After watching President-elect Trump’s Cabinet nominees sail through the Senate, Democrats have become desperate for a scalp. Minority Leader Chuck Schumer believes he’s found one in aspiring OMB director Rep. Mick Mulvaney.
The nominee had an unpaid tax bill, a fact that Schumer says disqualifies him from taking the job.
“What’s good for the goose is good for the gander,” Schumer argued yesterday, pointing to Obama’s failed 2009 HHS secretary pick, Sen. Tom Daschle. “If he couldn’t become a Cabinet member for not paying taxes for a household employee, the standard ought to apply to Mulvaney.”
Though persuasive, Schumer’s case isn’t as conclusive as some have reported. A closer look at the details shows significant differences.
The most obvious comparison is the size of the two unpaid tax tabs. From 2005 to 2007, Daschle owed more than $140,000 to the Internal Revenue Service — the sum of unreported income plus a the costs of a luxury car service provided by one of his lobbying clients. In comparison, Mulvaney failed to pay $15,000 in FICA taxes for a nanny he employed from 2000-2004 to take care of his premature triplets.
Schumer incorrectly asserts that both men failed to pay taxes for a household employee. As the Senate Financial Committee detailed at the time, the majority of Daschle’s unpaid taxes was the result of “unreported income from the use of a car service.” The South Dakota lobbyist was bringing money in while Mulvaney was paying money out.
That difference becomes apparent in the explanations offered by both men. The former Senate majority leader told the committee, the Wall Street Journal reported in 2009, that he was just used to having a chauffeur pick him up and he never thought to report the benefit. It just never occurred to Daschle that he might have to pay taxes on the private Cadillac that picked him up every morning.
What’s Mulvaney’s excuse? He probably didn’t realize his responsibility. Ryan Ellis, tax policy director for Conservative Reform Network, doesn’t excuse the South Carolina representative. But he says his mistake is an understandable one. “A lot of time people will have a household employee and just not realize it,” Ellis told the Washington Examiner.
“That’s the explanation for most people. If you hire someone to babysit, pay $20 dollars an hour, and keep them on for more than a couple thousand dollars a year then you have a household employee. The threshold isn’t very high.”
Of course, both Daschle and Mulvaney should’ve known better. Before Congress, the Democrat was an intelligence officer while the Republican was a lawyer. They should’ve been smart enough to pay their taxes. But unfortunately for Schumer, that’s where the comparison stops.
Both men eventually ponied up the cash. While Daschle’s indiscretions came to light thanks to Obama’s transition team, Mulvaney volunteered the information. “I have come to learn, during the confirmation review process, that I failed to pay FICA and federal and state unemployment taxes on a household employee for the years 2000-2004,” Mulvaney noted in a questionnaire. Does that excuse him? No. Does it mean he at least showed some good faith? Yes.
Like Obama, Trump’s standing by his nominee for now. But unlike Daschle, Mulvaney’s troubles with the IRS likely begin and end with his lapse in nanny taxes. Looming clouds of more speculation (namely pricey vacations on private jets for free) forced Daschle to withdraw his name from consideration. So far, there’s no additional evidence of wrongdoing clouding Mulvaney’s tax returns.
Minus the details, comparing Mulvaney to Daschle is easy. Desperate for a win, Schumer seized on the comparison to make his argument, and no doubt, the nominee will give his response when he testifies next Tuesday. But the minority leader also has to explain a different comparison.
If Schumer wants to sink Mulvaney over $15,000 in unpaid taxes, he must explain why he voted for an earlier Obama nominee, Timothy Geithner, who owed $35,000. Or maybe he only cares when Republicans don’t pay their taxes.
Philip Wegmann is a commentary writer for the Washington Examiner.
