Tuesday, September 9, 2008

Let Them Eat Cake... Again.

(Hey, Nanc... You mentioned Weekend at Bernie's?)

This is a photo of  Charlie Rangel lounging at his villa in the Dominican Republic (What, no nice places here in the States, Charlie), which he also rents out at a profit of about $75,000 per year.

The problem is, the head of the Ways and Means Committee, which is the committee that writes the onerous tax laws that you and I must avoid, claims he just didn't know he was supposed to be paying interest. 

I wonder if the gov't would be so understanding if you or I used such an excuse.

From this source, emphasis mine: 

The Democratic chairman of the Ways and Means tax-writing committee has come under scrutiny for his vacation property and apartments he rents in his home district of Harlem.

[These are rent-controlled apartments, subsidized by the taxpayers.]

Davis [Rangel's lawyer] said Rangel failed to report rental income from the resort property on his taxes, but didn't realize it was necessary because of the way the deal was structured.

Davis said it is unlikely the congressman owes any back taxes under the federal tax code, although he may owe a small amount to New York State, on unreported rental income of about $75,000.

"It is my understanding that over the 20-year time period there is not likely to be federal tax liability by Mr. Rangel because of offsetting depreciation expenses and tax credits. Therefore, whatever amendments might be necessary do not involve the federal tax code," said Davis.

Republicans call Rangel ethically challenged and have sought to censure the 78-year-old lawmaker. Even an unintentional tax error is highly embarrassing for Rangel, since he chairs the committee charged with updating the nation's complicated tax code.

[Yeah, the frickin' tax code is so huge and tangled that not even the Chair that dumps more into it each year can understand it. Um, Fair Tax, anyone?]

News of Rangel's no-interest mortgage comes on the heels of damaging reports that two other powerful figures in Congress, Senators Chris Dodd, D-Conn., and Kent Conrad, D-N.D., got preferential mortgages with lower interest rates through a "VIP" program for friends of former Countrywide CEO Angelo Mozilo. Dodd heads the Senate Banking Committee.

[I'm sure all that was an accident, too. It must be, since no one is in jail. You know, like how quickly one of us plebes would be behind pig iron?]

Rangel bought the beach house 20 years ago for about $80,000, with a down payment of $28,000. Instead of making payments himself for the property, Rangel used his share of collective rental money generated by the resort to pay down the mortgage, according to his lawyer.

Rental income from the property was used directly to pay the mortgage, so Rangel never made any mortgage payments himself, Davis said. Only once, in 2001, did Rangel receive money directly, when the company mistakenly wired him $2,000 in rental income rather than applying that, as it had before and after, to the mortgage.

The mortgage debt of slightly more than $50,000 was paid off fully in 2003, Davis said, and rental income was also used later to pay for a $22,000 home improvement project. That second loan did include interest payments totaling about $1,100, the lawyer said.

The congressman's personal finances have come under scrutiny and spawned a House ethics committee inquiry, leading to a showdown last month on the House floor between Rangel and Republicans.

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