tax cut did that. If you borrow money in order to reduce the tax liability and you cannot show the relationship between the tax cut and the increase in revenues that you receive, then what you have done is given a one-time gift. And the president wants to make it a permanent gift to a group of people who have not indicated that this money they received was used for increased investment. As a matter of fact, no economists–well, unless you push them–show the relationship between expanded economy and the tax cut.
BE: In his new budget, President Bush is pushing to make permanent his tax cuts, currently set to expire in three years. If you’re against the cuts, why wouldn’t fighting their extension be part of your agenda?
RANGEL: I’m not concentrating on 2010. If I really want to take care of the alternative minimum tax, it’s going to take me 10 years to do it. So naturally, I have to look to the future. The permanent cuts should only be part of the reform or the simplification of the tax code. If the president–or anyone–wants that, you’ve got to look at the whole code.
BE: Recently-enacted “pay-go” rules dictate that any measure to reduce taxes or boost spending must be offset by another initiative that raises revenues or cuts expenditures. How do these rules limit your ability to repeal the alternative minimum tax?
RANGEL: Pay-go applies to discretionary funding, and it just means that either you have to cut programs or raise the money to pay for them. The question would be, where do you find the money to take care of the alternative minimum tax? Politically, no one wants to come out of this saying that we increased people’s taxes in order to take care of this problem. The way I think I want to handle this, since the Republicans agree that this is an unfair, unintended tax burden on the middle class that happened merely because of our failure to provide cost-of-living adjustments, is to take a look at the entire tax code, which is about $2 trillion a year or $20 trillion over 10 years. We have not looked at this since 1986. If we took the whole tax code and squeezed out every deduction, a lot of people would have forgotten why they were in the tax code in the first place–so many of them were put in for political purposes that no longer exist. I do believe that in the code, there is $350 billion that I can identify that is a gap between what is collected and what should be collected. If you just readjusted the rates for the upper middle class and for the alternative minimum tax, there should be enough funds to make the tax more equitable.
BE: African Americans continue to lag as stock market investors and homeowners. From your standpoint, what needs to be done for our community to build wealth on an individual and collective basis?
RANGEL: Education, education, education. After that,