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Survey: Politicians Pretty Much Suck At Paying Taxes

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Following up on the multiple Obama nominees who've had tax troubles, Politico asked the 99 members of the Senate whether they've ever had mistakes on their tax returns or filed back taxes. Yes and yes.

Although only 56 senators responded to the survey, ten reported errors on their tax returns, and six have paid back taxes. Two of the senators that reported errors, Chris Dodd and Amy Klobuchar, had overpaid their taxes.

Our favorite response comes from the office of the reliably wacky Tom Coburn of Oklahoma:

After Dr. Coburn left the House, the House continued to pay him for three months. Apparently, they were very pleased with his service. However, because the payments were made in error Dr. Coburn returned all of the checks to Treasury. Yet, the House sent a W-2 to the IRS, but not to Coburn, reporting income that had been returned. After a long fight, the House and the IRS admitted their error and the IRS sent Coburn a corrected W-2. This is the government in charge of "stimulating" our economy.

(Photo: EricGjerde)

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Capitol Hill, a world of criminals who operate above the law.

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@Plates: But notice that not all of them are criminals, or at least aren't all the time.

Don't believe me? Read that quote again. They paid him in error and he did not accept payment. Ask yourself what you would have done in his shoes before you make insinuations on his honour.

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I think we're missing the point here. Of those who responded, most had minor amounts of taxes owed, due to honest mistakes that the rest of us might make. Are our elected officials perfect? No. But we're talking tax problems less than $5,000 in almost all the cases; not $120,000 in taxes like one cabinet appointee.

The tax code is complex and difficult to navigate. I think this illustrates the difficulty even those who write it have with getting it 100% right, not that they're criminals or liars.

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@Plates: I'm also not entirely sure how the two who overpaid their taxes were operating above the law, either.

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@tedyc03: It's worth noting I think some of them *are* criminals and liars. But in this case I'm not so sure there's anything to see.

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You would think they were using competent tax preparers to get their taxes done.

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I applaud you guys for running this.

Look, I don't think the government is smart enough to stimulate anything but their egos. However, that has nothing to do with this story.

They didn't stop paying taxes because they're dumb. They stopped paying taxes because they are corrupt.

Al Capone was taken down finally for not paying his income tax. We have guys in Government who do it, and they get a slap on the wrist. And if they pay their taxes, a position in high government.

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Yep its very complicated. Wouldn't you like to not have to deal with it any more? How much money would you save on "doing" your taxes alone?
One simple solution:
Fair Tax ([www.fairtax.org])

The only problem is that it takes the power of taxes away from the very politicians that would have to pass it. They're not going to let any of their power slip away. Just look at what they're passing right now!

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Why is this a shock?


If we have learned anything in all of this mess that human beings are far less intelligent and competent as other human beings give them credit for.


The 'Best and brightest' of us isnt really all that better or brigter then the average person.

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@tedyc03:

Oh,I think there's something to see. These are the guys responsible (in the present or in the past) for the design of our complicated tax code. If they're sincerely confused and befuddled by it, perhaps that's the hint they need to simplify it.

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@thebluepill: The best and the brightest are smart enough to avoid being a member of the national government.

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The Federal Government Tax Code is 6000 pages. I have done taxes before and their are many different ways to interept the tax law, especially the tax code. The goal of a CPA or tax preparer is to legally get the most money back for your client. A company had 100 CPA's or accountants do a tax return and only 20% got close to what the amount the organization. People who do taxes for personal and business taxes are up to the subjective intrepretation of the tax law to get the amount the tax law should reflect. Doing accounting is a practiced act, said one of my accounting professors. The tax treatment can be handled many different ways, and this report reflects exactly that item

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After Dr. Coburn left the House, the House continued to pay him for three months. Apparently, they were very pleased with his service.

Why can't my employer continue to pay me three months after I leave? It would be like my credit card company undercharging me.

But as everyone knows, things like this do not happen to common people. Ohh well, c'est la vie

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@SacredByte: If it is not taxes it is something else. They are all crooks, liars and scumbags.

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@thebluepill: You are forgetting these aren't human beings we are talking about, we are talking about one of the lowest forms of life on the planet - politicians.

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@Bladefist: Assignment for you. Define "imputed income".

