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Higher Taxes Do Not Raise Revenue in a Sustainable Way

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RUSH:  The Lone Wolf Institute, the EIB Lone Wolf Institute for advanced conservatives, that is me, the lone wolf, or that is I, the declarative, El Rushbo.  800-282-2882. 

Here is that sound bite that I heard last night.  This is Obama August 5th, 2009, on NBC News.  Then White House correspondent F. Chuck Todd interviewing Obama during a visit to a factory in Indiana.  F. Chuck said, "Elkhart resident, Scott Ferguson, he's upset about taxes. He says, 'Explain how raising taxes on anyone during a deep recession is going to help with the economy.' And he actually wants you look at historical markers where this has been a helpful thing to come out of a recession."

OBAMA:  Well, first of all, he's right.  Normally you don't raise taxes in a recession, which is why we haven't.  We don't have a --

TODD:  But you might -- you might for the highest percent of the wealthy.

OBAMA:  We have not proposed a tax hike for the wealthy that would take effect in the middle of a recession.  Even the proposals that have come out of Congress which, by the way, were different from the proposals I put forward, still wouldn't kick in until after the recession was over.  The last thing you want to do is to raise taxes in the middle of a recession because that would just suck up -- take more demand out of the economy and put businesses in a further hole.

RUSH:  Okay, two years ago, basically August 5th of 2009, you just don't raise taxes during a recession, it would just suck up money out of the economy and put businesses in a further hole.  Two years later, what's he propose?  Sucking more demand out of the economy -- i.e., money -- and putting businesses in a further hole. (interruption) Who cares why?  Yeah, I know it's to shore up his base.  Well, what sense does that make and what does it say about his base?  They're a bunch of crazed, anti-American lunatics and that's who he's gotta speak to, that's who he's gotta shore up.  My God, I'll tell you, I'd be depressed, too, if my job was to make Michael Moore and Robert Reich happy every day.  I don't know if it's possible. 

Mike in San Diego, California, welcome to the EIB Network.  Hello.

CALLER:  Yes, sir, very honored to be on your program.

RUSH:  Thank you very much, sir.

CALLER:  Listen, I've been a Republican since I enlisted in the early seventies in the military. I'm actually still in the military, the Reservists, mobilized several years during the latest conflict.  And the one thing that I have agreed with our commander-in-chief on and I know this is gonna sound like I'm a RINO to you, is raising taxes on the rich.  And let me tell you why.  And, by the way, let me preface it one more time, I agree with you that none of our tax money should go for illegal aliens or somebody's elective abortion or somebody's opinion of which way the climate may be going, all of that is not where our tax money should be going, but it should be going to the military. It should be going for police, fire, everything that protects our life and safety, and right now those exact areas are being underfunded.  You're talking about actually getting rid of pensions not just for police officers and firefighters, but for the military.

RUSH:  Well, but that's all local.  Firefighters and police have nothing to do with federal taxes.

CALLER:  Well, the military does and the Joint Chiefs of Staff are looking at getting rid of pensions for the military.  And it's not just that.  They're actually cutting back on things that protect us.

RUSH:  Here's the problem, though.  I mean you could take everything above $10 million in income, just confiscate it, and you couldn't pay for what you want paid for.

CALLER:  Well, not this year, and I agree with you, I mean I wouldn't want to do anything that would actually hurt a rich person.  I think rich people -- I mean, you know, Rush, you're probably a rich person yourself, the rich are richer than they've ever been, they've got more money than they ever had, if we increase our taxes to a reasonable tax rate like it was before George Bush, then over time, you know, that revenue would have to make a difference.

RUSH:  You know, here's the problem.  You're not talking about enough money to accomplish what you want to accomplish.  The only way to accomplish what you want to accomplish is the federal government has got to stop spending.

CALLER:  Yes.

RUSH:  The rich are not richer than they've ever been.  This country, the percentage of millionaires in this country is down 39% the last two years.  The rich are not richer.  There's so many myths that are associated with this. 

CALLER:  Yeah, I (unintelligible) because different articles say the complete opposite of that.  But in any case --

RUSH:  Well, who's writing them?

CALLER:  Probably liberal idiots, but the 35% tax bracket, Rush, you gotta admit is radically lower than it's been, like after World War II, they raised it to 91% on the rich all the way up until John F. Kennedy lowered it and Reagan lowered it back to 50%.

