Daschle Pulls ahead in the Who in Obama's Cabinet forgot to pay their taxes horse race

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**Frazzled**

Daschle fails to pay $128,000 in taxes, gives the finger to Geitner declaring "Ha, you only failed to pay $34,000. In your face Geitner, oh wait this isn't on the record is it?"

http://www.breitbart.com/article.php?id=D963J3G80&show_article=1

WASHINGTON (AP) - Trying to salvage his nomination, Tom Daschle apologized Monday for delinquent tax payments as President Barack Obama and a top Senate chairman stood by him as the choice to lead the Health and Human Services Department.
Following a weekend of revelations about taxes and potential ethical conflicts, Daschle expressed remorse to the Senate Finance Committee, the panel that will decide his fate, saying he was "deeply embarrassed and disappointed" about failing to pay more than $120,000 in back taxes.

Obama, speaking to reporters, said he was "absolutely" supporting his Cabinet choice. Sen. Max Baucus, D-Mont., chairman of the Senate panel, said he backed Daschle's confirmation. The expression of support from Baucus came hours before Daschle was scheduled to meet with the committee and despite a less than amicable relationship between the two men.

Daschle wrote a letter to the top leaders of the Finance Committee. The letter, released Monday, sought to explain how he overlooked taxes on additional income for consulting work and the use of a car service. He also deducted more in charitable contributions than he should have.

Daschle recently filed amended tax returns for 2005-07 to report $128,203 in back taxes and $11,964 in interest.

"I am deeply embarrassed and disappointed by the errors that required me to amend my tax returns," said Daschle, the former Senate Democratic leader. "I apologize for the errors and profoundly regret that you have had to devote time to them."

In the letter dated Feb. 1, Daschle provided a timeline for when the errors were discovered and tax payments made.

Uncertain is whether the tax issue will stall or derail Daschle's nomination.

"The ability to advance meaningful health reform is my top priority in confirming a secretary of Health and Human Services, and I remain convinced that Senator Daschle would be an invaluable and expert partner in this effort. I am eager to move forward together," Baucus said in his statement.

Daschle and Baucus have had tussles in the past over Baucus' handling of former President George W. Bush's 2001 tax cut proposals, the Medicare prescription drug bill in 2003 and trade legislation. Baucus has shown a greater willingness to negotiate with Republicans than most Democrats.

Daschle was an early supporter of Obama's presidential bid and several of Daschle's former Capitol Hill staffers went to work for Obama after Daschle, then a South Dakota senator, lost his re-election bid in 2004.

Daschle filed the amended returns after Obama announced he intended to nominate him as secretary of Health and Human Services.

Daschle explained in his apology letter that the presidential transition team flagged charitable contributions they concluded were deducted in error. When his accountant realized amended tax returns would need to be filed, he suggested addressing another matter that Daschle raised with him earlier in the year: whether the use of a car service provided by a close friend and business associate, Leo Hindery, should be reported as income.

The unreported income for that car service totaled more than $250,000 over three years.

At about the same time, Hindery's company informed Daschle's accountant of a clerical error it made on a form it provided to Daschle that he subsequently reported to the IRS. The error resulted in an additional $88,333 in unreported consulting income for 2007.

"I disclosed this information to the committee voluntarily, and paid the taxes and any interest owed promptly," Daschle wrote. "My mistakes were unintentional."

A financial disclosure form Daschle filed about a week ago shows that he made more than $200,000 in the past two years speaking to members of the health care industry that Obama wants him to reform.

The speaking fees were just a portion of the more than $5.2 million the former senator earned over the last two years as he advised health insurers and hospitals and worked in other industries such as energy and telecommunications, according to a financial statement filed with the Office of Government Ethics.

Jenny Backus, a spokeswoman for Daschle, said the money he earned in speaking fees from health care interests do not pose a conflict for the health care reform Obama wants him to lead.

"He welcomed every opportunity to make his case to the American public at large and the health industry in particular that America can't afford to ignore the health care crisis any longer," she said.

Among the health care interest groups paying Daschle for speeches were America's Health Insurance Plans, $40,000 for two speeches; CSL Behring, $30,000; the National Association of Boards of Pharmacy, $16,000; and the Principal Life Insurance Co., $15,000.

