Defining Franken: First His Jokes, Now His Business.

For months, Minnesota Democrats Exposed has dribbled out scores of out-of-context clips and quotes from a man whose business it was to say funny things. The humorless Michael Brodkorb labored mightily but unsuccessfully to define Senate candidate Al Franken as a mean man — never quite getting that many voters  understand the difference between cutting remarks about people and cutting programs that help people. 

So Brodkorb kept digging, and at last he got his mainstream media stories, if not his cherished attribution. While many people get the difference between a comedian and a bigot, fewer understand running a small but complex business. Thus, Franken's failures to make proper business filings in New York and California can more credibly be blown up into gargantuan character flaws and ethical lapses.

I'd wager at least half the U.S. Senate could not walk you through their tax returns, and if I found one senator's return without a signature from a professional tax preparer, I'd be shocked. On that basis alone, Franken would fit in. And when you add the fact that a senator's main job is to pontificate in committee and read speeches with conviction while staffers do the work, why, he's eminently qualified. Franken, at least, writes most of his own material.

Does bad paperwork disqualify him? As a former business owner who has not yet picked a candidate, I say no. But then, I have some empathy that has nothing to do with politics.

Most entrepreneurs, entertainers and other innovative types succeed by focusing intensely on creative output. Soon they are horrified to discover the are running a small business. This is the last thing they want to do. It is also the last thing most of them are cut out to do. While some will have succeeded by focusing on the details and others by focusing on the big picture, none get very far in business by focusing on the minutia.

Except for those stalwarts who do it for a living, filing tax forms and keeping up with regulations is minutia — especially in a business like Franken's that involved many different income streams from multiple states. Speaking fees, publishing and broadcast royalties, paychecks for TV appearances and associated expenses must only be part of his accounting. Then there's keeping up with tax and business law wherever he may land and pick up a payment.

Trust me, anyone in his situation will rely on others to stay on top of this stuff.

For example, I sold my company in 2005 but still own a very small stake in it. Among the 70 or so pages of tax forms I file each April, eight pages go the state of Georgia, where the company has an office. This year, I sent a check to Georgia for $6, the amount due on the taxable business income from Georgia attributed to me for 2007, which is still sitting on the company books, not in my pocket.

Meeting this obligation no doubt cost me more than I paid in tax. Was I aware I owed this tax? Only because my accountants told me so. Did I pay the correct amount? I have no idea and even less interest in reworking my accountant's computations, which were based on reports from my former company's accounting firm. If a problem turns up, I'll address it.

Franken's affairs were certainly much more complicated than mine, and his supposed transgressions may involve larger amounts, but I haven't seen any evidence he did anything to exploit the rules, intentionally evade his responsibilities or conceal his income. In my book, he's guilty of antipathy toward paperwork and a failure to hire the right people to watch over his areas of disinterest.

Minnesota had a U.S. Senator in the early '90s who also relied on the advice of lawyers and accountants for how he structured his speaking fees, publishing expenses and Minnesota condo ownership. By most accounts Dave Durenberger was once a pretty good senator and became an even better ex-senator. I had some empathy for him at the time, too, and was willing to accept that his conduct was in good faith. If you couldn't find a lawyer, accountant or investment advisor who'd tell you a shady deal was okay back then, it only meant you didn't have enough income to warrant sheltering it. But after reading this analysis and this retrospective from a former Republican staffer, I'm not so sure.

The difference between the two cases illuminates a couple relevant points, though. Franken's errors were passive, Durenberger's, active. Franken's failure to file may have temporarily put additional money in his pocket, but if you're a public figure and that's your goal, you structure a deal that looks legitimate, as Durenberger and his advisers did. Franken's business lapses occurred when he was flying around the country as an entertainer, not when he was a U.S. Senator collecting honoraria from groups that had legislation before his committees. Franken's oversight sullied only his future campaign; Durenberger's cast a shadow over all politicians and the institution he served.

Sure, I wish Franken had been given more attentive counsel, found the errors on his own and corrected them before the stink factory got a hold of them. I wish he had explained himself more completely and clearly. But does this say anything about his ability to carry out the work of the Senate?

