In 2009, we had “Geithner-gate”: a string of Obama nominees, including the head of money matters for the country, who were flagged for tax errors, inaccuracies and flat out failing to report income.
Treasury Secretary Timothy Geithner failed to timely pay $34,000 in taxes, citing confusion about his independent contractor status. Geithner ultimately blamed TurboTax for the error, said he was sorry, and was confirmed as Treasury Secretary.
Health and Human Services Secretary Kathleen Sebelius likewise announced that she made “unintentional errors” on her tax returns. Prior to her confirmation, she corrected three years of tax returns and paid more than $7,000 in back taxes.
The prior nominee for Health and Services Secretary, Tom Daschle, did not fare so well. The former Senator from South Dakota failed to disclose more than $325,000 in reportable income and eventually paid an additional $128,203 in federal income taxes, plus $11,964 in interest.
Ron Kirk, Obama’s nomination for U.S. Trade Representative, owed an estimated $10,000 in back taxes at one point. White House spokesman Ben LaBolt referred to the obligations as “a few minor issues.” He was eventually confirmed.
Nancy Killefer withdrew her nomination to become chief performance officer in the Obama administration citing “unspecified tax issues.” Those tax issues turned out to be a $946.69 tax lien on Killefer’s home relating to a failure to pay unemployment compensation tax on household help. The lien was paid off five months after it was filed.
And so it went.
Obama’s administration was blasted from the right and left alike for the embarrassments. Top tax professionals, finance leaders and members of the taxpaying public wondered aloud how so many could get it so wrong. Journalists and bloggers, myself included, alike took to the airwaves, internet and newspapers to decry the failures to timely pay taxes. None were so vocal as Glenn Beck, the widely popular Fox News personality, who referred to the failures as “a culture of corruption among some of the left.” He mocked the excuses of Obama’s nominees, labeling them “tax cheats.”
Beck is the founder and CEO of Mercury Radio Arts, a highly successful multi-media production company, which touts, among other things radio, books and a web site. In 2009, Beck’s Mercury Radio Arts grossed $23 million in revenue. Not bad for… a tax cheat?
It turns out that Mercury Radio Arts has committed a few tax errors of its own. The company has previously fallen behind on New York City business income taxes and has been cited for filing errors in two states. In 2007, the company was penalized $10,927.49 for overdue 2006 New York corporation taxes and was later cited for failing to carry worker’s compensation insurance. In 2008, the company used the wrong tax form in Texas, resulting in compliance issues. All three cases were eventually resolved.
To be fair, Mercury Radio Arts’ tax issues were relatively minor and were resolved fairly timely – much like Killefer and Sebelius (I’ll admit that I don’t think there’s any excuse for Daschle).
But perhaps if Beck publicly addressed his own issues for what they are, there could be a positive spin on this. Maybe it could be a talking point about how complicated our tax system has become and how difficult it can be to navigate the system. Killefer and Mercury Radio Arts both ran up against compensation issues related to their employees, a mistake that even accountants make. Geithner faced a rather complicated reporting scheme because of his employment status at the IMF. And Sebelius’ biggest error, like Mercury Radio Arts and its New York workers’ compensation issue, was related to documentation.
It’s easy to point fingers. Beck happens to do it for a living – it’s what made him famous. He has said of the Obama nominees, “I finally found out why liberals don’t mind taxes — they ain’t paying them.”
Notwithstanding whether those mistakes make them fit for office, ultimately each of Geithner, Killefer, Daschle, Sebelius and Kirk acknowledged their tax mistakes and paid any resulting taxes owed – as did Beck’s company. Does that make them all tax cheats, Beck included? I don’t think it does. Perhaps, it simply makes them human.