Taxes, Tax Cuts, Politicians & Wealth

RUSH: Philadelphia. Ryan, you’re next on the edition of Open Line Friday today. Great to have you.

CALLER: Great to talk to you. It’s a pleasure. Couple of things. One thing, I just wanted to talk about the Democrats not repealing the tax cuts. The Democrats let the tax cuts expire. How does it affect what I think is their base? You’ve got five million extra people that are going to be put back on the tax rolls here. The 10% bracket goes to 15. It’s a fifty percent increase. The marriage penalty is going to be repealed, the relief is going to be repealed. Child tax credit is going to be cut in half. It’s going to cost people $800 if they have two kids. It’s just a ton of stuff nobody is talking about. And this is their base, and 60 percent of the people in this country don’t pay taxes so they don’t feel it when they say they’re going to let the tax cuts expire.

RUSH: Well, they don’t pay income taxes. They’re paying their payroll taxes and sales taxes. We’re taxed to death. There’s so much wealth produced in this country and so much revenue generated to the government. But you are exactly right. Now, since you brought it up, I’ve got the story somewhere here in the stack. We talked about this last week. I don’t know why this story is making news today. We had it last week or the week before, the story about all the new revenue that flowed into the government.

CALLER: Huge.

RUSH: Tax receipts in April, an all time record. I’m glad it made news twice. Although I don’t know what it is that’s newsworthy about it the second time around or why it’s being reported as though it’s brand new, and it’s actually two weeks old or ten days. The Democrats run around and they tell people, ‘We need to raise taxes because we need to fund the government.’ Fund the government? The government is taking in record amounts of money after tax cuts, so you would say, ‘Don’t the Democrats want this money?’ You have to understand — and, Ryan, I can tell you do based on the content of your call — it’s not about the money. They’re going to get the money. It’s not so much about the money. It’s about control. It’s about preventing people from becoming wealthy.

CALLER: Getting as much as they can.

RUSH: The income tax prevents wealth. You might say, ‘Aren’t they taxing themselves?’ Look, there’s not a tax on wealth in this country. Let’s say you’re Nancy Pelosi and her husband or Dianne Feinstein and her husband or you’re Algore and his wife. Look at Edwards and all these rich Democrats who score. Look at the kind of money these people make after they go into politics. If you have a combined community asset with you and your spouse of $50 million, that’s already been taxed once, however you’ve acquired it. There’s no tax on your wealth. There’s a tax on income. So when you get into these kind of asset pools, you’re talking cap gains, if anything, if you take it, if you live on the income off of it. But it’s not much money. Also ‘raising taxes on the rich’ does not affect The Rich. It affects people who are on their way to becoming wealthy. It affects wage earners. The Democrats use class envy for this. It’s the same old thing. They tell these middle class people, ‘Well, we’re going to raise taxes on the rich,’ and the middle class folks go, ‘Good! Good, I want them to suffer.’ When the bottom line is, how does the fact that somebody might pay a few more dollars in taxes help somebody else who doesn’t have nearly as much money?

It’s like when your mom always told you, ‘Make sure you eat everything on your plate, there’s starving kids in China.’

‘Okay, mom. If I clean the plate, is there somebody in China rubbing his belly, talking about how good he feels?’ (I got slapped for that by the way when I said it. My mom called me a ‘sass.’) But these people play on the class envy things. The stock market, when it hit an all time high, do you know what Nancy Pelosi said? ‘Well, this is just another indication of how supply side doesn’t work. This is the Bush policy making the rich richer,’ and somebody said, ‘Ms. Pelosi, do you know how many Americans own stock now? Do you know that over 55% of Americans are in the stock market, either with their 401(K)s or whatever?’

‘That doesn’t matter! They’re not the ones making all this money.’

It’s classic, and they can’t wait for these tax cuts to expire.

CALLER: And you know what hurts them even worse is the real estate tax. They talk about subprime lending, when you’re going to reassess someone’s house and double their taxes in one year, it destroys the family making 60, 70, 80 grand a year.

RUSH: Oh, no question about it.

CALLER: These are the people that they claim to defend! That’s just a load.

RUSH: Well, yeah. You got a roaring economy out there. There’s wealth and opportunity like never before in this country. I’ll tell you another personal story to illustrate this. Snerdley asked me a minute ago when we were talking about the subprime lending crisis, with the caller from Miami. During the break after the call, Snerdley said, ‘How old were you when you bought your first house? In your 20s, right?’

‘No, I was 35 or 36, and it was a little $100,000 starter house out in Sacramento. The guy that built the house and sold it to me said, ‘Well, nobody lets you make any money until you’re 40 in this country. You’ve got to be 40 before they accept you as solid, responsible and so forth,” and that was an old rule of thumb. Today, kids coming out of college expect to have the house that they grew up in when they’re 25 or 26, and some of them do. The 80s were a great boom time for the country, but it’s even better now. Yet all we hear every day is the sordid tales of doom and gloom and economic woe and despair, when the opportunities that exist for people are just unparalleled. It’s a crying shame that more Americans aren’t inspired to go out and access their part of it. The Democrats say, ‘Well, it’s a finite pie.’ It’s not. The pie constantly grows. Look at our GDP. It constantly grows.

The Democrats believe in a zero sum game. Somebody gets a raise, somebody had to get fired. If somebody grabs a big piece of the pie, then that’s a smaller rest-of-the-pie that other people have to divvy up, and it’s not how it works. But they want people to think it is, because they live and breathe on class envy. They want to take this economy and destroy it. Now, I’m not saying that that’s their desire or their word, but you’ve got a roaring, robust economy. You’ve got tax receipts rolling in as the result of tax cuts — and they want to interrupt that. They want to stop that. They want to raise taxes as a percentage on certain people so they can go out and get political points for it and to be damned with what the economic result is or the economic impact of it is simply because they want control. This is why, folks — I’m not trying to be pessimistic about this, just realistic, as realism is what’s called for here — I know there’s all kinds of tax reform plans. You got fair tax. You’ve flat tax. You’ve got whatever the hell it is.

Do you really — those of you who are thinking, engaged people — expect members of Congress to give up the single greatest power they have? That power is the social architecture involved in writing the tax code. I would love for it to happen, but the name of the game in politics is getting elected and getting reelected and amassing power. I can tell you this: The Democrats are never going to support anything like that. It’s going to take such a large Republican majority in both the House and Senate with a Republican president to get that kind of tax reform done. That’s why elections matter and have consequences. Ryan, thanks for the call.