House Tax Chairman Opposes Using Tax Code To Recoup AIG Bonuses

Rep. Charlie Rangel (D-N.Y.) tried to get out in front of a congressional mob on Tuesday. Democrats in both the House and Senate have been calling for the IRS to use the tax code to recoup bonuses paid out to AIG executives with federal bailout money. Rangel, chairman of the House Ways and Means Committee, which writes the tax code, said that the approach was inappropriate.

"It's difficult for me to think of the code as a political weapon," said Rangel, who spoke to a handful of reporters outside his office.

"Is this an indictment or a bill?" asked Rangel. "Are they naming people? I mean, are they naming the taxpayers?"

Rangel said he sympathizes with the effort, but not the means it takes. "There's no way that good thinking Americans should reward people when they've been complicit in wrong doing," he said. "But as a former federal prosecutor, as I recall, it was the criminal code that you dealt with, not internal revenue."

Using the tax code could undermine citizens' faith in it as a fair instrument, according to Rangel. "There is some concern that I have that people will lose credibility in the income tax system and think of it as a political weapon rather than a revenue raiser," he said.

"What bothers me is my colleagues in the House are very angry, as is the administration, with these people at AIG and they want something and they want something now," he said. "This is a venting type of thing."

Despite his reservations, Rangel said he's willing to talk through whatever proposals members of Congress bring to him. "I would hope and assume they have alternatives to using the tax code as a method to either retrieve the federal money or to punish them," he said. "You know, when you get angry you don't think as clearly as you do when you calm down."

UPDATE: Following his conversation with reporters, Rangel met with House Speaker Nancy Pelosi (D-Calif.) and Financial Services Committee Chairman Barney Frank (D-Mass.). On Wednesday morning, said a Rangel aide, he'll meet with members of the committee to discuss a legislative response to the AIG bonuses. He remains open to discussing all options.

Comments

[nomadicexpat]

You people need to read article 1,section 9 of the US constitution

No Bill of Attainder or ex post facto Law shall be passed

what this congress is doing is a disgrace, and patently unamerican

[NWBrunette]

Hey Rangel! Either get our money back or go fly a kite. For once, act like a leader of the people, not your greedy grimy rich pals. Otherwise you'll get left in the dust at the side of the road by the raging progressives coming your way.

[sarabono]

It would be nice if the Members of Congress ACTUALLY READ bills before they passed them.

Remember the $800 Billion STIMULUS bill? Congress had less than 12 hours to read the 1,000 plus page Bill before the House and Senate leadership forced the vote on final package.

What happened to the Public Viewing 5 day review that Obama Promised before he signs a bill?

Congress passed the Stimulus on a Thursday evening / Friday morning and the bill sits on Obama's desk for 3 days, tell the following Tuesday, when Obama signs it.

When asked about the public Public review period? The White House said it was to difficult to put up on a web site that fast. Besides the Bill was so urgent, there was no time for review.

What a FUBAR move by the White House!

[NWBrunette]

Isn't curious how whenever there's not time to read a bill that its always the rich folks that are the beneficiaries? Obviously SOMEBODY is reading the bills... very, very carefully.

[batmanindy]

America needs to get the bonus money back from the people who received the money. As a taxpayer, I do not agree with handing out millions to the very people who created a $200 billion problem for our government and who contributed, through their shady business practices, to the near total collapse of our financial system.

The people who recieved the money need to return it to AIG who in turn need to return it to the treasury.

[hortonhearsawho2]

Did Al Capone work for AIG, too...

[arvay]

Rangel is one of those fat cat (literally) Democrats who are part of the problem. His own tax "problems" are part of the public record, his sympathy for AIG is easy to comprehend.

Time for his constituents, among the poorest in the nation, to send him elsewhere and elect areal representative.

[sfsoma]

Agree with Chairman Rangel 110%. If we go down this path none of us will ever be safe again from the confiscatory hands of unscruplous legislators. Yes, the staff at AIG Financial Services are greedy reprehensible creeps who do not deserve these bonuses any more that Bernie Madoff deserves to keep his ill gotten gains, but this is one of the most Un-America and dangerous ways to go about punishing these schmucks at AIG that I can think of. Slippery slope.

[mamacat]

Mr. Rangel thinks that using the tax codes to recoup the public's money would be wrong because it would be a political act.

If removing the bonuses is done without any Republican support, then it cannot be said to be a bipartisan law, and it could be construed as a political act. If, however, a law is passed with overwheming support, then it would not be political.

[hortonhearsawho2]

rght on kittycat...

