{"id":18790,"date":"2011-04-18T01:01:01","date_gmt":"2011-07-20T00:21:05","guid":{"rendered":""},"modified":"2011-07-20T00:21:05","modified_gmt":"2011-07-20T00:21:05","slug":"tax_day_half_of_us_pays_nothing","status":"publish","type":"post","link":"https:\/\/admin.rushlimbaugh.com\/daily\/2011\/04\/18\/tax_day_half_of_us_pays_nothing\/","title":{"rendered":"Tax Day: Half of US Pays Nothing"},"content":{"rendered":"
\n

RUSH: Stop and think about it, folks, even the tax code — especially, I\u2019d say, the tax code — is used for wealth distribution. Get this. Details coming up here in second. Well, actually these are the details of stories I\u2019ve got in the stack coming up momentarily. The bottom 40% of American earners — the bottom 40% — on average, make a profit from the federal income tax. What I mean by that is, they get more money in tax credits than they would owe otherwise in taxes. For those people, the government sends them a payment: The earned income tax credit, the I-don\u2019t-have-a-school-lunch tax credit, the defeat-the-Republicans tax credit, the support-unions-and-Democrats tax credit. <\/p>\n

There\u2019s all kinds of \u2019em out there, and they add up 40%. The bottom 40% of American earners make money off the federal government by virtue of redistribution. Where are they getting that money? They\u2019re not earning it; they\u2019re not paying any taxes. We tax everything. You know, we even tax unemployment benefits. But we don\u2019t tax the government. Now, I ran that as a test, and everybody on the other side of the glass (I can make them do this whenever I want) cocked their heads and frowned, \u2019cause everybody said: Why would the government pay taxes? That\u2019s the point. Government has this special place in everyone\u2019s heart. <\/p>\n

It can go do things that you and I would be put in jail for — and while it does so, it\u2019s considered to be heroic or compassionate or what have you. We don\u2019t tax the government. “Well, what would you do with the revenue if you did, Rush?” Keep \u2019em from spending it; pay down the debt. What if they had to pay taxes? Look, they\u2019re earning money or taking money or what have you. Just a little thought exercise. I know we\u2019re never gonna tax the government. It\u2019s not the point of my making the mention. My point is that government\u2019s the one entity that can do whatever it wants at any time to get money and print it, and, “Hey, cool!” as long as they\u2019re redistributing it to unions, or approved Democrat voters. <\/p>\n

We\u2019re now (and you knew this was coming) taxing cigarettes so much that drug dealers and gunrunners are starting to get into the smuggling-cigarette business. I\u2019ve got the story, and we have predicted this. We predicted a black market in cigarettes that was gonna rival the black market in drugs and guns, everything else because the tax revenue is getting so high. Where was it, some state the other day proposed lowering tax revenues on cigarettes, tax rates because they\u2019ve reached the point now of diminishing returns? What\u2019s happening is that these cigarette smuggling operations are taking place in Virginia and in New York. <\/p>\n

Now, I\u2019ve got two stories here by the AP written by the same guy, a guy named Stephen Ohlemacher. One was written on April 7, 2010. The other one was posted yesterday. On April 7th Mr. Ohlemacher wrote: “Tax Day is a dreaded deadline for millions, but for nearly half of US households it\u2019s simply somebody else\u2019s problem. About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That\u2019s according to projections by the Tax Policy Center, a Washington research organization…<\/p>\n

“The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.” Now, this is a story from last year. This April 7th of last year. The same guy has a story written this year, but last year: “Nearly Half of US Households Escape Federal Income Tax.” Now, this year Mr. Ohlemacher\u2019s story is: “For Richest, Federal Taxes Have Gone Down; For Some in US, They\u2019re Nonexistent.” So they\u2019ve got this whole story about how the rich aren\u2019t paying their fair share, the rich aren\u2019t paying enough, the rich are getting away with nothing — and they bury the lede. <\/p>\n

The lede is, again, that 45% of households do not pay any income taxes. “As millions of procrastinators scramble to meet Monday\u2019s tax filing deadline, ponder this: The super rich pay a lot less taxes than they did a couple of decades ago, and nearly half of US households pay no income taxes at all.” It seems to me that\u2019s the story. It seems to me that 45% of Americans paying no income tax at all is the story, especially when you balance that with when what you hear from the Democrats constantly is, “The rich aren\u2019t paying enough in taxes. The rich, those evil, dreaded rich, are getting away with bloody murder.” <\/p>\n