I think the real lesson is about why more lawyers than business people run for public office.

Comments

[Craig Westover]

So Charlie, what’s wrong with your picture? Hint: It is little to do with Franken’s character or your cavalier attitude toward your personal tax obligations.

If Franken is a victim of tax system complexities, then the victimizer is a government tax system that is so complex, only “those stalwarts who do it for a living, filing tax forms and keeping up with regulations is minutia” can keep up with it. And Franken is not the only victim. What about the rest of us poor schmucks trying to earn a living and better ourselves?

Not all of us are as fortunate as you and Franken are: We can’t ignore the minutia and wait for tax problems to come up and then deal with them. We can’t afford to take a chance on an audit, dig up our records, and pay fines plus interest for the sake of convenience. We don’t have people. We can’t afford to spend more to meet an obligation than we owe in tax.

And by the way, God bless H & R Block, but every dime American taxpayers pay H & Block is an unproductive expense that sucks money from the economy and creates no new wealth. Individuals can save money by saving on taxes; society loses in aggregate when individuals must “waste” money in order to calculate exactly how much tax is owed.

Taxes are necessary; a complex tax system is not. Coincidently, the major cause of the complexity of the tax system is the type of reforms folks like you and Franken promote. You want to make the system “fair and equitable,” which is a moral position, not an economic one – different in content, but not unlike the moral approach to policy taken by the Minnesota Family Council.

What makes a tax system “fair” is that it is uniform, easy to understand, and not subject to change at the whim of government. The system we have today piles exception on exception in a vain attempt to make sure everyone "pays their fair shares." It is difficult to understand, and the tax system is used to reward and punish individuals and industries that please or tick off the powers that be. The result is a tax system that drains the economy not just through its sheer size, but through its complexity and inefficiency.

If you want to use the “it’s soooooo hard to pay taxes” defense for Franken, then perhaps, given you work in a think tank and not a whine vat, you might want to give some thought to simplifying the tax code along economic lines not making it even more complex with arbitrary “fairness” features that are anything but fair.

If Franken is the victim of a complex tax system, then so are the rest of us. Franken is foisted on his own petard – he’s victim of a system you people created. He’s got the means and the people to deal with it. The rest of us don’t, and either you don’t care or haven’t given us a second thought. Were I of your ilk, I’d probably whine, “It’s not fair.”

[Charlie Quimby]

Gosh, where to begin? Do I really have to respond to all those things you invented for me to say and think?

"A victim of tax system complexities" and "it's soooo hard to pay taxes"? Those are your words, not mine. I'll leave it to readers to judge who's adopted the cloak of victimhood here.

It's a bit daft to claim "the major cause of the complexity of the tax system is the type of reforms folks like you and Franken promote." Perhaps you could explain how folks like me have thwarted the courageous fight by business and industry lobbyists, investor advocates, energy developers, corporate agriculture, wealthy political donors and chambers of commerce to ensure taxes are fair for all Americans.

Finally, I'm a bit surprised someone from a "Free Market Institute" appears not to understand how small businesses operate and why it's pertinent to differentiate between Franken's tax situation and the average taxpayer's.

[Charlie Quimby]

Oh, now I see your comment is a partially recycled post from True North and your MFMI blog — neither of which allows comments. Courageous, that!

So in case any of your readers decide to read my entire piece, I'll comment here to this from your post: "Case in point is the meme circulating among the supporters of Al Franken that his lapses in paying his obligations to government are not a character flaw; Franken is the victim of a complex tax code."

1. I haven't committed to a Senate candidate.

2. Again with circulating your point, not mine.

And yes, I do a little work for Growth & Justice. When I do, it goes on their blog, not mine.

[Sakaki]

Doesn't matter if the tax system is fair or not, you follow it or else you get exposed for it.

Al Franken did not, and now he's getting his just desserts for it. 17 states, with more on the way.

[Charlie Quimby]

Just so we're all straight here, I made no claim whatsoever about the fairness of taxing income earned in respective states, and agree that Franken should pay the price (taxes and fines where due). But this is nothing at all like the cases of cheats Wesley Snipes and Robert Beale.