Thursday, March 19, 2009

Congressional Tax Cheats Express Outrage over Bonuses

The public outcry over a mere $165mm in bonus at AIG is leading to a dangerous witch hunt as politicians try to cover up their culpability for the current mess that confronts our nation. Congress has approved more than $700 billion in “stimulus” for the economy under the guise of creating jobs while concurrently threatening to abrogate contracts, pass retroactive punitive taxes, and jeopardize the future viability of our financial institutions. These two policies seem largely contradictory. The hot air of indignation emanating from the mouths of some of the most prominent politicians reeks of hypocrisy as many of these politicians have been embroiled in tax scandals themselves. Charles Rangel, the New York Democrat being investigated for evading taxes and other ethical issues, has proposed a 90% tax on all bonuses from companies receiving government support. This (alleged) tax cheat, as chairman of the very committee charged with drafting our nation’s tax laws, has inspired his fellow congressmen to pursue similar tax evasion strategies. Representative Pete Stark, an elected official from California and second ranking member of Chairman Rangel’s Ways and Means committee, has claimed tax credits in the state of Maryland by claiming that a waterfront home in Anne Arundel County is his principal residence. It seems quite strange that Rep. Stark could be representing the people of California’s 13th district very effectively if he lives “permanently” in Maryland. Representative Eliot Engel of NY has similarly been identified as invoking the same credit for his home in Montgomery County.

These incidents are not isolated. Treasury Secretary Timothy Geithner was pilloried by congress for his failure to pay years of taxes while Senator Chris Dodd, among others, have been accused of receiving discount mortgages from Countrywide Financial creating a clear conflict of interest. Senator Dodd, as head of the Senate Banking Committee, has significant influence over policies that impact the nation’s financial institutions that have become subject of public fury. All of the congressional hearings and condemning speeches are convenient cover for the role that Senator Dodd, Congressman Barney Frank, and others have in the growth of subprime mortgages and the resulting implosion of the global financial system. Our economy will continue to suffer until the graft and corruption among the many unethical members of Congress. The honest and responsible Americans are being punished and exploited for the political benefit of these deviants. It is time to say “Enough is enough!”.

“We go far beyond AIG, Citibank, Freddie Mac, Fannie Mae and others,” said committee Chairman Charles Rangel, a New York Democrat. “This is not going to happen again, the light is flashing and letting them know that America won’t take it.”

No, Mr. Rangel… American won’t accept hypocrisy from an unrepentant tax cheat that seeks to punish some of the most productive members of society. Unlike the charitable Mr. Edward Liddy, the CEO of AIG, most people won’t work for $1 per year while you exploit your position of power for personal gain.

“We passed a recovery act, we did not pass a license to steal,” New York Representative Steve Israel, a Democrat, said at the news conference. “The middle class will no longer subsidize pay for failure.”

Sorry, Mr. Isreal, but it is the subjects of your persecution that are paying for their own failure, not the middle class. The top 5% of households in the United States paid 57.1% of federal income taxes in 2007 and the top 20% of households paid 82.5% in 2001. It seems that the middle class is relatively exempt from taxes and, therefore, should temper their outrage over the intervention necessary to stabilize our economy.