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By The Hill Editors
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Posted: 10/26/07 07:13 PM [ET] |
House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) pulled back the curtain on his “mother of all tax reforms” Thursday. And by doing so, he at least implicitly came up with another Democratic definition of what it means to be wealthy.
In the presidential race, Sen. Hillary Rodham Clinton’s (D-N.Y.) tax policy suggests that she thinks an income of $250,000 a year makes someone wealthy. Her rival for the Democratic nomination, former Sen. John Edwards (N.C.), appears to put the figure at $200,000.
On Capitol Hill, Sen. Charles Schumer (N.Y.) indicates $400,000, while over in the House, Speaker Nancy Pelosi (Calif.) looks somewhat higher and suggests $500,000.
Now, with his proposed overhaul — the legislation includes a wider range of cuts and increases — Rangel performs the neat trick of both agreeing with Pelosi and suggesting a far lower number. He proposes a surtax of 4 percent on incomes of $150,000 (or $200,000 for a married couple) that would notch up to 4.6 percent for incomes over $500,000.
To those people on the national average wage of around $39,000, and especially for those below it, $150,000 a year doubtless would constitute wealth. On the other hand, as Rep. Joseph Crowley (D-N.Y.) told The Hill a while back, “a police officer and a nurse could be making well over $100,000 … but in New York City, they’d be struggling.”
Rangel did not launch his root-and-branch tax reform as an overwrought way of defining what it means to be wealthy, but it does give an indication of where he is going.
Indeed, that is what Thursday’s massive piece of redistributive legislation is all about. The chairman wants extensive debate on the issues next year — they include the elimination of the Alternative Minimum Tax (AMT), lower corporate tax rates, the sunset of President Bush’s tax cuts and lower tax bills for some 90 million people at the low end of the income range — but the changes he hopes to see enacted will not pass Congress before the 2008 election, if ever. They are predicated on the election of a Democratic president.
In the meantime, Rangel will seek a “patch” to prevent 21 million new people from falling into the maw of the AMT this year, paid for by the doubling (or more) of the tax rate on carried interest — a move that would put the squeeze on hedge fund managers and may have trouble getting through the Senate.
Much as he does not expect to get his big ideas through Congress quickly, Rangel calculates that an argument now may help him get them through later. He has been in the House 36 years, so he is not green in politics — and he is not letting the grass grow under his feet.
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