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

[rad21]

No Congressman Rangle! Million dollar (individual) earners do not deserve the income. One can justify corporation making million dollar profits; if they invested perhaps ten times that money and took the risk.

The toughest job in the USA is the President and he makes $400,000. The most intelligent jobs in the USA are scientists who get Nobel prizes; and they likely earn about half-a-million.

Congressman Rangle, like Secretary Geithener ( former NY City fed chair) is likely partial to his NYC friends and may be shielding Wall Street Companies. Despite the public proletariat pronouncements, these guys are protecting the fat-cats and their campaign contributors.

[SurrealPumpkin]

Consider this: Cheney and Bush using tax laws to punish traitors.

Don't open a can of worms without being very very sure you'll like the consequences.

[AceInTheHole]

STOP THE GREEDIACS ON WALL STREET BEFORE THEY STEAL THE WHOLE DARN COUNTRY!

THE GREEDIACS MUST GO!

[MESGAIN26]

OOPS LOCK*

[MESGAIN26]

IAGREE PROSECUTE LOOK THEM UP FOR CORRUPTION SEND THE WAGON AT THEM LIKE THEY NIXINAMISTRATIN WITH CUFFS AND ORANGE JUMP SUITS

[NWBrunette]

Oh really? Well then, we'll fire you and raise your taxes. Enough of the nonsense you clown. We're done being patsies and fallin' for your lame excuses. Get our money back, now! Or get out of the f'ing way!

[ObjectiveRealist]

I love your attitude but he does have a point. He should have given credit to Barney Frank, though, who has an even better point. Check yesterday's Rachel Maddow Show at rachel.msnbc.com.

[eirrac]

Barney Frank was right on last night when he was on the Maddow Show. He's made more sense than anyone else so far.

[qmastertoo]

There are many. They cant be replaced fast enough

[KindMisica]

I tend to agree with Rangel, tax code shouldn't be used as a way to prosecute...but there has to be some other way to take the money back. I'm confident they'll find one, and it 'd better be soon,very soon!

[NWBrunette]

Ok. Let's raise the taxes NOW, start getting some of our money back. When you - or whomever - get that "other way" figured out, let us know, and we'll put the tax rates back. Thanks.

[KindMisica]

Hey, whatever it works, works quick and doesn't smell like mob-lynching or witch hunting, I'm all for it. People should lay down the pitchforks and think of efficient ways to screw them back just like they screwed us.

[SurrealPumpkin]

Don't forget that the Democrats will not always be in control of Congress and the White House. Do you really really trust the Republicans to responsibly use the US Tax Code as a method of punishment?

[vesaversa1]

There are also Democrats who are out of touch and in the tank with wallstret who need to be replace and Rangle is one of those peoples.

[serindipity803]

Sure sounds like it. The ones trying to uphold their extra income while pretending to be a congressman. Oye! give up - transparency is activated--we see everyone of you on the dole. Give it up before you are recalled.

[NWBrunette]

You're right. He's an enabler and has been for a long time. This chairman is someone who definitely has plenty of rich "friends" in high places that he's not about to ruffle.

[bazokbros]

Here's my take, like anybody cares, but I do think that there should be some recourse the government should be able to take regarding recouping the AIG bonuses even though there was a contract. I see the paying of the bonuses a mistake similar to a website or retailer posting the wrong price for a product and not being able to refuse the sale or pulling the product in the course of an obvious oversight. Just becuase a "mistake" was made not making provision about bonuses, the "too bad, so sad" defense shouldn't apply either and the government, we the taxpayers, should be able to recoup the mistake.

[lisakaz2]

While I understand Charlie Rangel's measured position, he needs to realize that we taxpayers already feel cheated by these Wall St. execs and fairness actually requires that something be done, via the tax code or not. It SHOULD be illegal to use federal bailout money on bonuses, or whatever they're called. The fact that some of these recipients don't even work for these companies anymore is just salt on the open wound.

[katekid]

Drastic rip-offs, call for drastic measures, Charlie.

[go4thegold]

Charlie is such a wonderful fool. He doesn't want the public to become dubious of the tax laws. Charlie: "WE ALREADY ARE!!!" D.

[oregonideas]

Charles Rangel is a most interesting fellow and, once again, he advances a position of integrity. Remember his yearly efforts to re-establish the draft, so all kids (yes, even the spoiled children of the very rich) have their equal chance to be killed or crippled in Iraq or Afganistan. Now, he states "don't selectively manipulate the tax code to punish folks you don't like. Well put, sir, and hopefully other Congresspersons are listening.

[NWBrunette]

"Now, he states 'don't selectively manipulate the tax code to punish folks you don't like'"

Actually that is NOT well put at all. Unless you're living in some alternate reality. Because the tax code is chock full of "selective manipulations to reward folks that someone in Congress does (or did) like." Chock full mind you. Ask any tax preparer or tax consultant. Unless and until they get rid of each and every one of those, Rangel's statement is pure rubbish and insult to any aware person's intelligence.

[LuckyLeif]

Too late Mr. Chairman! Haven't you read Obama's proposed budget? Tax increases $1.4 TRILLION!
Wake up America! The man is destroying our country.
http://allanerickson.wordpress.com/2009/03/17/obamas-path-to-complete-financial-collapse/

[XLintLuvR]

Ummmm....will you knock it off with the "he's going to raise our taxes and the sky is falling" complaints about this? Are you a multimillionaire Leif? If you are, then lucky is an appropriate adjective to describe you. Stu pid would be the other. If it's not going to affect you, quit yer bit chin. Next, it's not a tax increase, it's a roll back of an unfair tax cut that only benefitted those that were making the most money that were already hiding their wealth offshore and ditching taxes through all the loopholes.

[vesaversa1]

Chicken little the sky is falling the sky is falling .enough!

[bygollymissmolly]

I agree with Rangle. Unless we are going to change the tax codes to apply to all bonuses it doesn't make sense to pass a law that only applies to a certain class of bonuses.

And for those who are jumping all over Chris Dodd for the "only applies after Feburary 11" clause in the Economy Recovery bill, I don't think he was trying to get away with anything. You can't make a law and then say that it is retroactive. That's just asking for a lawsuit.

How would you like it if they passed a law saying that we were to pay 1% more in payroll taxes and then made it retroactive for a year?

[SarcastroBO]

What if the government gave me 200 billion dollars?

[NWBrunette]

We make laws that apply to a "certain class" of whatever all the time. Every hear of earmarks? What do you think the tax code is full of? Wise up folks. Rangel is blowing smoke. And of course you can make a law and have it be retroactive. Its done all the time.

"How would you like it if they passed a law saying that we were to pay 1% more in payroll taxes and then made it retroactive for a year? Really, you've got to be kidding. Like, duh. If I raked in millions in bonuses for driving the economy in to the tank I could handle a little extra in taxes. Sheesh. Pay attention to the issue.