Mark McHugh

My apology to Tim Geithner

In Open Thread on Monday, November 23, 2009 at 1:38 am

Treasury Secretary Tim Geithner’s been getting slapped around like a ping-pong ball lately.  Hatin’ on him has become as perennial as turkey and stuffing.  As much as I’d like to join the dogpile, there’s something I gotta do first…..Geithner Rubik's

My old man was 100% purebred, stubborn Irish blockhead. When he made up his mind about something, he changed his opinion like most people change eye color.  Mom was half stubborn Irish blockhead, and almost half  hot-head Italian (there’s a pinch of French blood that the family doesn’t talk about).  Atonement isn’t in my genetics.  I get headaches whenever I begin re-thinking my position on anything and changing my mind usually results in what I can only describe as near-death experiences. So either I need a double dose of Tamiflu or I owe Tim Geithner a sincere apology…

Background

I’m no Geithner fan (this is widely known), so when the Daily Bail asked me to write some commentary about the Financial Regulatory Reform proposed by the Treasury department, I gladly accepted. It was an opportunity to metaphorically hang, draw and quarter the Treasury Secretary on a pretty big stage. I planned my attack. I would start with Timmy’s tax evasion. I’d written briefly about it before, but this time, I would show in glorious detail his devious nature or fundamental stupidity (hopefully both). I began digging for the dirty details….

And that’s when things went horribly wrong……

more…….

When I wrote about Geither’s failure to pay all of his Social Security and Medicare taxes during his days at the International Monetary Fund (IMF), I was under the mistaken impression that his earnings were reported to him on a 1099 form. The wrap against Geither was that he failed to file Schedule SE (self-employment tax) although he had applied for and received reimbursement for the expense. Schedule SE is how self-employed people and contractors pay into Social Security. Geithner was neither. He was an employee with benefits, and his earnings were reported to him on a W-2.

The IMF doesn’t pay taxes directly to any government, period, including the 50% of the FICA (Social Security) tax that every other American Company has to pay for it’s employees. It’s part of their “We are the World” charade. They us the word “staff” rather than employees and pay allowances to said staff for taxes (“National, State and Local).

Here’s the link to the IMF recruitment page, which states:

…As the United States taxes U.S. nationals on their Fund earnings, the Fund pays a “tax allowance” to staff members paid on a net-of-tax basis who are subject to U.S. national, state, or local income tax on their Fund compensation….

So these useless dickheads, that have managed to collapse the banking system of almost every country they try to “help”, are promising to pay all the taxes associated with your base salary (look up “net-of-tax”) , by adding that money to your base salary……which changes your tax liability…….So I guess they have to give you more money to cover the additional taxes incurred by the Tax Allowance…..and they do this into infinity, I suppose.

No wonder the Bretton Woods system collapsed, but seriously, why are you clowns still here?

So let’s work a simple example:

Say you manage to land a pretty good gig with these guys like Director of the Policy Development and Review Department. Gotta figure an impressive title like that has at least a $200,000 price tag (I will dispute whether or not it makes you a regulator another time…). Now the IMF has promised to pay you a tax allowance (net-of-taxes). So they probably should give you about $50,000 for Federal tax, about $15,000 for FICA, about $10,000 for State, and maybe $2,000 for a 1% local income tax. Then at the end of the year, you get a W-2 stating that your salary was $277,000. Can you say AMT? The way I figure it, your tax allowance will cost you at least an additional 20 grand in taxes.

Hmmm…An IMF policy that doesn’t work as advertised? Go figure.

So Geithner got an allowance to pay some of his taxes, but the “snag” was that he supposedly wasn’t savvy enough to figure out how to pay his employer’s share of his Social Security tax. This amounts to somewhere around $7,000 (depending on year), less than 10% of his total tax bill. In order to do this, we are told, he should have used Schedule SE (Self-employment taxes).

Really? I’ve got a few questions…..

