Democrat Rangel Tries A Tax Reform "Squeeze" Play
House Ways and Means Chairman Charlie Rangel has adopted an unorthodox strategy for his attempt to achieve tax reform. Forget polarization--Rangel is trying to hug the Bush administration as tightly as possible.
More specifically, he's trying to hug Treasury Secretary Hank Paulson, his fellow New Yorker. Rangel says he's been persuaded by Paulson's argument that the top corporate tax rate of 35 percent is too high, and can "live with" 25 percent. In turn, he says Paulson has lent him "no fingerprints" help in identifying offsetting revenue by broadening the corporate tax base.
Rangel's idea is to dull conservative opposition to a package the right will deplore as a tax increase. Rangel argues that since higher taxes on some will eliminate the burdens of the Alternative Minimum Tax on others, it's no tax increase at all.
It's a nifty play, since lowering corporate rates has become a leading cause of economic conservatives. Embracing it won't win Rangel a lot of Republican support, but makes Republican complaints easier to answer.
Most in Washington still doubt Congress will enact a permanent "fix" for the AMT before Bush leaves office. Rangel's reach may exceed his grasp so long as power in Washington is divided. But the veteran lawmaker from Harlem chuckles at the idea that he's just paving the way for future action. "Hell no," Rangel says. "I'm 77 years old."
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