They\u2019re not paying! Their taxes are going down. Meanwhile, 45% of Americans pay nothing. “There are so many breaks that 45 percent of US households will pay no federal income tax for 2010, according to estimates by the Tax Policy Center, a Washington think tank,” and, of course, now the media is totally on board with it! They\u2019re totally on board. This Mr. Ohlemacher guy is all for all of this. “In all, the tax code is filled with a total of $1.1 trillion in credits, deductions and exemptions, an average of about $8,000 per taxpayer… More than half of the nation\u2019s tax revenue came from the top 10 percent of earners in 2007.”<\/p>\n

Yet their story focuses on how the rich aren\u2019t paying their fair share of taxes — their story and their headline: “For Richest, Federal Taxes Have Gone Down; For Some in US, They\u2019re Nonexistent” — yet halfway down the story: “More than half of the nation\u2019s tax revenue came from the top 10 percent…” Now, how do you write a story focused on what the rich are getting away with when 45% of the non-rich are not paying taxes, and the top 10% of wage earners are paying over half the total tax revenue? “Eric Schoenberg…” Oh, yes. That\u2019s true. Wait for AP to go out and find a rich guy who thinks he\u2019s not paying enough. <\/p>\n

“Eric Schoenberg says to sign him up for paying higher taxes. Schoenberg, who inherited money and has a healthy portfolio from his days as an investment banker, has joined a group of other wealthy Americans called United for a Fair Economy. Their goal: Raise taxes on rich people like themselves. Shoenberg, [sic] who now teaches a business class at Columbia University, said his income is usually ‘north of half a million a year.\u2019 But 2009 was a bad year for investments, so his income dropped to a little over $200,000. … ‘I simply point out to people, “Do you think this is reasonable, that somebody in my circumstances should only be paying 1 percent of their income in tax?”‘ Schoenberg said.” <\/p>\n

<\/a>It depends on how it\u2019s earned and what the law is. Now, the Gallup people have a poll out here that those who pay taxes think that they are too high. “Half of Americans believe the amount they pay in federal income taxes is too high, while 43% consider it about right and 4% too low,” and yet the AP goes out and makes a project out of finding rich people who think they\u2019re not paying enough, rich people that are unhappy with the tax code, rich people who think they\u2019re not getting screwed enough. That\u2019s our old buddies at AP, and yet Gallup says that half of those Americans who pay federal income tax say it\u2019s too high. <\/p>\n

I wonder if this could have anything to do with the fact that 43% or 47, whatever number you believe, pay absolutely no income tax at all, and a lot of them even get money back in these credits like Earned Income Tax Credit (which is preposterously named, by the way: the Earned Income Tax Credit). “In a recent speech outlining his vision for reducing the national debt, President Barack Obama repeated his call for repealing the Bush-era tax breaks on couples earning at least $250,000 a year. In doing so, he stated that the majority of wealthy Americans would agree that they should pay more. Not so, according to a compilation of Gallup data from the last several years,” not just recently. <\/p>\n

Now we move, ladies and gentlemen, to a Wall Street Journal story: “Where the Tax Money Is — A dominant theme of President Obama\u2019s budget speech last Wednesday was that our fiscal problems would vanish if only the wealthiest Americans were asked ‘to pay a little more.\u2019 Since he\u2019s asking, imagine that instead of proposing to raise the top income tax rate well north of 40%, the President decided to go all the way to 100%,” because, after all, if you accept the premise that the rich aren\u2019t paying enough… What\u2019s the top rate, 36%, 35%, whatever it is? <\/p>\n

“Yeah, Rush, that\u2019s right. The rate needs to be 40.” <\/p>\n

Oh, okay, good. Then why not 45? <\/p>\n

“Yeah, that\u2019s even better, Rush! Exactly right. Raise the top income tax rate of the rich to 45%.” <\/p>\n

Okay, cool, why not go right to 50? How about it? Let\u2019s just raise the top rate to 50%. <\/p>\n

“That\u2019s exactly right, Rush! Of course we should do that.” <\/p>\n

So the point is once you agree that higher rates are necessary, that higher rates are fair, where do you stop? Look, if we\u2019re all agreed that raising the top tax rate on the rich to 50% is good, wouldn\u2019t 60% be even better? <\/p>\n

“That\u2019s right, Mr. Limbaugh! I think now you\u2019re starting to talk like you have some sense. That would be great: 60% is a great figure.”<\/p>\n

Okay, Mr. New Castrati, why not 65%?<\/p>\n

“That\u2019s even better, Mr. Limbaugh!” <\/p>\n

See, where do you stop with this? It\u2019s like the minimum wage: If $7.50 is unfair, let\u2019s raise it ten. <\/p>\n

