Liberal Democrat proposes cutting corporate taxes
 "Have you lost it?"
That's the quote given by Rep. Charlie Rangel (D-NY) to the Wall Street Journal in a story in Thursday editions, regarding comments that he's open to cutting corporate tax rates in exchange for eliminating loopholes businesses exploit somewhere else in the tax code.
Rangel, Chairman of the House Ways and Means Committee -- the committee that has jurisdiction over all taxation -- says he wants to discuss with the Bush Administration ideas they've put forward over cutting the US corporate tax rate. Proponents of cutting the corporate rate argue that its driving US businesses overseas -- for example the recent migration of Halliburton from Texas to Dubai -- and causing hedge funds to exploit weaknesses in the US code.
Rangel told the paper Bush would have to offer "incentives [that] are good for the country," if he is to support it.
Republicans want to cut the top corporate rate down from its current 35%.
"A Treasury paper released in July suggested that getting rid of many existing tax preferences now available to corporations would generate enough revenue to reduce the top corporate rate from 35% to 27%," the Journal said. "For example, repealing an existing deduction for manufacturers that keep production in the U.S. would generate $210 billion over 10 years in revenue and simplify the code, the Treasury report said."
The 77-year-old House veteran, who's represented Upper Manhattan and Harlem since 1971, is perhaps better known recently for his proposal to reinstate the draft -- a quixotic attempt to bring attention to the fact that most of the US war in Iraq is being fought by those of lower socio-economic means.
"Rangel is aiming to pass legislation that he says would simplify the tax code and reduce taxes for about 90 million people," the paper adds. "The legislation would eliminate the individual alternative-minimum tax, which is starting to encroach on more middle- and upper- middle-income people. The bill also would beef up credits and deductions for lower- and middle-income people. The changes would be offset, as required under congressional budget rules, by raising the rates paid by roughly one million other people.
"Some ideas have already prompted criticism from businesses and many Republicans. One proposal, for example, would increase the taxes paid by managers of private-equity and venture-capital funds, as well as some real-estate deals."
But the move to reduce corporate taxes, the paper notes, could sweeten the bill such that it might draw enough Republicans and red-state Democrats to support it.
"If the American people say, 'Have you lost it? What are you doing?' then, hell, I have to back off and ask the Senate something," Rangel remarked. "But the Senate hasn't 'come up with anything since I've been chairman that's been so exciting...that I feel compelled to ask them anything."
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