House Ways and Means Chairman Charles Rangel (D-NY) is all for Barack Obama’s proposal to tax the income of subsidiaries of American companies earned abroad. Bloomberg quoted Rangel as saying:
Our tax code should reward companies that thrive by continuing to invest in America and American workers. I applaud President Obama’s commitment to simplifying our tax code and look forward to working with the administration to close these loopholes.
Does this mean Charlie will refund the $200,000 (of a million dollar pledge) he’s received from Bermuda-based Nabors Industries, formerly of Houston? It would only be fair.
David Kocieniewski reported in the New York Times on November 24, 2008:
…Rangel was instrumental in preserving a lucrative tax loophole that benefited an oil-drilling company last year, while at the same time its chief executive was pledging $1 million to the project, the Charles B. Rangel School of Public Service at C.C.N.Y.
The company, Nabors Industries, was one of four corporations based in the United States that were widely criticized in 2002 and 2003 for opening offices in the Caribbean to reduce their federal tax payments. Mr. Rangel was among dozens of representatives from both parties who bitterly opposed those offshore moves and, in 2004, pushed unsuccessfully for legislation to make the companies pay more tax.
But in 2007, when the United States Senate tried to crack down on the companies, Mr. Rangel, who had recently been sworn in as House Ways and Means chairman, fought to protect them. The tax shelter for the four companies was preserved, saving Nabors an estimated tens of millions of dollars annually and depriving the federal treasury of $1.1 billion in revenues over a decade, according to a Congressional analysis by the nonpartisan Joint Committee on Taxation.
Rangel and Nabors CEO Eugene M. Isenberg deny any quid pro quo. Maybe Isenberg found out the hard way that Charlie cannot be bought — only rented.
Of course, Rangel has had his own offshore tax problems, as exposed by NLPC, when he failed to pay tax on rental income from his Dominican Republic beach house.