“Yeah. Okay! That\u2019s good!”<\/p>\n

Hey, let\u2019s raise it to 20 bucks an hour. <\/p>\n

“Oh, yeah, that\u2019s even better!”<\/p>\n

Okay, let\u2019s raise the minimum income to a hundred grand.<\/p>\n

“Well, you can\u2019t do that, Rush.” <\/p>\n

Well, why? Why can\u2019t you have as a minimum wage a hundred thousand dollars a year? <\/p>\n

“That\u2019s just not reasonable, Mr. Limbaugh. (stammering)” <\/p>\n

Wait a minute. You\u2019re agreeing here there\u2019s an amount we can\u2019t pay as a minimum wage, Mr. New Castrati? On the same token is there a tax rate that\u2019s too high? How about 70? Let\u2019s raise the top rate to 70%! <\/p>\n

“That\u2019s even better, Mr. Limbaugh. You keep getting more smarter and smarter as we speak here.” <\/p>\n

Okay, so let\u2019s raise the top marginal rate all the way up to 100%. Let\u2019s just do it! I mean, we gotta be fair here. The rich aren\u2019t paying their fair share. The AP\u2019s gone out there and found a bunch of rich people who think they\u2019re not getting screwed enough, and they want to pay more. “Let\u2019s stipulate that this is a thought experiment, because Democrats don\u2019t need any more ideas. But it\u2019s still a useful experiment because it exposes the fiscal futility of raising rates on the top 2%, or even the top 5% or 10%, of taxpayers to close the deficit. The mathematical reality is that in the absence of entitlement reform on the Paul Ryan model, Washington will need to soak the middle class — because that\u2019s where the big money is.”<\/p>\n

Sit tight and I will explain this when we get back.<\/p>\n

BREAK TRANSCRIPT<\/p>\n

RUSH: We gotta raise taxes to lower the deficit, right? With a 100% tax rate on the rich, how much do you get? Stand by, \u2019cause it ain\u2019t where the money is. Something, by the way — we do this every year on Tax Day or about. Our website has had these numbers for years, attempting to educate everybody on just who is paying taxes, trying to push back against this narrative that the rich aren\u2019t paying their fair share and we need to raise their taxes. It\u2019s a… It\u2019s… I don\u2019t know. It never goes away. These stories, no matter what, the narrative never changes. It\u2019s been 22 years, folks, and the narrative doesn\u2019t change. <\/p>\n

“Consider the Internal Revenue Service\u2019s income tax statistics for 2008, the latest year for which data is available. The top 1% of taxpayers — with salaries, dividends and capital gains roughly above about $380,000 — paid 38% of taxes.” Top 1% paid 38%. The top 5% pays 58.7%. The top 10% pays 70%. The top 10% are paying 70%. The top 25% of the earners are paying 86%. These are IRS numbers, by the way, too. The bottom 50% pay 2% of all federal income taxes. Okay. “But assume that tax policy confiscated,” just took everything, “all the taxable income of all the ‘millionaires and billionaires\u2019 Mr. Obama singled out. <\/p>\n

“That yields merely about $938 billion…” We\u2019ve got a $4 trillion White House budget, and you take it — and you can do it one time. When you confiscate, it\u2019s gone. They\u2019re not gonna have the same amount of money. You\u2019re taking everything they\u2019ve got: $938 billion. That\u2019s what you would raise. Not even one-fourth of the Obama budget. The dirty little secret is $2.5 trillion is what you would raise, if you confiscated ALL income. They can\u2019t tax enough to get out of it. What do you think the deficit is? The deficit is an expression of how much more we\u2019re spending than what we take in, so it makes total sense. <\/p>\n

If you get $938 billion from the rich, and basically $2,000 billion from everybody else, that gives you $3 trillion (a little bit less than that, actually) and then you\u2019re talking about a budget deficit of one to $1.4 trillion, where is the money coming from? The point is you wouldn\u2019t even close the deficit if you confiscated everybody\u2019s money. If you confiscated every dime of income in this country, you would still — we would still — have a trillion-dollar or a half a trillion-dollar deficit every year — and, by the way, you could do it one time. So next what do you have to do? <\/p>\n

Well, next you have to start taxing their children (which is what we\u2019ve been doing) and then you have to tax their grandchildren. People who are not born yet are paying taxes, in just blunt economic terms. The money at some point has to come from somewhere. We\u2019re going out and we\u2019re taking money from people not even in the womb yet. That\u2019s what we\u2019re doing. All the while, this is being blamed on George W. Bush and Ronald Reagan and the rich, and our problem is not that we don\u2019t have enough money — well, it is now. It\u2019s not just a spending problem. Our problem is a redistribution problem. We\u2019re spending money in ways that depress the creation of wealth throughout our society.<\/p>\n

END TRANSCRIPT<\/p>\n

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