RUSH: Well, now this is interesting. We have an AP Obama story that just cleared the wires about 45 minutes ago: "Democrat Barack Obama is calling for a 90-day moratorium on foreclosures and a two-year tax break for businesses that create jobs as part of a plan to heal the nation's ailing economy. The presidential candidate says banks that participate in the federal bailout should temporarily postpone foreclosures for families making good-faith efforts to pay their mortgage." This is so wide open. Postpone foreclosures for families making good-faith efforts? What's a good-faith effort? You're one month behind, you're two months behind, you're six months behind and you're not mowing the yard, what's a good-faith effort? Wait, this gets better. And, by the way, a two-year tax break for businesses that create jobs. Well, what business would not go out and create a job? If all you have to do to get a two-year tax break is go out and create a job, who wouldn't do that? So there's gotta be businesses that create jobs. What's that mean? How many jobs? And not only how many, but who must you hire in those jobs? Let us not forget who we're talking about here. We're talking about the United Socialist States of America.
"He also called for a $3,000 tax credit for each additional full-time job a business creates. The tax break would end after 2010." So whoopee-doo. You get a one-year tax break of three grand or tax credit for every additional full-time job you create? So Obama is going to replace the market, but only for one year and then all of a sudden you don't get the tax credit after you've hired these people. For every full-time job? Doesn't say small business. For every full-time job a business creates. "Obama also is proposing letting people withdraw up to $10,000 from their retirement accounts without any penalty this year and next." Obama, do you know that there isn't much left in them? Barry, there's not a whole lot left in people's retirement accounts right now. But beyond that, Barry, do you know what your guys in the House are doing? George Miller is crafting legislation that would eliminate this tax break for a lot of people who deduct money from their pay to go into their 401(k). And then the last line, and get this. This is Christopher Wills at the Associated Press Obama. "The Obama campaign emphasizes that these ideas can be done quickly, either through executive order or legislation." The AP, a press release for the Obama campaign.
RUSH: Let's go Mike in Detroit. Mike, I'm glad you waited, sir. Welcome to the EIB Network. Hello.
CALLER: Thank you, Rush. How are you?
RUSH: Very well, sir. Thank you.
CALLER: Outstanding. I want to talk a little bit about the tax situation also as it relates to small business and something I think that John McCain needs to get his arms around very, very quickly 'cause I really don't think he sort of gets what we are going through out here. Barack Obama is definitely cantinebulous, (sic) no doubt about it, and I do believe he's talking about individual income as opposed to corporate income, but let me explain quickly how that adds up. I've got about a $25 million company here. We employ several hundred people, mostly in the Midwest but throughout the country, and there are thousands of businesses between the let's say 5-million and 50-million-dollar in revenue companies around the United States that are providing most of the job creation that we have today. When you take the income that we have as individuals, the way the tax structures work for most private companies is whatever earnings we have pretax earnings the company has are added on top of your personal income and that makes people with high growth businesses well, well over that $250,000 range, and you are going to smack us down in our ability to create jobs, no question.
RUSH: Well, hold it a second. I'm a little confused because you've got a business, you say a $25 million dollar business?
CALLER: Our business is $25 million, yes.
RUSH: Obama's number is $250,000. What do you think -- we don't know -- what do you think he means that $250,000 is?
CALLER: Well, I think he means the income from the business, but what I'm saying is he's right about one thing, and that is --
RUSH: Okay, well, hold it, hold it, 'cause you gotta help me out here.
RUSH: You're a $25 million small business.
RUSH: Do you earn less than $250,000 a year on it?
RUSH: Well, of course not.
CALLER: No. And what I'm saying is 75% of the jobs today in America that are being created are being created by small business.
RUSH: Exactly right.
CALLER: And the growth companies in there are usually in the $5- to $50-million range, they're still considered small businesses, under 500 employees. We're the ones that are going to get just absolutely slapped silly, and our ability to create jobs is going to be seriously impaired. You take away the cap on the Social Security tax and make that unlimited, it becomes Armageddon.
RUSH: I know. I don't know if he's going to make it unlimited, but he's certainly going to raise the ceiling.
