RUSH: Peter, Middleville, Michigan, you’re next on the EIB Network. Hello, sir.
CALLER: Mega Fuente dittos Rush from a long-time listener and multiple time caller.
RUSH: Thank you.
CALLER: Since you’re the man running the country, when are you going to declare that Congress needs to get their act together and tell the rest of the country you need to be calling our senators and congressmen to make this tax cut permanent?
RUSH: Well, you’re asking me as the man who runs the country, when we’re going to do this?
CALLER: Absolutely.
RUSH: Well, see, now, let me ask you, why are you waiting for me? You already have the gumption and the awareness, and I think you’re expressing the desire to call. I didn’t urge people to call during the immigration debate. They did it on their own. This tax business… I interviewed Jeff Sessions yesterday after the program for the upcoming issue of the Limbaugh Letter, and we talked about immigration and his heroic work in defeating the bill. I said, ‘What’s the next thing on the horizon? What’s the next big thing in the Senate?’ He said, ‘Well, it’s hard to say just one thing, but people need to be on the lookout for the budget that the Democrats have proposed. It has got tax increases like people will not believe, all over the place.’ In fact, the Democrats are not even going to try to do anything about the alternative minimum tax before the ’08 elections because they’re afraid that they will fail. The alternative minimum tax is going to be a tax increase. They’re going to be get rid of it on certain people and raise taxes on ‘the rich,’ and they’re afraid that they don’t have the votes yet to do it and so they don’t want to lose going into the election. But if they win things, if they win in ’08, you can make book on the fact that they’re going to start raising tax rates back up all that they can, and it’s not for revenue generation.
We’re already drowning in revenue, compared to what everybody thought would be rolling in. The capital gains rate reduction of 15% is causing increased revenue. People are having to get out of the way at the treasury department with all the dollars rolling. In the same thing with the income tax receipts, the economy booming, 4.5% unemployment. There are a lot of taxpayers at lower rates that are e therefore creating an aggregate amount of tax revenue that’s larger than any ‘expert’ predicted. I wonder why this always eludes them? The Democrats, they’re not worried about raising money. That’s not what it’s all about. With them it is control; it is social architecture; it is the illusion of punishment. They run around and say they’re going to raise taxes on the rich, and you think that the rich are all these people on the Forbes 100 list and all the Fortune 500 CEOs, and that’s not whose taxes are going to go up. Those people have their lives structured so that their income is not, quote, unquote, ‘earned income,’ as in wages and salary. Taxing the rich is a giant misleading fraud, but Senator Sessions warned of some of these things that they want to do. You know, making tax cuts permanent is something that does need to happen, but it’s going to need Republican support. There are even some wavering Republicans on this. But when the time is right, this will all evolve, and you’ll know when the time’s right because I will tell you.
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RUSH: I mentioned earlier, ladies and gentlemen, we had a caller wanted to know when we going to get in gear here on making tax cuts permanent, and I referenced the story that the Democrats have been promising everybody to get rid of the alternative minimum tax because the alternative minimum tax — and this is classic; this is classic Washington. The alternative minimum tax was set up some years ago to trap, what was it, 30 families? It’s a ridiculously small number that somehow were not paying any income tax at all. They were wealthy. So the alternative minimum tax was designed to trap those people. They were not doing anything illegal. They were following the tax code. It was just, ‘They just can’t get away with that!’ So what’s happened is the alternative minimum tax is now affecting millions of Americans, more and more every year. So there have been all these promises to get rid of it because it’s punitive and it’s unfair, which is exactly why they’re not going to get rid of it! It is a measure of control. That’s what tax increases and taxes, as far as liberals are concerned, are all about, and the AP even references this today.
‘House Democrats’ promise to permanently protect millions of middle-class families from a mostly unknown tax increase is faltering before it’s even unveiled. Senate Democrats prefer a Band-Aid approach to delay for just a year or two the alternative minimum tax, or AMT, from adding $2,000 more in taxes on average to families with incomes between $100,000 and $200,000 a year. That way Democrats wouldn’t have to go into next year’s election after having tried – and likely failed – to raise income taxes on wealthy taxpayers – those making $500,000 or more – back to almost what they were before President Bush took office.’ That’s what their plan is. They want to raise the tax rate back to 39%, where it was in before Presiden’t Bush’s tax cuts lowered the rate to 35%, but they don’t have the votes to do it right now. So they want to offset the AMT and getting people out of its clutches by raising taxes on the rich. They don’t have the votes to do it, and the president will veto it; he’s not going to stand for it. He wants his tax cuts made permanent and so forth. So the Democrats aren’t even going to try because they don’t want to go into the ’08 elections having lost a tax-increase-on-the-rich battle.
