RUSH: Friday, we’re gonna be starting with the audio sound bites here at the top. The U.S. economy was expected to grow in the last quarter at 2.7% but now they’ve actually revised the number up, and it’s now official. “U.S. Economy Grew at a 3% Rate From July to September.” Under Obama, the economy grew at an average of 2.1% a year.
It says here he had many quarters where growth exceeded at 3%. He didn’t! That’s the whole point. He didn’t. Obama’s economic growth sometimes was less than 2%. There’s no way Obama was in the three percents, especially here, what does it say, “many quarters.” Anyway, the economy is booming in a lot of sectors, and it is one of the great unspokens and, as such, unreferenced aspects that are positive of the Trump administration.
And the Democrats are running around wondering why they haven’t been able to destroy Trump and why they haven’t really been able to do much damage in terms of approval numbers and so forth. And the answer is what James Carville always said, “It’s the economy, Stupid.” And consumer confidence rolling into the Christmas season is said to be an all-time high. By the way, this is including the hurricanes. Despite the hurricanes, which are always used as an excuse for a slowdown in economic activity, this 3% growth happened despite the hurricanes.
Also, Mick Mulvaney, who is a Rush Baby. We’ve interviewed him for The Limbaugh Letter, and he is the director of Office of Management and Budget. You know, it turns out yesterday I was wrong about something, and it’s rare when I’m wrong. It’s so rare, people love pointing it out.
By the way, Dawn, were you up today at 3 o’clock to order the new iPhone X? (laughing) No, I don’t get up at 3 o’clock to order phones. Even if I was up at 3 o’clock, I wouldn’t have ordered that. No, no, no, no, no, no, no. I was just teasing. I knew you weren’t up. It’s not on your list of prioritized interests. That’s why I asked you. I was just being facetious.
Anyway, I thought yesterday that the top 1% are paying 40% and the top 10% were paying 60% of total tax revenue. There was a poll, it’s a Fox News poll, and it’s got some of the screwiest results in it. Something like 80% of the American people don’t think the rich are paying enough, unusually high numbers of people who think the middle class are paying too much. And none of that is accurate, but it’s what people think. And so that’s why there’s not gonna be a tax rate cut for the top 1%, or maybe even top 5%’s ’cause of that polling data. There’s not a politician in the world that wants to be seen giving the rich a tax cut when 80% of the people or 78% think the rich aren’t paying enough already.
But the real numbers are even more shocking. Try this, folks. Ninety-five percent of all taxes are paid by the top 20%. That is an all-time high. It has never been there. Last night, Georgetown University, Mick Mulvaney, who is the director of the Office of Management and Budget, spoke about Trump’s tax reform plan. And the moderator was somebody named Cathy Koch, and she said, “The way the benefits of this tax cut falls across different income taxes is going to be a real arithmetic trick.”
Does anybody know what that question means? This is a moderator of the event. Let me read the question. “The way the benefits of this tax cut falls” — it should be “the way the benefits of tax cut fall.” But “the way the benefits of this tax cut falls across different income taxes is going to be a real arithmetic trick.” What is the different income taxes? Now, I, your host, know what she meant. The way the benefits of this tax cut fall across the different rates, the different brackets, is gonna be a real arithmetic trick. No, it isn’t. There’s no trick here. There aren’t any arithmetic tricks. Arithmetic, math, is just pure logic. Anyway, here’s Mulvaney’s answer to whatever that question was.
MULVANEY: Top 20% pay 95% of the taxes. If you break the income tax universe into what we call quintiles, so equal sized 20% columns, the first two columns, the first quintile and the lower quintile, don’t pay any taxes at all. In fact, they net positive. We pay them when they file a tax return. That middle quintile, which you might describe, some people do, as middle class, pays an effective rate in the low single digits. And all of the taxes are paid by folks in the top two quintiles, and that last quintile pays almost fully, 95% I think, of the taxes.
RUSH: This is just unreal. Now, if you’re still confused about a quintile, it’s just dividing by five instead of by quarters. So they’re dividing the taxpayers into five different groups here, and each one of them equals 20%, obviously. So the top 20%, that top quintile, pays 95% of all income taxes. The top 20%! Now, let me give you another startling statistic. Now, this is not gonna be exact because I haven’t seen the recent revision of this.
