- The Washington Times - Tuesday, March 24, 2009

TAX TROUBLES

”Oh-oh, looks like more tax troubles for another Democrat in Washington,” Andrew Malcolm writes in a blog at latimes.com.

”California’s Rep. Pete Stark, a senior House Democrat who helps write the nation’s tax laws, has been claiming a $1.7 million Maryland home as his principal residence in recent years, although he represents the Golden State’s 13th District on the east side of San Francisco Bay,” Mr. Malcolm said.

”The 77-year-old Stark has saved himself nearly $3,900 in state and county taxes by claiming the six-acre waterfront estate as his principal residence, according to an investigation by Bloomberg News.

“Maryland law allows the tax break only to those residences used ‘for the legal purposes of voting, obtaining a driver’s license, and filing income-tax returns.’



“Notified of the discovery, a state official said an investigation would be launched.

“Stark tells Bloomberg, ‘Insofar as I know, I’m obeying the law.’

”Now in his 19th congressional term, the liberal Democrat and one of several Californians in House leadership under Speaker Nancy Pelosi, confirmed that he and his wife Deborah are indeed not registered to vote in Maryland.

“He said they use her parents’ address in San Lorenzo to maintain their California voting eligibility.

”Stark would save another $3,770 under the same claim this year. He is the second-ranking Democrat on the House Ways and Means Committee. Members of Congress recently allowed their $4,700 pay raises for 2009 to take effect, a total spending increase of $2.5 million a year. They now each earn $174,000 annually.

”Although much recent congressional attention has focused on corporate bonuses in New York, taxes seem to be the problem de la saison for Washington Democrats this winter.”

LATEST BLUNDER

”When does a single policy blunder herald much larger economic damage? Sometimes it’s hard to know ahead of time. Few in Congress thought the Smoot-Hawley tariff was a disaster in 1930, but it led to retaliation and a collapse of world trade. The question amid Washington’s AIG bonus panic is whether Congress’s war on private contracts and the financial system is a similarly destructive moment,” the Wall Street Journal said Monday in an editorial.

”It is certainly one of the more amazing and senseless acts of political retribution in American history. In its bipartisan rage, the House saw fit last week not merely to punish the employees of AIG’s Financial Products unit that the company still needs to safely unwind credit default swaps. The members voted, 328-93, to slap a 90 percent tax on the bonuses of anyone at every bank receiving $5 billion in TARP money who earns more than $250,000 a year. A draft Senate version is even broader. Never mind if the bonus was earned last year or earlier, or under a legally binding employment contract. The confiscatory tax will apply ex post facto,” the newspaper said.

“Never mind, too, that such punitive laws were expressly deplored by America’s Founders. In Federalist 44, James Madison warned that ‘Bills of attainder, ex post facto laws, and laws impairing the obligation of contracts, are contrary to the first principles of the social compact, and to every principle of sound legislation.’ ”

PAY UP

”What one hand giveth, the other taketh away,”Henry Payne writes in a blog at National Review Online (www.nationalreview.com).

”The federal stimulus bill will reportedly net the average American $13 a week. [On Monday], Michigan´s two major utilities announced that federal green emissions mandates will in part necessitate an 11 percent electric rate hike this year - or approximately $10 a month to the average Michigander,” Mr. Payne said.

“And that´s just the tip of the iceberg for the bills that are coming due on the ‘greening of America.’

“Michigan sports the nation´s highest unemployment rate at 10.6 percent and can ill-afford higher utility costs. But as a state controlled by hip Obamawannabe, Gov. Jennifer Granholm, and her union allies, Michigan bears watching as a harbinger for what awaits the U.S.

“Like Obama, Granholm has ordered a fundamental restructuring of Michigan´s energy infrastructure, putting all new state coal plants on hold and demanding a 45 percent cut in coal generation in 20 years … allegedly to be filled by government-mandated wind power.

“Meanwhile, Democratic Washington is trying to force through a cap-and-trade law that will discriminate against coal-heavy manufacturing states like Michigan. Utility executives predict electricity rates may climb another 40 percent as a result.

“Finally, in anticipation of these costs, the state utilities lobbied for - and have received - a gutting of the state´s electric deregulation law, so that they can get a guaranteed return on the enormous investment of, say, a low-carbon nuclear plant. Translation for ratepayers of a re-monopolized environment: More rate hikes ahead.”

DON’T HOLD BACK

”We’re not going to mince words. Chris Dodd is a lying weasel,” the New Haven (Conn.) Register said in an editorial published Friday.

”It is hard enough to swallow that the senator had no idea that he got preferential treatment on his home mortgages that saved him thousands of dollars. Or that, simply out of friendship, a wealthy New York man, who was later convicted in a huge stock swindle, picked up much of the cost of a condo Dodd bought in Washington; or that the stock swindler’s business partner out of a love of Ireland did the same for Dodd when the senator bought a waterfront house in Ireland.

“Now, Dodd flat-out has lied about his role in legislation that is allowing employees of American International Group to receive $400 million in bonuses despite receiving $173 billion in taxpayer money to keep the failed financial giant alive. …

”Dodd claims he was unaware of the AIG bonuses when he changed the language of his amendment to allow them. Dodd, however, is more than familiar with AIG. Its Financial Products unit, which helped drive AIG to the brink of bankruptcy, has headquarters in Wilton. As a member and now chairman of the Senate Banking Committee, which has jurisdiction over AIG’s industry, Dodd has received more campaign money, $281,038, from AIG than any other member of Congress.

”Dodd’s lie about the bonus loophole should haunt him next year when he seeks re-election. He has broken a bond with voters who expect honesty from their elected officials.”

• Greg Pierce can be reached at 202/636-3285 or gpierce@washingtontimes.com.

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