Search the Site

Tax Cheats or Tax Idiots?

INSERT DESCRIPTIONTom Daschle (Photo: Brendan Smialowski/The New York Times), Nancy Killefer (Photo: Doug Mills/The New York Times).

So today is a two-fer: both Tom Daschle and Nancy Killefer will not be joining the Obama administration, as planned, as Health and Human Services secretary and chief performance officer, respectively.
They were both undone by failure to pay taxes.
Tim Geithner, meanwhile, the new Treasury secretary, was recently confirmed by the Senate despite his own tax failures.
Good God: what does it say about the U.S. tax code that people like Geithner, Daschle, and Killefer haven’t properly paid their taxes?
(By “people like” them, I mean people who are smart and accomplished, have been through many application and vetting processes in their careers, and above all have reason to comply with tax-paying.)

Here, we’ll make it a quiz:
A. If all three of them were intentionally cheating (and getting away with it until high-level scrutiny), then it’s much too easy to cheat on taxes.
B. If all of them made honest mistakes, then the tax code simply isn’t working.
C. If there’s some combination of cheating and mistakes, then it’s too easy to cheat and the tax code isn’t working.
I’d vote for C. We wrote a column about tax cheating a while back. It included this passage:

The first thing to remember is that the I.R.S. doesn’t write the tax code. The agency is quick to point its finger at the true villain: “In the United States, the Congress passes tax laws and requires taxpayers to comply,” its mission statement says. “The I.R.S. role is to help the large majority of compliant taxpayers with the tax law, while ensuring that the minority who are unwilling to comply pay their fair share.”
So the I.R.S. is like a street cop or, more precisely, the biggest fleet of street cops in the world, who are asked to enforce laws written by a few hundred people on behalf of a few hundred million people, a great many of whom find these laws too complex, too expensive and unfair.

Maybe the gross embarrassment over these high-profile tax failures will at least spur some tax-code sanity — like the Simple Return, promoted by Austan Goolsbee, who has Obama’s ear.
People like Daschle wouldn’t fill out the Simple Return, but it might free up the I.R.S. to catch tax cheats before the Senate confirmation hearings flush them out.