If I let a buddy sleep one off in my guest room, does he owe the IRS for the "imputed income" due to not having to hail a cab or go to a motel? If so, which motel chain's nightly rates are to be used as the benchmark for determining taxes owed? Is the official IRS mileage rate then to be applied for the unpaid cab fare?

This is mostly silly "gotcha" nonsense, at least in Tom Daschle's case with the limo. Tim Geithner, OTOH, should have known better, and should have been the one thrown under the bus, not Daschle. Of course, Geithner is more "establishment" than Daschle is, so he gets confirmed; is that how it works?

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@Blueskylaw: My employer did. I left a job in April of 2008 and kept receiving direct deposit paychecks for 3 more pay cycles (we were paid twice monthly there).

It was a tremendous pain in the ass because my account was full of money I couldn't spend, and I had to keep calling them to get them to reverse it. And, come to think of it, maybe that's why my taxes for that state seem really off from what they should be.

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@tedyc03: That's why some of the cabinet appointees I had sympathy for -- taxes are complicated, I've had to file a corrected return twice and I'm only 30 and my taxes aren't that complicated!

But Tom Daschle has no excuse for not crossing every T and dotting every i; he's been in public life a long time, and he's smart enough to know to hire a CPA who signs that affidavity thingie saying the CPA did it. He knows better, and he knows that even honest mistakes by a public official are fodder unless they're very small. And his wasn't (small or, I suspect, honest).

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@Plates: Really? The temptations of power and government are great - everyone knows that. Our founding fathers expected that. But to suggest that everyone who gets involved is inevitably a crook, liar or scumbag (if not all three) is absurd. We elect our officials. We ARE our officials - any one of us can be involved in our government, and most of our officials are regular people - just like us. Are you here to engage in a discussion or to just be bitter and angry about what you perceive as some kind of personal slight with regard to our society? Every comment I've read of yours is unnecessarily absolute in its judgment.

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@SacredByte:

"They paid him in error and he did not accept payment".

Did he return it before or after the media found out?

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@Plates: Really? I expect a research paper on my desk by Monday. I want a full review of every senator, and if you can't find a single honest man, I'll give you a gold star.

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@theblackdog: The issue is not that they were using competent tax preparers... the issue was that these competent tax preparers are well aware of all of the loopholes and are told they will not be audited because of their client base. The gray area of tax deductions grows exponentially when you don't believe you will be audited.

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Sorry, but politicians can't hold a candle to big business. With all of their offshoring and loopholing, they barely pay a nickle of federal, state and often even local taxes. Oh sure they cry about a high tax rate, but it's not really an issue when you're paying close to nothing.


Thank goodness there's always us little guys to take up the slack and pay for things like roads, sewers, water, services, bailouts.


Behold the splendor of capitalism!

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@alexawesome:

The problem is, this saying proves true the majority of time. Power corrupts, absolute power corrupts absolutely.

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@tedyc03:

If they can't figure out the tax codes and complete their taxes properly, with most of them being doctors, lawyers, PHDs and Masters...how do they expect the American people to do their taxes correctly? How about a SIMPLIFIED TAX CODE? 15% for everyone sounds about right.

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@Saboth: Except that a flat tax is regressive unless other taxes and tax breaks are rolled back.

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@tedyc03: Do you honestly think that a politician who KNOWS that he's cheating on his taxes BIG TIME is going to actually come out and say so?

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@U-235: Actually, a good number of the best and the brightest work in the offices of elected officials, where they can actually have an effect on policy without worrying about fund-raising all the time.

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@tedyc03: That is probably the biggest point - the tax code is so complex and incomprehensible, that not even the supposed authors of the tax code can get it right. And they have staff, accounting firms, and such to help them get it right (they don't sit in the living room and fill out a 1040 on their own).

I feel that the answer to the tax code is 42, and if we ever make sense of it, it will be replaced with something more bizarre and inexplicable. I have a feeling this has already happened once, which is why we have this one.

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@alexawesome: The thing is that we don't have much of a choice in who we elect. Part of it is the political party systems, part of it is the lack of real term limits which turns politics into a career instead of something that people go and do then return to their real job. This is why these people are out of touch with us, be it Bush or Obama or whoever. They get elected on marketing campaigns that anyone who actually critically thinks about it are obviously a sham.

There are two kinds of corrupt politicians - Republicans and Democrats.

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@Ghede: They are in the Senate and politicians, ergo they are not honest.

