Posted on 01/15/2009 6:25:15 AM PST by the Real fifi
The media rush to exonerate Timothy Geithner's failure to pay his self-employment tax as an "innocent mistake" (in Obama's words) ignores a crucial fact: even after he knew of his liability thanks to an IRS audit, he failed to pay taxes on years covered by the statute of limitations. Additionally, his failure to pay in the first place flies in the face of the fact that his employer, the IMF, notified him regularly of his obligation, and even paid him half of the tax liability, in lieu of the employer's share, money which he kept for himself.
(Excerpt) Read more at americanthinker.com ...
Here is what others are saying:
UPDATE: Additional facts have come to light that make this situation much more serious. Byron York reports that IMF employees received additional compensation that was earmarked for their portion of FICA taxes. Their incomes were, as the IMF put it, “grossed up.” Thus, Geithner accepted “reimbursement” from the IMF for taxes that he didn’t pay. Not only that, he certified that he would pay the taxes:
The IMF did not withhold state and federal income taxes or self-employment taxes — Social Security and Medicare — from its employees’ paychecks. But the IMF took great care to explain to those employees, in detail and frequently, what their tax responsibilities were. ...
The tax allowance has turned out to be a key part of the Geithner situation. This is how it worked. IMF employees were expected to pay their taxes out of their own money. But the IMF then gave them an extra allowance, known as a “gross-up,” to cover those tax payments. This was done in the Annual Tax Allowance Request, in which the employee filled out some basic information — marital status, dependent children, etc. — and the IMF then estimated the amount of taxes the employee would owe and gave the employee a corresponding allowance.
At the end of the tax allowance form were the words, “I hereby certify that all the information contained herein is true to the best of my knowledge and belief and that I will pay the taxes for which I have received tax allowance payments from the Fund.” Geithner signed the form. He accepted the allowance payment. He didn’t pay the tax. For several years in a row.
If Byron’s description is correct (and I’m confident it is), it represents a level of carelessness that is not going to be tolerated in a Treasury Secretary at this moment in history. I expect Obama to withdraw Geithner’s nomination.
VIA POWERLINE BLOG
Geithner lacks the character....
Sadly, CHARACTER, doesn’t seem to matter anymore.
I know college interns who work as subcontractors who pay their taxes. Are they overqualified to run this banana republic?
If Geithner lived in California, he could send an IOU to the Franchise Tax Board....
Geithner is an undocumented taxpayer, dodging the taxes Americans refuse to dodge.
On the other hand IMF's own internal accounting system is not capable of handling the tax withholding needs of its own employees.
Why anyone would want to continue tolerating this level of indolence and incompetence in the IMF is beyond my reckoning.
Obama's FIRST ACT should be to extricate the US from the IMF.
Just like drunk driving, drowning a girl, and leaving the scene of an accident is punishable only if you're not an elite. Driving under the influence of drugs in DC.... you do it, you go to jail... a Kennedy does it... Congress. ..... oh and they get to lecture us about how they know how to "fix" the country.
It's all cr#p. Everything. For the next four years we will see a collection of incompetents, thieves, shysters, idiots, sloths, perverts and scammers.
I remember how Rubin was such a genius at finances. I remember him telling us how we should run the country's money supply and spending. He did wonders over at CITI.
Starve the beast. Cut taxes, get spending out of DC. That's the only way. RINO's are just democrat-lite. They are actually worse than democrats, cause they are the enemy within our own camp.
On the contrary, he has proven and perfect character for the job. We just need to slighty adjust the job title.
Thief in Chief
After all, look at how well Paulson performed.
No. You
re wrong. IMF is an international organization exempt from that obligation which is why US employees are responsible for paying it. The IMF—with all its cushy bennies —nevertheless reimburses its employees for what would be the IMF share so that when the employees pay the tax it is less onerous. It’s less onerous , indeed, when, like Geithner , they simply pocket that extra money and pay nothing to the US treasury.
On second thought, I don't have a problem there. What should disqualify him is his giving lip-service to the idea that our tax code is workable.
The question is does the republicans have enough Balls to block it??? I would bet NO!!
Why not write your Senator and ask him if he thinks having a tax cheat’s signature on our tax forms is a good idea?