RUSH:  Yeah, but nobody ever paid that, nobody ever paid that.  When Reagan took office and, by the way, John Kennedy had to cut those rates --

CALLER:  Right.

RUSH:  -- in order to spur economic growth and they got the top marginal rate down to 70% --

CALLER:  Yes.

RUSH:  -- and that's what it was when Reagan took office in 1981, the top marginal rate in this country was 70%.

CALLER:  I know.  So why can't we raise it back up to what Reagan lowered it to --

RUSH:  Well, because when Reagan cut the top rate from 70% to 28%, revenue to the Treasury doubled, went from $500 billion to almost a trillion dollars by cutting rates.  The point, we don't need more taxes on anybody.  There isn't enough revenue in the, quote, unquote, rich to fund pensions for military people or firemen or cops which is a local and state issue anyway.  The feds have no business meddling with cops and firemen.  They have nothing to do with it, it's a local issue in most places and some cases a state issue, but that's where it ends.  What needs to happen here is more jobs.  More jobs equals more taxpayers. 

Now, the way you get to more jobs is to free up capital, i.e., money in the private sector and have less of it going to government.  Government doesn't create jobs.  There can't be a pension for anybody if there's no revenue to support it, and the government can only get revenue by taking it from somebody, or printing it, or borrowing it, and none of the three produce a single job that creates or produces anything.  So what has to happen here, the government has got to stop spending what it's spending.  You want money spent and allocated to pensions, then it's gotta be stopped, the spending has to be redirected from something else.  There isn't the revenue in the private sector to tax and make this spending possible.  We're already $16 trillion in debt.  There's not enough revenue to get us out of debt by raising taxes on anybody. 

This is purely an irresponsible spending problem, and the way to get started on reversing this is to reduce whatever pressure there is on job creation, reduce pressure on job advancement.  The government needs to get out of the way.  People that know how to create jobs must be freed and allowed to do so.  Get the regulations off their backs, get the government out of their lives, and let them go to town.  Then when you have more people working by definition you're gonna have more people paying taxes, and that equals more revenue to the government.  If that's what you're interested in.  Raising taxes has never increased revenue in a way that is sustainable and lasting and productive.  Money only comes from one place.  I'm talking about real money, not printed or borrowed or what have you, but money that results from productivity, creation of jobs, creation of products, performance of services or what have you. 

It happens in the private sector.  That is being shrunk.  And Obama just said it in the sound bite that I just played.  He knows.  You suck capital out of the private sector, and you're sucking lifeblood out of the private sector.  There isn't the money raising taxes on the rich.  It's not there.  And if you do it, you're just gonna slow down the economy even further. (interruption)  When you say "only one solution," the one thing that is not tried and the one thing that we have not tried in all my life is to reduce the size of the government.  Reagan tried and gave it his best shot.  Budgets don't get smaller every year, they get bigger.  Federal budget does nothing but expand.  It's bloated.  We all know why.  Democrats want that to be the case.  They want more and more people dependent on the federal government for their daily whatever so they keep voting Democrat. 

March 2009, Reuters: "Number US Millionaires Falls by 25%." Churchill, a quote: "I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle." You. Can't. Do. It. Every bucket has a handle. You stand in the bucket then try to lift yourself by lifting up the handle and yourself. It's not possible. I don't think you're a RINO. I think you've been corrupted by two things: Your passionate devotion to the military and all the years of your life that you've been subjected to the disinformation campaign and propaganda of the left-wing media; and those are the two things that are probably animating your belief system in this.

But the math doesn't work, the numbers aren't there, and it ought to be clear as day for everybody to see. We're losing jobs. We're losing revenue. Spending is sky-high. We can't afford these obligations that we've assumed. This whole pension thing is a big bugaboo with me anyway. The military I have a little bit more patience and understanding for that, but still this notion that you're gonna be paid for life for something you quit doing 30 years ago? I just never was raised that way. That just still is a foreign concept to me because somebody has to pay that, and under what obligation? Where is it written? Now, for the military, I can make a far more convincing case.

The military, I can see where there's a justification for that, give an what these people put on the line, but I don't know why citizens ought to be paying the pensions of union members and teachers and firemen, all that stuff when they don't have these things themselves. I don't have a freaking pension! I've had to create my own! Now, where is it written that other Americans should have one paid for by their neighbors? "But, Rush! But, Rush! Those deals were made. Those deals have to be honored." What if the money isn't there? "Well, I don't know." When the money isn't there for me, I just do without whatever it is I need or want.

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