? How many people know when does a gift become taxable income?

Most tax payers, middle class and above, probably have some taxes owed for things bought and sold outside the taxed retail world.

Do you personally pay taxes for everything you order on line?

I bet an audit of every member of congress would reveal a few glitches. And maybe a few Journalist too.

[dinglebe]

I would agree. It's easy for one to overlook his tax obligations for "little" things. But how does one fail to recognize an obligation in the thousands of dollars? One can argue ignorance or forgetfullness when no W-2 or 1099 is received, but you have to know that if you are benefitting from big perks or that you are paying domestic help, there are tax implications.
I think what governs the behavior of such people has nothing to do with political affiliation. It is rather a sense of ENTITLEMENT, in the sense that "I am entitled to such benefits, and I am entitled to not pay taxes on them if the IRS doesn't know about them. If you catch me, OK, I'll pay (although my lawyer may contest for me)." Unfortunately for them, this premise gets short-circuited if any sort of public vetting process takes place.
I believe that this entitlement sense resides within all of us to some extent. And it parallels one's ego - the more important I believe I am, the more entitled I feel.

[Emmory]

Great...
Then why not give all Dem liberals a free pass?
Would you have felt this way about a Bush appointee?
hell no.

[JonShank]

Good point.

[Senzasord]

But when Democrats give the apearance of running afoul of the law they are investigated and if the facts warrant they are prosecuted or otherwise held responsible. I refer you to Rod Blagjoyavich, Bill Richardson, Tom Daschle, Kwame Kilpatrick (Mayor of Detroit) and so the list goes. Democrats believe in being responsible. Republicans on the other hand believe in shielding each other from testifying through spurious claims of executive privilege.

[VikingQuest]

First of all, $150,000 is not a garage sale type number . . . .

Second, Timmy G received a check from the IMF to pay his taxes . . . if this guy is really dumb enough not to pay them, he shouldn't be head of the IRS. He knew he was ripping off Government or the IMF all along.

[HappyWarrior]

In the spirit of former President Harry S. Truman, "Give 'em hell!"

Thank you, AbraHP, for pointing out that many, many Americans would owe taxes (in any given tax year) if a thorough audit of their finances were conducted.

I understand that Sen. Daschle screwed up big-time. And what probably irritates people the most is the ASSUMPTION that he never would have paid the taxes he paid late WITH PENALTIES AND INTEREST--if he had not been nominated as HHS Secretary.

That aside, the sanctimonious flavor Mr. McQuaid's blog and the seeming general reaction of Americans is sickening.

[overd0g1]

It's just a good thing they are Democrats, because that way it's just a goof. Anyone else would be evil and greedy.

[Emmory]

Exactly!

[JonShank]

Right. Just like Bush and Co. made a few "missteps" in Iraq. If a Democrat had scre wed up that badly, Trent Lott would've had a massive or gasm.

[luziannagirl]

Taxpayer angst is not centered so much around the actual paying of the money, but around the nagging feeling that one is paying the wrong amount because of your own or your preparer's ignorance of the incredible convoluted, constantly changing intricacies of the code.

Fear of being a Tax Chump while others with more or better preparer/accountant resources aren't, is a real boogie-man in many of our minds.

So, many taxpayers err on the side of conservatism---in their own favor---and can we really blame them? Some actually err in the government's favor, but we never hear about those because the IRS isn't obligated to point those out and correct them.

It's just so easy to ignore or skip over something that's 1) unpleasant no matter how you cut it and 2) unbelievably complex and difficult to manage.

The current difficulties with cabinet nominations should underscore the crying need to greatly simplify the federal tax code.

[lovethehuff]

So if i dont file/pay my taxes this year, when can i expect my cabinet nomination?

[JonShank]

LOL!! Taxes? We don't pay no stinking taxes!!!

[babaann]

We trust other people to prepare our tax returns. If errors occur, that is not necessarily CHEATING.

[grateful4thedead]

I like Geithner and think he can do a credible job at treasury.

