geithner!?

I used to work in DC and knew a number of people at the IMF and World Bank. They all felt that they should not have to pay US taxes. In fact, the IMF and World Bank "grossed up" their incomes to offset taxes. What a deal. I knew one guy who bitched and moaned because the IMF assumed you had 2 dependents when calculating the gross up, and he didn't have any, so he felt "cheated".

I say Geithner knew exactly what he was doing, and just thought the IRS would never catch him.

Of course he knew what he was doing. Their forms explicitly warned employees about the exact "mistake" that he made--repeatedly--over several years. Sadly, he'll get away with it.

modern - I used to work at the World Bank and never met an American that was happy about the tax system and no one I ever met felt they shouldn't pay taxes. The facts are that the World Bank and IMF are exempt from employee withholding taxes, but American employees are still responsible for paying their taxes. That means you're filing quarterly tax payments and paying penalties at the end of the year if you're short, just like self-employed people. And you're always short because you don't know what your tax liability is going to be. The World Bank and IMF add quarterly tax payments to your American pay and almost everyone just passes that money to the IRS. This isn't extra money, it's part of your total pay package, but it never covers your actual tax liability because the withholding assumptions are unrealistic. So if you don't add more to your quarterly payments, you will get penalties. Then at the end of the year, you true up with the IRS and can go back to the World Bank/IMF and claim the difference between your actual taxes and the quarterly tax payments received. Then, after your receive that amount, you pay taxes on that amount. It's a disaster, and most Americans would have trouble paying their taxes in this manner, it's an incredibly stupid system.

I'm not justifying what he did, but it's alot more complicated than you think, you're not filling out a 1040-EZ. I never cheated, but I got penalized every once in a while.

i hear what you're saying but this guy is going to be the Sec of the Treasury--he better be able to handle complication and a lot of it.

It's not that he didn't pay his taxes. He didn't pay the self-employment part of Social Security. What would be interesting to know is "Is this something TurboTax/TaxCut catches or not?" If it would catch it he's probably a cheat. If it wouldn't, probably an honest mistake.

But the issue is not the "honest" mistake. He said that he consistently calculated his taxes during his four years at the IMF. The question that he was asked repeatedly and ducked was: when the IRS audited you for the last two years and determined that you erroneously (and perhaps innocently) calculated your taxes, did it not occur to you that having done the exact same calculation for the previous (and unaudited) two years, that you owed money for them as well. And having thought that (which he refused to acknowedge) did you then rely on the legally sound road of being protected by the expiration of the statute of limitations for those two years.

If he did and the senator acknowledged that 99% of his fellow citizens would have done the same, just own up to it and perhaps suggest that at some time in the future it might make sense to convene a real panel on tax simplification.

Don't dodge and duck--that is far from the transparency we have been promised and many of us voted for. And...only 1 1/2 days into the new future!

Gosh, I can't imagine what it's like to be a freelancer who has to pay quarterly estimates that are never on-target and to have sync up once a year. (*snort*)

Lots and lots of us manage to do this. The sad thing is that I'm rooting for Geithner's confirmation, because if we don't get the tax cheat, we get Larry Summers the misogynist.

ali r.
{downtown broker}

interesting take from Charley Gasparino

http://www.thedailybeast.com/blogs-and-stories/2009-01-22/wrong-man-for-the-job/

perhaps he is wrong about Larry Summers, but the rest of his points certainly do make sense. I cannot stand the continual use of the phrase "he's the right man for the job," implying that there are no other qualified candidates. That's ridiculous.

The question from the Senator is a trap. There is no way to answer it without appearing to be a liar, cheater, jerk or idiot. The Senator is simply beating his chest to show who is the dom and who is the sub. Theater of the absurd.

And I couldn't care less who becomes Treasury Sect.

I can't believe I got sucked into this discussion.

But unfortunately, that is precisely the point. through his actions and statements, Geithner has limited his choices are you have so clearly laid out. as i said earlier, why not come clean and see where that leads him. he is playing the rest of us as idiots and while perhaps for reasons of your own you don't care who becomes Tres Sec, I am naive enough to think that it actually matters.

Of course it matters! Christ almighty, are we all that cynical? Does it not matter who Sec of State is? How about Sec of Defense? Rummie did such a great job, right? How about we go all the way to the top, POTUS doesn't matter either?
That's an ignorant statement if I've ever heard one.

Let's just keep Paulson, he's done a bang-up job with the TARP program thus far.

The five stages of political views:

1) idealism - "Change!"
2) denial - "There's no way people re-elected this idiot!"
3) anger - http://en.wikipedia.org/wiki/Category:Congressional_scandals
4) cynicism - see anger
5) apathy - Ahhh. Sweet relief!