Academic

It seems like every day you pick up a paper (figuratively) and see that one of Barack Obama's cabinet choices is withdrawing, being sued or paying back taxes.  What is going on here?  Did the Democrats think they would never be back in office, so they just let their selves go?  Or is this mere posturing (in the case of Mary Schapiro) and nitpicking (in the case of Timothy Geithner)?

I have gone back and forth today over whether the flap over Geithner's tax problems is warranted or not.  From the headlines, I thought Geithner was squirreling away drug profits or something:  "Timothy F. Geithner, the president-elect?s choice for Treasury secretary, failed to pay more than $34,000 in taxes early this decade."  Hello, how does that happen?  This isn't a case of someone giving a paid lecture for $500 and not getting a 1090 and forgetting about it.  Except that it may not be that far from that.  Between 2001 and 2003 or 2004, Geithner worked as a senior official at the IMF, which does not withhold for Social Security and Medicare, paying U.S. employees a "gross-up" payment of half of what the employee will need to pay the full 15% to the U.S. government.  According to the IRS, half of these kinds of employees forget (or maybe not) to pay these taxes when they file their income tax returns.  So, this is sort of old news and a 2006 audit resolved the issue with no penalties and mere reimbursement of back taxes owing from 2003 and 2004, although a statute of limitations kept the IRS from pursuing similar amounts from 2001 and 2002.  Once Geithner was nominated for the Treasury position, he offered to repay the 2001 and 2002 amounts.  (The NYT asks why he didn't voluntarily pay these amounts before.  Because all of us honest people would gladly pay amounts we don't legally owe the IRS.)

So, the IMF salary snafu doesn't bother me too much.  I can live with that.  Ditto with Geithner's immigrant housekeeper problems.  Admittedly, anyone since the 1993 Clinton AG picks of Kimba Wood and Zoe Baird should realize that all household employees should be documented and taxed appropriately.  (Interestingly, see PunditMom, who is skeptical that Obama can forgive Geithner's housekeeper problems when two women were not forgiven for similar domestic screw-ups.)  However, I can forgive Geithner because at the time of hire, the housekeeper was legally in the U.S.; her status expired three months before her employment ended.  Should it be routine to check your housekeeper's status on a monthly basis?  I don't believe anyone who says that they do.  So, I can get past this, too.

But deducting sleep-away camp for his teenagers as child care?  That's just silly.  As someone with three kids who tries to max out the child care credits with day care, after-school care and summer day camp, I understand the temptation.  However, if this kind of sleep-away camp needs to be subsidized so parents can have gainful employment, then we need a very different kind of Treasury Secretary.  Preposterous.