Economics

We at Scragged have been accused of excess cynicism in our appreciation of actress Lily Tomlin's quip, "No matter how cynical you get, you can never keep up."  Today, however, we're going to switch to sunny optimism.  This article adopts a positively Panglossian outlook on a recent political scandal, or let us, in the light of our optimistic outlook, say "misunderstanding" instead of "scandal."

Pangloss was a fictional philosopher, a main character in Voltaire's book "Candide."  It's the story of a gentle man who, though pummeled repeatedly by an unjust and uncaring fate, clings steadfastly to the belief that his is "the best of all possible worlds."  We at Scragged don't believe that the United States is the best of all possible worlds - we have offered a number of suggestions for improvement - but we do believe that it is the best of all existing nations and that the rest of the world knows this even if the MSM don't.  Far more people desire to immigrate to the United States than desire to leave, which is suggestive evidence of foreigners' true opinions about the United States.

In that vein, let's consider the wrangle about Rep. Charles B. Rangel.  In an article "House Chairman Failed to Report $75,000 in Income," the New York Times reports:

Representative Charles B. Rangel has earned more than $75,000 in rental income from a villa he has owned in the Dominican Republic since 1988, but never reported it on his federal or state tax returns, according to a lawyer for the congressman and documents from the resort.

Mr. Rangel, chairman of the House Ways and Means Committee, which writes the federal tax code, bought the beachfront villa at the Punta Cana Yacht Club and has received twice-yearly payments from the resort, which rents the property for $500 or more per night.

Except for not telling us that Rep. Rangel is a Democrat, a highly salient fact which they chose to reserve until late in the article when they pointed out that Rep. Rangel has served on the Ways and Means Committee since 1975, the Times gave a pretty straightforward account of the situation. They also explained how the unreported income happened:

Mr. Davis said the congressman did not realize he had to declare the money as income, and was unaware of the semiannual payments from the resort because his wife, Alma, handled the family finances and conferred with their accountant, John Viardi, on tax matters. [emphasis added]

Although you might worry that we'd risk a serious case of cognitive dissonance, which is stress caused when you try to believe multiple contradictory ideas at the same time, we're going to cling firmly to our Panglossian belief that Rep. Rangle is not a crook.

Admittedly, assuming he's not a crook takes a bit of doing. 

• We have to ignore the long tradition of Harlem being represented by crooked Democrats going back to Rep. Adam Clayton Powell who held the seat from 1945 until 1971 when he was succeeded by Rep. Rangel.
• We have to interpret in the best possible light the New York Times report that he didn't know he was not being charged any interest on the mortgage he took out to pay for the resort property.
• The Times reported "his wife, Alma, handled the family finances."  We have to assume that her household duties are sufficiently engrossing that she couldn't cope with the family tax returns in spite of having an accountant to help her.  She's clearly not qualified to be VP in spite of her gender.
• We have to ignore the Wall Street Journal revelation on page A2 of the Sept 10 issue which told of Rep. Rangel having three rent-controlled apartments in the same building in New York City.  New York rent control laws are among the most complex in the land.  There are platoons of building owners, some of whom are wealthy enough to hire lawyers and lobbyists to build loopholes into the law so they can raise rents.  There are armies of renters, some of whom are rich enough to hire lobbyists and lawyers to build loopholes into the law so they can keep their rent absurdly low.  There are cubicles and cubicles of housing bureaucrats who write rules to enhance their employment prospects.  Byzantium would be proud to author rules of such mind-bending complexity.
• We have to assume that Rep. Rangel did not know that the law forbids any individual from having more than one rent controlled apartment and assume that he did not know that his income is large enough that he's not qualified for a rent controlled apartment at all.
• We have to assume that the landlord gave Rep. Rangel multiple apartments at below market levels out of the goodness of his heart because he's simply overflowing with the milk of human kindness.  Rep. Rangel may not have known he was not entitled to the apartments, but the building owner certainly knew.  If the landlord wanted favors from Rep. Rangel, perish the thought, he'd certainly have told Rep. Rangel of the favors the landlord was giving as part of the quid pro quo.  No, we're assuming that the landlord's motives were unusually pure for New York and that he went out of his way to bend New York law because of his high esteem for Rep. Rangel.

Now that we've gotten our assumptions out of the way, where does our foray into Panglossian optimism get us?

Ron Paul and Steve Forbes are right: The IRS should be abolished.

How can we say that?  Let's consider the evidence:

• Rep. Rangel has had a seat on the Ways and Means Committee, which writes our tax laws, since 1975.
• Rep. Rangel is chairman of this committee and sets the committee agenda.
• He has an accountant to help him with family tax matters.
• He still got in trouble because he couldn't understand our tax code.

If a man who's smart enough to be elected to the US House of Representatives and who's sat on the committee that writes the tax laws for more than 30 years can't understand our tax code even with the help of a professionally-trained accountant, nobody can.

Our tax code is too complicated for mortal men.  We should abolish it and start over.  Given the evidence, Rep. Rangel should be the first in line to call for this change.  Despite calls from the New York Times and his own Speaker of the House Nancy Pelosi to resign his chairmanship, the Hon. Mr. Rangel insists on staying put.  This can only be because of his plans to fix the system so no other innocents less privileged than he will be caught in the same snares.

And if he doesn't, well... maybe we'll have to revisit some of our Panglossian assumptions about him.