Research Briefing

It’s Easy To Support Hiking Taxes, When You Just Don’t Pay Them

IT’S NOT JUST RANGEL

• Senator John Kerry Is Avoiding Paying $500,000 In Taxes On His Yacht.
• Obama’s First Nominee For HHS Secretary, Tom Daschle, Failed To Pay $128,000 In Taxes.
• Treasury Secretary Tim Geithner Failed To Pay $34,000 In Taxes.
• HHS Secretary Sebelius And Her Husband Had To Pay $7,000 In Back Taxes.
• Labor Secretary Hilda Solis’ Husband Had A Tax Lien On His Business For 16 Years.
• Nancy Killefer, Slated To Be The White House Chief Performance Officer, Had A $900 Lien On Her House For Failing To Pay Unemployment Taxes For Household Help.
• Lael Brainard, Obama’s Nominee For Undersecretary Of The Treasury For International Affairs, Was Late In Paying Property Taxes.

RANGEL HAS DUBIOUS HISTORY ON PAYING TAXES

Rangel Rented Out His Caribbean Villa For 20 Years, Yet Only “Sporadically Declared Income.” “For 20 years, Harlem Rep. Charles Rangel has owned a beachfront villa in a sun-drenched Dominican Republic resort, yet has only sporadically declared income on the property in federal filings. While the villa was rented to paying guests for the past two years, for instance, Rangel reported no income from it in 2006 and 2007, The Post has learned. As a congressman, failure to fully list all income and investments can result in civil penalties or criminal charges.” (Isabel Vincent & Susan Edelman, “Tricky Charlie's Carib 'Hideaway,'” The New York Post, 8/31/08)

• The Villa Was Financed By A No-Interest Mortgage, Created $75,000 In Income That Should Have Been Reported. “Rep. Charles B. Rangel  (D-N.Y.) did not know that the Caribbean resort villa he purchased 20 years ago was financed with a no-interest mortgage from the developer and has generated $75,000 in income that he should have reported on tax and financial disclosure forms, his lawyer said yesterday.” (Christopher Lee, “Rangel Says He Didn't Know of Loan Terms,” The Washington Post, 9/6/08)

Rangel Failed To Disclose Hundreds Of Thousands Of Dollars In Assets Over Many Years. “Representative Charles B. Rangel  failed to report hundreds of thousands of dollars in income and assets on his financial disclosure forms for 2002 through 2006, including tens of thousands of dollars in rental income from a Harlem brownstone he sold in 2004, according to records filed this month with the clerk of the House of Representatives. Mr. Rangel, who is facing investigations by two House subcommittees into his personal finances and fund-raising, filed amended financial disclosure forms on Aug. 12 acknowledging that he had omitted an array of assets, business transactions and sources of income. They include a Merrill Lynch Global account valued between $250,000 and $500,000; tens of thousands of dollars in municipal bonds; and $30,000 to $100,000 in rent from a multifamily brownstone building he owned on West 132nd Street.” (David Kocieniewski “Rangel Failed to Disclose More Income and Assets, Forms Show,” The New York Times, 8/28/09)

• In Addition To An Already Admitted Failure To List “At Least $500,000 In Assets.” “The latest filings come on top of an amendment to Mr. Rangel’s 2007 disclosure form reported this week showing that he had failed to list at least $500,000 in assets. A spokesman for Mr. Rangel, a Democrat who has represented Harlem since 1971, issued a written statement saying the errors were inadvertent.” (David Kocieniewski “Rangel Failed to Disclose More Income and Assets, Forms Show,” The New York Times, 8/28/09)

Rangel Violated City And State Guidelines By Using Rent-Controlled Apartments For Campaign Offices. “Representative Charles B. Rangel  has decided to move his campaign office out of one of four rent-stabilized apartments he leases in Harlem, his spokesman said on Monday. Mr. Rangel has faced intense scrutiny since The New York Times reported last week that a developer had allowed him to lease rent-stabilized apartments in the Lenox Terrace luxury apartment complex at a time when some tenants are being evicted from such apartments around the city. One of the units — a one-bedroom apartment that he paid for with money from his re-election fund and from a political action committee — had been used as a campaign office, despite city and state guidelines that require rent-stabilized apartments to be used solely as a primary residence. Because that apartment is rent-stabilized, Mr. Rangel paid $630 per month, while similar market-rate units in the building rent for $1,700 a month and higher.” (Raymond Hernandez & David Kocieniewski, “Rangel to Relinquish Apartment Used as Office,” The New York Times, 7/15/08)

