Geithner's Taxes and Obama's Tickets

Tim Geithner, Obama's choice to be treasury secretary, claims about his failure to pay $34,000 of taxes:
These were careless mistakes. They were avoidable mistakes. But they were unintentional. I should have been more careful.
But the taxes that he should have paid are self-employment taxes. The self-employment tax replaces the Social Security and Medicare taxes of income that we are all required to pay -- if you don't have an employer withholding and doing employer matches, you are supposed to pay the entire amount yourself on your tax form along with your quarterly estimated tax statements.

In other words, these are really basic taxes that every consultant in the country pays on every penny of contract income. The most basic form where you declare non-W2 income has a line that tells you that you owe this. If you use Tax-Cut or Turbo-Tax, the software automatically puts in the amount. No tax accountant in the country will mistakenly leave it out. Tell someone with independent income that you "forgot" to pay self-employment tax and he'll snicker at you. So, I'm surprised that Geithner seems to be getting away with his whopper (see also James Fallows' comment at the Atlantic).

The real clincher, however, is that Geithner worked at the IMF and failed to pay self-employment taxes for 2001 to 2004. Due to the statute of limitations, an IRS audit was able to demand that he pay only 2003-2004. A person who made a honest mistake would then have paid up 2001 and 2002 as well. But not Geithner. It was not until he was tapped to be Treasury Secretary that he decided to pay what he owed from 2001. In other words, he was not going to pay the tax as long as he could get away with it.

Of course, this is not very different from Obama paying 17 traffic tickets dating from 1988-1991 weeks before he launched his presidential bid. Two peas in a pod, these two men are. If a law is not diligently enforced, they won't abide by it.

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