From the Rangel-Geithner School of Thought on Taxable Income: The Daschle Disciple

Former Senator Tom Daschle, President Obama’s nominee for secretary of health and human services, can be added to the list of those government officials who have made”honest mistakes” on their income taxes.  Mr. Daschle did not pay taxes on a car and driver provided to him by Leo Hindry Jr., a media and telecom executive who also founded a private equity firm, Intermedia Advisors.  On January 2, 2009, with senate confirmation hearings looming, Mr. Daschle paid more than $100,000 in back taxes and interest on the value of the car/driver services.  Intermedia Advisors had paid Mr. Daschle more than $2 million in consulting fees, and Mr. Hindery contributed $52,000 to Mr. Daschle’s senate campaigns between 1997 and 2004.  An administration official called the failure by Mr. Daschle to pay taxes on the car service “a stupid mistake.”  The Barometer is tempted, but will refrain from the obvious cheap shot. 

The choice for any additional officials who are anteing up even as The Barometer keeps score:  “I made a honest mistake,” or “I made a stupid mistake.”  The Barometer wonders what criteria are used to distinguish between the options.  The Barometer wonders whether these options are indeed mutually exclusive:  Honest, but stupid?  Stupid, but honest?  Not honest, but stupid? Honest, but not stupid? The Barometer wonders why there are not better accountants and CPAs for government officials.  The trip-ups do not involve mistakes in amortization tables, albeit honest tables. These are fairly plain vanilla, “Yup, that’s income!” The Barometer wonders why so many of these folks do their own taxes.  The Barometer wonders what message we send to young people.  The Barometer wishes that the message was, “Look what happens when you aren’t honest and don’t pay your taxes!”  The problem is no one chronicled here has had a setback.  The confirmations are sallying forth, and the back taxes paid without further sanctions or consequences.  The message to young people observing these officials is, “Be sure and pay taxes you owe before your confirmation hearing and you can sail through.”  How terrific it would be to have an example of someone who sailed through the confirmation process, having paid taxes on time and in the right amounts.  

Imagine, a nominee who had paid his or her nanny taxes!  Imagine a government official who paid taxes on rental income.  Imagine a government official who recognized that a car and driver are taxable benefits.  Imagine a country in which government officials obeyed just the letter of the law (we can work our way into the spirit of the law after we conquer the basics).  Imagine a government in which all officials had clean bills of health on their tax payments.  The Barometer will stop before John Lennon’s tune has new phrases.  Imagine!  

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
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One Response to From the Rangel-Geithner School of Thought on Taxable Income: The Daschle Disciple

  1. David A Counts says:

    Bottom Line – Ethics and ethical conduct matters. It is not a matter of any of the major political parties being intrisically ethical or better behaved than the other — they both have proven that some members and leaders are un-ethical.
    During the election, Al Franken ran ads in Minnesota which blamed George Bush and the Republican Party for all of the nation’s woes. I found that very disengenuous of him. When a national crisis exists and people from all political persuasions allowed self interest to dictate how they govern, we all suffer.
    Bottom Line – Ethics and ethical conduct matters, privately or publicly.

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