SEN. JOHN KERRY DUCKING TAXES ON HIS LUXURY YACHT

Sen. John Kerry (D-Mass.) Is “Saving” $500,000 a Year in Taxes By Docking His New $7 Million Yacht in Rhode Island Instead of Massachusetts. “Massachusetts Sen. John Kerry is docking his family's new $7 million yacht in neighboring Rhode Island, allowing him to avoid paying roughly $500,000 in taxes to the cash-strapped Bay State.” (“Sen. Kerry Docks Yacht Out Of State,” The Associated Press, 7/23/10)

• “Massachusetts, Like Most Other States, Has Been Grappling With Plunging Tax Revenues. Last Year's Budget Deficit Was $600 Million, And Officials Are Bracing For A $1 Billion Deficit This Year.” (“Sen. Kerry Docks Yacht Out Of State,” The Associated Press, 7/23/10)

AND SEVERAL WHITE HOUSE NOMINEES HAVE HAD DIFFICULTY PAYING TAXES

Obama’s First Nominee For HHS Secretary, Tom Daschle, Failed To Pay Over $128,000 In Taxes. “Thomas A. Daschle, Nominated To Be Secretary Of The Department Of Health And Human Services, Did Not Pay More Than $128,000 In Taxes Over Three Years ... A spokeswoman for Daschle confirmed last night that he recently paid back taxes in excess of $100,000. She said that Daschle, a former Senate majority leader, and his accountant discovered the error regarding the luxury car service and reported it to the committee after his vetting was completed.”  (Ceci Connolly, Paul Kane & Joe Stephens, “Daschle Owed Back Taxes That Exceeded $128,000,” The Washington Post, 1/31/09)

Treasury Secretary Timothy Geithner Failed To Pay $34,000 In Federal Taxes. “Timothy F. Geithner, President-elect Barack Obama’s choice for Treasury secretary, failed to pay more than $34,000 in federal taxes over several years early this decade, and also faces questions about the employment papers of a former household employee, suddenly complicating what had seemed to be an easy confirmation process in the Senate.”  (Jackie Calmes, “Geithner Questioned On Tax Returns,” The New York Times, 1/13/09)

HHS Secretary Kathleen Sebelius And Her Husband Had To Pay Over $7,000 In Back Taxes. “Kathleen Sebelius, President Obama's nominee to become Health and Human Services secretary, said in a letter obtained by the Associated Press that she made ‘unintentional errors’ on her taxes and has corrected her returns from three different years. In the letter, which was sent to senators and dated today, Sebelius wrote that she had made changes related to charitable contributions, business expenses and the sale of a home, according to the AP. The wire service reports that she and her husband paid just over $7,000 in back taxes, along with $878 in interest, for the years 2005-2007.” (Brain Montopoli, “Another Obama Nominee Has Tax Issues,” CBS News, 3/631/09)

Labor Secretary Solis’ Husband Had Tax Liens On His Business For 16 Years. “Labor Secretary-designate Hilda Solis faced questions over her husband's unpaid business taxes, in the latest in a string of tax revelations that have hampered Obama's efforts to seat a Cabinet. … The 22-member panel delayed a vote on Solis last Thursday following reports that her husband had paid about $6,400 one day earlier to settle tax liens outstanding against his business for as long as 16 years.” (JoAnne Allen, “Obama’s Labor Nominee Advances Despite Tax Problem,” Reuters, 2/11/10)

“And Then There Was Nancy Killefer, Chosen To Be The White House Chief Performance Officer, Who Once Had A $900 Lien Placed On Her House For Failing To Pay Unemployment Taxes On Household Help.  (Peter Baker, “Republicans Seize On Obama’s Nominee’s Tax Problems,” The New York Times, 2/6/09)

• “Nancy Killefer Withdrew Her Nomination As President Barack Obama’s Deputy White House Budget Director, Citing A Personal “Tax Issue” That She Said Would Have Delayed Or Derailed Her Nomination.” (Roger Runningen and Julianna Goldman, “Killefer Cites ‘Tax Issue’ In Withdrawing As Obama Budget Aide,” Bloomberg, 2/3/09)

Lael Brainard, Obama’s Nominee For Undersecretary Of The Treasury For International Affairs, Was Late In Paying Property Taxes. “President Barack Obama's choice for a top job in the Treasury Department did not disclose all of her late tax payments until she was repeatedly prodded by Senate investigators, a congressional report issued Wednesday said. Obama's nominee for undersecretary of the Treasury for international affairs, Lael Brainard, is the fifth presidential nominee to reveal tax issues during the congressional vetting process. Brainard was late in paying real estate taxes in 2005, 2006 and 2007 on property in Northern Virginia, according to the report by the Senate Finance Committee staff.” (“Another Obama Nominee Faces Tax Troubles,” The Associated Press, 11/18/09)