Thursday, February 12, 2009

Saint Hillary?

I can be relentless about some stuff. Or maybe, I'm just a pain in the ass. Countless heads are nodding in agreement at this point. And so I kept asking my same old questions but, at least now, I was starting to get different answers. Not from the Kool-Aid brigade of course but I didn't expect that.

From the others though, a new mantra was emerging and it went something like this. "It doesn't matter if he's never managed anything nor do we care that he's never done anything. But he knows what has to be done and he'll choose the right people to do it. Trust him."


Really?

Let's take a look!

First, there was Bill Richardson (Democrat) of New Mexico who was tapped to join the Obama disciples but, Oops, a problem when he withdrew because of Federal inquiries into "improper business dealings".

Nancy Killefer was next and she withdrew her candidacy to be the first chief performance officer for the federal government. In a brief letter to Obama, Killefer, the 55-year-old executive with consulting giant McKinsey & Co., wrote that she had "come to realize in the current environment that my personal tax issue of D.C. unemployment tax could be used to create exactly the kind of distraction and delay" that must be avoided in responding to urgent economic problems. When her selection was announced by Obama on Jan. 7, The Associated Press disclosed that in 2005 the District of Columbia government had filed a more than $900 tax lien on her home for failure to pay unemployment compensation tax on household help. And so she disappeared back into the weeds.

Enter Tim Geithner destined to be Treasury Secretary whose job includes the oversight of the IRS.

At the Senate confirmation hearings, it was revealed through documentary evidence that Geithner had not paid $35,000 in self-employment taxes for several years, even though he had acknowledged his obligation to do so, and had filed a request for, and received, a payment for half the taxes owed. The failure to pay self-employment taxes was noted during a 2006 audit by the Internal Revenue Service, in which Geithner was assessed additional taxes of $14,847 for the 2003 and 2004 tax years. Geithner failed to pay, or to admit his failure to pay, the self-employment taxes for the 2001 and 2002 tax years until after President Obama expressed his intent to nominate Geithner to be Secretary of Treasury. He also deducted the cost of his children's sleep-away camp as a dependent care expense, when only expenses for day care are eligible for the deduction. Geithner subsequently paid the IRS the additional taxes owed, and was charged interest of $15,000, but was not fined for late payment. In addition, his housekeeper's work authorization lapsed during the last three months she worked for him.

Geithner's employer at the time, the International Monetary Fund, gives its American employees the employer's half of the payroll taxes, expecting that the employees will deposit the money with the Internal Revenue Service. The IMF does not withhold money for U.S. taxes, but it adds the approximate amount to the employee's pay. The employee should forward tax payments to the IRS, according to the papers released by the Senate. During his time with the IMF, Geithner was required to pay both Social Security and Medicare taxes for himself as both employer and employee. It appears that Geithner forwarded some tax payments but not others. For instance, he owed Social Security tax to the U.S. government. He did forward the employee portion to the IRS, but did not send the portion normally paid by the employer, although he was required to do so.A report from the Senate Finance Committee documented Geithner's errors. While working for IMF, Geithner signed a tax worksheet stating his "obligation of the U.S. Social Security tax, which I will pay on my fund income" and another annual worksheet stating "I wish to apply for tax allowance of U.S. federal and state income taxes and the difference between the 'self-employed' and 'employed' obligation of the U.S. Social Security tax which I will pay on my Fund income."In a statement to the Senate panel considering his nomination, Geithner called the tax issues "careless", "avoidable", and "unintentional" errors, and he said he wanted to "apologize to the committee for putting you in the position of having to spend so much time on these issues."

Geithner said at the hearing that he was always under the impression that he was an employee, not a self-employed contractor, while he served as director of the Policy Development and Review Department of IMF. However, despite all this he was confirmed by the Senate ostensibly because he possessed a "brilliant mind and was the only person capable of steering the failing US economy back into calmer waters." We'll see more about that assertion later.

And the beat continued with Tom Daschle's bid to join the Obama cabinet. On January 30, 2009, it was reported that Daschle's friendship and business partnership with businessman Leo Hindery could cause problems for Daschle's Senate confirmation.

Daschle has been a paid consultant and advisor to Hindery's InterMedia Partners since 2005, during which time he received from Hindery access to a limousine and chauffeur. Daschle reportedly did not declare this service on his annual tax forms as required by law.

A spokeswoman for Daschle said that he "simply and probably naively" considered the use of the car and driver "a generous offer" from Hindery, "a longtime friend". Daschle told the Senate Finance Committee that in June 2008 -- just as he was letting the press know he would like to be HHS secretary in an Obama administration -- that "something made him think that the car service might be taxable" and he began seeking to remedy the situation.Daschle reportedly also did not pay taxes on an additional $83,333 that he earned as a consultant to InterMedia Partners in 2007; this was discovered by Senator Daschle's accountant in December 2008. According to ABC News, Daschle also took tax deductions for $14,963 in donations that he made between 2005 and 2007 to charitable organizations that did not meet the requirements for being tax deductible.The former Senator paid the three years of owed taxes and interest -- an amount totaling $140,167 -- in January 2009, but still reportedly owed Medicare taxes equal to 2.9 percent" of the value of the car service he received, amounting to "thousands of dollars in additional unpaid taxes.

On Tuesday, February 3, 2009, Daschle withdrew his nomination, saying that he did not wish to be a "distraction" to the Obama agenda. He was forced to withdraw because, even though he had a sufficient number of Democratic votes for nomination, he became an untenable political liability for the President. Many news sources reported that the controversy had begun to undercut President Obama's promise to run a more ethical, responsible and special interest-free administration.

The pattern is so starkly clear and is highlighted by the case of Charlie Rangel who has been mired in tax controversies for years and who, earlier this week was reconfirmed by the House Ways and Means Committee as its Chairman. This committee just happens to the body to recommend confirmation of Geithner.

So, now we know why Democratic politicians don't object to higher taxes. It's because they don't pay them!

I never thought the day would dawn when Hillary Clinton would seem to be the most ethical of the Obama regime.


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