Timothy Geithner, the tax code’s poster boy
Every four years or so, Washington trots out a new Nominee with a Tax Problem. The latest is Timothy F. Geithner, president of the New York Federal Reserve Bank and one of the architects of the current efforts to end the credit crunch. Geithner somehow failed to pay thousands of dollars in payroll taxes from 2001 to 2004 while working for the International Monetary Fund. Now he’s President-elect Barack Obama’s choice for secretary of the Treasury, which would put him in charge of ... the IRS.
According to news reports, Geithner also claimed improper dependent-care deductions, mishandled a withdrawal from a retirement plan and made other mistakes that required him to pay additional taxes and interest in recent months. Based on what we’ve read so far, we’re willing to accept Geithner’s contention that his errors were inadvertent. Assuming the Senate agrees and confirms him, we’d like Geithner to do us all a favor in return: lead the fight for a radically simpler tax code that is easier to enforce and harder to evade.
The complex rules that trip up financial sophisticates such as Geithner are a minefield for the honest and a gold mine for cheats. It’s long past time for Washington to whittle down the tax laws, stripping the layers of incentives and disincentives in favor of a system that simply raises the money needed to fund the government in a fair and equitable way. Then, perhaps, we can spend more time talking about nominees’ expertise and less about their tax returns.
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