RUSH: Mitt Romney, we told you yesterday, Romney had a new tax plan. Well, he told Kudlow. Somebody from the Romney camp leaked it to Kudlow, Kudlow said, "Hey, I just heard from the Romney camp. They like me; they don't like you. And they told me something that nobody else knows, and that is that Romney's gonna have a new tax plan tomorrow," meaning today. "And it's gonna have a lot of supply-side stuff." And Romney has announced it in Chandler, Arizona, at a campaign event.
ROMNEY: I'm going to lower rates across the board for all Americans by 20%. (cheers) All right? And in order to limit any impact on the deficit, because I don't want to add to the deficit, and also in order to make sure that we continue to have progressivity as we've had in the past in our code, I'm going to limit the deductions and exemptions particularly for high income folks so that we make sure that the top 1% keeps paying the current share they're paying or more
RUSH: Oh, oh, oh-ho-ho. There's a story in the UK Telegraph today. They raised taxes to 50% in the UK. Their revenue collected has plummeted. It's as predictable as the sun coming up. They raised income tax rates up to 50%, and their revenue coming in is down precipitously. This comment about, "Well, yeah, I'm gonna cut taxes, but I don't want to add to the deficit." That's not supply-side. He's gonna cut everybody's taxes 20% but he's not gonna permit deductions, gonna limit deductions and exemptions for high income folks to make sure that top 1% keeps paying the current share. It's not across-the-board, but more than that, that's incorporating liberal speak. "I'm gonna make sure the top 1%..." that's accepting the premise of the 1% versus the 99%, which is an Obama premise.
RUSH: "Obama Offers to Cut Corporate Tax Rate to 28%." What a coincidence. The White House proposes this right after Romney's tax plan announcement in Detroit, which he made in Arizona today. He's gonna have a 20% across-the-board income tax rate cut. The top rate under Romney would go to 28%. The bottom rate would be 10%. There would be six rates, 28 would be the high, but for the top 1%, Romney will not permit deductions or other write-offs. So they will effectively see their tax rate remain at 35. Under Romney there will not be a significant reduction. I think that's a bit of a mistake because it accepts this 1%, 99% premise that Obama has put forth in his class envy scheme, but apparently Romney's advisers think that there is ground to be gained with the 99% by portraying himself as being on their side and against the 1% in this climate, with Occupy out there.
Romney, one of the things that he does -- and he's right about this, he's very sensitive to it -- he does want to avoid at all costs the allegation sticking that he's a rich guy favoring the rich. And that's why the 1% are exempted from his across-the-board tax cut. Well, I don't know if he'll tell us it's a severely conservative tax plan or not, but he's very sensitive to being called a rich guy. But yet at the same time at the debates he's out there proudly describing himself as a great achiever in life, and he's not gonna apologize for his success. But clearly his advisers have decided that it makes sense politically, in terms of winning the White House and the nomination, to let it be known that the 1% are not gonna get away with anything even under a Romney regime.
RUSH: I know some of you are gonna get mad at me for this, but I just can't gloss over this because to others in the audience, I would be accused of failing to... ah, not do my duty, but to say what everybody knows here. If Mitt Romney has a great proposal in his tax plan, across-the-board 20% cut, which takes the top rate to 28% but he's gonna exempt the top 1%... let's just listen to him explain this, and then I'd be remiss if I didn't have some analysis about it.
ROMNEY: I'm going to lower rates across-the-board for all Americans by 20%. (cheers) All right? And in order to limit any impact on the deficit, because I don't want to add to the deficit --
RUSH: Stop the tape. Whoa. Stop the tape. Back it up to that point, if you can. I'm sorry. Oh, gee, how do I say this? My gosh. Why do I have to be the one to do this? Why can't somebody else do this? You don't add to the deficit by cutting taxes. You don't add to the deficit by cutting tax rates. What's happening here is that Governor Romney is announcing an across-the-board tax cut, which is good, and his top rate ends up being 28%. But then falls into a trap, I'm sure it's a consultant that's come up with this, says, "Look, but you've got to make sure --" I know what they're doing. What they're doing is assuming that most members of their audience, i.e., voters, the American people, however you want to describe them, think that a tax cut equals less money to Washington.
So rather than teach and explain how that isn't the case, you go ahead and accept what they think and -- I don't want to use the word "pander," but why not take the occasion to teach? You're in the middle of a primary fight, you're trying to secure the nomination with a conservative base, and here's a great opportunity to do it. "How would you do it, Mr. Limbaugh? You say you know everything." Fine. Okay, in this context, cut taxes across the board, and the top rate's gonna get cut and it's gonna be get cut to 28%. I would rather this be a flat tax, we're gonna get there someday, but this is the best we can do right now, and any of you who think that the rich are getting a tax cut here, they're gonna end up paying more revenue. More revenue is gonna be collected by the government and I go back and I cite the statistics from the eighties when Reagan lowered the top rate from 70 to 28 and revenue doubled.
