RUSH: Now, Obama’s protecting those who already have their wealth. Obama is at war with those who have not yet acquired their wealth but would like an opportunity to do so. Those are the people that Obama’s cheering minions at this pep rally were opposed to. People who wish to acquire wealth.
Now, folks, it is very important to understand this. There are two kinds of wealth in this country. I’ve talked about it before, but I’ve never used these terms. I’m trying to use different terms here in a way of being more explanatory. Income wealth versus asset wealth. Asset wealth is that group of people who are already rich, already wealthy, and do not need income to stay wealthy. They are not seeing any tax increase to speak of. Five percent increase in capital gains, but that is it. In fact, several of the asset wealthy got carve-outs in this fiscal cliff deal.
The asset wealthy, Democrat donors, Democrat bundlers, Hollywood types, hedge fund types, Wall Street types, the very people that Obama is ginning up hatred for, are the very people exempted. And in their place are the income rich that people are being encouraged to resent, encouraged to hate. Obama is encouraging people to feel good when these rich people get stuck with higher taxes, except the real truly rich people in this country aren’t being stuck with higher taxes, the asset wealthy. I mentioned it in the first half hour, the carried interest loophole.
This is such an outrageous loophole that if you could get beneficiaries of it to be honest, they would tell you it’s unfair. They would tell you they can’t believe they’re getting away with it. Let’s say a young entrepreneur, say in Silicon Valley, starts up a big firm, and it goes gangbusters. He sells it for hundreds of millions of dollars. He has now become asset wealthy. He’s not income wealthy; he’s asset wealthy.
What does he do with this money?
Well, he invests it here and he invests it there. Maybe he starts a hedge fund, or maybe he starts a fund that will ask other people for their money that he will invest. So he takes other people’s money, he invests it, and if that money shows a gain… It’s a very complicated thing. Basically to understand carried interest, just think of it as income on assets that’s taxed at the capital gains rate instead of the income tax rate.
That’s who the asset wealthy are, and carried interest was not touched. And the reason carried interest wasn’t touched is because of who it is that benefits from it. By the way, I’m not on a warpath here against these people. I don’t resent anybody. I want that to be understood. I don’t want to use government to get even with anybody except people who break the law. I don’t want government getting involved with anything like this.
So don’t confuse things here. I’m just telling you the lay of the land. The people in the asset-wealthy class comprise those who donate in great amounts to political campaigns, candidates, and politicians. And because of that, they are untouched when it comes to new tax increases. The great illusion here is possible because the low-interest voter, the low-information voter doesn’t know asset wealth from income wealth.
He just knows that the rich are rich. He doesn’t like ’em, and it’s unfair, and they’ve become rich in dishonesty ways. That’s what the low-information think. He thinks, “Any, any tax, any government policy that takes money back from them? Damn well go ahead and do it!” They don’t know asset wealth from income wealth. Which is the great benefit Obama has, because the truly wealthy in this country aren’t being touched.
Warren Buffett’s tax rate is still lower than his secretary’s. Even with the vaunted Buffett Rule, even with all of that PR and with Buffett out advocating for tax hikes. Have you noticed that all these super-asset wealthy people are in favor of raising your taxes? Do you ever hear them say that their taxes ought to go up? They might say, “I’m not paying enough in taxes.”
But they never say, “The carried interest loophole needs to be adjusted or gotten rid of.” They say, “We need to raise the income tax.” They don’t pay income taxes! So they, in effect, are helping the effort to raise taxes on the income rich, which is in fact an assault on individuals, particularly younger people who want to acquire wealth. The income tax is designed to prevent the acquisition of wealth.
RUSH: Now, Obama says he’s not through raising taxes on the rich. There’s still more to be done. The rich still aren’t paying their fair share. It could well be that he’s gonna go after these hedge fund guys and others who benefit from the carried interest loophole. There are a lot of them. Not in relation to the population, but there still are a lot of them. Every hedge fund’s income is via carried interest.
It isn’t called income, and it’s currently taxed at 15%. Did cap gains go to 20%? I’m not sure. I’m still confused. But I think that’s what it was headed for, 20%, which is half of the top income tax rate. But Obama, at the end of the day, has no loyalty to anybody but himself, and he’s done with donors now. I mean, they’ve done for him what they can do. He’s not running for president again. (interruption)
I know, I know, but I’m not going there. He’s not running for president, so he’s done with donors. He doesn’t need bundlers, he doesn’t need donors, he doesn’t care about Democrat Party. He has no loyalty to anybody but himself. So it could be that they’re next. We’ll find out when it happens, because they will start squealing like you can’t believe, even though many of them think they’re getting away with theoretical murder.