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@Plates: Don't get me wrong, I'm not saying everything is hunky dory and that there aren't really, really bad people in positions of power. I take issue with these absolute statements and the us vs. them mentality. IF it is actually that bad, what are you going to do about it? What do you want everyone else to do about it? It's the absolute statements and the fatalistic attitude I object strongly to.

@Saboth: You're right - power is a corrupting element. No one's disagreeing with that. I take objection to the idea that people in power are inherently evil or always corrupted. Or that we're powerless to change the pattern.

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The 'Best and brightest' of us isnt really all that better or brigter then the average person.

@thebluepill: They are, they're just not better and brighter in all subjects. A surgeon may be the 'best and brightest' in their field but that doesn't mean that they can repair a car, or write a novel, or do their own taxes.

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@Plates:

COME ON PEOPLE!!!!! Who hear doesn't have trouble doing their taxes?!!?!?!?!! If it were f-ing easy then the IRS would be out of a job. It's f-ing complicated as hell! I hate reading any literature from the IRS, it is so god damned confusing. That's why every moron in america=everyone hires some jackass to do it for us, and then that jackass screws it up. I don't call this criminal theft as much as I call it the repercussions of the most bureaucratic system on the face of the planet. AND I DON'T EVEN CLAIM ANYTHING BEYOND THE STANDARD DEDUCTION, I USE THE 1040EZ!!!!! Just the rebate portion was enough to boggle the mind. Stop pretending like these people are evil and realize they're a bunch of idiots like the rest of us.

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@Saboth:
Funny thing is the representatives and senators, nor the president, nor the supreme court justices have ABSOLUTE POWER. We live in a system with the balance of power within the government structure. Absolute power is only found in Wall Street.

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Interesting read, but hopefully not a setup for the "everybody does it" excuse.

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@jsbeagle: Every time I read about the Fair Tax I think, "Man, that would really screw over everyone who invested in a Roth IRA."

It always puzzles me that Dave Ramsey endorses the Fair Tax, but then turns around and tells people to put their retirement savings in a Roth. There are reasons to support either of those things, but not both at the same time.

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I have some sympathy here. I'm not convinced I've always done my taxes right, and mine are infinitely less complicated than these peoples'. No one is giving me stuff for free that counts as income, and I don't have any taxable investments, just for starters.

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This does not help in collecting taxes owed -
"I.R.S. to Cut Tax Auditors"
[NYTimes] By DAVID CAY JOHNSTON, July 23, 2006

"The federal government is moving to eliminate the jobs of nearly half of the lawyers at the Internal Revenue Service who audit tax returns of some of the wealthiest Americans, specifically those who are subject to gift and estate taxes when they transfer parts of their fortunes to their children and others."

So they Fired about half of the Auditors of the Wealthy.
Great.

I suggest we hire 5-10 X the number of Auditors now - and especially start looking at all of the Wall Street CEOs and their offshore bank accounts.

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As my finances have become more complicated, my taxes have become exponentially more complicated. It takes me approximately 40 hours of work to collect the information to do my taxes. It appears to me that we need to simplify this system.

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@Coksibum: "are told they will not be audited because of their client base"

I hate to intrude on your deluded "all politicians are corrupt" rant, but would you care to back that up with actual evidence?

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Americans are being hypocritical and self-righteous. Haven't you seen the commercials for tax negotiation services where a half-dozen people talk about how they owed the IRS thousands of dollars and are now paying a fraction of that amount? Yeah. The citizenry are as guilty as their representatives.

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@tedyc03: Exactly. THEY are not perfect so why were they so closely scrutinizing the other imperfect people Obama nominated?

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So....politicians are human beings like everyone else. Their not the only ones who suck at paying taxes.

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@Saboth: Yep, 15% for the guy at the McDonald's and 15% for Bill Gates.

Someone slept in when they were discussing "marginal utility" in econ class...

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@jsbeagle: People complain about the IRS now - wait until they start busting people for avoiding the "Fair Tax" by buying stuff at yard sales and flea markets, and nailing small businesses for not paying sales tax, while rich people put loopholes in it.

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@varro: For that matter, the numbers for the Fair Tax assume no tax evasion. Which is ridiculous since it's extremely easy to evade. Besides the usual under-the-table transactions -- which are common in countries that have similar schemes -- used goods aren't taxed. Just claim everything you sell is used, and bingo, you're operating tax free.

The Fair Tax sounds like a great idea until you actually think about the details.