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Debunking Tax Cut Myths -- Again

BEGIN TRANSCRIPT

RUSH: Jim in Chicago, you're next. Great to have you on the EIB Network. Hello.

CALLER: Ah, Mr. Limbaugh, it is a pleasure to speak to you, sir. I've been listening to you since 1990. I was turned on to you by a guy in a shipping dock, and I've been a faithful listener ever since.

RUSH: Thank you very much. I appreciate that.

CALLER: Oh, no. Thank you for the education, sir. Hey, it drives me nuts when these liberals call your show and they say that we're not paying our fair share. I'm a truck driver. I do okay, okay? But my taxes have gone up. They take about $500 a week out of my check in taxes, okay? Now I pay for my insurance, too, and that's about $636 a month. Now, when these people call and they say that we have a deficit because we're not paying our taxes...? Our fair share?

You know, I swear to God, Rush, I want to choke these people, because I talk to my friends, and there are a lot of liberals here in Chicago. They're firemen and stuff, and I always tell 'em when they talk bad about rich people, "Have you ever gotten a check from a poor person?" You know, and it just drives me nuts. It's just... You know, I mean, we're struggling. My wife's laid off. I'm working my tail off as much as I can until the government regulates driving a truck.

RUSH: I'm curious. What do they say when you ask them if they've ever gotten a check -- or a job, is what you mean -- from a poor person? What do they say?

CALLER: They just laugh. "That's nothing." I tell 'em, "You gotta be out your mind, man. Rich people are the savior." I love rich people, man. They're the best. I swear to God, I love 'em. I walk in every day and shake my owner's hand, the owner of the trucking company I drive for. I shake his hand, 'cause if it wasn't for him, I couldn't put food on the table for my family. These people that tell me that the rich are destroying this place? It just drives me nuts.

RUSH: Wait a minute.

CALLER: I want to choke the life out of them.

RUSH: You're not sitting out there thinking that the rich guy has the money you used to have?

CALLER: No, not at all, because, hey, I coulda been rich if I went to college. But, you know, I got married at a young age, had kids, and we send our kids to private schools. We would not send them to these liberal, government-run education camps.

RUSH: (laughing)

CALLER: You know, we didn't have big cars. We didn't live beyond our means like the Joneses. You know, we just did what we had to do, we save a couple pennies here and there. We're saving right now 'cause our computer took a crap about three months ago, and we're saving our pennies and our dimes and our quarters to buy a new computer. I think about another two/three months of saving, I'll be able to go out and buy my family a new computer. You know, it just drives me nuts, man. I don't know what's going on in this country. The Republican Party, some of these guys, the way they talk, they make me sick.

RUSH: Well, the reason you're frustrated is there's no push-back. I mean, you have to sit there and listen to the Democrats get away with impugning the rich, blaming the rich for all the problems. Your firemen buddies agree. They never hear any alternative. Republicans are afraid to oppose anything like that. The rich are never gonna be defended. They're never gonna be spoken for. I mean, half the rich even criticize themselves. Warren Buffett, Bill Gates, you name it.

But they're all in there hoping they're number one on the Forbes list every year. They all have that private little competition. Anyway, Jim, don't change. Your values are solid, and your kids are gonna be great. You've made decisions with what you have that you thought were the best for your family and for your kids, based on a set of rules that you've always believed in, and I wouldn't change. I think you're solid. I'm glad you're out there, and I appreciate your call.

BREAK TRANSCRIPT

RUSH:  You know, this whole subject of taxes, this is one of those days where I'm worn out on it.  I have, for 25 years, told everybody the truth about taxes, lower taxes, high revenue, over and over and over again.  And I, frankly at times, I just get exhausted with it.  Sometimes it feels like it's pointless.  I'm gonna try one more time on this low tax business.  There's a reason that it's in the news.  There's a reason why we're getting calls from these wackos that the deficit and the national debt are so high because of taxes. 