  1. Does anyone care that he isn’t actually self-employed?
  2. Doesn’t Schedule SE require an accompanying Schedule C
  3. Can you put earnings reported on a W-2 on a Schedule C?
  4. Was he supposed to pretend his W-2 was a 1099? So what does he do with the W-2?
  5. Where the fuck are these “specific instructions” he supposedly received? Can I see them too?
  6. How much of his earnings should have been entered on Schedule SE?
  7. Is he still entitled to the “half of SE tax” deduction?
  8. Does he get the self-employed health insurance deduction?
  9. ARE YOU FUCKING KIDDING ME?

Geithner wouldn’t have had any tax troubles if the IMF paid it’s share of his Social Security, like everyone else who reports earnings on a W-2. But nooooooo, not paying them gives you IMF jerk-offs some kind of imagined “we’re not American” cred.   Oooooo, you’re so International!  Do us all a favor; sell the gold, then kill yourselves.

The Apology (and some praise)

Don’t get used to this “Turbo”, but given the ridiculous set of circumstances you were faced with during your tenure at the IMF, I can honestly say I would have prepared my taxes exactly as you did, unless I had extremely detailed instructions directly from the IRS.  I criticized you without understanding the situation.  That was very wrong and I am sorry!!!  (psst….in the original published version of this piece, I actually forgot the apology…..told you this wasn’t easy for me).

If Tim Geithner had filed a return in the manner suggested by the IRS, that would have been crazy. I mean, underpants on your head retarded. If the IRS wants returns prepared in that manner, make them put it in writing so that they can be the laughingstock.

I am genuinely impressed with the composure Mr. Geithner showed during the confirmation hearings. He stepped in front of every bullet regarding his taxes. He apologized for mistakes that weren’t his fault and refused to cast aspersions on his former employer, the IRS, or the software he used. But when you look closely at the circumstances surrounding his tax nightmare, he was actually a victim of two self-important bureaucracies that refuse to work together or act logically. He let his own reputation get beat like a pinata rather than speak ill of others. I have to respect that.

His new boss didn’t help matters any either.  When Geithner was selected to serve as Treasury Secretary, the Obama administration made him file ammended  ’01 & ’02 returns, and pay additional taxes.   But “normal” Americans are only allowed to file ammended returns for the prior three tax years, so even if he wanted to, geithner couldn’t have filed an ammended ’02 in 2006.  So the new administration actually pulled strings to make their guy appear even sleazier (nice..).  And through it all, he continued to blame only himself.  Good Soldier.

Why I’ll never be Treasury Secretary…..

Whatever you’re thinking, just shut-up and suspend your disbelief.  I put myself in Turbo’s shoes, and tried to imagine what my Senate Finance Commitee Confirmation hearing might be like…it wasn’t pretty….Here’s a partial transcript:

Senator Grandstanding Fathead: So you admit that you failed to pay Social Security Tax while employed by the IMF.

Me: Yes Senator, It was an unintentional, inexcusable, careless mistake on my part (….God, this hurts)

GF: What Tax Software did you use?

Me: The software was not at fault (those tools at the IMF were), but I used Turbo-Tax ([laughter]….what the fuck’s so funny about doing your own taxes?)

GF: How can we entrust the collection of Taxes to a man who’s averse to paying them himself?

Me: Eat the corn out of my shit (I said that out loud, didn’t I?).

GF: Excuse me?