[unite4change]

As I have been trying to tell you. This is what transpired before Obama was president.

American International Group, Inc. (AIG) (NYSE: AIG) is a major American insurance corporation based at the American International Building in New York City. The British headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Défense, Paris, and its Asian HQ is in Hong Kong. According to the 2008 Forbes Global 2000 list, AIG was the 18th-largest public company in the world. It was on the Dow Jones Industrial Average from April 8, 2004 to September 22, 2008.

It suffered from a liquidity crisis after its credit ratings were downgraded below "AA" levels, and the Federal Reserve Bank on September 16, 2008, created an $85 billion credit facility to enable the company to meet collateral and other cash obligations, at the cost to AIG of the issuance of a stock warrant to the Federal Reserve Bank for 79.9% of the equity of AIG. In November 2008 the U.S. government revised its loan package to the company, increasing the total amount to $152 billion. AIG is attempting to sell assets to repay the loans. So far the U.S. government has given the company over $170 billion.

80% of the company is owned by all tax payers in the United States of America.

[hortonhearsawho2]

Wh could argue ewith that....or not.

[mirhaque]

Rangle is a crook. AIG must must have thrown him a bone.

[peter777]

Rangle needs to get out of the way. The full amount of the bonuses need to be recovered. And, it is not revenge. It is justifiable recovery of money that has been purloined through secretive conspiracies within AIG.

[smokeystover39]

I simply can't understand the hysteria about the bonuses. While all the tubthumping is going on the real story has been hidden in the noise. CNN had been reporting about bonuses for the criminals in the bailed out firms - when?? - they reported the issue in January 09. Lets look at this thing in a calm manner. Key players in Congress had ample opportunity to addess the bonus issue and didn't BUT when Senators Ron Weiden and Olympia Snow tried to put the legislative hammer on the handouts they were stymied. The real question is who blocked their efforts??

Using the tax code retroactively is permitted IF the issue is beneficial and not punitive (check the Constitution re Expost facto laws and bills of attainder for openers). If we deviate from this basic axiom and bang the bonus recepients - no matter how much we may want to - we open ourselves to the will of the mob if in the future we are seen as the "transgressors".

Let's instead direct our energies to defeating the Whitehouse trial balloon re charging VETS for VA services through their insurance companies. Now there's a real villan.

[unite4change]

Smokeystover39, I wrote President Obama yesterday. I told him that dog don't hunt when it comes to third party insurance for combat veterans. I believe, this is one of those thing were he said all options are on the table; however, it doesn't mean he's going in that direction.

I agree, this AIG bonus is a sideshow being perpetuated by our corporate media. They are trying to hinder getting President Obama budget passed. Corporations will lose a lot of subsidies since President Obama wants to spend our money on us.

[JC1c1]

http://www.stripes.com/article.asp?section=104&article=61312

Military update: Obama budget draws cheers, jeers from vets

I think this article sheds more light on the subject. It is being considered, not in the bill. It also goes to say that Obama has given the VA more money than they were hoping for, and very happy with it. Anyway take the time out to read the article.

[POLINUT]

The solution is simple:

Anyone receiving a large bonus gets a knock on the door from the IRS and an invasive audit going back to 2000. That would do it. We only need a couple of folks made an example and the rest would surely pass on the bonus.

[smokeystover39]

When the IRS marches up to the suspects door should they goosestep? Your suggestion has a 1939 German aroma to it.

[Firestarter]

LMAO..AIG > American International Group. ..says it all there. People are more stup!d then one can even imagine. AIG founded in Shanghai, CHINA was formerly know as American Asiatic Underwriters by Cornelius Vander Starr...Name sounds familiar!...LOL.. Uncle of Kenneth Starr. Come on people... Ken Starr. supposedly d!ed in 1993..is there a video of his fu neral and the a real death certif!cate, Has anyone verified the bur!al and that he stayed that way. Anyway..AIG was investigated in the 2000 for fr aud and yet they remained in business, once again the SEC asleep on the job.

[Firestarter]

LMAO..AIG > American International Group. ..says it all there. People are more stup!d then one can even imagine. AIG founded in Shanghai, CHINA was formerly know as American Asiatic Underwriters by Cornelius Vander Starr...Name sounds familiar!...LOL.. Uncle of Kenneth Starr. Come on people... Ken Starr. supposedly died in 1993..is there a video of his funeral and the a real death certifcate, Has anyone verified the burial and that he stayed that way. Anyway..AIG was investigated in the 2000 for fraud and yet they remained in business, once again the SEC asleep on the job.