WASHINGTON - Ways and Means Committee Chairman Charles B. Rangel today sent an open letter to Treasury Secretary Hank Paulson, challenging the Bush Administration to outline its plan to reform the tax code. Chairman Rangel recently introduced the Tax Reduction and Reform Act of 2007, which would provide overwhelming relief to individual taxpayers and corporations through a repeal of the alternative minimum tax (AMT) and a significant reduction in the corporate tax rate, both of which have been stated goals of the Administration.
Chairman Rangel’s legislation is the most comprehensive tax reform proposal introduced since the landmark act of 1986. This historic overhaul of the code began with a series of cooperative discussions between the Reagan Administration and the Democratic Chairman of the Ways and Means Committee.
Excerpts from Chairman Rangel’s open letter to Secretary Paulson:
On a fiscally responsible AMT "patch":
"…[T]he President’s budget proposal requested a one-year "patch" for the alternative minimum tax (AMT) without raising taxes. If we prevent the AMT from falling on 23 million additional taxpayers this year, this will result in an estimated $50 billion in revenue that will not be collected by the Federal government. You have stated that we should not close existing loopholes or eliminate narrowly-targeted benefits in the tax code to recover that cost to the treasury, so I assume the Administration would propose a reduction in Federal programs to cover the cost of an AMT patch. Mr. Secretary, I ask you, which programs does the Administration recommend cutting to ensure that the cost of this patch does not add to our Federal deficit?"
On corporate tax reform:
During a meeting before the Ways and Means Committee earlier this fall, you shared your view that our corporate taxes are much higher than those of other industrialized nations. That is a concern that Committee Members took seriously. I proposed a reduction in the corporate tax rate from 35 to 30.5 percent in my bill…
Mr. Secretary, please share with me - if we are going to have a revenue-neutral corporate tax reform bill -- where would you raise the money to compensate for the revenue lost by a reduction in the corporate tax rate?
On the need for leadership from the Administration:
…President Bush has been in office for nearly eight years and yet we have received no bill, no suggestions, and no direction. It is easy to be critical, but if not this bill, what would the Administration recommend that we pursue to meet these goals?