Take the opportunity to teach it. But I'm sure the advice was, don't get caught in defending the rich, because there's no way to win that. That's what a consultant would believe. No way to defend it, no way to win that, so just go out and make sure that the voters know that the rich are not getting a cut, gonna pay their fair share, the top 1% aren't getting a break here. Well, what does that result in? The result of this is what I'm talking about. Sure, it's accepting the premise. That's what bugs me. It's accepting the 99 versus 1% premise that Obama's setting up to run class warfare. But there are hundreds of thousands of small businesses who are not going to get tax relief because of this, because a lot of these subchapter S small businesses file a personal tax return, Form 1040. And some of them, because of the overall size of the business, in terms of gross receipts, are gonna be lumped into the 1% so they're not going to get the benefit of the tax cut here. They're gonna get the rate reduction down to 28%, but their ability to write off and deduct, which everybody else is going to maintain, will not exist. So you're gonna have some small businesses that won't get tax relief, and who, compared to others, will suffer.
Now, yesterday Kudlow told us that Romney was gonna announce pro-growth, supply-side proposal. But he didn't say that it was gonna contain this 99 versus 1% stuff. Folks, you have to understand, I like Mitt Romney. He's come by here over the course of many years. I've sat with him and chatted many times since the 2008 campaign. Snerdley is yelling at me, "It's aimed at the moderates!" The tax plan really isn't aimed at moderates. The way he's describing it is aimed at moderates. And I guess that's a good way of describing why I think it could be so much more. Let's just put it that way. This tax plan that he announced today has the potential to be really, really great, something that his campaign needs. And it may work for what he wants to accomplish here. This 99, 1%, exists for a reason, class warfare works for certain voters. But we don't do it.
RUSH: I'm being inundated with Romney supporters saying, "Hey, wait a minute. This is nothing different than what Reagan did. Reagan did exactly the same thing." No, Reagan didn't do exactly the same thing. In the first place, when Reagan took office, the top rate was 70%. The first stage got him down to 50%, then in 1986 came the famous tax rate reduction down to 28%. There was a bubble in there that left some people at 31%. But what happened when the rate got down to 28, the tradeoff was that everybody lost their deductions.
Remember, Snerdley, all the calls we had from people who were livid, middle-class people, 99%-ers in today's lingo, upset that they had lost the ability to deduct their credit card interest. Romney's plan reduces rates for everybody, no question about that, but he limits deductions for the top 1%. But my problem, as I just told Snerdley, is the way it was announced and the acceptance of the 99 and 1% premise, which is an Obama premise. It's a liberal Democrat premise. Many of the deductions that were eliminated in 1986 have not come back. There aren't that many deductions to limit anymore anyway. The 1% already have much greater limits on what they can deduct than existed even back in 1986. They've continued. And everybody knew this was gonna happen.
The great fear was with reducing the rate, top rate 28%, get rid of the deductions, you get a Democrat back in the office and, lo and behold, what's gonna happen the rates are gonna come back up and what happened, Bill Clinton gets elected '92 and rates went back up and with retroactivity and the deductions were gone, and so we're faced with having to get the rates back down again. And George W. Bush did, the famous Bush tax cuts. And they got the 39.6 down to 35 or 36, whatever it is, where we are now. They're gonna sunset, rates are gonna go back to 39.6, then the Obamacare tax increase is gonna kick in and whatever other tax increases on the 1% Obama can engineer.
So Romney's plan is good in that sense. He cuts rates across-the-board for everybody. I'm just a stickler. I'm just a stickler for language, words, and how the whole thing ends up being sold. It's accepting a premise that somehow certain Americans have to be punished. And if we don't say that certain Americans are gonna be punished, then somehow we're not gonna be able to win elections. It's an opportunity to teach, that's all. I don't know, folks. It's just difficult to say. I don't dislike any of these people at all. I like them. They're all fine people. I just see so much potential. I feel like a parent. I see so much potential in my kids and I've done my best to teach 'em. Now I know how my dad felt when I told him (raspberry) college.
RUSH: Look, I know, before I even check an e-mail, they're probably trying to get on the phones now, mad at me for ripping Romney's plan. You have to understand something. I just want these guys to be the best they can be. It's nothing more than that. I want all of them to be the best they can be. I cringe when any one of them does something that I think is mistaken or could be done better. Whether it was Perry or Michele Bachmann or Palin or whoever it is, Newt. When you know they can be better, that's what I want.
We're talking about one of these people is gonna be our nominee. One of these people is going to be out campaigning for votes. I want them to be the best they can be at this. So the criticism is entirely constructive. I'm not trying to kill anybody's candidacy here, and I don't want any of you Romney people or Santorum people or Newt people to think that.
RUSH: Now, the Reagan tax cuts, 'cause the Romney people are still hitting me on this, and I understand that, but when Reagan initiated the great tax cuts that his administration was famous for, he indexed rates to offset the impact of inflation. He increased the tax exemption on estates and gifts. That's why the exemption on gifts is as high as it is. He established a 10% investment tax credit. There were a lot of other improvements in taxes for business, capital investment, R&D. It was pretty comprehensive. And it was, in its context, I mean given the tax code in 1981 when he assumed office, I mean this was practically rewriting it, what he did.