Rangel to Democratic Hopefuls on Taxes: Don’t Forget Congress
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WASHINGTON — The Democrat in charge of tax policy on Capitol Hill, Rep. Charles Rangel of Harlem, has a warning for his party’s presidential hopefuls: Don’t forget about Congress.
The leading Democratic White House contenders have been releasing tax plans in recent weeks, and their proposals have mirrored congressional priorities in some respects, but not in others.
“One of the concerns that I do have is that our candidates don’t get ahead of the tax-writing committee with their rhetoric,” Mr. Rangel, the chairman of 9th House Ways and Means Committee, told reporters at a Capitol briefing yesterday.
He said that “no matter who is the president,” it was up to House lawmakers to draft a tax proposal. A president that was “locked in” to a specific campaign plan could create headaches for the Congress, he suggested. Senator Obama of Illinois and John Edwards of North Carolina have proposed various tax cuts for the middle class and increases for top earners, although neither candidate has addressed Mr. Rangel’s signature issue: the alternative minimum tax. Mr. Rangel has endorsed Senator Clinton, who has yet to release a detailed tax proposal.
Mr. Rangel is preparing what he has called “the mother of all tax reforms,” which will be centered on an elimination of the minimum tax, a levy enacted in 1969 that could hit as many as 23 million Americans next year because it has not been adjusted for inflation. A permanent repeal costs $800 billion over the next decade, and Mr. Rangel is eyeing a variety of tax increases and “loophole” closings to pay for it.
He has been trying to push tax policy higher on the Democratic agenda, and he said the House majority leader, Rep. Steny Hoyer, assured him yesterday that his proposal would come up for consideration before Congress leaves for the year in November. Mr. Rangel is expected to submit the completed legislation within the next few weeks.
The chairman also said yesterday that he was open to considering a proposal floated recently by the Treasury secretary, Henry Paulson, to lower the nation’s corporate tax rates, which are among the highest in the world. Mr. Rangel said he would meet soon with Mr. Paulson to discuss the idea, but he hinted that he might use a corporate tax cut as a bargaining chip to gain administration support for his other tax priorities. “It would be one step further toward me trying to work with the administration,” he said.
Mr. Rangel indicated that he would not let Senator Schumer, his New York colleague, stop him from pushing for a tax increase on the “carried interest” profits of hedge fund and private equity managers. Mr. Schumer, the third-ranking Democrat in the Senate, has signaled his opposition to the tax hike, citing its possible negative effect on Wall Street and saying it could hurt New York’s competitiveness in the global market. Mr. Rangel dryly noted that by law, tax policy originates in the House, not the Senate.
“Even though he’s my dear friend, my respect for the Constitution and the jurisdiction of this committee far exceeds that,” the chairman said.
In the meeting with reporters, Mr. Rangel gave a general thumbs up to a recent $8.5 billion proposal by Mayor Bloomberg to expand and reform the earned income tax credit, a key anti-poverty measure. But while Mr. Rangel also supports expanding the tax credit, he could not guarantee that the mayor’s proposal would make it into the final bill. “The mayor has some great ideas, but my job is to find the money to be able to fund them,” he said.