RUSH: Folks, this was predictable, too. The Republicans are establishing the mechanism to cave on tax increases. McConnell, we’ve got the sound bite, ready now to talk about revenues as long as there’s talk of spending cuts, but you and I know that there won’t be any of those because Obama doesn’t have to cut any spending. That’s the last thing there’s gonna be, and so Obama wants $1.6 trillion in new taxes.
Now, here’s something to think about. How’s he gonna get that — and he will. See, this is the thing that we’ve gotta realize. This is going to happen. It may be 1.2. He is going to get this. Boehner, we had our note from the chief of staff for Congress say Boehner said let Obama lead and see where it takes us. McConnell says we’re fine and dandy on the revenue side now. The Republicans are the ones that always, “Okay, we lost the election, we’re gonna have to moderate our tone and our beliefs,” and all this. So we’re on the verge here of watching the cave. Benghazi, too. I hope the Republican Party understands what’s at stake for them politically in making sure that there is a single select committee on this. If you have a bunch of different committees looking into it or no committees looking into it, it’s gonna blow the opportunity. There has to be a single select committee on this. Not just for the political value of it, but because it’s the right thing to do.
We got four dead Americans, and it is a large scandal, which, of course, takes us back to Petraeus. No, let me finish one thought. How do you get $1.6 trillion in new taxes? Now, politics like this is quite simple. The Republicans have sworn in every campaign that they’re not gonna permit a tax increase. The Democrats have said, “We’re gonna raise taxes on the rich.” Well, raising taxes on the rich and even getting rid of deductions is not gonna get you anywhere near $1.6 trillion. It’s not gonna get you anywhere near $800 billion, just raising taxes on the rich. So how are they gonna do it?
My friends, I just want to alert you to a possibility. I’m like the old Hogan’s Heroes prison camp guard, Sergeant Schultz, “I know nothink. Nothink!” But in thinking about it, how do you get to $1.6 trillion and both parties being able to claim that they were true to their political promises. There is a way to do it, and it’s called the Alternative Minimum Tax, and it’s called expanding the Alternative Minimum Tax to practically everybody. The Alternative Minimum Tax will not involve one change in income tax rates. So Obama, for example, will be able to go out and raise the rates, marginal rates on the rich at 39.6 and the Republicans will be able to say that they fought raising marginal rates on the middle class. The rates won’t change, but over here is gonna be this thing called the Alternative Minimum Tax, which says that everybody’s gotta pay a minimum of 30%. And a bunch of deductions are gone.
They’ll probably leave the home mortgage deduction in for cover. And then the cherry on the top is making it retroactive to 2012, just like Clinton did when he raised taxes in 1993. So if you have an Alternative Minimum Tax that, say, hits 60 million taxpayers, but you haven’t changed rates, except on the rich, and you get rid of a bunch of deductions for the rich, why, you’re looking at a win-win, until people file. And of course the economic impact of this would be an abject disaster, taking $1.6 trillion away from people under the guise of reducing the deficit, when there is no spending cut anywhere near any of this. There’s a patch, as you people who have been caught in the AMT, you know what hell it is. There’s a patch that will expire I think this year. They’ll let that go.
Look, I’m just talking off the top of my head here trying to figure out how they could get this done and, within the realm of politics, be able to tell their voters that, “I didn’t break any promises.” And it’s right out there waiting, AMT. And then if you want, put a VAT on top of it, and just claim that, “Well, yeah we’re gonna tax the rich even more. We’re gonna tax every level of consumption, it’s gonna really hit the rich,” and of course the Obama educated voters, “Yay!” Economic impact of this will be an abject disaster. You know, some people have to file an Alternative Minimum Tax even though it doesn’t apply to ’em. The Alternative Minimum Tax form is a nightmare to have to deal with. Talk to your accountant. Well, you know if you pay the AMT, if it hits you.
But just think about it. I could be all wet here. I’m just thinking how do they do this. And I’m thinking about this because I’m seeing the signs of Republicans giving in on opposing new taxes. At the highest levels. Three governors, including Bob McConnell of Virginia. They’re all saying, “We’re willing to put revenue on the table, as long as we get some spending cuts.” Well, yeah. And I’m sure that the regime will say, “Oh, spending, we’ll certainly look at that. We’ll lop a couple hundred million off of this and a couple hundred –” and bam, everybody gets, “Yeah, we cut spending,” and there really won’t be. I can see this. Well, elections have consequences.
BREAK TRANSCRIPT
RUSH: Here’s Tom in Dexter, Michigan. Tom, I’m glad you called. Welcome to the program, sir.
CALLER: Glad to be here. You earlier talked about the tax increases that are coming. The impending tax rate increases will not translate into increased revenue for the government because we’re on the wrong side of the Laffer curve.
RUSH: Yeah, you’re right, you’re right. I’m not arguing with you, but it will at first. There’s gonna be a huge transfer of money from the private sector to the public sector, they’ll be able to show it. But the point is over the not so very long term it’s gonna shut down economic activity, and ultimately, you’re right, it is going to cost the government money. But Obama doesn’t care about that. If he cared about that we wouldn’t have had the last four years. The Obama tax plan — I’m glad you mentioned this, Tom — the Obama tax plan’s not about raising revenue. It’s not about reducing the deficit. He says it is, but it’s not about that because it won’t do that. It’s going to fundamentally change the relationship of citizen to state. It’s going to fundamentally remove capitalism as the US primary economic system. All it’s gonna do is grow government and we’re gonna implode. We can’t at some point sustain any of this, and that’s not far down the road.
CALLER: In a nod the Hostess, the government eventually is gonna have half a box of Twinkies, you know, as opposed to having 20% of a truckload of Twinkies, ’cause that’s where they’re at on the Laffer curve.
RUSH: Well, even about that, that’s, again, 18,500 people losing their jobs. It’s a union struggle. If anybody thinks the Democrats are willing to compromise about anything, here’s the perfect chance for them to come in and compromise, do a good thing. No way, not interested in compromise, folks.
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