**dienekes96**

Campaign Joe Biden: Paying taxes is patriotic.

VP Joe Biden: Unless you are a politician. Who left office worth $200K. And then lobbied...oops, sorry...consulted health care companies from 2004-2008, netting millions.

All of this = worthless executive order about lobbyists in DC.

There is our "change".

**dietrich**

Republicans 'cheat' by not paying taxes.
Democrats 'forget' to pay taxes.

Democratic politicians are still politicians.

**Frazzled**

Ok, but who looked at Daschle and thought "Nope he looks completely honest to me." Its like saying there's no way Cheney could be Darth Vader's father...

**Polonius**

That's pretty shady. Daschle (or his accountant) should have known that the car service was income. It's either malfeasance or such a stupid oversight as to lower my confidence in the guy. Daschle was an early and vigorous supporter of Obama, which probably explains the support he's being given by the White House. The smart play at this point would be for him to withdraw his nomination and move on. HHS isn't exactly the biggest deal in Washington, and it's not like another good candidate couldn't be found.

The upside for me is how it was detected: by the White House transition team. Somebody over there as doing their job and really digging through the candidates files.

**Frazzled**

It would be interesting to cmopare to the amount of $ Al Capone "forgot" to pay in taxes-sentencing of which sent him to Alcatraz.

**Polonius**

Frazzled wrote:It would be interesting to cmopare to the amount of $ Al Capone "forgot" to pay in taxes-sentencing of which sent him to Alcatraz.

A criminal conviction for a tax matter requires a willful failure to file. It's a hard legal standard that very rarely results in conviction for anything other than tax protesters and the like. The federal income tax is self reported, and one result of that is that the IRS is pretty lenient with people who "forget" things. You pay interest on anything not claimed, but it's just a late payment fee, not a criminal fine.

Interestingly, depending on the nature of the car service Daschle could probably make a claim that it wasn't a perk, but was for the convenience of his employer. In other words, if the IRS had found this on it's own in an audit, he had at least a decent argument against it's inclusion. That means that the IRS would likely settle the matter for less than full value. And to be fair, a lot of people find it easier to "forget" in kind payments than cash payments when it comes to income. Obviously as a wealthy lawmaker with top notch financial and legal counsel he knew better, but I think of lot of people are simply going to shrug and move on, in much the same way all kinds of relatively minor offenses like this get forgotten.

**dietrich**

I wonder what he paid in taxes for those years. If he paid $10 million in taxes, it's a little easier to understand how he 'forgot' to pay those taxes. If he paid $10,000 in taxes, it looks a lot more fradulent. Also, if he had to clain them, shouldn't his employer have provided him the info as non-salary benefit on his W-4 or provided him with a 1099 (I think it'd be a 1099)?

**Polonius**

I was able to find United States v. Capone, 40-2 U.S. Tax Cas. (CCH) in Lexis, and Capone was find liable for a defeciency of $ 201,347.28 after penalties and interest, in 1935.

**ShumaGorath**

Back taxes aren't a huge issue with me as long as they are payed. They have to tac on interest for "forgetting" so they in effect screw themselves by not filing the correct amounts and paying on time. That said, these guys really need to pay more "attention" to their finances. It's a bad showing.

I wonder what he paid in taxes for those years. If he paid $10 million in taxes, it's a little easier to understand how he 'forgot' to pay those taxes. If he paid $10,000 in taxes, it looks a lot more fradulent. Also, if he had to clain them, shouldn't his employer have provided him the info as non-salary benefit on his W-4 or provided him with a 1099 (I think it'd be a 1099)?

The story also fails to mention the proportionality of it. When your paying out millions it's quite possible to actually make a 200 thousand dollar "mistake". Which is why people in his position are supposed to have financial legal aid so that they can keep track of it all. This is the skeleton closet phase of cabinet confirmations. It happens with every new president. It's unfortunate that taxes are the big skeleton this time around though, it's very poorly timed with the current political climate.

**Frazzled**

Polonius wrote:I was able to find United States v. Capone, 40-2 U.S. Tax Cas. (CCH) in Lexis, and Capone was find liable for a defeciency of $ 201,347.28 after penalties and interest, in 1935.