But five years ago this was true. If you earned $55,000 a year, you were in the top 10% of income earners in America. Is that not shocking as well? Now, we think of the top 20% as the gazillionaires, the billionaires, the millionaires — and they’re in there, but you really need to go to the top 1% to get the gazillionaires and the billionaires, and the top 5% to pick up everybody that are millionaires — and maybe that wouldn’t even do it. Maybe the top 2%, 3% at most, is what you would do if you want to include millionaires in this.
So the top 20%, that’s a pretty broad income spectrum there. It still is just unreal that the top 20% are paying 95% of all tax revenue. You balance that against what the Fox News poll yesterday found. Nobody is aware of this. Well, not nobody. You are, because we’ve made this a seminal point of this program for all of the years that we’ve been here, because it matters. But a full 80% of taxpayers are paying 5% — and, as Mulvaney said, the bottom 40% are paying nothing and in effect are being given a refund every year via the earned-income tax credit.
There simply isn’t any truth to the notion that the rich are not paying their fair share, and there isn’t any truth to the notion that the middle class are paying most of the burden, and then Mulvaney… Now, this gets tough to listen to, because it’s numbers, but he tries to explain the math behind the so-called tax cut for the rich.
MULVANEY: People always ask all the time: Why do you want to give a tax cut to the rich? Here’s the math. We have a progressive tax system, which means that if you make a million dollars and a make $50,000, we both pay the exact same rate on the first, let’s say, $20,000. And then from the next 20 up to my 50 — and her next 20 to her next 50 — we pay the same. I think it’s now… I know it’s 12% or 15%. I can’t remember what the brackets are, and then she goes on to make her higher rates and I stop, right? Well, if you want to give me in the middle class a cut you take my 15% rate say down to 10%, right? That gives a middle class a cut. Guess who else benefits from that? She does, because she pays the same rate on the way up the brackets. You can sit there and do nothing and lower the rates on the middle class and all other things being equal you’re gonna give the rich a tax cut.
RUSH: Now, let me walk you through this. Did you…? Snerdley, did you understand that? (interruption) Yeah, it’s tough when you’re using numbers. It’s really tough when you’re using numbers. I’m gonna use different examples than the Office of Management and Budget director. I’m gonna use $100,000 ’cause it gives us more room to play here. We’ve got the brackets, and we’ll use the brackets of 39%, 35%, 28%, and 15%, and we’re talking about income of $100,000. If you make a $1 million, you still make $100,000 and to start with.
Not all of your $1 million is taxed at the… Well, no. In the case of millionaires, it is. In the case of millionaires, they don’t step through this. They charge you 39% on pretty much everything. So let’s say it’s income of $500,000. The person that makes $100,000 will pay on the first $10,000 or $20,000 and he earns the 12% or 15% rate, and then the next bracket of that $100,000 a year until pay at 28%. And then the last percentage of that $100,000 he earns he will pay the top rate of 35%. That’s the marginal rate.
The marginal rate is the last rate you pay on the income you earn. So if you earn $100,000 and somebody earns $50,000, you pay the same percentage on the income that’s equal: $50,000. The person making $100,000 earns $50,000 first, and the person earning $50,000, they pay the same rates on that they pay the same rates on that $50,000. Then the guy that’s earning a hundred has two more rates to pay on his way. He’ll have 28% and 35%, and I don’t know where the 35% kicks in.
But the point is the guy earning $100,000 is paying the same percentages on half of his income as the person making the person making $50,000. Mulvaney’s point is if you cut the 12% rate and the 15% rate, you’re also gonna be cutting that rate for the guy making $100,000 because the first $50,000 he makes will also be subject to the new lower rates. So his point is, when you lower rates for the middle class, you cannot help but lower rates for everybody, because everybody is gonna be subject to all of those brackets up to the total taxable income they report.
We’re talking taxable income here: $100,000 versus $50,000. So the person earning $50,000 will pay taxes… Well, actually, this person doesn’t pay much at all, but in the math example we’re using, that person would pay a percentage at 12% and a percentage at 15% and be done. The person making $100,000 would pay the same 12% and the same 15% up to his first $50,000, but then two more rates kick in for him: 28% and 35% on his way to a hundred grand.
