RUSH: Here is Clarence in Philadelphia. Hey, Clarence, great to have you on the EIB Network. Hello.
CALLER: Rush, what do you think about Trump coming out for taxing the rich?
RUSH: Clarence, can I thank you for something? I think you are the fastest-to-the subject caller I have had on this program in I can’t tell you how many years. “Rush, what do you think…?” Not, “Rush, how are you?” Not Rush this, not Rush that. “Rush, what do you think about Trump…?” I just… That’s great. You got in, you got it, and got out.
CALLER: Well, what do you think of it?
RUSH: What’s that?
CALLER: What do you think of it?
RUSH: You think I’m trying to delay you. I’m not. I’m actually complimenting you.
CALLER: He’s also for single-payer insurance —
CALLER: — run by the government like Medicare.
CALLER: He’s for that, too.
CALLER: I guess that puts him on your crap list.
RUSH: Uh, puts him on my…?
CALLER: That puts him on your crap list, doesn’t it?
RUSH: Uh, it puts —
CALLER: Does that put him on your crap list, Rush?
RUSH: No, no. No, no, no. We call it The Excrement List.
CALLER: Hey, Rush —
RUSH: But he’s not —
CALLER: Hey, Rush —
RUSH: Clarence, what…? Clarence, wait just a minute.
RUSH: Look at what’s happening here. I try to be nice to the guy and he’s being contentious with me for no reason whatsoever. Crap this; Trump this. Clarence, you don’t have to filibuster. I started off compliment —
CALLER: (filibustering) — Hillary!
RUSH: I’m gonna answer the question.
CALLER: — bags of money.
RUSH: Clarence, do you want to have a conversation or do you just want to do what you’re doing here?
CALLER: Rush, are you there?
CALLER: Oh, Rush!
RUSH: Clarence, first thing: Are you really serious about this, or are you just trying to be irritating?
CALLER: (muffled fumbling)
RUSH:: Clarence, are you there?
CALLER: (echo of the show in the background)
RUSH: He’s listening to the radio now, trying to… (interruption) I know, but he’s trying to hear himself on the radio now, and our two-minute delay is… (laughing) Okay, thanks, Clarence very much. Here’s the answer to the question. This is the reason I took his call. Clarence wants to know what I think of Trump raising taxes on the rich. Here’s what Trump wants to do. The primary tax increase on the rich that I’ve heard him talk about is on people he considers to be “hedge fund bandits.”
What Trump is talking about is called “carried interest,” and carried interest is taxed at catalogs rates rather than earned income rates. So whereas the top marginal rate now is 39.6%, these hedge fund guys who Trump calls bandits — who are a hundred times over millionaires, some of them billionaires — pay taxes as used to be 16%, and then 19% and I think they’re up at 25 or 26%, and Obama wants them at 39%.
But he hasn’t gotten there yet, and when it was pointed out to Obama (just as a little aside here), “Mr. President, we’re getting more money from the capital gains rate of 16% than we ever dreamed we’d get. That low rate is just causing all kinds of activity. People are moving, they’re selling stocks, they’re reporting the sales and reporting their income. They’re not trying to shelter it. We’re getting more money flowing in than ever,” Obama said, “I don’t care about that! I care about the fundamental fairness.”
“What do you mean, fundamental fairness?”
“Well, it’s not fair that they should only be paying 16%. They ought to be paying 39% like everybody else is.”
“Well, they are on their personal income.”
“Yeah, but on their hedge fund income they’re not.”
So it didn’t matter. If you think that the Democrats are for the tax code to generate revenue, that’s not what they care about with the tax code. Tax code to them is used to punish success and achievement. The tax code to the Democrat Party is social architecture. The last thing they care about is whether or not it raises any revenue. I mean, look at Obama. He’s added six or eight trillion dollars to the national debt.
He doesn’t care about revenue coming in, and very few Democrats do. The income tax code, the entire tax code… Look at Lois Lerner and the IRS and the ongoing scandal there of not to grant tax-exempt status to Tea Party groups so that they could not raise money. It’s a scandal that’s gone… Well, it hasn’t been punished. It’s been reported, but the Regime got away with it like they’ve gotten away with practically every other scandal.
