WHEN: Thursday, October 25 at 7:00PM ET
WHERE: "Kudlow & Company"
The following is the unofficial transcript of a CNBC interview with Charles Rangel, Chairman of the Ways and Means Committee in the U.S. House of Representatives, on CNBC's "Kudlow & Company". All references must be sourced to CNBC.
In the interview with CNBC's Larry Kudlow, Rep. Charles Rangel discusses his proposed U.S. tax overhaul, among other topics.
LARRY KUDLOW, host: Ways & Means Chairman Charles Rangel, thank you for coming back on KUDLOW & COMPANY, sir.
Representative CHARLES RANGEL: Always good to be with you.
KUDLOW: All right, Mr. Rangel, why don't you give me the key bullets for the mother of all tax reform.
Rep. RANGEL: Well, I know that so many people are saying, `There they go again, raising taxes.' As it turns out, our tax bill actually reduces taxes for 90 million people. The main thrust, of course, was to remove this tremendous tax burden, something like $800 billion, off of those people that the tax was never intended to what you commonly refer to as those affected by the alternative minimum tax. But while we were at it and recognizing that there was so many loopholes that were in the tax code, we wanted to simplify the code, we wanted to encourage investment, and we wanted to make certain that there was a degree of fairness and equity involved. And so what we have done is we closed up the differences in how you treat those that manage equity funds, the difference between those who would like to believe it's capital gains and get taxed at a low 15 percent, as opposed to do the very same thing and they're taxed at a much higher rate of ordinary income of 35 percent. Once we started closing up these loopholes, we found that we could provide relief for some 70 million people. How do we do it? Well, we take into consideration the fact that everyone is talking about more people working, but they don't talk about that they're working longer or the increased cost for health or child care or housing and education. And these are people who are not on the top ranks of our rate, it's people that are caught right in the middle. So the first thing we do is increase the standard deduction. And of course, everyone knows this determines how liable you're going to be, if at all, for any income tax. Then we start dealing with those people who work every day but still, at the end of the day, they end up working below the poverty line. Rather than have them discouraged and stopping to work, we have what is called the Earned Income Tax Credit, and that means that we give an incentive, we get them a check to keep these people working, and we're very proud of that. We...