So the difference between Tom Daschle and Al"whaddayamean I'm goin to jail" Capone is less than $82,000. Priceless...

**ShumaGorath**

Frazzled wrote:
Polonius wrote:I was able to find United States v. Capone, 40-2 U.S. Tax Cas. (CCH) in Lexis, and Capone was find liable for a defeciency of $ 201,347.28 after penalties and interest, in 1935.

So the difference between Tom Daschle and Al"whaddayamean I'm goin to jail" Capone is less than $82,000. Priceless...

Now adjust that for 74 years of inflation...

**Kilkrazy**

Capone went to jail on the tax charge because they couldn't nail him for all the murders and bribery.

Is anyone suggesting this Dasche guy is a major league gangster?

**Frazzled**

Well he was a member of Congress for decades, so yes, clearly he was a member of organized crime

**Frazzled**

ShumaGorath wrote:
Frazzled wrote:
Polonius wrote:I was able to find United States v. Capone, 40-2 U.S. Tax Cas. (CCH) in Lexis, and Capone was find liable for a defeciency of $ 201,347.28 after penalties and interest, in 1935.

So the difference between Tom Daschle and Al"whaddayamean I'm goin to jail" Capone is less than $82,000. Priceless...

Now adjust that for 74 years of inflation...

Only if the criminal laws were likewise increased...

**dogma**

Frazzled wrote:
So the difference between Tom Daschle and Al"whaddayamean I'm goin to jail" Capone is less than $82,000. Priceless...

Actually its more like $2,884,651.28 once you adjust for inflation. In terms of 2007 dollars Capone owed $3,012,651.28.

Frazzled wrote:
Only if the criminal laws were likewise increased...

What does that have to do with anything?

**dietrich**

If you take inflation to be 3% a year, that's a multiplier of 8.9 over 74 years. At 5% a year, it's 37.0. At 2% it's only 4.3. Adjusting Capone's totals for inflation gives (note, I used the actual computed multiplier for inflation, not the rounded numbers given above):
2% = $ 871,682.80
3% = $1,791,990.79
5% = $7,446,529.22

So, you could say that Daschle is anywhere from 2% to 23% as corrupt as Capone.

**Frazzled**

dogma wrote:
Frazzled wrote:
So the difference between Tom Daschle and Al"whaddayamean I'm goin to jail" Capone is less than $82,000. Priceless...

Actually its more like $2,884,651.28 once you adjust for inflation. In terms of 2007 dollars Capone owed $3,012,651.28.

Now convert that to Canadian dollars, just for kicks. Yea but don't forget our new dollars are only worth 1/10th of what you could buy in the 30s....Inflation, deflation, oppression, all I know is I'd be in jail if I didn't pay $120M in taxes.

Frazzled wrote:
Only if the criminal laws were likewise increased...

What does that have to do with anything?

It means if the minimum threshhold for spending time in supermax might still be forgetting to pay $200,000. Screwing with the IRS is not indexed with inflation.

I'll admit its not as funnny as the future head of the IRS cheating on his taxes, but its a perfect descriptor of limousine liberal-its literal in this case.

**Frazzled**

dietrich wrote:

So, you could say that Daschle is anywhere from 2% to 23% as corrupt as Capone.

Thats about right. Capone should've stuck to white collar crimes, the money's so much better.

(Ok full disclosure, I can't stand Daschle with the same burning passion I can't stand Trend Lott)

**ShumaGorath**

(Ok full disclosure, I can't stand Daschle with the same burning passion I can't stand Trend Lott)

And you hide it so well.

**Polonius**

Frazzled wrote:
dietrich wrote:

So, you could say that Daschle is anywhere from 2% to 23% as corrupt as Capone.

Thats about right. Capone should've stuck to white collar crimes, the money's so much better.

(Ok full disclosure, I can't stand Daschle with the same burning passion I can't stand Trend Lott)

We couldn't tell. You're well measured and penetrating insight, presenting with the cool aplomb and even handed-ness we've all come to expect from you thoroughly concealed any trace of passion.

