Change We Can Believe In - And Deplore

On August 8, 2004, US News reminded us:

[Leona] Helmsley, the Manhattan hotelier and real-estate magnate who notoriously declared that "only the little people pay taxes," was convicted in 1989 of tax evasion and served time at the Federal Correctional Institution in Danbury, Conn.

Her erratic behavior and hasty firings of employees earned Helmsley the nickname the "Queen of Mean" in the 1980s.  Helmsley still nitpicks over the details of the operations of her hotels today. "She pays attention to the menus, to the cleanliness, and to customer service," Rubenstein [her spokesman] says.

Mrs. Helmsley went to jail because she did not declare income when some of her employees, whose salaries were deducted as business expenses by her hotel, made repairs on her house.  Not paying your taxes would seem to be a crime which is worthy of jail time.

In 1993, President Clinton nominated Zoe Baird to be his Attorney General.  After the nomination, it was disclosed that she had hired an illegal alien as a nanny, hired another to be her family chauffeur, and had failed to pay their Social Security taxes as required by law.  Mrs. Baird's nomination was withdrawn, but she didn't go to jail.

The phrase "Zoe Baird Problem" became shorthand for being less then meticulous in observing the law with respect to hiring or compensating household help.  Her problem inspired entrepreneurs to start services for handling the rather complex employment paperwork which is required of people wealthy enough to afford household servants.

After Mr. Obama chose Mr. Timothy Geithner to be his Secretary of the Treasury, Reuters reported that Mr. Geithner neglected to pay $43,000 in income taxes earlier this decade.  Mr. Geithner had also hired a nanny who, although she was legal at the time he hired her, continued to work for him after she became illegal when her visa expired.  Mr. Geithner employed an illegal nanny and he failed to pay his own income taxes.

Mr. Clinton withdrew Zoe Baird's nomination when her infractions of the law came to light.  Reuters reports that Mr. Obama, in contrast, supports his nominee "absolutely."

President-elect Barack Obama "absolutely" stands behind Timothy Geithner, his choice for Treasury secretary, despite "a big mistake" involving his failure to pay some taxes, the incoming White House chief of staff said on Sunday.

Reuters quoted Mr. Obama as saying that Mr. Geithner had made an "innocent mistake."

If Mr. Geithner made an "innocent mistake," why wasn't Mrs. Helmsley's failure to pay her taxes an "innocent mistake?"  Why did Mrs. Helmsley go to jail?

The IRS has traditionally taken the position that ignorance of tax law is no excuse.  Being numbered among the "little people," we at Scragged have no doubt that the IRS would give us a very hard time were we to emulate Mr. Geithner, Zoe Baird, or Leona Helmsley.

Mr. Geithner's confirmation represents a significant change in our polity, but it's not a change we need, it's a change to deplore.  16 years ago, even Democrats regarded breaking the law by hiring illegals and breaking the law by failing to pay income taxes as grounds for rejecting a Presidential nominee.  Now, Democratic grandees such as Nancy Pelosi and Hillary Clinton, who made such a fuss about the Republican culture of corruption, turn out to be equally corrupt.  Rep. Barney Frank influenced the government to bail out a bank which was not eligible to receive our tax money, and Sen Dodd got a sweetheart loan from a bank his committee regulated.

Corrupt politicians accepting illegal behavior on the part of Cabinet officers is very much a change we can believe in, but it's a change that we regard as cause for great concern.  The House of Representatives has left a lawbreaker in charge of writing tax law and now the Senate has confirmed a lawbreaker to a position where he will oversee the disbursement of trillions of taxpayer dollars in the name of stimulating our economy.

We're not alone in our concerns.  In "Woodstock Without the Mud," the New York Times said:

Most of the senators seemed reluctant to poke too hard at Obama's Treasury secretary nominee, Timothy Geithner, even though Geithner has a record of not having paid all his taxes.

"Tim has made some mistakes, which he has freely admitted and corrected," said Charles Schumer of New York.  This is what Geithner's supporters always say.  It's their defenses that make him sound really indefensible.

In the House, Speaker Nancy Pelosi has decided to leave Charles Rangel in charge of the tax-setting Ways and Means Committee during an ethics investigation of his incredibly sloppy personal finances.  In defense, she points out that the House leadership does have standards, and that she kicked former Representative William Jefferson off Ways and Means after investigators found $90,000 in marked bills hidden inside his freezer.  In the Senate, Schumer argues that Geithner's errors "pale before the myriad mistakes made by the operators of financial institutions."

Maybe we should have higher standards for our Treasury secretary than being better organized than Lehman Brothers.  Really, we're ready for a new era that looks a little ... newer.

Mr. Obama's Secretary of the Treasury hires an illegal nanny and cheats on his income taxes and it's OK.  Rep. Rangel cheats on his income taxes and that's OK too.

Mrs. Helmsley was right, only the little people pay taxes.  She thought, wrongly, that her wealth made her a big person; we now know that what makes you big enough to cheat on your income taxes with impunity is to be a big-shot Democrat.