So Trump is coming in and he wants to end what’s called “carried interest,” and he thinks that these rich hedge fund people ought to be paying the same rate as the top marginal rate that people that earn ordinary income are paying. And he has also… I don’t know how specific he’s gotten, but I think he has also included other really, really, really rich people who ought to be required to pay a higher rate. Now, I don’t know what his cutoff is.
I think I heard people that are incomes of $100 million. We’re talking about one-tenth of one-tenth of the top 1% here. But the thing about it is that the Republican Party never is in favor of tax increases on the rich. (Have I been saying “cuts”?) Tax increases is what Trump is talking about. The Republican Party never, even now… I mean, that’s the one thing amazingly they have not given away. They are steadfastly opposed to tax increases on the rich, anybody, anywhere, any time. Income tax.
They go along with other fees and so forth being raised along the way. But when it comes to the income tax and the marginal rates on income tax, they have never come out in favor of raising it on anybody. Trump is. So Clarence here thinks that he’s gonna get me in a trap ’cause he thinks I’m a Trumpster and that he can get me on hypocrisy, ’cause he knows that I’ve always been opposed to tax increases on anybody.
But since he thinks I’m supporting Trump, that I’m gonna bite the bullet here and come out and support Trump’s tax increases on hedge funders. The desire to raise taxes on the hedge funds, get rid of carried interest, is not an idea that originates with Trump. It’s been floating out there. You know, I’ll tell you the what really point to learn about this. I first heard about the… I’m not a hedge fund guy, so carried interest was something I had to learn about.
It’s a really screwball definition. It’s one of those things that you can’t possibly understand unless you’re in the business. You know, economists and money people have their own lexicon and they speak in that lexicon and it sounds like you don’t know what you’re talking about, therefore you really aren’t allowed to participate. A lot of industries do that. They come up with their own lexicon, their own language. It’s a way of identifying who’s in and who isn’t.
Carried interest is a term that basically is a convoluted way of computing what kind of taxation there should be on activity at hedge funds. It’s a way of shielding a lot of ordinary income from top marginal tax rates. And the first people I ever heard stand up and oppose it were Democrats, which made sense to me. I mean, hedge fund people, for the most part, are the uber-wealthy. And by the way, it’s a law written by Congress, written by Democrats, written by the Ways and Means Committee with all kinds of input from lobbyists and so forth. So this is not something that just magically happened because the hedge fund guys had all this power.
This was a law. It’s written in the tax code like any other aspect of the tax code is. And it’s made to order for the Democrats to oppose. I mean, it’s made to order for their whole argument that the rich are getting richer, the poor are getting poorer, and the rich are stealing from everybody else, and yet it’s not the Democrat Party attacking carried interest. Have you noticed that? The Democrat Party, whenever they talk about raising taxes, they always exempt the hedge fund people.
The reason is, folks, contrary to what every low-information voter thinks — hell, every union member thinks. Practically half the country thinks that the Democrat Party is devoted to the little guy, that the Democrat Party is defending the little guy and the Democrat Party is out there attacking CEOs and attacking corporations and attacking all these big behemoths and they’re gonna get even with ’em and they’re gonna take money away from ’em because they’ve been stealing from the poor and that’s how they’ve been getting rich, everybody thinks that’s what the Democrats do.
The Democrats are not making a move on carried interest and haven’t. They’re trying to protect the hedge fund guys because most of the hedge fund guys are big Democrats, a good percentage of them are, as are a lot of the Wall Street CEOs, as are a lot of media CEOs. They’re all liberal Democrats. The Democrat Party, contrary to what everybody thinks, is not circling the wagons and defending the little guy. The Democrat Party’s in bed with Wall Street. That’s why Bernie Sanders is not going to get the Democrat Party nomination no matter what because he’s serious about implementing policies that would punish those people financially.
The Democrat Party’s in bed. They have become the party of Wall Street. The Democrat Party has become the party of the rich, and they’ve done everything they can to shield it. It’s amazing to me that of all the talk about raising taxes on those people coming from a Republican, at least in the primaries, Trump, carried interest, that’s what he’s attacking. If I know Trump, he’ll have a codicil to his tax increase, and it will be an option not to pay it.