Me: (here we go…..)  that’s right, fuck-face.  Douche-bags like you are the reason our tax codes are fifty times longer than “War and Peace”.  Do you prepare your own tax return?  FUCK NO!  [nervous laugh] You spend your life passing laws you don’t even understand, because they were written for you by your “campaign contributors” [finger quotes].  AND YOU HAVE THE NERVE TO LAUGH AT ME FOR DOING MY OWN TAXES!!!…DO YOU EVEN KNOW WHAT MY BIG “INEXCUSABLE” [more finger quotes] MISTAKE WAS?…..DO YOU?……KEYING IN MY W-2 AS A W-FUCKING-2!!!!!!….IMAGINE THAT!!! [maniacal laughter]…..OH SURE, I GOT THE “INSTRUCTIONS” [psychotically over-dramatic finger quotes]…KNOW WHAT I THOUGHT?…I THOUGHT IT WAS ONE OF THOSE OFFICE JOKES…YA KNOW…LIKE WHEN YOU COME BACK FROM LUNCH AND FIND AN URGENT MESSAGE TO CALL MR LYON RIGHT AWAY, BECAUSE EVERYONE WANTS TO KNOW IF YOU’RE STUPID ENOUGH TO SAY “CAN I SPEAK TO MR LYON?” BEFORE YOU REALIZE THAT YOU’RE TALKING TO THE FUCKING ZOO!!!!….I THOUGHT IT WAS LIKE THAT [off-the-charts manical laughter]….IT WAS LIKE GIVING SOMEONE A RUBIK’S CUBE TO DO THEIR TAXES!!!!…HAD TO BE A JOKE, RIGHT?…BUT THEN IT TURNS OUT I WAS REALLY SUPPOSED TO PRETEND I WAS SELF-EMPLOYED SO THE IMF COULD SEEM MORE “INTERNATIONAL”!!!!!!….FIVE YEARS LATER SOME IRS JACK-OFF WANTS TO MAKE A NAME FOR HIMSELF BY BUSTING THE PRESIDENT OF THE NEW YORK FED….AND I SAY, “SORRY, MY MISTAKE”, PAY THE TAXES PLUS INTEREST, WITH NO RE-IMBURSEMENT….AND I THINK I’M DONE….THEN, THEN MY NEW BOSS WANTS ME TO PAY EVEN MORE TAXES AND PENALTIES…TRY TO SELL MY FUCKING HOUSE AND MOVE TO WASHINGTON…AND KNOW WHAT I SAY???….”FUCK YOU!”????..NO, NOT ME…I SAY, “IT WOULD BE AN HONOR”….AND NOW, NOW I’M GETTING MY INTEGRITY QUESTIONED BY SOMEONE WHO MAKES BERNIE MADOFF LOOK LIKE A CHOIR BOY!!!…AND SO I SAY TO YOU “EAT THE CORN OUT OF MY SHIT” [panting]

At this juncture in the proceedings, I would leap onto the table, drop my trousers, and try to drop a duece which I would promptly throw at my inquisitors (and won’t they be surprised to learn that I really don’t care much for corn).  At some point, however, I’m sure my presentation would be interrupted and I’d be physically removed…sobbing, cursing, snot bubbling from my nose…….never to be heard from again.

Epilogue (or something)

Hope you enjoyed my Hallmark moment with Tim Geithner.  I hate to see anyone get a bum rap, even people I don’t like much.  In a world where so many people pass the blame every chance they get, it’s good to see someone who accepts responsibility above and beyond duty (perhaps even beyond reason).  And that’s where I start to worry again.  There’s a fine line between being a good soldier and being a patsy. I hope Treasury Secretary Geithner understands that. 

Geithner Rubik's

  1. Funny post Mark, even though I can’t stand the SOB,it sucks to see anyone get a bum wrap.

    Have you been hearing anything about the alledged bullion that has been turning up that is really gold plated tungsten?

  2. I have heard a little about that. I heard it about bars (not coins). One of the things I’m concerned about is people selling “proof” coins on ebay. They look just like the real thing, except they have “copy” stamped on them….can’t help but think what might happen if they didn’t have that stamp. Reminds me of a Nostradamus quote (and I’m not a fan of him in general):

    Quatrain 28 in book eight:
    “The imitations of gold and silver will become inflated which after the rape are thrown into the fire, after discovering all is exhausted and dissipated by the dept. All scripts and bonds are wiped out.”