Will Offensicht is a staff writer for and an internationally published author by a different name.  Read other articles by Will Offensicht or other articles on Politics.
Reader Comments
Would you believe a Republican Congressman has formally submitted a bill to do as follows:

"All U.S. taxpayers would enjoy the same immunity from IRS penalties and interest as House Ways and Means Chairman Charles Rangel (D-NY) and Obama Administration Treasury Secretary Timothy Geithner, if a bill introduced today by Congressman John Carter (R-TX) becomes law.

Carter, a former longtime Texas judge, today introduced the Rangel Rule Act of 2009, HR 735, which would prohibit the Internal Revenue Service from charging penalties and interest on back taxes against U.S. citizens. Under the proposed law, any taxpayer who wrote "Rangel Rule" on their return when paying back taxes would be immune from penalties and interest."
January 29, 2009 4:11 PM
Very interesting. Last year, I received notice that I owed a few hundred dollars more in taxes because I misreported taxable investment income. How could $43000 be overlooked? Maybe this was before the age of computers? As we look at the incredible dishonesty of our lawmakers and corporate executives, we must also be aware of the hypocrisy of the common man who receives payment for services "under the table." Waitresses, construction workers, and even consultants all work the system. This extends to health care as well, as government programs encourage businesses to shift the burden on those already over-stressed programs. I have health insurance through my employer and pay a higher rate at the doctor's office and hospital than those 80% in my community who use gov't assistance programs. My insurance rates continue to rise and my employers continue to complain even louder. While I pull the wagon, more people continue to ride. What a country.
January 30, 2009 7:40 AM
These top Democrats aren't the only ones.

Use of Free Car Lands Tom Daschle in Tax Trouble
The health and human services nominee failed to pay more than $128,000 in taxes, mostly for free use of a car and driver, officials said.

I love Helmsley's slogan, "taxes are for little people." How very, very true!
January 31, 2009 8:23 AM
Maybe Geithner really did overlook $43,000.

There are two reasons someone would overlook that amount of money:

a) They don't realize that it's owed.
b) They are making SO much money that the overlooked part is paltry in comparison.

Geithner already acknowledged that he knew about the amount and had acknowledged it previously in 2006. So option a is off the table.

That leaves option b. The IMF is notoriously corrupt. They have paid high ranking officials gobs of money under table for decades. It's possible that Geithner was getting so much money from the IMF that $43k over two yeras was pocket change.
January 31, 2009 12:51 PM
Looks like we're just getting started with the tax cheats on the left...

"Daschle -- Obama's nominee to head the Department of Health and Human Services -- failed to pay $128,203 in back taxes and $11,964 in interest"
January 31, 2009 1:20 PM
Hey, the NY Times is getting on board! About time!


"This is a big problem for Obama, especially because it was such a major, major promise," said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. "He harped on it, time after time, and he created a sense of expectation around the country. This is exactly why people are skeptical of politicians, because change we can believe in is not the same thing as business as usual."

And so in these opening days of the administration, the Obama team finds itself being criticized by bloggers on the left and the right, mocked by television comics and questioned by reporters about whether Mr. Obama is really changing the way Washington works or just changing which political party works it.

Some Republicans saw a double standard. "What would it be like if Hank Paulson had come in without paying his taxes, or any other member of the cabinet?" asked Terry Nelson, a political strategist who worked for President George W. Bush and Senator John McCain, referring to Mr. Bush's Treasury secretary. "It would be roundly attacked and roundly criticized."

Several Democrats, including some who have advised Mr. Obama, said privately that he had only himself to blame for delivering such an uncompromising message as a candidate without recognizing how it would complicate his ability to assemble an administration.

In the campaign, Mr. Obama assailed Washington's "entire culture" in which "our leaders have thrown open the doors of Congress and the White House to an army of Washington lobbyists who have turned our government into a game only they can afford to play." He vowed to "close the revolving door" and "clean up both ends of Pennsylvania Avenue" with "the most sweeping ethics reform in history."

It is fascinating that big time Democrats are telling Mr. Obama that promising to clean up Wasington would make it more difficult to govern. Are Democrats saying that our country can't be governed cleanly? Let's see if Mr. Obama comes through.
February 3, 2009 1:28 PM
It seems that big-time Dems don't care whether cabinet members pay their taxes.

Daschle Apologizes Over Taxes as Allies Give Support
Tom Daschle said his failure to pay taxes on use of a car was inadvertent, while Senate Democrats said they
intended to win his confirmation as secretary of health and human services.

I wonder why Mr. Daschle decided to withdraw his nomination? Was there more we haven't been told about yet?
February 3, 2009 1:31 PM
Maybe the Times has had enough. They're calling on Burris to resign:

So What Tipped You Off?
Now that it appears that Roland Burris finessed some of his testimony about his connection to Rod Blagojevich, the disgraced former governor of Illinois, he should consider resigning.
February 19, 2009 9:09 AM
Today we have Obama appointees going down for bribery and conspiracy. Sigh.

It's getting to be old news at this point:

March 12, 2009 4:37 PM
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