CALLER: No question.
RUSH: No question. You guys are all going to get soaked, this is the point, we're all going to get soaked, even in an economy like this.
CALLER: Well, and that's it. I mean right now, it sounded to me with what you were talking about earlier like I'm going to get a tax break on my tax increase. Is that what I'm hearing?
RUSH: (laughing) Yes. A tax cut on your tax increase.
CALLER: This guy's a train wreck looking for a pair of tracks. Unfortunately, I think he's found them.
RUSH: Look, I maintain that he doesn't know what he's talking about.
CALLER: Oh, I don't think there's any question, you're right.
RUSH: I think he's got some economic people down there preparing all this. He doesn't have economic people. He has got political people putting together an economic proposal that uses this magic number to convince most people that everybody but them is going to get soaked. And this comes after they keep saying eight years of nothing but tax cuts for the wealthy, and this economy's in the dregs because of tax cuts for the wealthy, and so those people, those rich people that caused me to lose my house -- this is the theory from Obama campaign headquarters --
RUSH: -- they're going to pay now, Obama's going to stick it to them. It's the old class envy business. You know, in the past it's been debatable as to how effective it's been. It didn't work for Mondale and Carter against Ronaldus Magnus. It didn't work for Algore and John Kerry against Bush. But they weren't in as dire economic circumstances. It did work for Clinton you might say 1992, but that also happened when perception was that we were all in the worst economy in the last 50 years. This is why I've been trying to reach out to people regardless what your political persuasion is. I know a lot of Democrats own small businesses and I know a lot of Democrats work for small businesses. And we're all going to get soaked if this guy actually implements what he is promising to implement. So now tax cuts if you create a job. That's the latest economic proposal from the Obama political team. Tax cuts if you create a job. This is the kind of thinking that would lead Obama to try to get Representative Mahoney's mistress a job so that she shuts up the rest of the election cycle. Now, is Obama also saying that if you lower taxes, that you encourage businesses to create jobs? If he's going to give businesses just for a year a $3,000 tax credit that create a full-time job, is he not admitting that cutting taxes creates jobs? Obama does not know what he's talking about. He is repeating it and regurgitating it according to his political people.
RUSH: This is Sherry in New Braunfels, Texas. It's great to have you on the program. Hello.
CALLER: Yes. It's an honor to speak with you.
RUSH: Thank you.
CALLER: Just a great honor. Hey, thanks for giving us a voice. I'm a small businessperson here with a son who will be headed to Iraq in January.
RUSH: God bless.
CALLER: Hey, what I want to talk to you about today is the Democrats' plan to spend your way out of debt for America. It goes against everything I was ever raised to believe, and I do not understand. I'm so frustrated that Americans are falling for this. It just frustrates me to no end.
RUSH: Well, not all Americans are, but enough are, and the reason they're falling for it is 'cause they're the one getting the spending. They're the ones receiving it.
CALLER: But --
RUSH: They're the ones that are not going to be foreclosed on. They're the ones, the Fannie Mae gang, the people that should have never been lent the money in the first place. Extended unemployment benefits so people don't have to look for a job. Obama is proposing that even right now. Immediate relief to families. They're talking about another economic stimulus package. They're talking about expanding food stamps. So, yeah, you can't get your business or your household out of debt by spending like crazy, but they can because the people that get the spending, there are enough of them that vote.
CALLER: Well, Rush, you know, intelligence is one thing, but wisdom is another. There are some just wise facts that I think many Americans were raised with that are kind of falling off the table, and one of those is: nothing in life is free, nothing.
RUSH: Oh, we got rid of that in this country -- where were you? -- 30, 40 years ago. There's a growing percentage of people in this country since the New Deal who think that there certainly are things for free, and they're right! Free to them, they're not free to you and me and others who pay for it, but there are a lot of people who get free stuff.
CALLER: But it's not free.
