Mr. Geithner's Taxes

If Treasury Secretary-designate Tim Geithner can’t get his own taxes right, why should we trust him with ours? It is a fair question but one that I suspect has a simple answer. My guess is that Mr. Geithner actually does not do his own taxes but instead hires someone to do them. But, that raises a different question and one that is equally troubling: Is he a good judge of character and competence in others? And, if not, what does this say, in turn, about President-elect Obama’s capacity to judge his subordinates?

At the heady levels of executive expertise where Mr. Geithner finds himself, it is the ability to recruit, manage and motivate talented subordinates that matters as much as anything else. He should certainly know his craft, know how to spot unanswered questions or internal contradictions in a briefing, and bring a sense of direction to his department. But, executives must rely on others to work, and to work well, at the tasks to which they are assigned and whomever Geithner got to do his taxes messed up.

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This revelation brought me back to Hillary Rodham Clinton’s "3 a.m." campaign ad in which she tried to raise doubts about Obama. For dramatic effect, much information was left out of that ad but, in fact, we know it would have been the National Security Advisor on the other end of the line and we know that whatever the crisis being reported, the President is likely to have the same two questions: What do you recommend and when can we assemble the team? If the President does not have a knack for picking his subordinates well, that recommendation and that team may not give the best advice.

The other thing about the Geithner tax issue is the sheer amount that he owed. I don’t know about you but I have never earned enough money to owe $42,702 in taxes. Mr. Obama has surrounded himself with very successful men and women. That is a good thing. No one wants a Treasury Secretary who is incompetent. But, there is a type of cultural cronyism to which Democrats are prone. We do not know a lot about the personal lives of the incoming Cabinet. We do not know which among them goes to church every Sunday morning, for example. But, I am quite confident that all of them read the New York Times every Sunday morning, send their children to the best schools where they meet other children of successful parents, have recently driven in a car where the driver was paid to drive, etc. This type of cronyism is not as indelible as the ideological cronyism of the Bush administration but it lays the Democrats open to the charge of elitism that is not entirely a false charge.

I would still vote to confirm Mr. Geithner, short of evidence that he knew he was evading his tax burden. And, it is likely the Senate will do the same. Still, the incident raises some alarm bells and the President-elect needs to do more than keep his blackberry to stay in touch with the world outside the bubble of the Oval Office.

 

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9 years 9 months ago
This issue is not so cut and dried as it seems. I believe that the income from the World Bank and the IMF are tax exempt (except for the Self Employment portion, which is the contribution to Social Security), so he likely did not file taxes. It is easy to make this mistake.

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