**Frazzled**

Polonius wrote:

We couldn't tell. You're well measured and penetrating insight, presenting with the cool aplomb and even handed-ness we've all come to expect from you thoroughly concealed any trace of passion.

Son, that was probably the best insult I've had in a long long time. Respect and I'll drink the first coconut rum in your honor.

Edit: sigged.

**dogma**

Frazzled wrote:
It means if the minimum threshhold for spending time in supermax might still be forgetting to pay $200,000. Screwing with the IRS is not indexed with inflation.

Maybe not, but criminal law is based on intent, and one of the ways to gauge intent in matters of finance is the size of the illicit transaction.

**ShumaGorath**

Frazzled wrote:
Polonius wrote:

We couldn't tell. You're well measured and penetrating insight, presenting with the cool aplomb and even handed-ness we've all come to expect from you thoroughly concealed any trace of passion.

Son, that was probably the best insult I've had in a long long time. Respect and I'll drink the first coconut rum in your honor.

Edit: sigged.

Polonius would be a good crane.

**Polonius**

ShumaGorath wrote:

Polonius would be a good crane.

What's a crane in this context?

**ShumaGorath**

**VermGho5t**

damn that set came out a long time ago. Lots of nice artwork though, better than Dawn of the Empire at least.

**Frazzled**

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/02/03/MN8515LSRL.DTL&type=printable

Back to Article

Senators rally round their pal Daschle
Dana Milbank, Washington Post

Tuesday, February 3, 2009

(02-03) 04:00 PST Washington --

Tom Daschle failed to pay taxes on a quarter-million dollars of income related to the chauffeured Cadillac that ferried him about town for three years. But don't call the guy a limousine liberal.

When he visited Capitol Hill on Monday to explain his tax problems to senators, Daschle - President Obama's choice to run the Department of Health and Human Services - he came in one D.C. cab and left in another.

"My failure to recognize that the use of a car was income and not a gift from a good friend was a mistake," the former Senate majority leader explained as his onetime colleagues stood behind him in a display of support. "It was completely inadvertent. But that's no excuse, and I deeply apologize to President Obama, to my colleagues and to the American people."

It's unclear whether the American people will accept the apology; they tend to look unfavorably on people who amass more than $350,000 in unreported income and improper deductions. They also might be skeptical of somebody who used his connections and influence to pile up more than $5.2 million since he left the Senate, much of it from a major Democratic donor and $220,000 of it from health care interests that Daschle, if confirmed by senators, will begin to regulate.

But Obama, and Democratic senators, were eager to accept their friend's apology. The president, a former senator himself, pronounced himself "absolutely" behind Daschle, and members of the Senate Finance Committee, after sitting with Daschle for just 15 minutes, lined up at the microphones to absolve him.

"I don't know of a person more honorable," said Kent Conrad, D-N.D.

"It's an innocent mistake," added John Kerry, D-Mass.

"I will vote for Sen. Daschle," the committee chairman, Max Baucus, D-Mont., read from a prepared statement.

Indeed, the senators will almost certainly confirm the former member of their club, barring the discovery of more tax problems. But in doing so, they risk leaving the impression that they operate under the Leona Helmsley rule: Only the little people pay taxes.

First there was Treasury Secretary Timothy Geithner, who underpaid Uncle Sam by $43,000. Then the administration dribbled out the news late Friday that Daschle owed the Treasury nearly $150,000. By the time Obama spoke at Saturday night's Alfalfa Club dinner, he was joking that even his family's plans to get a pet labradoodle had been delayed over problems with the dog's back taxes.

At Monday's White House briefing, ABC News's Jake Tapper asked whether Obama worried that the nearly $200,000 in back taxes and penalties owed between Geithner and Daschle will "undercut the president's cry for an era of responsibility."

"Both Secretary Geithner and Secretary-designate Daschle are the right people for very important jobs," press secretary Robert Gibbs replied.

"Is there an amount of money in unpaid back taxes for any nominee to the president's Cabinet that would be considered disqualifying?" needled Fox News' Major Garrett.

"I'm not going to get into hypotheticals," Gibbs answered.

**malfred**

Nice!

**reds8n**

Why do you pay your taxes the way you do as opposed to simply paying monthly % cuts ?