However, Obama should have him step aside in regards to his ethics promises. Geithner's tax oversights and apologies are BS: it is my opinion that he is too smart to have made the "mistakes" and it seems more likely than not he was trying to avoid paying his fair share.

Yeah, taxes can be complicated, but this particular one was not.

[JonShank]

ABSOLUTELY AGREED!!! Well said.

[hark]

If he can't understand taxes, how the hell can he understand the economy?

[realitylover]

We are a nation of scofflaws and cheats. Face it, folks. If it isn't diddling the tax man, it's driving under the influence or too fast; cheating on exams; doing our kids' school projects for them; littering, shoplifting, or keeping the extra money when the clerk gives you too much change. Look at the figures on incarceration, and the cost, and compare that to what we're willing to spend on social programs that are proven to prevent crime. As a nation, we have a morbid fascination with violence, which we find entertaining, and a juvenile crush on the "outlaw." Nearly everyone hates paying taxes and Joe Biden was subjected to derision for suggesting that it is a patriotic duty to pay one's share. It is not going to be easy to find competent, qualified people to serve at all levels of government. I think we're going to have to consider a concept of amnesty for those who, like Obama's appointees, have fulfilled their obligations and made a public apology. It's time to forgive them and move on to addressing the real problems that confront us. And it would be great if everyone obsessing over the cheating of others would examine their own behavior and make the appropriate changes. Simply obeying traffic laws would be a great start today.

[William1950]

right you are on this...

[glockman]

At least these problems bring to light the massive problems with our insane tax system. Maybe we'll change it someday.

[overd0g1]

More than that, it brings to light the sleaziness of our politicians. I doubt we'll ever change that.

[glockman]

True.

[PhilipTaylor]

Lets FOCUS on the REAL MONEY!

What is the "REAL" Tax Rate FOR THE TOP 1000 Wall Street Earners? Less Than 10%?

America Needs to Know! Republicans are constantly saying America has the highest Tax Rates!

Need IRS Report: What was aggregate Tax versus Income for Top 1000 Wall Street EARNERS?

Average Income was $200 million with high of $3.9 Billion!
Yes! A Hedge Fund Manager made $3.9 Billion/Year and average Hedge Fund Manager clears $500 Million/Year.

REAL TAX RATE = TAXES PAID / INCOME TAKEN (from IRS data)

IRS NOTE: Audit all the Top 1000 Wall Street EARNERS!

[William1950]

abolish the IRS... flat tax, the first $25,000 is free... ten percent on the rest, no deductions, no exemptions.... income above $25k is taxed at ten percent... simple, easy, fair, and with no exemptions the govt. will get more money and we will have much less confusion.

[anandakos]

What a crock! The "no exemptions" will last about 37 seconds. Republicans would all holler "investment returns should be specially treated because they make everyone else richer!"

And if we did go with a "flat tax" it should be 25%. That's what the government really needs to meet all its commitments while maintaining its empire so the corporations can rape other people too.

[luziannagirl]

And the "because they [Republicans] make everyone else richer" argument once flew when it was primarily Americans ---rather than multinational stockholders and foreigners---who were sustained by the "trickle down" effect.

Now we see "trickle down" for what it always really was. "Pissed-on".

And Americans are beyond pissed-off over it, too. Obama is riding a wave of populist sentiment, and he should use it to full extent. At some point, he's just going to have to appoint who he thinks can do the job, regardless of tax problems we all can understand.

[overd0g1]

Then it needs to reduce it's commitments.

[William1950]

a flat tax of ten percent... NO exemptions... NO decuctions... above $25,000 ... if a corporation earned one million profit they would pay ten percent... if you made fifty thousand you would pay ten percent of anything above $25,000 ... the government would not need more than this, and it would be fair, easy and accountable.

[rocketman69]

Abolish ALL taxes and the we'll use what the democrats owe to run the country. Soros and Buffett can start and then Congress can join in.

[helpontheway]

you REALLY think that dems are the only ones who don't pay their taxes?
that's hilarious. The problem is with rich people not wanting to pay their share, not with a specific party.

[babaann]

Democrats love to pay taxes. That means they have a good paying job.