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Change We Can Believe In - And Deplore

By Will Offensicht  |  January 29, 2009

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 Baird's nomination was withdrawn, but she didn't go to jail.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.