Tuesday, September 01, 2009

The magnificent hypocrisy of Charlie Rangel

Amid all sorts of ethics charges swirling around Charlie Rangel, including taxes he forgot to pay and assets he forgot to report, the guy wants to increase the penalties for ordinary folk who have done some of the same things he has.
The changes approved by the House Ways and Means Committee that Rangel chairs would strip away legal defenses and pile higher penalties on corporate and individual taxpayers facing IRS proceedings for what they claim are unintentional mistakes, experts said.

Rangel's bill would:

* Punish those who fail to alert the IRS to potentially questionable tax exemptions.

* Bar the IRS from waiving penalties against taxpayers who clearly erred in good faith.

* Double fines in certain circumstances.

"The bill raises penalties and eliminates many of the reasonable defenses that taxpayers have always been able to use when honest mistakes are uncovered," one lawyer told The Post.

In fact, the bill increases fines "in some cases even for honest mistakes," the expert added.

.... The Rangel plan also would prevent the IRS from waiving punishment in cases where tax officials thought the penalty was excessive.

Under another provision, the IRS would require that taxpayers self-report areas where they may have gone over the line seeking tax advantages. If they fail to self-report and problems are found, tax penalties skyrocket.

The IRS becomes "judge, jury and executioner," said a lobbyist.

In one provision, the measure doubles the fine against the taxpayer from 20 percent of the underpayment to 40 percent.

As with many of the complex tax provisions buried in the 1,018-page bill, the severity of the self-reporting language is a matter of debate.

Advocates argue that the provision is intended only to go after flagrant tax cheats, but that's not clearly spelled out.
What is deliciously hypocritical of Rangel is that he has been guilty of some of the same transgressions.
In addition to $75,000 in rental income he failed to report to the IRS a few years ago, Rangel recently filed new papers revealing he neglected to disclose to Congress more than $1.3 million in income and $3 million in business deals between 2002 and 2006.

The Post reported last week that he also failed to pay taxes on property in New Jersey that he neglected for years to disclose he owned.

His office maintains he is now up to date on all his taxes.
Let's add in a provision to double the fine if the person is a member of Congress.

Or, we can adopt the Rangel Rule.
And then there is H.R. 735, also known as the "Rangel Rule Act of 2009."

The brainchild of Rep. John Carter, a Texas Republican who spent two decades as a judge before coming to the House in 2002, H.R. 735 would require the IRS to give everyone the same kid-glove treatment it gave Rangel.

The bill's title is modeled on something known in Texas as the "Hobby Rule." In the 1970s, Bill Hobby, then the state lieutenant governor, was pulled over for drunken driving. Hobby was taken to the police station, but when his attorney showed up in the wee hours of the morning, authorities simply let Hobby go -- no bond, no nothing. That special treatment became a precedent for future drunken-driving cases, as lawyers cited the "Hobby Rule" to demand their clients be freed with no questions asked, just like Bill Hobby.

Thus the "Rangel Rule." Under H.R. 735, if you're caught cheating on your taxes, you would pay what you owe, then write "Rangel Rule" at the top of your return, and you wouldn't be charged any penalty or interest. That way, Carter said when he introduced the bill, ordinary taxpayers would be "treated with the same courtesy that, it seems, the IRS is treating the chairman of the Ways and Means Committee."

Of course Carter's bill doesn't have a chance. Democrats undoubtedly see it as a joke. But the Rangel case is very, very serious.
As Byron York points out, Ted Stevens was indicted for hiding smaller funds than Rangel.
If you don't think so, just look at this, from the front page of the Oct. 28, 2008 Washington Post: "Sen. Ted Stevens of Alaska, one of Congress's most powerful Republicans, was convicted yesterday of lying on financial disclosure forms to conceal his receipt of about $250,000 in gifts and expensive renovations to his house. ..."

Stevens' conviction was later thrown out because of prosecutorial misconduct, but the message was clear: This is the kind of thing you can go to jail for.

Rangel appears to have hidden greater sums of money than Stevens allegedly did. Democratic leaders don't want to face it now, but it's just a matter of time before they're forced to admit they have a serious Rangel problem.
And Republicans are hoping that they keep the guy in charge of the Ways and Means Committee through the next election just so they can beat the Democrats up about him.