Wednesday, February 4, 2009

If They'd Only Investigated Themselves as Much as They Investigate Blackwater. . .

If the new administration had investigated its own appointees as well as its partisans have been investigating Blackwater, perhaps our new president would have avoided some of the big tax-cheat scandals in his cabinet picks.

Amy Ridenour of the National Center for Public Policy Research in Washington takes note:

Remember the ultra-mini Blackwater tax scandal of 2007? In it, liberal Senators Barack Obama, John Kerry and Dick Durbin kicked up a fuss because Blackwater treated security guards it employed in Iraq as independent contractors (making them responsible for paying their own taxes) rather than as employees whose income and payroll taxes were deducted from their paychecks.

Obama and Durbin sent a letter to Bush Administration Treasury Secretary Henry Paulson complaining that misclassification of employees as independent contractors contributes to the 'tax gap' (that is, the difference between the amount of taxes legally owned to the federal government versus the amount collected), and seeking a full investigation into Blackwater.

Fast forward 15 months. After sticking behind a Treasury Secretary nominee with 'tax gap' problems of his own, Barack Obama is pushing for an HHS Secretary, Tom Daschle, who somehow managed to leave $83,333 in consulting income off his 2007 tax return, deducted $14,963 in non-existent charitable contributions from his 2007 tax return, and accepted $73,031 worth of car and driver services in 2005, $89,129 worth in 2006 and $93,096 worth in 2007 without it occurring to him over three solid years that these benefits are taxable income.

And then there's the unresolved question of possible tax liability for luxury travel paid for by others. Of the Daschle nomination, John Kerry is saying 'there is a completely understandable, absolutely acceptable and rational explanation for what happened here.' (Blackwater had a stronger case than does Daschle, but never mind.)

For his part, Dick Durbin is assuring the country, 'If all you knew about Tom Daschle was that he used to be a Senator, and he made a mistake and had to pay over $100,000 in back taxes, you have a right to be skeptical, even cynical. But if you know Tom Daschle, you know better.' Where is the concern for the 'tax gap' now?>

The bottom line, of course, is that our leaders should not tolerate tax cheats. At the same time, the public should no tolerate politicians who use the tax laws as political weapons against people and companies they don't like. Blackwater's practice of hiring contractors is entirely lawful and ethical, but certain politicians wanted to beat up the company anyway. Those same politicians' excuses for Daschle and other obvious tax cheats shows how insincere they are. They have destroyed any credibility they might have had in criticizing Blackwater, and hopefully we've heard the last of them on this subject.

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