be able to have people show how you can save money by investing money and trying to cut down on the risk of investments. Let people see that paying rent is not the same as building equity. The whole homeownership program in the United States is a tax program–that is, the ability not to pay taxes and to deduct the interest from your liability.
BE: Beyond Social Security, what can be done to stimulate saving and investing for retirement? Do you support the concept of a universal 401(k)?
RANGEL: This nation is one of the poorest in terms of individual and national savings. Saving is contagious, but you have to encourage people to do it. Long-term interest is not as important as matching deposits up to a certain level and up to a certain income. We can have matching funds as an incentive for people to put more money in savings and have penalties for taking it out prematurely. It doesn’t have to be on the 401(k) level, which is employer-sponsored. It could be the federal government going into partnership to encourage people to save. This is one of the things [former President Clinton’s economic adviser Gene] Sperling had brought up. I just don’t want to raise false hopes as to what we can accomplish knowing that next year is an election year. But that is certainly on our agenda in terms of pension benefits.
BE: What tax incentives will need to be put in place to stimulate investment in small- and minority-owned businesses?
RANGEL: My biggest problem all my life was that every time I went to get a loan, I couldn’t get it because I didn’t have any money to back up the loan. When people start small businesses, you’re making an investment in them. So there should be a broader evaluation of a person’s ability to succeed in business. The government should play a bigger role in encouraging the banks even if it does mean, to some degree, guarantees. I think the tax code is one way to get partners in the business. If somebody has the capital and wants to support an entrepreneur
who has the skill, then show that person how they can save money on their income tax. There’s an excellent opportunity where you can manipulate the tax structure on investments made in high-risk areas. You can greenline a district where people are encouraged to invest. This is even more important than the empowerment zones because you are talking about the accumulation of capital as opposed to job opportunities.
BE: So what will be your focus as the Democrats gear up for the 2008 presidential election?
RANGEL: If we don’t get something done in terms of Social Security, tax simplification, major trade bills that are pending, or something in the health delivery system, the 2008 candidates could be out there talking about same-sex marriage or the war. We won’t have a chance to capture the imagination of the American people. BE
BLACK ENTERPRISE : blackenterprise.com : APRIL 2007
“we have democrats who truly believe