Fine Charlie
The IRS should demand interest and penalties from Ways and Means Committee chairman Charles Rangel.
If you owned a condominium unit in a foreign country and earned income by renting it out and if you didn’t have your employer withhold enough money for taxes or make adequate quarterly payments, you probably owed a tax penalty. That is unless you were the chairman of the House Ways and Means Committee, the committee responsible for writing US tax law. It seems that paying interest and penalties is optional if you have been in the House since 1970.
The aspect of this story that I enjoy the most is the defense that Congressman Rangel has given for not paying taxes. He actually claims that the investment was so complicated that getting adequate statements from the management company was not possible. This was after he claimed that he did not know that the income was subject to income tax. Those of you that write a check to a tax preparer every year are encouraged to send their cards to Mr. Rangel’s office.
Forgive those of us that send sizable portions of our income to Washington if we are not adequately sympathetic with Charlie’s plight. In the 38 years that Mr. Rangel spent in Washington, the tax code has grown more complicated while the penalties for noncompliance have become more draconian. Now that the chairman is snarled in the same net he and his compatriots have set for the rest of us, he offers lame excuses and a defiant attitude. Looks like the only lesson he learned from the experience is how to provide material for late night comics.
Complaining about the complexity of the deal is the last thing the chairman should be doing. Talk about looking a gift horse in the mouth. The condo in question was purchased on the recommendation of a long time campaign financer. If I were offered a lucrative investment in a luxury condominium that forgave the interest on the mortgage and provided $75,000 in income in three years, I think I would figure out how to pay the taxes.
Simplifying the tax code is the first thing the chairman should do. If the chairman of the House Ways and Means Committee finds the tax code too complex to comply with, maybe it is time to simplify the law. If ignorance of the law is no excuse for breaking the law, why do we have laws that are incomprehensible even to the people that wrote them?
This case demonstrates the arrogance of our elected representatives. Why should a Congressman that has won reelection for decades with 90% of the vote feel compelled to live under the same laws as his constituents? Why should a public official when confronted with an impenetrable bureaucracy armed with circuitous legislation act to alleviate the same burden placed on his constituents? The fact is that Charles Rangel has benefited from the largess heaped upon public servants due to a complex tax code that punishes those that do not pay tribute to keep the tax man at bay. At least we now know that it requires “guerrilla war” to get a Congressman to comply with the law.