Last words on the Geithner SE Tax issue

After the jump, samples from a surprisingly strong stream of reader mail about a comment earlier today on whether our Treasury Secretary-designate made an innocent error, or did something more, in neglecting to pay part of his federal taxes for several years. Summary of my view: I think he should be confirmed, since dealing with the economic crisis matters more than anything else. But that doesn't mean that I believe his tax story.

Mail has run approximately 3-to-1 in favor of this interpretation -- which is to say, against Geithner's explanation. (With most but not all people saying they think he should still take office, and soon.) Paragon of fairness that I am, I include samples from three posts on "I'm not buying it" side and two on the "innocent oversight" side. After that, let's move on to coping with the emergency.

"Not an innocent error" dept:

1) I couldn't agree more about Geithner and after 8 years of the rankest, in-your-face demonstration of a two-tiered justice system in which every wrong doer with a white collar has gotten off scott free (who is this scott anyway?) or even been rewarded for his malfeasance I just wish we could go back to the pretense that we have a legal system that works one way for all the people.

Let me hasten to add: I'm so excited about Obama and his promise I could just about burst but this episode keeps me from bumping my nose against the ceiling.
2) I think you failed to mention the worst of the Geithner tale.  Even if one is willing to consider that the initial nonpayment was an innocent error, it is inconceivable that when he was audited for the later years and was told he owed SS taxes, that he didn't also realize that he owed for the earlier years.  But since they could no longer audit those years, he knew he could get away with it. I accept that he may be essential in our dire straits but I can't help thinking that what got us into this mess is a bunch of smart people who thought they could bend the "rules".  Do we really believe that someone else smart who thought he could bend the rules will get us out?

3) I just wanted to say that you express so well what my husband and I have said about this little "tax oversight".  He's clearly lying about what happened, and he clearly, as my husband says, made a mental calculation as to how much of a chance there was that he would get caught and decided to take that chance.  Also when caught for the "errors" of two years, he did not voluntarily go back and correct the previous years they couldn't get him for.

We differ with you in that we WOULD NOT vote for him on those grounds.  We feel helpless with regard to knowing what should be done about this whole economic/fiscal disaster, and you can find seemingly knowledgeable advice on all sides.  We don't have enough expertise to judge what should be done.  But we didn't trust Paulson to make the right decisions and I don't trust Geithner either, based in part on what this says about his character. 

The other part is based on a dilemma:  the only people seemingly knowledgeable enough to help resolve this problem have ties that are too close to the people who caused it and participated in it and are STILL participating in it.

"It was an understandable/innocent mistake" dept:

1) I believe that Mr. Geithner paid the appropriate self-employment taxes in those years on his consulting income. That would argue strongly that he was aware of the difference but did not catch that the IMF worked differently.

It's a black mark, to be sure, but I think the evidence is that it was a sin of ignorance rather than an attempt at fraud. Surely if he meant to evade taxes he would have done it either more thoroughly (paying on none of his consultant income) or more sneakily (so it would not be caught in an audit).

You've worked overseas for many years, so I'm not sure the people you're consulting are a random sample comparable to Mr. Geithner's US- based international employment. [Disagree: The people I'm consulting haven't necessarily lived overseas; what they've done is work for the IMF and similar organizations with unusual status under US tax law.]

2) I take your point about Geithner not paying taxes, but my experience working for a regional planning agency in the '80's, where it was decided that we did not need to pay into Social Security because most of our funding came from the federal government (and we were members of CalPers)suggests that the tax system is so complicated and has so many loopholes that someone needs to simplfy it. Who better than Geithner. If someone has come to me after five years in that system and said, oops, you need to pay back social security and penalties I would not have been able to come up with the money. Not that it is the same situation as he was doing his own taxes. But I'm willing to believe he made a mistake as long as he doesn't make a mistake on rescuing the economy. It is embarassing,

Thanks to all; on to other matters.