RUSH: To them it is. I know, but as I mentioned, Obama's got this new voting group, this new voting bloc: the 30% or 35% of people don't pay federal income taxes. He's trying to make them into a single voting bloc. That's who he's gone after with this $250,000 figure that he's thrown around all over the place and all this stuff about tax cuts for the rich causing this economic climate that we're in. The greed, the Wall Street greed. Everybody but the people who are really responsible for this housing problem are being pointed fingers at by Obama, and that group of people is believing it. They're not enough to win an election by themselves, but that's why this stuff is a constant battle.
The Democrat Party is doing and will continue to do what it has always done, actually, since LBJ. The last Democrat in the old days that I really knew as a Democrat is JFK. LBJ came in with the New Deal 2, the Great Society, the War on Poverty. They didn't work. New Deal 1 didn't, either, but don't try to tell anybody that. They think you're nuts. They think it saved us from the Depression. New Deal 2 didn't work, so by all means let's try New Deal 3, and we're in the midst of it. Now, they're not enough to win an election, but that's why they always have to be reminded. I love relying on the character, the strength, and the wisdom of the American people, but you have to keep educating people for that wisdom and strength and character to maintain 'cause the left is going to perpetually try to dumb 'em down.
RUSH: Now, my friends, we're talking about Obama today. By the way, you might be wondering, "Rush, why are you saying 'my friends' so often?" Because I'm trying to make it a little bit more palatable, as often as Senator McCain says it. I figured, I am universally loved and admired, and if I can say, "my friends," and make it palatable then it will be palatable to you when you hear Senator McCain say it twice or three times every sentence. At any rate, we've been talking about Obama here and his tax cuts. If you're just joining us, he's going to give a tax credit of $3,000 for every job created -- every full-time job created -- in the economy, but only for one year. It will expire in 2010. Now, think about this for a second. Obama says he will give a tax break for creating a job, but you don't create jobs for tax breaks.
That's not why people go into business. You create businesses to make money. You need the capital! (For those of you in Rio Linda, that's money). You need money to create your business or expand your business or run your business, and you get that capital mostly by making a profit. You hire more people and if in doing so you can make more money per person hired, that's why you do it. You hire more people to create more productivity, to produce more, which leads to more profit per person, more money. A tax cut does not cover the cost of hiring a person or create value when hiring a person. If you're told, if you're a business, "Okay, we're going to give you a $3,000 tax credit for every full-time job you create," you know what the businessman is going to say?
"Okay, I'm going to get a tax credit for three grand, but I gotta go out and hire my person at whatever salary it is, and then I gotta add the benefits package to it and then I've gotta do this and I gotta do that." Now, what happens if the average businessman says, "This is a rotten deal. I'm going to be given a tax credit of three grand, and it's going to cost me $75,000 or more to get it, and I got no reason to make this hire right now in this economy because we're not growing? So I'm supposed to be sucked in by a $3,000 tax credit, to go out and expand my business, when there isn't any productivity to justify it, or might not be?" This is silly! Now, I'll tell you what's going to happen, and this is exactly what Obama's boys are planning on happening.
A lot of businesses won't take the deal, and then Obama's going to point fingers, "They don't care about you. It's Wall Street, Main Street, greed. They coulda had a $3,000 tax credit." Now to you, $3,000 tax credit might be a huge deal if you don't have to spend any money to get it. But businesses are going to have to go out and spend money to get this tax break. So what good is saving three grand for one year, when it costs you $75,000 to get it? So you opt out saying, "No thanks, Obama, I'll wait 'til business circumstances warrant my hiring somebody, and I'll hire somebody on the basis that businesses do it." He wouldn't know that, by the way. He's never been in one, and the one time he did work in the private sector he considered himself "a spy" in there, as he wrote in his own stupid book. When these guys do not take advantage of this and small businesses don't hire these people, then Obama is going to say, "Well, look at this! This is greed, selfishness."
