Last year, United States Representative Charles B. Rangel (D-NY), who heads up the powerful Ways and Means Committee, found himself in hot water when it came to light that he “forgot” to report some rental income on his personal taxes. Apparently, Rangel’s memory hasn’t gotten any better.
In an effort to comply with an ethics investigation, Rangel has amended tax and other disclosure forms. As it turns out, Rangel’s total net worth is somewhere between $1,028,024 and $2,495,000, about twice as much as he reported last year. Included in the list of previously omitted assets include property in Glassboro, NJ; as it turns out, Rangel is delinquent on his property taxes according to the Gloucester County Clerk’s office. While the outstanding amounts are small, records indicate that there were at least six tax liens levied against Rangel’s property during the past 16 years. All of those liens were eventually settled by Rangel.
While Rangel’s aides are blaming the bookkeepers, the GOP is calling for Rangel’s head. A spokesman for Rep. John Boehner (R-OH) has suggested that Rangel step down, saying, “This, again, raises serious questions about whether he should continue as chairman, given the multiple ethics investigations.”
At this point, Rangel has a number of matters, mostly financial, which are being investigated by various ethics committees. In each case, he has an excuse. In this case, it’s just forgetfulness, he claims.
C’mon, who can blame him? Pesky tax bills? He doesn’t have time to worry about paying his taxes… he’s busy chairing a committee that oversees other people’s taxes. Pish!
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Charles Rangel, Ways and Means Committee
The House Committee on Ways and Means has announced that Rep. Charles B. Rangel (D-NY) has introduced legislation to tax executive bonuses. The legislation, if passed, would affect bonuses received after January 1, 2009. You can read the text of the bill here as a pdf.
The legislation, which has been introduced as H.R. 1586 imposes a tax of 90% on bonuses of “highly paid individuals” (meaning those with AGI of $250,000 or more) for employees of companies which have received $5 billion or more under TARP. Hmm… Who could that be? Thinking… Thinking…
Could it be AIG? And Bank of America?
Interestingly, as Congress ramps up the restrictions on TARP money, more and more banks are miraculously finding that they really don’t need the money after all. In recent weeks, banks such as Sun Bancorp, Inc., the parent company of Sun National Bank, have indicated that the program is more trouble than it’s worth; Sun says it will return the $89 million of TARP funds that it has received. Makes you wonder why they took it in the first place.
Other banks, like Wells Fargo, are already whining about the “cost” to the banks. Wells Fargo cut its dividend pay out in order to repay TARP money. Wells’ CEO, Jeff Stumpf, has said, “These actions will help us repay the government’s investment at the earliest practical date. The U.S. Treasury’s Capital Purchase Program investment is generating a return for the U.S. taxpayer — at significant cost to the company.” Um, but that’s what lenders do, right, Mr. Stumpf? They make money on loans. I guess it doesn’t feel so good in the other direction.
Meanwhile, smaller community banks are making very public the notion that they have not accepted TARP funds. Some of those banks include Auburn National Bancorporation, Inc., United Bancorp and Pennsylvania’s own Harleysville Savings Financial Corp.
The field keeps changing on this one day by day. Stay tuned!
Rep. Charles Rangel (D-NY) has announced that he will not step down as chairman of the House Ways and Means Committee, despite an ethics investigation into his personal finances.
Instead, according to his lawyer, Rangel will hire a “nationally renowned forensic accounting firm” to review and report his finances. After the review, the report will be released publicly, along with 20 years of tax returns.
Rangel has admitted he did not report $75,000 in rental income for a property in the Dominican Republic but claims that he didn’t understand the tax consequences because of language and cultural barriers. “Every time I thought I was getting somewhere, they’d start speaking Spanish,” Mr. Rangel said.
Really, Congressman Rangel? That’s the best you can offer? Cause $75,000 would buy you one heck of a translator… You could even tap the population of your own district – where more than half of the residents speak Spanish. Someone, somewhere could help you say:
Tengo que pagar mis impuestos.
The tax issue is particularly embarrassing for Rangel since his job as Chair of the Ways and Means Committee is to help create tax law.
Unpaid taxes may just be the tip of the iceberg: investigators are also looking into allegations that Rangel used government letterhead to promote an educational center named after him (what other kind is there?) and other questionable financial deals.
The GOP has called for Rangel’s resignation from the Committee, claiming that Rangel’s insistence on keeping his seat shows that Democrats have “officially abandoned their promise to run the most ethical Congress in history and instead embraced the politics of corruption with open arms.”
For more commentary on Rangel, check out this Oxford University Press blog.
Defying the White House, Representatives in the US House voted to prevent about 22 million taxpayers from being hit by the alternative minimum tax (AMT).
What?
Oh yeah, just like with any headline, there’s more.
The idea of AMT relief was originally endorsed by the GOP (such as Senator McCain). The problem with AMT relief? The $61 billion hole in the budget left behind.
To offset the hole, Deomocrats propose to raise revenue in three key areas:
1, The bill would tax the “carried interest” of private equity and hedge fund managers at ordinary income tax rates instead of the 15% capital gains rate;
2, The bill would close a loophole that Democrats say has allowed foreign-owned US firms to avoid taxes on payments to foreign parent companies as a result of tax treaty provisions; and
3, The bill would bar integrated oil companies from claiming a domestic manufacturing tax deduction and would freeze the benefit for smaller oil and gas companies. Integrated oil companies are those involved in the upstream (i.e., exploration and production) and downstream (i.e., refining, marketing, distribution and retailing) segments of the industry. Prior to 2004, oil companies were not entitled to this deduction which was estimated to cost $3.5 billion over 5 years.
House Ways and Means Committee Chair Charles Rangel (D-NY) claims that the offsets are necessary in order to prevent the deficit from getting bigger: “We’ll be able to say we didn’t borrow the money and we didn’t put this burden on our children and grandchildren.”
But the GOP and the White House see it differently, calling the offsets a “permanent tax increase.”
With the offsets in place, the bill likely won’t pass the Senate. If it does, the White House has threatened a veto.
I think we all agree that AMT relief needs to happen in some form – and not as a series of last minute patches. The question is whether there should be an accompanying revenue offset: what do you think?
