Amy Goodman just interviewed award-winning investigative reporters Jim Steele and Don Barlett on Democracy Now!(I had the pleasure of interviewing them myself years ago - they're not just smart and ethical, but very nice people.) In the interview, they discuss why Timothy Geithner's tax problems were much bigger than Daschle's - except, of course, when the Senate wants to look the other way:
AMY GOODMAN: It’s good to have you both with us. Jim Steele, let’s begin with you. Why do you think Geithner’s problems were actually worse than Tom Daschle’s tax problems?
JAMES STEELE: Well, Daschle ended up having to pay far more in taxes than Geithner did, and neither one of these cases are forgivable or can be explained away easily. But the difference with Geithner is, I think almost every American knows that you have to pay Social Security and Medicare taxes. I think just the average person on the street who draws a paycheck knows that is taken out of their check. And that’s what’s so disturbing about Geithner’s. If these were avoidable mistakes, if these were simply things he overlooked, I think the question is, why weren’t those corrected at some point before President Obama had tapped him to be Treasury secretary?
This is the thing that’s actually disturbing about both of these cases. Both Geithner and Daschle went back and paid these taxes, but only after their names were dropped into that hopper, which suggested they were going to be cabinet officers. If these were truly under those categories of those kinds of mistakes, the question is, why wasn’t that done at some time in the past, especially in the case of Geithner, where he had been audited by the IRS for previous tax years and had paid some additional taxes at that time. It was only after he was suggested for the Treasury secretary and the vetting process began that he then remitted these additional taxes.
AMY GOODMAN: Don Barlett, explain further exactly what the taxes were that Tim Geithner paid and didn’t pay and what the relation was to his work at the IMF, the International Monetary Fund.
DONALD BARLETT: Well, as Jim indicated, these are the payroll taxes—Social Security, Medicare—that everyone has to pay. And, you know, the tax code is complex. Everybody knows that. It is easy to make a mistake.
But the reason we said that Geithner’s was far more egregious is this. He signed a piece of paper acknowledging that he owed both taxes while he was employed by the IMF. He then collected the money from IMF to pay the taxes. Now, most of us, you know, the payroll taxes are withheld. We don’t get reimbursed for those taxes. It comes out of our own pocket. But Mr. Geithner not only signed a paper acknowledging he owed taxes, he collected money to pay the taxes and then didn’t pay them and pocketed the money. This is why it was far more egregious for him and why—you know, the New York Times demanded that Tom Daschle withdraw, and he did. But the same demand was not put on Mr. Geithner.
And even more disturbing is the fact that only one Democratic member of the Senate Finance Committee voted against Mr. Geithner for this reason—for this reason. That was the Iowa Senator Tom Harkin, who said he just couldn’t support it. And Harkin was right, because the message this is sending to the public of large—the tax system already is as close to collapse as you’re going to get as a result of it not being enforced evenly. The double standard on tax law—as you indicated in the introduction, Jim and I have been writing about taxes for almost forty years. Our first series that won the Pulitzer Prize was on the unequal enforcement of the tax code. And that was back in the 1970s. And since then, it has exploded. And what is happening now in Washington just captures where it is now. Here you have the Senate Finance Committee approving this, and you have the Senate overwhelmingly approving it.
