Politicians and Tax Problems

Senate Holds Confirmation Hearing  For Tom Daschle As HHS Secretary

The Washington media has been abuzz the last few weeks with the news of tax problems by two of Obama’s Cabinet appointments. Most recently, Health and Human Services nominee Tom Daschle somehow missed $128,000 in taxes and another $15,000 in penalties and fees.

Prior to that, it was revealed that Tim Geithner is not good enough with money to figure out his own taxes, but too good with money to not be appointed Secretary of the Treasury.

To be fair, I feel that tax avoidance is, at least in theory, a noble pursuit. What better way to prevent the government from doing evil things then to take away its lifeblood? But then, I’m not engaging in the hypocrisy of voting for taxes on others.

(Note: I neither engage in, nor really recommend that others engage in, tax avoidance as an actual pursuit. Unlike Washington pols, real people pay substantial penalties for such behavior.)

These politicians have access to financial advice and support that the rest of us can only dream of. Yet they still ran into serious tax problems. One of two things must be true:

  1. They are lying, cheating hypocrites.
  2. The tax code is too complex even for those with great resources.

Or is it both?

Update 2/3/09 @ 12:27pm: AP is reporting that Daschle has withdrawn from the nomination for HHS Secretary.

Update 2/3/09 @ 6:58pm: Obama’s nominee for deputy director at the Office of Management and Budget and the newly created position of Chief Performance Officer, Nancy Killefer, has also withdrawn because of tax problems. It was revealed in early January that she had had a lien put on her property by the District of Columbia for failure to pay unemployment compensation tax on household help. Administration officials had refused to say whether her tax problems extended beyond this one issue.

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