You need profit to hire people, Obama, not government! You need profit. If you are going to go out and hire a person, a tax cut based on hiring people doesn't cover the cost of hiring the person. I don't even think Obama cares or even knows this. He's a socialist. He simply cannot bring himself to leave businesses alone, to make it easier for them to grow -- harder for them to grow. He does have the slightest clue. You know, he wants to micromanage the private sector with gimmicks like tax breaks for hiring people. Why not just give him a tax cut, period? Just cut the corporate tax rate, Obama! Just do it the simple way, just cut the corporate tax rate. Obama could propose -- this is never going to happen -- cutting the federal workforce and giving all Americans a tax cut. But Obama, you're running for president, not CEO of every company out there. It seems to me a president has enough to do than to try to manage every business in the country.
But Obama is trying to make you think that only Washington can manage everything correctly. Only government can manage everything correctly because, "After eight years of Bush and McCain (ta-da ta-da ta-da!) we got corruption on Wall Street. We got greed on Wall Street. We got corruption on Main Street. We got corruption everywhere but Congress," and of course Congress is corruption headquarters.
RUSH: Here's Obama in Toledo confirming the tax credit for every new employee that I mentioned earlier today.
OBAMA: We've already lost three quarters of a million jobs this year. Some experts say that unemployment may rise to 8% by the end of this --
RUSH: No, he's wrong, idiot.
OBAMA: We can't wait until then to start creating new jobs.
RUSH: Of course not.
OBAMA: That's why I'm proposing to give our businesses a new American job tax credit. Instead of giving tax credits to -- and tax breaks to companies that shift jobs overseas, what we're going to do is say to American companies, for each new employee you hire in the United States over the next two years--
RUSH: We're going to give you a tax credit of $3,000. That's the plan. This is not why businesses hire people. The cost of hiring these people will be far more than what Obama's tax breaks are. It's not possible, it's not gonna work, you cannot micromanage business this way. People do not hire employees to get tax breaks, it's going to cost somebody 75 grand to get that three grand, and it's a tax credit, it's not even a straight deduction. This is smoke and mirrors. And he continued.
OBAMA: To fuel the real engine of job creation in this country, I've also proposed eliminating all capital gains taxes on investments in small businesses and startup companies. They're the ones that create 80% of the new businesses. And I've proposed an additional tax incentive through next year to encourage new small business investment.
RUSH: Stop the tape. Now, I don't know what this means. I hate to parse this, but I don't think he knows what he's talking about, either. "To fuel the real engine of job creation in this country, I've also proposed eliminating capital gains taxes on investments in small businesses." Now, look, folks, bear with me here. I think I know what he's trying to say, but he didn't say it. When you invest in a small business, one way you could do it is in the small business is listed on the stock exchange and you buy stock. But most small businesses are not listed. So when you invest in a small business, if you don't own it, how do you invest in a small business? Maybe you make a loan to the small business? Or does he mean, if you are a small business owner and you invest in your own business, to grow it, then I will eliminate capital gains taxes. I don't think there are capital gains taxes on your small business.
Now, I'm not totally sure here, I have a small business here, I do my taxes every year, and I don't see a cap gains deduction that I take. This I think is the continuation of that stupid answer that he gave with the Money Honey, Maria Bartiromo on CNBC. When Bartiromo asked him about capital gains, he said, (paraphrasing) "We're only going to tax capital gains to some big businesses capital gains, some people, rich people, we're going to stagger it, like progressive --" You can't make a capital gains tax progressive. He didn't know what he was talking about. Somebody else caught him on this, too. It might have been Lou Dobbs, I forget who it was, but somebody else was beside themselves he didn't know what a capital gains tax was. "I'm going to eliminate all capital gains taxes on investments in small businesses." See, most small businesses are Subchapter S corporations and a lot of small businesses are allowed to do that on their individual 1040 return. We're not even talking about corporate taxes here. I don't know that he knows what he's talking about. You can interpret this any number of ways, but I'll guarantee you the way it's meant to be determined is class envy. The logic is good enough for small business, well, fine, we'll try to promote this and make people think I'm giving tax cuts to people. I think he's being nailed here on all of his tax increases. Now he's running around looking for any excuse to talk about tax cuts, tax credits, eliminating capital gains taxes? By the way, I'll tell you what this is really about. This is really about he knows that part of what's going on on Wall Street last week is the plunge is due to some people anticipating his economy. Okay, roll the rest of this. Let's see if we can make sense of any more of it.