What people are not considering is the effect on the market if this guy is not eventually confirmed...knowing what I know about the IMF, I don’t think this is a big deal. However, the market dropping like a bomb does concern me. I hope the GOP is prepared to own the worsening economy if they do this because they will. Even Fox Business asked pointed questions of Vitter (why is this guy even out there;every time he is a guest, afterword someone mentions the prostitute scandal) concerning the effect on the market...The GOP has known about this since December;it looks very political. I don’t think Americans will take kindly to any party playing partisan games with the economy.
Geithner lacks character
he will never have the stature and credibility a US Treasury Secretary needs to ask the American taxpayer to make any kind of sacrifices, or to honor their commmitments under the tax code
he is obviously a greedy arrogant elitist - but then, he fits right in with the new era of zerO
if he is confirmed, then any US taxpayer who paid any kind of IRS penalty for making an “honest” mistake during 2001-2006, should receive a refund of that penalty, since Geithner paid NONE
Now, on to Charlie tax-free Rangel
Why stop there? This is becoming a highly flawed (and crooked) cabinet with this clown, Hillary, and Holder on their way in the door.
How far a slick tongue carries a man!
excellent idea !! I think I’ll do it.
Makes me wonder if more of the American "NON-employees" of the IMF did the same thing as Geithner.
The arrangement might have been viewed as sort of a "double perk" for the Americans in the IMF club.
Yes, according to yesterday’s NYT about 50% of them. They are transnationalists in their views and are therefore entitled not tohave to pay taxes you know.
http://www.americanthinker.com/blog/2009/01/the_geithner_grossup_grossout.html
We may not need the Republicans to have cajones in this case. Dems and Reps are playing it safe so they can’t be accused of deep-sixing Geithner, and the MSM are being their usual biased selves. However, yesterday’s NYTimes editorial was bad news for Geithner and may indicate that, behind the scenes, political and media support for Geithner are not strong in light of what has come out. With Citigroup in free-fall and Bank of America having real trouble with its Merrill merger, the US economy is in a parlous state. If Geithner’s confirmation hearings next week catch the public’s attention, the average Joe may start making noise about why he (Joe) would be called a thief for not paying taxes, while Geithner is made Secretary of the Treasury despite doing the same. If Geithner thinks he may be humiliated next week, he may take himself out of the running over the weekend “for the good of the country”.
Derivatives!!!!
However, Citibank was only the third largest holder of derivatives as of June.
Who were number 1 and 2?
JP Morgan holds around three times more derivatives than Citigroup. And Bank of America is number 2.
As Martin Weiss, PhD writes:
Bank of America was a somewhat bigger player, holding $39.7 trillion in derivative bets, with 93.4% traded outside of any exchange.
But JPMorgan Chase was, by far, the biggest of them all, towering over the U.S. derivatives market with more than double BofA’s book of bets — $91.3 trillion worth. This meant that JPMorgan Chase controlled half of all derivatives in the U.S. banking system — a virtual monopoly that tied the firm’s finances with the fate of the U.S. economy far beyond anything ever witnessed in modern history. Meanwhile, $87.3 trillion, or 95.7% of Morgan’s derivatives, were outside the purview of any exchange.
One bank! Making bets of unknown nature and risk! Involving a dollar amount equivalent to six years of the total production of the entire U.S. economy! In contrast, Lehman Brothers, whose failure caused such a large earthquake in the global financial system, was actually small by comparison — with “only” $7.1 trillion in derivatives.***
At Bank of America, the [Office of the Comptroller of the Currency] calculated that, at mid-year, the bank was exposed to the tune of 194.3% of its capital. In other words, for every $1 of capital in the kitty, BofA was risking $1.94 cents strictly on the promises made by its betting partners. If about half of its betting partners defaulted, the bank’s capital would be wiped out and it would be bankrupt. And remember: This was in addition to the risk that the market might go the wrong way, and on top of the risk it was taking with its other investments and loans***
And if you think that’s risky, consider JPMorgan Chase. Not only was it the largest player, but, among the big three U.S. derivatives players, it also had the largest default exposure: For every dollar of capital, the bank was risking $4.30 on the credit of its betting partners.
Someone will be along shortly to tell you the melt down is the fault of CRA. Sure it was!!!!
Thanks for answering my question!
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