But those first two rates — the 12% and the 15% — if they’re cut to 10% and 12%, they’re gonna be cut to 10% and 12% for everybody. So Mulvaney’s point is, you cut the middle class tax rates, it is axiomatic, it’s automatic, and it is unavoidable that the rich are gonna get the same tax cuts on the first $50,000 they earn. Not everything, just the first $50,000. So that’s what he was trying to explain here.
RUSH: Let me give you one more stat here, folks, to illustrate who really pays taxes. What’s the population of New York City? Give me the number. What…? (interruption) Just the city. I’m not talking about the Tri-State area. Eight million people. Well, it’s probably 7.5 million because half a million have probably have left since the last time, but we’ll figure eight million, okay? Would you believe that one half of New York City’s tax revenue…? There are eight million people, and one half of the city’s income is paid by 34,500 people? They are the rich.
They are the people not paying their fair share: 34,500 people out of eight million are paying nearly half (or as Clinton would say, “contributing”) nearly half of the city’s taxes. You remember Clinton when he was raising everybody’s taxes referred to them as “contributions.” We needed more “contributions” from people. But, see, even these facts are not gonna sway anybody. It’s just etched in stone that the rich don’t pay their fair share, that the rich get all these tax breaks, that the rich aren’t paying anything, and that the middle class is bearing the full burden, and people believe it because the Democrats and…
Hell, it’s not just Democrats. The media, everybody’s been spreading that BS for decades. And it’s become part of the traditional class envy.
RUSH: Steve in Attleboro, Massachusetts. I’m glad you called. Welcome to the program. What’s up?
CALLER: How are you? Not too much. Second-time caller, Rush, and it’s an honor to speak to you. I love the subject; it’s great. But I have take us back to taxes and New York City. You’re right, probably 37,000 people pay those taxes. But you gotta remember, people are paying very, very high rent. You know, it costs a lot to live in New York City. So these people that are paying the taxes could not get that money to pay it if the little guys like us, you know, the poor guys, so to speak. You know, the middle class is paying that tax inevitably through, you know, paying their rents and store prices and going to stores, shopping, et cetera, et cetera. You got it? You understand?
RUSH: I think so, but I want to take some time with this.
CALLER: Oh, not the great Rush Limbaugh. Come on!
RUSH: I just want to make sure I heard you right, is all.
CALLER: Okay. No, no, no. I’m not making fun of you. I love you. I love you, Rush.
RUSH: You’re on a cell call, which to me you sound like Charlie Tuna, okay?
CALLER: Oh, I’m sorry.
RUSH: That’s number one. Number two, did you say that while it may be 37,000 or 38,000 New Yorkers that are paying over half the freight, they’re still paying very, very high income tax rates?
CALLER: No. What I’m saying is —
RUSH: Okay, hang on. Hang on. I could have sworn you said that, and it’s a good point. But don’t go away.
RUSH: I had a chance to go back and read the transcript of what you said. And now I get it. You were saying they weren’t paying high rents; you were saying the middle class is paying high rent, right?
CALLER: Well, the point I’m trying to make is I think the point you’re trying to make on your show a lot is that the rich in this country are paying the freight of all the bills, on paper. You’re right. On paper it looks that way. But you have to understand, the rich are getting their money from somebody, and in New York City it’s in the form of rents or commerce in the stores, et cetera.
RUSH: Right, right.
CALLER: They would have the money to pay these high taxes if the people weren’t paying them. You know what I’m saying?
RUSH: Right. I get — (crosstalk)
CALLER: — and the freight.
RUSH: What you’re saying, while sounding like you’re in a barrel six feet underwater, to me — I’m sure anybody else that can hear you sound normal, but that’s why it took me awhile to figure this out. What you’re saying is that the middle class are actually providing the revenue that these rich New Yorkers are using to pay all these taxes?
CALLER: Bingo. Got it.
RUSH: That’s called making the complex understandable, folks. That’s called weighting it all down to the bare essence. Now, you mentioned rents, so obviously this is a bugaboo to you. You think obviously the landlords of New York are paying a high freight of the income tax revenue and they’re getting that money through these exorbitantly high rents, right?
