Congressman Rangel's Letter
To the Editor:
The recent inflammatory articles by David Kocieniewski attempting to link my position on retroactive tax legislation affecting United States companies that incorporate abroad (inverted companies) to support for the Rangel Center at C.C.N.Y. echoed in your recent editorial, reflect willful blindness to the history of that legislation and a fundamental ignorance of the legislative process that produced it.
Moreover, your editorial board is now criticizing me for opposing a 2007 Senate bill that The New York Times itself strenuously opposed. In fact, The Times roundly praised my efforts to defeat that very same bill by working on separate, targeted, bipartisan legislation in the House.
Contrary to The Times’s reporting, I played no role in preserving a tax break for Nabors Industries. 1 The tax loophole that benefited companies moving offshore was closed in 2004. The effective date of this legislation was determined by the then-Ways and Means Committee Chairman Bill Thomas, Republican of California, and Senators Chuck Grassley, Republican of Iowa, and Max Baucus, Democrat of Montana. I did not participate in those negotiations. 2
In 2007, although the legislation had been on the books — and the effective date fixed — for three years, Senators Grassley and Baucus sought to reach back five years to establish an earlier effective date. This and other retroactive provisions were included in a larger Senate tax bill that many, including the editorial page of The New York Times, found to be highly objectionable. I opposed that bill because it created tax breaks for big business at the expense of small businesses and middle-class Americans.
I began working on a separate, bipartisan bill in the House that would provide tax relief for small businesses. Consistent with my longstanding views and the desires of the Ways and Means Committee ranking member, Jim McCrery, Republican of Louisiana, this bipartisan House bill included no retroactive provisions. This bipartisan legislation was developed and introduced before any alleged contact 3, however brief, with the Nabors lobbyist. At no time was the issue of offshore inversion raised in the development of this legislation. Indeed, that issue never came before the Ways and Means Committee during my tenure as chairman in the spring of 2007. The House passed the small-business tax bill with an overwhelming bipartisan majority of 360 to 45.
The article’s assertion that I “defended” the loophole in order to benefit Nabors Industries is patently false. The Senate Finance Committee staff dropped this and other controversial tax increases before any negotiations took place between me and the Finance Committee chairman, Max Baucus, on the final bill. 4 The issue was never raised again.
Not only has my position against retroactive tax law changes been consistent, but let me be clear, I have actively pursued legislation to crack down on loopholes benefiting inverted companies, like Nabors. I helped my colleague Lloyd Doggett, Democrat of Texas, author H.R. 3160, which would prohibit companies from taking advantage of tax treaties to avoid a 30 percent withholding tax in the United States. This provision passed the House on Aug. 2, 2007, but has not yet passed the Senate. Nabors would pay more taxes under this bill. 5
My support for this bill demonstrates that my prior opposition to a retroactive increase in taxes 6 is a consistent 7, principled stance that has nothing to do with the Nabors Industries. It is absurd to suggest there was ever a change in my position in connection with a pledged donation to C.C.N.Y.
I should note that I made available to the reporter a longstanding Congressional tax policy expert who confirmed from experience that my position on this issue of tax policy has been consistent. The reporter chose to omit this statement. 8
Eugene M. Isenberg, the chief executive of Nabors Industries, and I share nothing more than a passion for helping America’s youth build a brighter future and the understanding that a good education can open doors for boys and girls — this is the established goal of the Rangel Center at C.C.N.Y. This passion is also shared by the distinguished Robert M. Morgenthau, Manhattan’s district attorney, who introduced us. 9 For this reporter to imply otherwise — and repeatedly ignore facts to promote his agenda — is irresponsible and should not be tolerated by any paper, especially The New York Times.
Charles B. Rangel
Chairman, House Committee on Ways and Means
Nov. 26, 2008 |
