Politicians Who Skipped Out On Taxes

By Jonas Elmerraji | March 31, 2010 AAA
Politicians Who Skipped Out On Taxes

Ask most Americans how they feel about paying their taxes, and the answer will usually be the same: the fewer the taxes, the better. But if recent news stories are any indication, when lawmakers and other public servants aren't able to pass tax cuts, they're at least willing to cut down on the taxes they personally pay. But does the perception jive with reality?
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Clearly, public servants rely on taxes to get their jobs done. Taxes pay their salaries, fund their projects and ensure that life continues as usual here in the U.S. by paying for things like roads, schools and social services. But as long as there have been taxes, there have been public high profile servants who weren't paying their fair shares. Here's a look at a handful of politicians who shirked on their tax bills.

Tax Troubles of Yore
Apparently, even the chief tax collector isn't immune to underpaying Uncle Sam. Joseph Nunan was the United States Commissioner of Internal Revenue from 1944 until 1947. In his role, Nunan was the head of the IRS - the dreaded government agency responsible for collecting our taxes. After retiring from his post, Nunan's run-ins with the IRS were far from over; just five years later he was convicted of tax evasion after concealing income of more than $90,000. That's more than $719,000 in today's dollars.

But Nunan was small potatoes compared to the tax troubles of a slightly more important public servant back in 1973: the Vice President of the United States. Spiro Agnew was the 39th Vice President, serving under Richard Nixon after his election in 1969. And while Agnew was a popular public figure, he was also a corrupt one. In 1973, it was revealed that Agnew has received more than $29,000 in bribes during his tenure as the Governor of Maryland - he pleaded no contest to criminal tax evasion charges as a result. Ironically, even bribes are required to be disclosed to the IRS as earned income. (The services we rely on, like education, law and security, were built on taxes. Find out all about it in Paying Uncle Sam: From Tobacco To $1 Trillion.)

Contemporary Cheats
The number of tax problems among public figures seems to be on the rise as of late. With a small handful of high profile politicians in hot water over underpaying Uncle Sam right now, it's no wonder why the public is outraged over public servants dipping from the dole. But when is a politician cheating the system, and when is he simple being careless?

Guilty Geithner?
That's a question that Americans had to ask themselves when it was revealed that Tim Geithner, President Obama's Treasury Secretary, failed to pay $35,000 in self-employment taxes from his tenure as a director at a department of the IMF. While Geithner claimed that not paying the taxes was an oversight, some questioned the idea that the Treasury Secretary wasn't able to keep track of his own household's finances.

The ultimate irony came from the fact that as Treasury Secretary, Geithner's areas of supervision include the IRS. (Learn more about these government agencies in The Treasury And The Federal Reserve.)

Rangel Comes Up Short
Congressman Charles Rangel isn't only one of the most well recognized politicians in the House, in 2008, he was also nailed for failing to report rental income on his villa in the Dominican Republic. Revelations that Rangel came up short on his tax bill (to the tune of $75,000) were part of a string of ethics concerns that came up about the congressman in recent years.

Congressman Rangel paid his back taxes, albeit without any penalties or interest, prompting Republican John Carter to introduce the Rangel Rule Act of 2009 (H.R. 735), which would have allowed all tax payers to avoid interest and penalties on their back taxes.

Daschle's Excessive Deductions
Former Senate Majority Leader Tom Daschle took heat in the beginning of 2009 for failing to report income and taking too many tax deductions, bringing his I.O.U. to the IRS to more than $140,000. Daschle tax issues came at a tough time for the Senator - he had hoped to score a role in Obama's cabinet as the Secretary of Health and Human Services. Ultimately, Daschle withdrew in order to avoid being a "distraction."

Are Public Servants More Likely to Cheat on Their Taxes?
But the question of whether public servants are more likely to cheat on their taxes isn't as cut and dry as it might first appear. With the added scrutiny of public office, it's far more likely for tax cheats of potential public servants to be detected.

Millions of Americans owe back taxes to the IRS - a number that runs into the billions in yet-to-be collected tax dollars. And whatever the reasons for their tax troubles, politicians and appointees are far from alone. But as long as people opt to take on a high profile job as a public servant, they can expect to have their personal financial issues drawn out.

Still feeling uninformed? Check out last week's business news highlights in Water Cooler Finance: Zombies File Taxes, Dead Bills Rise Again.

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