RUSH: The Wall Street Journal today, a brilliant, brilliant piece that any of us who understands taxes, trickle-down, supply-side, economic growth understands without reading but there’s some interesting data in it that I still want to share with you. ‘President Obama has laid out the most ambitious and expensive domestic agenda since LBJ, and now all he has to do is figure out how to pay for it.’ See, that’s the first mistake. He doesn’t have to figure out how to pay for it. If he were worried about paying for it, he wouldn’t be doing it. I don’t mean to sound pompous. Don’t confuse my desperation that you understand this for pomposity. There’s no concern in the Obama administration about paying for anything. They got rid of that fear long ago. They can print the money. They can sell some debt to the ChiComs, or whoever else. They don’t care about paying for it. If they cared about paying for it, they wouldn’t be doing any of this because we can’t pay for it. That’s why there’s going to be a fundamental restructuring of our country. We cannot pay for what’s going to be done, and at some point the fact that there’s no money to pay for what is being done and what’s going to happen is going to come out, it’s going to be a collapse like you can’t believe, dwarfing what this is looking like.
‘On Tuesday, he left the impression that we need merely end ‘tax breaks for the wealthiest 2% of Americans,’ and he promised that households earning less than $250,000 won’t see their taxes increased by ‘one single dime.’ This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can’t possibly raise enough revenue to fund Mr. Obama’s new spending ambitions. Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and ‘the wealthiest 2%.’ Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That’s about 7% of all returns; the data aren’t broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% — about 1.65 million filers making above $388,806 — paid some $408 billion, or 39.9% of all income tax revenues.’ You could confiscate all income over $500,000 a year and you wouldn’t even come up with half our budget deficit.
RUSH: Here are the numbers. You confiscate all taxable income over $500,000, you could do that one time ’cause who’s going to worry about earning all that again, so $500,000 over that, you confiscate it, you raise $1.3 trillion in revenue, less than half the 2006 federal budget. You ain’t going to balance anything. It’s only going to punish people and cause jobs to be lost.
RUSH: I know what you’ve been saying if you’ve been listening the full first hour, ‘So what, Rush, if they raise tax on the rich? It’s only a small percentage of taxpayers. They’re going to have enough left over afterwards. Why does it matter? Clinton raised taxes on the rich in the nineties and the economy was just fine.’ Yeah, but you realize at the same time we were balancing the budget in the 1990s? You can’t compare the two eras. But there’s a more fundamental reason why this ought to concern everybody. Remember, rich now starts at $250. That’s a lot of small businesses, and it ain’t rich. It’s not rich and it certainly isn’t wealthy. Let me give you these numbers again. I said earlier this program is a series of teachable moments today. The basic numbers are these. Most recent year for data, 2006. Obama says he gonna raise taxes on the wealthiest 2%. That’s 3.8 million filers in 2006, 7% of all returns. The wealthiest 2% paid about $522 billion in income taxes, 62% of all federal individual income receipts. The richest 1%, 1.65 million filers, the richest 1% above $388,000 paid $400 billion, or 40% of all income tax revenues, while earning about 22% of all reported US income.
You keep hearing about the gap between haves and have-nots. It’s not quite what they tell you. So the vast majority of the tax burden is being paid for by 1%, 2% of American taxpayers. Now, Obama is saying that we have to raise taxes on these people to reduce the deficit. Well, that’s where the numbers don’t work. His new rate of 39.6 starting in 2001 is actually going to be 42% because the percentage that these people will be allowed to deduct on genuinely deductible items will only be 28% of every dollar. So if they give a buck to a charity, they’ll be able to deduct 28 cents of it. There’s probably going to be a lot less charitable giving as a result, but that’s another point. So you have a 42% break. So the Wall Street Journal says let’s confiscate, let’s just confiscate 100% of taxable income from everyone earning over a half million dollars, most recent years, 2006. That would generate $1.3 trillion in revenue. That’s less than half the 2006 federal budget of $2.7 trillion and is tiny compared to the four trillion that Congress is going to spend in 2010. So even taking every taxable dime of everyone earning more than $75,000 — let’s go to that level. If you take every taxable dollar from people earning more than $75,000 a year, you would have barely yielded enough to cover the $4 trillion budget in 2010.
Now, folks, you could only do this confiscation one time, because nobody’s going to work to earn more than 75 grand if it’s all going to be taken. Nobody’s going to work to earn more than 250K if it’s all going to be taken. But I use the confiscation simple as an illustration. Even if you confiscate from these people, you don’t have enough to even get close to paying for what Obama is spending, which means what? Which means, hello, middle class tax increase. I don’t care what he’s doing, starting in April with your little $13-a-week tax cut or what have you, by the time we get to 2010 and 2011, you’re going to be in the mix. There’s not enough money in the wealthiest 2% to even make a dent in what Obama is spending, and so the rest of you are going to get taxed just as much. That’s what it means and that’s why it’s important, it’s not just the rich. It’s not enough to cover what Obama is doing. And he’s going to continue to operate under the illusion that he cares about revenue. I’m telling you, he doesn’t. He doesn’t care about paying for anything, but he knows everybody else is concerned about it so he’s going to say, ‘Well, we’re gotta pay for this, and here’s how we’re going to do it.’ Every tax increase is a loss of freedom. Every tax increase runs the risk of losing a job. Every tax increase expands power of government. That’s what they’re after.
RUSH: To the phones we go, ladies and gentlemen. I apprroeeciate your patient and holding on. Matthew in Pittsburgh, it’s nice to have you with us, sir. Hello.
CALLER: Hello, Mr. Limbaugh. Thank you for taking my call.
RUSH: Yes, sir.
CALLER: I’m calling because it troubles me how yourself and many others classify our legislators and our current president, as Keynesian. John Maynard Keynes stated that during good times, you paid off the debt, and during bad times, is when you increased the debt. They’ve never done neither one. The only one that possibly could have done anything like that would have been a Democrat, believe it or not, Andrew Jackson. That our current president and our legislators were Keynesian? John Maynard Keynes would have rolled over in his grave.
RUSH: All right, Keynesian is simply government spending in times of recession, down times, to try to reignite things. It never has worked. If you don’t like the term Keynesian, what do you want me to call it? What do you want me to call them?
CALLER: Socialist, Marxist as it is. It’s Marxism or socialism, no?
RUSH: I’m sure I’m not using the word ‘socialist’ enough for you. I think I’ve been using the word ‘socialist’ and ‘collectivism,’ (sigh) and I even used the word ‘dictator’ today. I’m sorry I’m disappointing you. What the hell? Where we going? Jamie in Las Vegas. It’s nice to have you on the program. Hello.
CALLER: Yes, Rush, it’s an honor to talk to you today.
RUSH: Thank you, sir.
CALLER: Thank you for taking my call. I just wanted to point out something to you about your comments on taxing, and Obama’s own economic advisors agree with you, and it’s in a report that I found online. It’s the Economic Report of the President. It’s issued by the Council of Economic Advisors, which were appointed by Obama, and there’s an entire section in that report that says lowering tax rates stimulates economic growth.
RUSH: That was then. They have removed that from the website. What’s the woman’s name that wrote that? I’m having a mental block. Romer. Christina Romer. She wrote that. She put it on their website and once Obama won: Bam! It came off, and now in its place is: ‘Spending a dollar generates a dollar and a half.’ It used to be, ‘Reducing taxes every dollar generates a dollar and a half,’ or a half a dollar. They’ve totally reworked it. She’s been neutered, as it were.