All right, Tax Day. This is the day that everybody has to file their returns today or file for an extension, and quarterly filers owe their first installment for the tax year. So there are a lot of stories about taxes out there, and of course I don't believe in coincidences, as you well know. For example, there's an AP story out there that's been running everywhere: "For Richest, Federal Taxes Have Gone Down; For Some in US, They're Nonexistent." By virtue of the headline, they want you to think this is a story on how the rich continue to pay less and less and less. It's just the opposite. The rich are paying more.
Their effective rate may be down but the rich are paying more in terms of the total burden. The real story here is that 45% of American households don't pay squat when it comes to income taxes. (Payroll tax is another matter.) Forty-five percent. Ten percent of all taxpayers are paying after the freight. The top 1% are paying 38% of all of it -- the top 1% are paying 38%! Isn't it interesting, too, 45% of households don't pay any income taxes, and what was the number we had last week of the percentage of Americans working?
The number working is 45.6% working, so that would be 54% not working while 45% are not paying any income taxes, and yet the focus is on the eeeevil rich. And it happened on Sunday right according to schedule. (interruption) Snerdley, I'm gonna get to it. The S&P rating is out. It's Drudge's lede here: "S&P Moves US Outlook to Negative." There's no coincidence on that, either. We're, what a week or two or a month before raising the debt limit, now, and we got a story about how we might crash and default and it's the end of the world? It's another crisis, same old thing.
We are not going to default. We have printing press!
This is absurd. We are not going to default; we have printing press. Even though: "Standard & Poor's lowered its outlook for the nation's long-term debt Monday, even as it reaffirmed the agency's top-tier rating for the U.S. economy." So look, two things are true here: At some point we are gonna have a little bit of reckoning to deal with our debt here. There are some questions about it. At the same time, we're not gonna default. It just isn't going to happen but they want people to think it might because we're just weeks away from raising the debt limit, you see? This is a story specifically designed (there are no coincidences) to help push the notion of the left that we have to raise the debt ceiling by a lot and go into further debt.
Bob Schieffer. We have an example here of people talking at each other, not having a conversation. Bob Schieffer with his template -- Bob Schieffer with his narrative, Bob Schieffer not listening to answers -- had Paul Ryan on yesterday on Slay the Nation; and he grilled him about "tax cuts for the rich." That's the template. No matter what Ryan said, Schieffer was gonna continue to ask and commentate on the fact that the rich continue to get tax cuts in his budget. Here's how Schieffer started it all...
SCHIEFFER: I guess the question I would have, uh, congressman: Why do these rich people need another tax cut? I mean, they're already rich. They seem to be doing pretty well as it is now. Why cut their taxes s'more?
RUSH: Bob Schieffer is one of "the rich." You know, this is one of the disconnects. He's talking about "the rich" as though they are a different group of people from him. He is the rich! He's pretty close to the 1%, to the top 1%. "I guess the question I would have, Congressman: Why do these rich people need another tax cut? I mean, they're already rich. They seem to be doing pretty well as it is now. Why cut their taxes some more?" As though it's his business what's "enough," but that's not even the point. The point is there aren't any tax cuts, in aggregate terms, in Ryan's budget. Here's Ryan's first answer...
PAUL RYAN: We're not talking about cutting taxes. We're just not agreeing with the president's tax increases. I guess that's the new definition of tax cuts. We're saying keep tax rates where they are right now and get rid of all those loopholes and deductions -- which, by the way, are mostly enjoyed by wealthy people -- so you can lower tax rates. A simpler, flatter, fair tax code more internationally competitive so we can create jobs: That's what we're proposing. This isn't tax cuts.
RUSH: Bob Schieffer doesn't listen, didn't listen, didn't hear the answer.
SCHIEFFER: Am I misinformed? I thought you were talking about lowering that, uh, rate for the top --
PAUL RYAN: In exchange for deductions.
SCHIEFFER: -- income taxpayers back to about 25%.
PAUL RYAN: That's right.
SCHIEFFER: So isn't that a tax cut?
RYAN: In exchange for losing your deductions, in exchange for losing the loopholes and deductions that mostly higher income earners use. So what we're saying is: Keep tax revenues where they are, don't lower tax revenues, but clean up the tax code so that it works. If you have really high tax rates, what you end up doing is you penalize small businesses.
