Timothy Geithner's expected confirmation as the new U.S. Treasury secretary has been tarnished by news of his perplexing failure to pay self employment taxes for 2001 through 2004 on time.
The fact the former head of the Federal Reserve Bank's New York regional bank made a mistake is not as disconcerting as the reality that when he was first made aware of the problem he didn't fully correct it. A 2006 audit of Geithner's taxes noted that while he worked at the International Monetary Fund he failed to pay U.S. Social Security and Medicare taxes in 2003 and 2004. This news would have constituted a giant red flag to any taxpayer that those identical taxes were also not paid in 2001 and 2002, Geithner's earlier years with the IMF. Geithner even acknowledged signing an IMF statement saying he was aware it was his responsibility to fully pay his Social Security and Medicare taxes.
For some inexplicable reason Geithner failed to pay the 2001 and 2002 taxes until after he was nominated for the Treasury Post.
Granted the federal tax system is in drastic need of simplification but it strains credibility that a man of Geithner's background and training didn't understand his obligations. If he didn't that raises questions about his competency. If he did understand the situation, the other alternative is equally disturbing. The second scenario would be that he thought he could get away with not paying those taxes. If that's the case then it's a distressing critique on the character of a man who will head the IRS and be President Obama's chief adviser in a time of economic turmoil.
While Geithner failed to satisfactorily explain his actions he has apologized for them and has been chastened by members of the Senate Finance Committee.
No one wants to deny the new president the ability to pick the best team possible to implement an economic recovery, but he should be mindful that character is just as important as knowledge in the important federal posts that are being filled.
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