You know what it can be traced to?  What got it all started, the recent incarnation of this was an AP story back in 2011 -- or was it Washington Post?  Washington Post story, AP, whatever, they both ran the story, February 2011.  AP reported that the federal tax rate was the lowest since the 1950s.  By one measure, it said, federal taxes lowest since the 1950s.  This was a purposeful, in conjunction with the regime story to support Obama's tax increases, and the intention was to tell the low-information crowd that Americans are paying the least in taxes than they ever have since the 1950s. 

The trick was, they were not talking about rates; they were talking about revenue generated.  And the reason why they could say that was half the country isn't paying income taxes anymore, and this was in the middle of a recession when more people were being laid off and not paying taxes, and when people were being downsized to part time and not paying as much.

So the federal take from income taxes was down.  But it was because of a rotten economy and tax law which exempts 47, 48% of Americans from paying any income tax.  But the AP and the Washington Post join forces to try to make it look like taxes were low because the tax rate, i.e., percentage, was the lowest it's been since the fifties, which was a crock.  At the time, the top marginal tax rate was either 35 or 36%.  It's now 39.6, but at the time they wrote the story the top marginal rate was 35%.  Now, under Ronaldus Magnus, the top marginal rate plummeted to 28%.  So tax rates have been lower than they are today, since the fifties.  Their whole story was a lie. 

But all it takes, one story in the AP, amplified by the Washington Post, shows up in all the blogs and all the social media, and it balloons, becomes a little snowball. It gets bigger and bigger and bigger, and the low-information crowd thinks the rich aren't paying their fair share, bammo, and that's why we got a national debt.  That's the record high, and that's why we got a deficit.  And that's how the latest incarnation of this bogus theory can be traced back, I think, to that. 

(interruption)

How can they ignore the Obama spending?  'Cause he's not doing it.  (laughing) Even Snerdley, who is as immersed in news and politics day to day as anybody I've ever known, just asked me how can people not factor Obama's spending?  He's not doing it.  He's opposed to it, Mr. Snerdley.  Obama is upset at the spending.  He's upset at the debt.  That's why Obamacare is gonna lower the deficit.  That's why everything he's been doing has been to lower the deficit and to shrink the national debt.  He's opposed to it.  He's not causing it to happen.  Bush did that with his "three" wars.  We have this national debt that this is the mess that Obama inherited.  He didn't do any of it. 

So you couple that with that story on the Washington Post, which is an AP story, February 2011, that the American people are paying their lowest taxes since the fifties.  None of it's true, no matter how you slice it, but they were looking at revenue collected, not the tax rate.  They were trying to make everybody believe that the tax rate that the rich were paying was the lowest it's been since the fifties and we've got this big debt, and that's why.  And the low-information crowd just ate it up.  That's why we get nitwits like this guy in Rochester called today essentially just repeating all of this.  Ronald Reagan took office in 1981, top marginal tax rate was 70%, folks.  Eight years later, Ronald Reagan leaves office.  Top marginal tax rate, 28%.  So in eight years, it went from 70% to 28%. 

Do you know what happened to revenue?  Almost doubled.  When Reagan took office, revenue generated by the tax code at 70% was $500 billion.  The amount of revenue collected after the rate plunge from 70 to 28% was about $968 billion, almost doubled, with the tax rate plunging, because it created more jobs and more taxpayers. And more taxpayers paying taxes equals higher tax revenue but lower tax rates is what caused it.  Now, this February 2011 story tries to turn that on its head, and it worked with the low-information crowd, as most every trick will work, by definition, with the low-information crowd, including the fact that Obama hasn't done anything in five years.  None of what's happened... well, he's against it all, he's opposed it all.

BREAK TRANSCRIPT

RUSH:  No, the AP never mentioned tax rates.  That's the key to it.  They just said by one measure, federal taxes lowest since 1950.  They knew the low-information crowd would assume rates and percentages, 'cause that's what Obama was talking about.  The rich weren't paying their fair share.

END TRANSCRIPT

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