OBAMA: Protect the jobs we have and to create the jobs of tomorrow by unlocking the drive and ingenuity and innovation of the American people, and we should --
RUSH: Stop the tape. We have to unlock the drive and the ingenuity and the innovation of the American people? What the hell do you think got us where we are in this country? What do you think unlocked the drive and the ingenuity? Obama, it's your party that wants to punish that. It's your party that wants to shackle that. Here's the rest of this.
OBAMA: -- track the loan guarantees that we've already passed for our auto industry and provide more as needed so that they can build the energy efficient cars not in Japan, not in South Korea, but right here in the United States of America.
RUSH: Only government action can unlock ingenuity. Only government money or tax cuts can accomplish great things in American business. I mean, that's what this all boils down to. Let me grab a couple phone calls here because we've got lots more to go.
Robert in Florida, nice to have you on the EIB Network, sir. Hello.
CALLER: Hello. How you doing today?
RUSH: Very good, sir. Thanks.
CALLER: I was watching CNBC a while ago, and they had Tom Jurassic Park Brokaw on explaining how the markets got in this big mess that we were in, and then he finally said, "Now, what we're going to have to do is someone's going to have to take a look at debt, we're going to have to decide who can have debt, how much debt they can have, what size house they can have," where does this end with the socialists?
RUSH: Brokaw said these things?
CALLER: Yeah, he said them about 40 minutes ago. He was promoting --
RUSH: Snerdley has CNBC on back in his office, he likes some of the babes on that channel, and I saw that Brokaw was on there, I thought it was Brokaw.
RUSH: But we didn't have sound up to know what he was saying. We, Brokaw speaking for we, we're going to have to decide who can have debt, how much debt they can have, what size house -- did he actually say what size house they can have, or are you just inferring that based on how much debt we can have?
CALLER: No. He said once we get through this mess, we're going to have to take a look debt, who can have debt, how much debt they can have, what size house they can have. And I said, wait a minute --
RUSH: He actually said those words, what size house they can have?
CALLER: Listen, I'd be willing to bet my small business income on it, which is not going to be much if Barack wins.
RUSH: (laughing) I'm sorry for laughing. It's a serious thing.
CALLER: It is. I use independent contractors, and I've told them flat out, because I think I'm the last --
RUSH: Let me ask you a question about that. You're an independent contractor, small businessman, that means ladies and gentlemen, for an independent contractor, what it means is this poor guy gets paid the gross. Whatever his business is -- and I'm not asking here -- whatever his business is, you're going to bill for the full amount, he's gotta file quarterly and federal, state, whatever estimated tax payments basically every three months, and I want to ask you, have you invested in your independent contractorship?
CALLER: Yes, I have.
RUSH: Do you pay capital gains on the success of your investment in your business?
CALLER: I've never heard of that.
RUSH: I haven't either. I'm still mystified trying to understand this one, which is my mistake, 'cause it doesn't mean anything. He doesn't know what he's talking about. It's not supposed to mean anything. He's just relying here on the lingo. This is the way he can say tax cuts, eliminate tax, eliminate capital gains, eliminate capital gains, 'cause he knows he's getting hit on this subject in the stock market. Okay, look, I appreciate that out there, Robert. This is where the socialists are heading. Tom Brokaw from Jurassic Park? Well, they can't come after my house 'cause I have no debt on my house. I cannot borrow any money to buy my house. I haven't borrowed money to buy a house since 1985. I rented until I could afford. After I sold that house in Sacramento, moved to New York, I rented, people said, "You're throwing your money away." But those first five years that apartment was like a dormitory, just a place to sleep, you know, leave the potato chips lying around, never invite anybody into it, just a base of operations. They can't kick me outta my house. They might be able to kick me outta my house if I violate turtle lights, you know, and that sort of stuff. But limit the size of house people can have, Tom Brokaw, Drive-By Media emeritus? He still hosts Meet the Press now and then. I would have loved to have known the input. He would have been on with the Street Sweetie, if it was after two o'clock. I wonder what the Street Sweetie said to that.