RUSH: As to the fiscal cliff, folks, do you realize in all...? If you strip it all down, there is no common ground between the Republicans and the Democrats. There isn't one shred of common ground, not an acre. What do the Republicans want? The Republicans want to reform the entitlement system. Why? So that the government doesn't require as much money, so that the government does not take as much money out of the private sector.
They want to reform entitlements because we don't have the money for it. We're in debt. The Democrats want more money so that the entitlement system doesn't have to be reformed. They don't want any reform of the entitlement programs. The only reform they want is more money. They don't want any reduction in spending. They don't want any changes in the entitlement structure.
They want more money to maintain it and to grow it. The Republicans want to reform entitlements, which means stop spending. There is no common ground. There is no way to come to an agreement. The only thing that can happen is for one side to cave in. That's the only way there's gonna be an agreement. This is not one of those things where if one side gives and another side gives and we have common ground.
RUSH: So, to resume our discussion here on taxes, if you are among those who want to see taxes on the rich go up because there are a lot of rich Democrats who voted for Obama, you're gonna get your wish. California: 52%/53%, top marginal rate. Hawaii: Over 50%. New York: Over 50%. Now, I want to stress again that the kind of people that you want to punish are not gonna be punished. Warren Buffett.
Just to give you an example because his name was brought up three or four times at me since yesterday's program. Warren Buffett, I don't know what his annual income is. I know what his net worth is. But let's say he makes $2 billion a year. Pick a number. How much of that do you think is salary? I don't know, but I'm gonna guess it's $125,000. I'll guess that that's what he pays income tax on.
Every bit of the rest of it is either going to be investment income, capital gains income, clipping coupons, investment growth, you name it. But it's not gonna be income taxed at the new 39.6% rate, or 50% if he happened to live in one of these blue states. It's gonna be taxed at whatever the new capital gains rate goes up to. Depending on that, that could hit 35%. But that's still going to be less than what the new income tax rate is going to be.
But despite people like Buffett, there are still a lot of Democrats in these blue states that make $250,000 a year who are going to get creamed. And if that makes you feel better, then go ahead and feel good, because it's gonna happen. Obama is taxing his own people. Some people think it's because of that that he might be bluffing. But he's not bluffing.
I want to stress again, folks: There is no common ground in this fiscal cliff deal. There is no middle ground. There's nowhere to meet. There's nothing in common. This is like the Palestinians and the Israelis. There isn't any common ground. Just to go through it again very quickly: The Republicans are insistent that tax rates stay the same and that spending cuts take place in order to reduce the debt.
They want entitlement reform because we can't afford it anymore. So they want less money for entitlements because we reform them. The Democrats do not want entitlement reform. They do not want less money. The Democrats want more money to prop up -- not just to prop up, the Democrats want more money to grow -- the entitlement system. In that side-by-side comparison, there is no common ground.
So the only way this is going to be get solved is when one side gives up.
It's the only way.
I'm not trying to be defeatist. This has been realistic. There's no common ground here. There is no bipartisanship to be had. Isn't gonna happen. There is no compromise. None! There is only concession. That's all that can happen, and that's what will happen.
RUSH: Here's John, Indianapolis. Welcome to the EIB Network. Hello.
CALLER: Hello. Conservatarian dittos from Indianapolis.
RUSH: Thank you, sir, very, very much.
CALLER: (bad cell connection) It is time, in my belief -- or may be time -- for the Republicans to march down to the White House, grab and hold President Obama's hand, and jump off the fiscal cliff. They are being bullied, and if you're gonna get beat up in a bullying incident, at least get some punches in. The only punch they have is to go off the fiscal cliff. (garbled)
RUSH: Well, there's only one problem with that, and I'm not trying to be funny. I'm a naturally funny person, but I'm not trying to be funny. If anybody goes over the fiscal cliff, it isn't gonna be Obama. The Republicans, if they choose that route, are gonna go over it alone.
CALLER: But, Rush, they're going to get blamed regardless of what happens.
RUSH: That's my point. They're gonna get blamed regardless.
CALLER: Well, if they cave and give him everything he wants they're gonna be taunted for being toothless tigers. They'll lose people like me. I'm on the verge of leaving now.
RUSH: Right. So why do you want them to go over the cliff then?
CALLER: Because that's the only thing that will give them leverage in negotiations after January 1st. That's the only way they can get leverage. They don't have any now. In my opinion -- I may be dead wrong, but -- they have no leverage. He will be... If he ever comes... (garbled)
RUSH: What do you mean, they have no leverage? They have a majority of the votes in the House.
CALLER: In the House, yeah, but they can't affect any legislation. The only thing they can do is allow the fiscal cliff to happen. What happens in the fiscal cliff? We go back to the Clinton tax rates, right? That's one thing that happens. My argument is Obama wants to add to the Bush tax cuts 'cause the Bush tax cuts were very progressive. Nobody talk about it, but he wants to add progressivity to a very progressive tax code.
Remember how the left lied about how there were nothing but "tax cuts for the rich"? That was a lie. It was a very progressive tax system. I'm saying, let it happen and we will get some serious negotiations, but do not... We have no way of forcing his hand. He has a way of forcing ours if we have the gumption to just walk away. That's my point. I may be dead wrong. I put it out to you.
RUSH: Well, now, wait a minute. "Walking away" and "going over the cliff" are two different things.
CALLER: Well, I think if we walk away --
RUSH: What is it you want? You want 'em to walk away is what you want, right?
CALLER: I want 'em to walk away from negotiations, which means we do go over the cliff.
CALLER: Yeah, that's what I want.
RUSH: But what you want is what we all want. If we go over the cliff, you want it to be Obama driving the car. That's your whole point, right?
RUSH: If disaster is gonna happen, it ain't gonna be because we helped.
CALLER: Well, right. If it goes over the cliff... Look, he signed the legislation, right? I mean he's going over the cliff, too.
RUSH: The legislation's signed.
CALLER: Right. Yeah. That's my point.
RUSH: It was legislation that Obama and Boehner have already agreed to.
RUSH: Yeah. Yeah. No, I get your point. But they're not gonna have any leverage. Even if they did, they don't know what to do with it.
RUSH: Dave, Salem, Oregon, you're next. Great to have you, sir. Hello.
CALLER: Hello, Rush. Thank you from the great left state of Oregon. I'm one of the few conservatives left out here. I just have a observation going back to one of your previous callers. Oh, and one other thing, Rush, I really consider it an honor to be on the air to be talking to you.
RUSH: I appreciate that. Thank you very much.
CALLER: One of the things that the college professor that was speaking earlier brought to mind, the thought that Obama in his books has always proclaimed himself as being anti-colonialist, and I think most people know that's probably why the British got the statue of Churchill back. But here it is, I'm looking at what he's doing to our country, and he is just turning us into nothing more than a colony state as we stand right now.
RUSH: Of who? Who's colonizing us?
CALLER: Well, the reason why people left England was to avoid the colony and move here to have religious freedom and to --
RUSH: Oh, I see what you mean.
CALLER: -- to break away from England. And here we are, we went through the taxation period, and that's what triggered the actual break from England, and here we are, we're being taxed more now --
RUSH: Well, the left has been working on this for a hundred years and we just happen to be alive at the moment they have apparently reversed course.