RUSH: So here's an example, as I say, of two people talking at each other. Ryan's trying to answer his question. Ryan's trying to explain. But Schieffer's got the template, got the narrative: "There are 'tax cuts for the rich;' and I don't care what I hear, I'm gonna keep talking about 'tax cuts for the rich'!" Ryan is talking about simplifying the tax code: Lower the rate, make it simpler; no loopholes, no deductions. Keep it more internationally competitive. You heard what he said, and he specifically says here: "Don't lower tax revenues." See, most people, when they hear the phrase "tax cuts" think the government's gonna get less money -- which is fine with me, by the way.
The government getting less money is fine with all of us, but that causes conniption fits on the left and among the ill-informed, uninformed, malinformed -- and this is what Schieffer is continuing to probe here. "Well, but -- but -- but!" Ryan says, "No, no, we're not lowering tax revenue," in other words, we're gonna have a rate to make it simpler. The same amount of money is gonna keep rolling in. Schieffer is not even listening to the answer. He's got a template in his head; he's sticking to it. You just heard Ryan say, "We want to clean up the tax code so that it works. If you have really high rates, what you end up doing is penalizing small business." Schieffer doesn't hear it -- and even if he had, I doubt that he would understand it.
SCHIEFFER: If the country needs to borrow 40 cents of every dollar that it spends, how do you help that by reducing the amount of taxes that the richest people in the country pay? It would seem to me that's where you get revenue. How do you justify it?
PAUL RYAN: Two things. We don't have a tax problem. Our revenue is going back to where they have been historically. We have a big spending problem. Spending is growing at a very unsustainable rate. Massive tax increase... The President's proposing $1.5 trillion in tax increases. Raising tax rates on anybody, especially successful small businesses, slows down the economy; loses jobs; and if you have lower economic growth, you have less revenues, and it puts you further behind.
RUSH: Now, Schieffer doesn't hear any of that. That's the end of the sound bites, but he didn't hear any of that. He didn't hear Ryan say, in the previous answer, that we're talking about revenue neutral here. He goes on to talk about what we really need to do is cut spending. But, Schieffer, he's stuck on "tax cuts for the rich." I mean, if you're gonna "borrow 40 cents of every dollar that it spends, how do you help that by reducing the amount of taxes that the richest people in the country pay? It would seem to me that's where you get revenue." No. I remember telling you last week that at one point back in the seventies, they said you could confiscate (which means you could do it only one time) not just the wealth, but everything the rich have.
And you could run the government for a week. Today, if you confiscate -- "confiscate," that means you can do it one time; you can't tax 'em next year because they don't have anything -- you raise something like $960 billion. If you confiscate all the wealth of the rich, you net $960 billion, on a deficit of $1.6 trillion and a national debt of $14 trillion. The point being raising tax on the rich is not where to go. But where does all the other revenue come from the government raises? On the people nobody talks about, $2.2 trillion is the aggregate total (I'll find it in the story here) from the middle class and other groups that don't classify or qualify as being in the "rich."
RUSH: Now, folks, as you know I have a lot of respect for Paul Ryan, and I don't want to quibble with Paul Ryan, but I'm going to just a little bit. It may be a minor technical point, but I don't think so. I think it's actually imperative that everybody understand this. Yeah, we have a spending problem. There's no question that we have a spending problem. But the problem we really face is how the money is spent. What we really have is a redistribution of wealth problem. That's, to my mind, the bigger problem that we have. The federal government (and when we say "the federal government," we mean the Democrats, Obama) now see their primary role as the redistributors of wealth -- and tax increases don't help that.
You know, they pitch tax increases as, "Well, we got this huge deficit out there. We're gonna make the whole," and they pitch tax increases, some sort of a moral crusade. Wrong! It would exacerbate the problem, given that the government's role is one of redistribution. Give 'em more revenue and they're gonna spend it, right? But how? They are going to spend it by redistributing it, in an effort to "equalize outcomes" and all the other rigmarole. Tax increases will only make that problem worse. If it were possible, what really needs to happen is take away the government's power to redistribute our income against our will.
Have you ever wondered (just as a little intellectual exercise, just to get people thinking about something) what is the one entity in our country that never pays a cent in taxes? The government! The government. It earns what? It takes and takes and takes, but it never pays taxes on its income. Now, I know what you're saying. "But, Rush, but, Rush, the government..." That's exactly what I want you to say, and I want you to challenge yourself. The government doesn't pay any taxes on what it earns. It has the power to levy taxes. It has the power to collect, has the power to redistribute. It's the one entity can go out and print, do whatever it wants, and never pays the taxes itself.