Spin Cycle

Popular Atlantic blogger Marc Ambinder calls the Tim Geithner tax issue a "hiccup," which pretty much summarizes the media reaction so far. But does that reflect reality, or a desire to be nice to all things Obama in the January of Good Feeling?

Geithner earned money from the IMF from 2001 to 2004. He was audited in 2006 for not paying self-employment payroll taxes in 2003 and 2004, and he paid up for the error. But it didn't occur to him that he had made exactly the same error on his IMF income from 2001 and 2002 -- until after he was nominated as Treasury Secretary?

That's a hiccup? Why isn't it, on the surface, a conscious decision to not pay taxes in 2001 and 2002?

Moreover, here's some excerpts from the Senate Finance Committee report, which lays out all of the times Geithner was notified that he needed to pay his own payroll taxes, and told how to do it. He even signed a certification asking for additional money (a "gross up") to cover his income and Social Security tax liabilities -- but claims now that he didn't know he was supposed to pay Social Security taxes?

There's an understandable desire to be nice to Obama, and not hang up a key player on the financial crisis. But a hiccup? Don't you need some evidence that this was actually an honest mistake, as opposed to an intentional non-payment? The report:

"IMF employees are responsible for meeting their own tax obligations, including federal income taxes, state income taxes and self-employment taxes. The IMF provides employees with several documents throughout the year to help employees understand and meet their tax obligations. These documents include:

"IMF Employee Tax Manual. This manual is given to employees at the time they are hired and includes information describing how to pay self-employment taxes.

"Quarterly Wage Statements. These statements are provided to employees on a quarterly basis. They report on separate lines for each type of tax the amount of gross-ups for federal, state and self-employment taxes that have been included in wage income for that quarter.

"Year end Wage Statements. These statements are delivered annually via an e-mail that describes the data as very important and includes information regarding the payment of self-employment taxes. The wage statement sent with the e-mail contains a detailed breakdown of wages and compensation paid to the employee for the entire year including........