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Yet another nominee understates her tax liability

03.31.2009 · Posted in Uncategorized


Health and Human Services nominee Katheleen Sebelius admitted that she underpaid her taxes by about $7,000 today.

I read through the mistakes that Gov. Sebelius made–they are serious and not technical requirements–the requirement that all charitable deductions be backed up by a written statement from the charity exists because too many people were falsifying deductions.

But, in all honesty, these errors are far from the clear disregard that Tim Geithner and Tom Daschle showed for our tax system. The lesson from Kathleen Sebelius’ experience with the tax system is probably the same lesson that we are all taking from the tax system as April 15th rolls around–we need to make the system less complex. We could save a large amount of transactional costs if politicians were willing to do the hard work of simplifying the tax code.

Politically, it far better to talk about yet another credit for college, even when there are at least 5 different tax advantages for education, instead of consolidating and simplifying them. Simplification would help people considering higher education, because they could actually estimate the amount of money they willl receive for education through tax incentives–which is the whole point of the education tax credits in the first place.

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