  3. I forgot to say, “Yikes!”

  4. Tungsten would be a tuffie, same density as gold, good conductor. You’d have to melt the gold to discover it. I was wondering if it would “sound” different?

  5. This is very convincing piece of journalism. Plus its got great dynamics!

    So instead of being a corrupt liar, Timmah’s merely corrupt? I can accept that.

  6. I do not know if it would sound different, but apparantly they are hiring a bunch of assayers to test drill every bar and assay the filings to see exactly how bad they have been cheated…

    Kinda makes you wonder were the real gold went, the governments of our worlds gold is supposed to be “safe”.

  7. SNK,

    I’m not going to brawl with you (especially defending Turbo), but I think I’d paint Geithner with a different shade of grey….

    Geithner’s Dad worked for Ford and his Mom was a piano teacher. He wasn’t born to be a master of the Universe. I see nothing in his background to suggest he was even remotely qualified to be President of the New York Fed. I believe he was selected by the banksters because he wouldn’t make waves. They could tell him what to do (or not to do) and he’d follow (“Don’t worry kid, we’ll show you the ropes”).

    When you don’t know what to do, you tend to listen to the people whispering in your ear, and therein lies the problem……..

    He’s a fall guy, corrupt primarily because he won’t oppose his masters. Not a quality I want in my Treasury Sectretary, but I don’t want Jamie Dimon either.

  8. Mark, those are all great points, but these subtleties are hurting my brain–ack! I don’t think I’m far enough along in my anger management therapy for all this! You are a better person than I.

  9. Perhaps the gold was removed and replaced as a result of the manipulated bankruptcy of the United States of America in 1930.

    It is difficult to believe someone “stole” it, or that we would actually attempt to pull off this fraud on the Chinese.

    Happy Thanksgiving Mark.

    The Bankruptcy of The United States

    United States Congressional Record, March 17, 1993 Vol. 33, page H-1303

    Speaker-Rep. James Traficant, Jr. (Ohio) addressing the House:

    “Mr. Speaker, we are here now in chapter 11. Members of Congress are official trustees presiding over the greatest reorganization of any Bankrupt entity in world history, the U.S. Government. We are setting forth hopefully, a blueprint for our future. There are some who say it is a coroner’s report that will lead to our demise.

  10. SNK,

    I think there’s something about him that rattles those “reptilian brain” instincts in you (and those feelings may be quite valid).

    Congrats on your DB piece! and Happy Thanksgiving

  11. Gompers,

    Well that was quite a bombshell you just dropped. I never heard any of that before and I can’t process it all right now (I’ve been scrapping with a Microsoft troll all night).

    So I’ll just say Happy Thanksgiving and I’ll talk to you soon!

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  13. (i promise not to make a habit of harassing you by way of emailed comments, but… )

    this one is a tour de force (i.e. really f-ing awesome). i think you hit the geithner nail on the head, too — patsy, fall guy, good soldier, NOT the master of the universe type.

    although… he seems to be growing into a sort of quasi-master of the universe kind of guy of late. albeit, the kind that still has to call up bob rubin or somebody six times a week, but he did save the world or something.

  14. I agree, Doc. You pull somebody from obscurity, tell them, “don’t worry, we’ll tell you what to do kid…” At some point, that person realizes how much power they actually have and how much criminal activity they’ve been engaged in. Looks like Geithner has been lost to the dark side.

    This reminds me of a funny story. My old man told me his first job was being a shakedown artist, but he didn’t realize. He grew up near Shibe Park (Connie Mack Stadium), where the Phillies used to play. A poor Philly neighborhood that was going downhill. The kids in the neighborhood would go to the streets around the park and offer, “Hey mister, I’ll watch your car for a dollar…”

    According to him, he didn’t understand the threat he was implying to the hapless sports fan, he thought he was performing a public service.

    I’m not sure how much I trust his recollections of motive on that one…

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