In the wake of the American International Group (AIG) bonus controversy, some have called the plans of congressional leaders to tax those bonuses at a rate of 90-100 percent "legislating with a vengeance."
However, Chairman of the House Ways and Means Committee Rep. Charles Rangel, D-N.Y., insists that doing this is a necessity, despite the premise that retroactively taxing anything is a dangerous precedent. In an interview with CNBC "Squawk on the Street" co-hosts Mark Haines and Erin Burnett on March 19, he explained different rules apply in these extraordinary circumstances.
"When you violate the public trust, different rules apply - the same thing we have in charitable organizations, 501(c)3 when they have excessive payment in certain areas that we're able to penalize them for," Rangel said.
But Haines, referring to a Sept. 9, 2008 New York Times article that alleges Rangel hasn't paid taxes on some of properties, questioned the New York congressman's moral authority.
"With all due respect Congressman, when you talk about violating the public trust, you've had some tax issues of your own," Haines said.
"Well, I wouldn't think that you know what they are since what I did or did not is being investigated by a committee, by me," Rangel said. "So what you're doing is reporting on what a reporter says because you have no clue as to what problems, if any, I have."
Haines pressed on and asked, "So all of the reports in the press were erroneous?"
"All of the reports in the press have been sent to a congressional committee that I asked to be sent to," Rangel said.
Rangel dismissed Burnett's suggestion that he step aside from setting tax policy while under the investigation of his tax payments was going on.
"I don't pay too much attention to irresponsible reporters who report inaccuracies that I know are going to be, in the final exam, be exonerated," Rangel said. "If every time a reporter decides that they want to attack someone, whether they call it taxes, whether they call it ethics, and that person has to step aside, we can find reporters really governing the House of Representatives."
Burnett asked if Rangel would deny claims that he failed to pay interest on his mortgage in the Dominican Republic, that he reported $75,000 in rental income from the Dominican Republic villa and that he didn't have two residences and take a rent stabilized apartment in New York.
"You know, if I tell you that if at the end of the day I will be exonerated of these charges, you're just going to ask the questions over and over," Rangel said. "I am telling you that you have to have some confidence in the House Ethics Committee, where we have Republicans and Democrats. I'm not telling you anything, except accusations, false accusations have been made by a reporter and picked up by other reporters and find people like you asking me questions, where the only thing that you have is not that anyone except the reporter has said it."
Rangel continued to maintain that just the accounts of the fourth estate are not enough for him to take the accusations seriously and step aside.
"There hasn't been any government agency that has looked at this," Rangel said. "And so reporters are reporting on reports asking me questions. In order to eliminate all of that, I sent it to the ethics committee."
