An Interview With Charles Rangel

Image: Charles Eckert / Polaris

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It took him a while—36 years—but Representative Charles Rangel, the Harlem Democrat, is finally one of the most powerful figures in Washington: chairman of the mighty House Ways and Means Committee, which originates all federal tax legislation. And if the 77-year-old Rangel has his way, your income taxes just might be going up.

"I can see how you can reach that conclusion," the blunt-spoken 18-term congressman tells Portfolio.com in an exclusive interview. "But I never would think about giving any reporter a quote from me that says ‘Rangel says he's going to raise the tax rates for the rich.' I would never say that. I'm saying that what scares the hell out of so many people, especially those that are in hedge funds, is that I want to be able to say at the end of the day that it's a fair and equitable system that has the confidence of the taxpayers. And they say, ‘He's coming after us. Goddamn it, that's what Rangel meant!'"

What Rangel will say is that he wants to eliminate the Alternative Minimum Tax. The A.M.T, originally aimed at the wealthy who were not paying any taxes, has since ensnared millions of middle-class taxpayers.
 
"If I'm honest enough to tell you that rates have to be changed in order to accomplish the elimination of the Alternative Minimum Tax, no matter how you frame the question, some people are going to pay more taxes, and most people are going to pay less taxes," Rangel says.

"Well, who in the hell is going to pay more?" he adds. "Those who enjoy loopholes or what appear to be unfair advantages in terms of rates are going to pay more."
 
Rangel, who contends that fewer than a million taxpayers have benefited from the Bush tax cuts, says he's not hearing any complaints from the upper classes—at least not yet. "I don't go to those people that may have a rate increase—I don't know them," he says. "They don't come to see me. They don't like me!'"

During an hour-long sit-down, the dapper Rangel also discussed his friendship with Treasury Secretary Henry Paulson, his public trash-talking with Vice President Dick Cheney, and his loyal support for presidential candidate Hillary Clinton—who, he predicts, "will be the nominee that would eat anybody's lunch," especially Rudy Giuliani's.

Lloyd Grove: Thank you so much for doing this.

Charlie Rangel: Sure, glad to. It's good for people to know what I'm thinking rather than for them to guess what I'm thinking.

L.G.: A lot of people are guessing what you're thinking. So, let me just start. The top marginal income tax rate is 35 percent. The economy seems to be doing fairly well, with a 4 percent growth rate. The I.R.S. figures show that revenue has actually gone up since the Bush tax cuts and that the deficit is under what it would have been. So what's broke that you want to fix?

C.R.: If we're reading the same reports, and you're not trying to be provocative but really trying to get to candid answers, don't those same reports indicate that income is up, [the categories of] working families are up, more people are working is up, longer hours are up, and that whether the lower tax rate on the top was responsible for the increase in growth is by some economists questioned? And whether or not the tax cuts paid for themselves, as opposed to money being borrowed, are just questions? I never said—and that's why I welcome this interview—that anything was broken. Your questions are framed as though Rangel has made up his mind to go after the wealthy who are enjoying the Bush tax cuts. "Why are you doing this if nothing is broken?" So my response to your carefully prepared question is—

L.G.: Not that carefully prepared.

C.R.: —I didn't say anything was broken! But I am anxious to tell you what I did say and will say.

Our committee has a responsibility to look at this tax code—the size of it, the complexity of it—and to realize that simplification is just as important politically as whether or not we can allow a volunteer tax system to exist because people believe it's fair. Fairness has to do with how you set the rates for different categories of taxpayers. And if the rates are different—as we've experienced with carried interest where certain people have 15 percent, others have 35 percent—or hard workers in the office are paying at 35 percent, while for people who do less than laborious work it's 15 percent. It's not just a question of who deserves what, or what would be the economic incentives. It's "What does the average taxpayer think about the code?" So the very first thing that Republicans and I agreed upon was that the Alternative Minimum Tax was one impediment for people having confidence in the tax system. And that is why I wanted to start out by saying that what attracted our attention in a bipartisan way was the Alternative Minimum Tax, and the desire to eliminate it completely.

L.G.: And in order to pay for that, you're going to have to get revenue elsewhere.

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