‘New York Rep. Charles Rangel,’ chairman of the House Ways and Means Committee where all tax legislation originates, ‘would like to rewrite the AMT to once-and-for-all prevent it from ensnaring about 20 million additional and unsuspecting middle-class taxpayers. He and Rep. Richard Neal, D-Mass., had planned to unveil their plan in May but now that’s not likely to occur before September, if then. The problem is that Rangel’s and Neal’s plan is a nonstarter in the Senate, where the tax-writing Finance Committee’s chairman, Sen. Max Baucus, D-Mont., is up for re-election next year in a state whose voters overwhelmingly favored Bush in 2004. Baucus doesn’t want anything to do with a Rangel-Neal proposal to pay for protecting middle-class voters from an AMT increase by instead imposing a new 4 percent or so surcharge on incomes above $500,000 a year. That would effectively raise the marginal tax rate on those with half-million-dollar incomes back to 39 percent, where it was in 2000. The tax increase on the wealthy would raise an eye-popping $800 billion over 10 years, enough to both fix the AMT and spread smaller benefits to lower income taxpayers.’ You know that’s not going to happen. (sigh) It doesn’t work that way. Besides, $800 billion is not ‘eye-popping’ in terms of running the government or anything else. It’s not eye-popping whatsoever. The thing about taxation… How many times have you heard this? This is a great example. The Democrats want sponsor tax relief for the middle class BUT…
‘But, but, but, but, we’ve got to offset that somewhere. Why, why government can’t do with less! What are you talking about? So if we cut somebody’s taxes, why, we’ve gotta find someplace else to increase taxes. We can’t do without.’ Let me ask you this. When they want to raise your taxes, do they care whether you can afford it? Do they care whether or not you have a way to go out and generate additional income to pay for it? Because even if you do, that income is going to be taxed. Do they care about that? Do they ever care that you may have to do with less? No, they don’t. They couldn’t care less if you have to do with less. In fact, the more of you that have to do with less, the more they can portray you as victims and blame Republicans for it, and the wealthy and so forth, which is a hoax and a fraud on a par with the fraud and hoax that is global warming. ‘Many Democrats, including party leaders, appear comfortable with Baucus’s temporary fix rather than forcing a politically risky vote to raise taxes when the idea isn’t going anywhere in the Senate.’ Temporary fix? Play around with the standard deduction for a while for those 20 million families that are affected by this. So they want to monkey and nickel and dime it but they don’t want to do anything permanent because they can’t risk losing a vote on raising taxes for the rich, and it’s a Democrat standing in the way because the people that support him are not going to vote for him. They voted for Bush in 2004. So he’ll wait ’til he’s reelected before he goes along with raising their taxes.
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RUSH: Bob, where is this? Ureka, California. Welcome to the program. Nice to have you with us.
CALLER: Rush, mega dittos from a fellow golfer at the top of the Golden State.
RUSH: Nice to have you with us, sir.
CALLER: Rush, on this alternative minimum tax.
RUSH: Yes?
CALLER: My wife and I are retired. We got an AGI adjusted gross income of about 90,000. It gives us a 15% federal tax bracket, okay?
RUSH: Yup.
CALLER: Last year we had some stock, and it was only paying three-quarters of a percentage in taxable income, so we said, ‘Let’s sell off some of this and put it over into munies and avoid that.’
RUSH: Good move. Good move.
CALLER: Yeah, it was cool except what little we sold put us up over $300,000, and of course the 15% capital gains applied, which is fine. That’s what they keep telling us. But they take the whole thing then and move it over into the alternative minimum tax, and our tax that we paid then was 28% on every nickel that came in our house.
RUSH: Every nickel?
CALLER: Every nickel.
RUSH: Not the dollars over your $90,000, but —
CALLER: Well, they add all of that together, and when they go into the alternate minimum tax, all of a sudden we have over $320,000 available for them to apply a tax to it.
RUSH: Okay. How much of the $21,000 when you sold the stock, you converted to munies, when did you do that?
CALLER: In ’06.
RUSH: I guess you had no choice. You had to take that as capital gains income, as income.
CALLER: Yeah. We talked to an accountant, he says, ‘Oh, sure, 15% to prepay your taxes and ten to the state,’ and all that good stuff. We did it, and then when he sat down to compute our taxes, he said, ‘Oh, by the way, Bob, we need another 30,000 bucks.’ So I sat down and figured it all out when we got our returns back, and we ended up paying 28% total on every nickel that came in our house.
RUSH: Yeah.
CALLER: So they can talk all they want about the 15% cap gains, but it doesn’t really apply if you have anything more than a couple of bucks.
RUSH: Well, it depends what your floor income is before that before you incur the capital gains.
CALLER: Well, it was only $90,000.
RUSH: The best way to eliminate the alternative minimum tax from affecting you, is out-earn what the floor for it is.
CALLER: Yes, that’s right.
RUSH: Which is half a million dollars.
CALLER: Yeah, that’s right.
RUSH: But that’s easier said than done. It’s great that you called and people were able to hear that story. Twenty million families are being affected in a similar way by this.