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Financial Literacy - Taxes
SPOTLIGHT
A chat with Congressman Rangel
A new bill from the chairman of the House Ways and Means Committee would impose a surtax on higher wage earners.
Taxes made easy

Interview: Charlie Rangel, D-N.Y.

The shrinking middle class
Many have charged that the tax policies of the last seven years or so have led to a widening gap between the rich and the poor. Is this an oversimplification or is this in fact a truthful assessment?

Rangel on tax reform
Tax reform's winners and losers
The shrinking middle class
The politics of taxation
A time frame for AMT legislation
Tax hike vs. tax code reform
The need for further changes
Changing the estate tax
The possibility of a 'fair tax'

It's a truthful assessment but it cannot all be laid on the tax system. It's the economy. It's just people are making billions of dollars while others are fighting for minimum wage. And when you find all of the living costs increasing faster than salaries are, then you find that you have the pinch, really, on the working poor and the middle class, and every year that division widens. We're becoming a country where the middle class is dwindling and slipping into poverty while the wealthy continue to accumulate wealth. And so you have this disparity between those that have and those that don't.

The politics of taxation
You're one of the few politicians willing to raise taxes. Everyone else seems to be filled with tax terror. Of course, political survival is a powerful incentive. But what needs to be done to get the U.S. on the road to long-term fiscal survival?

Well, let me first say that I am not raising taxes. At the end of the day my tax proposal is revenue neutral, which means that we don't raise taxes. What I do is redistribute the tax burden. Now it's very interesting that when the administration agrees with me in closing loopholes, they say that it's closing loopholes. When they disagree, they say you're raising taxes. It's true, if somebody is getting preferential treatment in the tax code and there's no economic reason why they should receive it, if you take that away from them, you're raising their taxes. But that should not preclude people from wanting to simplify the tax code.

There's so much more to be done but I just want to give a little bit at a time until ultimately we can simplify the code and make it more equitable.

-- Updated: Dec. 26, 2007
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