CALLER: Well, that’s called capitalism, isn’t it?
RUSH: Yeah, but I’m not arguing with that.
RUSH: My point is I don’t think it’s landlords that are paying the gigantic percentage of freight. I think it’s Wall Street people.
CALLER: Oh, okay. Okay, I didn’t know that’s what you were really referring to, but it’s not just Wall Street. I mean, everybody has to pay to live in New York, and it’s not cheap.
RUSH: But we’re talking about 37,500 people who pay 50% of the total New York City, not state, we’re talking New York City tax revenue.
RUSH: Now, I don’t doubt that rents are sky-high. I used to live there and paid them. I know exactly that. But I don’t think it’s just landlords ripping people off. There are a lot of people on Wall Street that are making gazillions of money and in the tech sector especially, and they are paying a percentage. You’re being contentious with me for no reason here.
CALLER: What’s that mean? What’s that mean? Contentious.
RUSH: It means you’re arguing with me for no reason here. I haven’t criticized anything you’ve said.
CALLER: Correct. I just didn’t want you to misinterpret this call because definitely I’m on your side, I watch you guys on TV, I listen to Sean. Believe me, I am a conservative. But the only point I like to make to you, Rush, is, yes, these people are paying the taxes, but inevitably the money — it’s capitalism. It’s people paying for things to give these rich the money to pay these —
RUSH: Okay. I need a clarifying question. Are you upset about that or not? I can’t tell from the tone of your voice.
CALLER: Oh, no, no, no, no. I’m not upset at all. Not a little bit. Nope. I’m just saying this is how the world goes. It’s called capitalism. People pay bills, people pay their bills, people pay — you know, that’s how the world goes around.
CALLER: I mean, seriously. I agree with it.
RUSH: What we have here is female logic in the minds of a guy, and that’s why I have — (laughing)
CALLER: Go ahead. I’m sorry.
RUSH: (laughing) I just —
CALLER: — have a problem with — sorry. I can’t believe I got through to you, Rush. I can’t believe I —
RUSH: Steven, this is iPhone X day. Did you get in line, try to get one, did you stay up to 3 o’clock and try to order one?
CALLER: I would definitely do that, yes.
RUSH: No. Did you?
CALLER: Oh, no. I’m sorry, I didn’t. No.
RUSH: All right. I don’t have any iPhone Xs because if you didn’t order one within two minutes last night you have to wait five to six weeks to get yours.
RUSH: But wait. What I do have is a bunch of iPhone 8s and 8 Pluses. And I want to tell you something. I have an 8 Plus and it’s the best phone I ever had. The only difference in the 8 Plus and the X is the screen is full screen on the X, and it’s OLED screen versus LCD, and it doesn’t have the Face ID stuff. But aside from that, the 8 Plus, it has wireless charging, it has fast charging, it has the new fastest chip, same chip that’s in the X. It’s got the same camera system with the same improvements. It’s the same phone, but it’s not in the body of the iPhone X. And I was just gonna offer you one if you’d like one.
CALLER: I would definitely like one, yeah, thank you. That’s really, really nice of you, Rush.
RUSH: I’m happy to do it. Now, which size do you want? Do you want the 8 which is the 4.7-inch screen or the Plus which is the five-and-a-half-inch screen.
CALLER: Well, I would ask for your recommendation, please, on that. Which one do you think would be the best one?
RUSH: The Plus.
CALLER: All right. And I’ll take that one.
RUSH: All right. And you’ve got two colors. You’ve got black or gold. Which one do you want?
CALLER: I better choose black. I won’t go any further than that. I want to be, you know, politically correct.
RUSH: What do you think there’s a racial component to choosing the color of your phone? I’m not gonna go any further — it’s typical New Yorkers choose black because it doesn’t show the dirt. Okay, so, Steven, I need you to hang on here so that Mr. Snerdley can get your address so we can send the phone out to you. I’m gonna include a 29-watt charger and a cable to go. Don’t use the charger that comes in the box. Use what I send you and it’ll charge the phone faster than it’s ever been charged. You’ll be dazzled by this thing.