Well, I'm not sure if I believe this trend or not. Yesterday, the Washington Post exposed what sure looks like a shakedown by Democrats – led by Chuck Schumer – trading opposition to closing a tax loophole for large donations. Today, the New York Times reports that another Democrat – Charles Rangel this time – appears to be legislating in favor of large donors.
The chairman of the House Ways and Means Committee has proposed legislation that would effectively halt some current tax audits of people who get a tax break for living and operating a business in the United States Virgin Islands.
Many beneficiaries of the tax break are campaign contributors to the lawmaker, Representative Charles B. Rangel, Democrat of New York, according to data collected by CQ MoneyLine, which tracks political contributions.
At least one of them, Richard G. Vento, is currently under audit, according to court filings. Mr. Vento gave $4,400 last year to the Baucus-Rangel Leadership Fund, which supports Mr. Rangel and Senator Max Baucus, the Montana Democrat who heads the Senate Finance Committee.
Beneficiaries of the tax break including Michael W. Masters and Richard H. Driehaus, money managers, accounted for more than half the $51,900 that individuals in the Virgin Islands gave last year to Rangel for Congress, the chairman’s campaign organization. Mr. Rangel raised almost three times as much from such donors last year as in any other year in the MoneyLine database.
Mr. Rangel says his measure is simply an effort to address a discrepancy between the Internal Revenue Service’s treatment of Americans living in the Virgin Islands and its treatment of their mainland counterparts. Except in cases of fraud, the agency has three years to cite errors in a mainland resident’s tax payments. But since 2006, under I.R.S. rulings stemming from the agency’s efforts to crack down on abuse of the tax break, it has faced no such time limit in auditing Virgin Islands residents.
A discrepancy Rangel never noticed until it was painted a nice bright green with Virgin Islands cash, apparently. Remember all those promises to clean things up? Like I said yesterday, the Democrats are cleaning up alright. Just not exactly in the way they promised.
