House Ways and Means Committee chairman Charles Rangel, D-N.Y., said yesterday that he will not step down from his position as top tax writer, despite pressure from House Republicans, in light of recent allegations of ethical misconduct.
Rangel has come under fire recently for failing to report and pay taxes on the income derived from a beachfront house he owns in the Dominican Republic.
But he told reporters at a news conference that he mistakenly neglected to report the mortgage reductions on the property he received in lieu of direct rental payments as income.
"What I now know is that although I have not personally received proceeds in cash, the fact that any reductions to the mortgage actually counted as income and should have been reported as such," Rangel stated in a letter he sent to House Speaker Nancy Pelosi, D-Calif., yesterday.
He added that the mistake was an irresponsible oversight and that he intends to pay the Internal Revenue Service $5,000 in back taxes. However, he said he does not believe the error merits his removal as chair of the committee.
The call for Rangel to step down stems from a letter sent Tuesday to Pelosi by Minority Leader Rep. John Boehner, R-Ohio, and other House GOP leaders. In it, they said that because of Rangel's "continuing ethical lapses, he cannot effectively carry out his duties" as chairman.
"We hope you take a necessary step in the right direction for America by agreeing it is in the best interest of the public and this representative institution for Rep. Rangel to step down from his chairmanship until his ethical issues have been resolved," the Republicans told Pelosi.
Nadeam Elshami, a Pelosi spokesperson, said in a statement that Republicans should stop the partisan attacks and allow the House Committee on Standards of Official Conduct, which conducts probes on ethics issues, to complete its ongoing investigation into the matter.
"The American people would be better served if Republicans would stop playing politics and allow the bipartisan ethics committee to do its job," Pelosi said.
The committee is currently investigating allegations that Rangel paid below-market rent on four Harlem apartments, including one he improperly used as a campaign office. Rangel initiated the examination after the allegations surfaced. His attorney, Lanny Davis, told reporters last week that Rangel is also considering initiating another examination of the island property.
Rangel has served as a strong proponent for tax-credit bonds, which provide the holder with an income tax credit in lieu of tax-exempt interest payments. He has sponsored a bill extending expiring tax breaks, including $5.6 billion of taxable tax-credit bonds.
In addition, Rangel has taken the lead on the House's efforts to enact a one-year "patch" of the alternative minimum tax, which applies to interest earned on private-activity bonds and some governmental and 501(c)(3) bonds. Since the tax - which was created to prevent high-income households eligible for several tax breaks from paying little or no taxes - is not indexed to inflation, more and more taxpayers become subject to it each year.