Government of Helmsleys

by Pejman Yousefzadeh on February 2, 2009

Let’s review the bidding:

1. Timothy Geithner is Secretary of the Treasury, despite having been delinquent on his taxes to the tune of over $40,000 because he was defeated by his TurboTax program and because he didn’t pay attention when the International Monetary Fund tried to educate him on his tax obligations as an independent contractor for the organization.

2. House Ways and Means Committee Chairman Charlie Rangel is in a world of trouble because of various tax delinquencies. The fact that his committee plays a key role in writing the tax laws makes this especially rich. Despite Nancy Pelosi’s promise to give us “the most ethical Congress in history,” she has yet to remove Rangel from his chairmanship to punish him for his comprehensive failure to abide by the tax code.

And now, we learn that former Senate Democratic Leader and current Health and Human Services Secretary Tom Daschle has tax problems of his own. The former Senator accepted the services of a car and driver without reporting it as income on his tax returns, a tax liability of over $100,000. In addition, Daschle failed to report over $80,000 in consulting income in 2007. To be sure, now that Daschle is a Cabinet nominee, he has gone back and paid his delinquent taxes but that doesn’t excuse or put to the side the astonishing degree of personal negligence Daschle displayed in preparing his tax returns. Proving that there is no shortage of gall in the universe, Daschle tried to explain away his actions by stating that “he had grown used to having a car and driver as Senate majority leader and didn’t think to report the perquisite on his taxes, according to staff members.”

As Dana Carvey’s Church Lady would say, “Isn’t that special?” I wonder how many of us would get away with illegal and unethical behavior simply by stating that the behavior stemmed from “perquisites” to which we had grown accustomed?

There are a lot more where Geithner, Rangel, and Daschle came from. While I have David Boaz to thank for a clever title for this article, I am sure that he joins me in wishing that it never had to be written. Alas, the Obama Administration and its allies seem to have a serious problem when it comes to paying taxes. Or, as House Republican Whip Eric Cantor puts it, “It’s easy for the other side to advocate for higher taxes because you know what? They don’t pay ‘em.”

Mistakes happen in preparing taxes but few people make mistakes of this magnitude and get away with it, let alone get rewarded by the President of the United States with an offer to serve as a Cabinet officer. And in fact, preparing one’s taxes ain’t that hard. The Internal Revenue Code clearly states that taxable gross income constitutes “all income from whatever source derived.” How could Daschle not have understood that a car and driver constitute a form of remuneration and are therefore taxable income?

And how much longer are we going to let the behavior of people like Geithner, Rangel and Daschle to go unpunished? Geithner and Daschle appear to have privileges that other people do not have, the freedom from the obligation to avoid paying tens or hundreds of thousands of dollars in back taxes until the moment when their tax delinquencies becomes politically inconvenient to the Obama Administration. Once their delinquencies are discovered, they then ask us to forgive and forget and let them take their high-powered public jobs, jobs that will allow them to determine policies that affect our futures.

Charlie Rangel gets to keep his powerful chairmanship despite behavior that makes a mockery out of Nancy Pelosi’s pretensions to high ethical standards. If your average Joe or Jane tried this kind of thing, however, he or she would find the U.S. Government far less forgiving than it appears to be to Geithner, Daschle, and Rangel. Or, to put it another way, Tim Geithner’s Treasury Department would not be nearly as sympathetic to your average Joe or Jane as it was to Tim Geithner and his fellow Democratic tax cheats.

Despite having cheated on his taxes, Geithner has been safely installed as Treasury Secretary. He will use his position to push for a deeply flawed stimulus package that was crafted without any serious effort to engage Republicans in the process and will, among other things, undermine the dramatic progress we as a nation have made in implementing smarter and more effective welfare policies. Despite having cheated on his taxes, Rangel gets to stay on at the Ways and Means Committee, thus allowing the Obama Administration to have an experienced hand in place when it decides to do what all Democratic administrations do; raise taxes. And despite having cheated on his taxes–and despite also having received over $220,000 from health care groups with a vested interest in the work he would do as HHS Secretary, thus causing serious conflict of interest problems–Tom Daschle will likely be able to join the Obama Administration and help implement policies that will ration medical care, in addition to engaging in a regressive nationalization of health care through a flawed and deeply unfair expansion of the State Children’s Health Insurance Program (SCHIP).

It should be noted that Daschle’s service in the Obama Administration will likely not be limited to his work as the HHS Secretary. In addition to the Cabinet role planned for him, President Obama wants Daschle to serve as the Director of the White House Office of Health Policy. This “health czar” role requires no Senate confirmation, would allow Daschle an office in the West Wing and will give him the opportunity to ride herd over both the Department of Health and Human Services and the White House staff when it comes to shaping health care policy. In short, despite the fact that he is a tax cheat and has conflicts of interest as far as the eye can see, Tom Daschle is being offered even more power than are other Cabinet Secretaries. The mind reels.

The only way to stop such double standards from being perpetuated is to clamp down on them. That should have meant denying Senate confirmation to Tim Geithner. It is too late to be able to do anything about that, apparently, but it is not too late to remove Charlie Rangel from his chairmanship in order to actually give some meaning to promises of “the most ethical Congress in history.” It is not too late to make an example of Tom Daschle and put the kibosh on his nomination as Health and Human Services Secretary and his appointment as Director of the White House Office on Health Reform. Lawbreaking should receive no reward in any section of the federal government. And lawbreakers should not be rewarded for bad behavior by being given the chance to shape national policy in critical and consequential ways. Such privileges should be reserved for people who play by the rules, not for people who think the rules don’t apply to them.

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