Tuesday, May 05, 2009

Geithner is the Wrong Messenger

Why on earth did President Obama ask Timothy Geithner to talk about tax cheats during his overseas tax plan announcement yesterday? I received a ton of emails and comments from folks totally baffled by all of this. I have no idea why Obama did this.

Here’s an excerpt from Mr. Geithner’s remarks:

Today we are taking another important step toward those goals by ending indefensible tax breaks and loopholes which allow some companies and some well-off citizens to evade the rules that the rest of America lives by.

Huh? Let’s take a look back at Geithner’s “non-answer” answer to a simple question posed by Sen. Jim Bunning during Geithner’s confirmation hearing.

SEN. BUNNING: Would you have paid your 2001 and 2002 tax had you not been nominated to be the treasury secretary?

GEITHNER: Senator, as I said initially, I should have asked more questions when I concluded that audit at the time, and I didn’t. When I think back on that, I regret not having done that. But I should have done it at that point.

Hmm. Incidentally, it’s worth remembering that Geithner was working at the IMF when he dodged his taxes. The IMF itself is a tax haven. The income is tax-free. All you’ve got to do is pay your payroll taxes, which is precisely what he failed to do until he was nominated back in December.

Clearly, Timothy Geithner is not the guy to be talking about tax evasion. All it did was remind people that our current Treasury Secretary—the individual charged with overseeing the IRS— was guilty of a multi-year delay in paying his taxes. Some people are speculating that Mr. Geithner has a limited shelf life as Treasury Secretary. The thought is that Rahm Emanuel, Obama’s current chief of staff, will eventually replace him. More to be revealed.

But the bottom line here is that President Obama demonstrated very poor judgment in using Geithner for this particular attack. I don’t know why he did this.