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This is a RUSH transcript from "The O'Reilly Factor," August 15, 2011. This copy may not be in its final form and may be updated.
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LAURA INGRAHAM, GUEST HOST: In the "Personal Story" segment tonight: Stop coddling the super rich. That's what billionaire investor Warren Buffett said in his New York Times op-ed today. America's third richest man, worth about $50 billion, said he only paid about $7 million in taxes last year. Buffet's buddy President Obama mentioned this during his bus tour today in Minnesota.
(BEGIN VIDEO CLIP)
PRESIDENT OBAMA: He pointed out that he pays a lower tax rate than anybody in his office, including the secretary. He figured out that his tax bill, he paid about 17 percent. And the reason is because most of his wealth comes from capital gains. You don't get those tax breaks. You are paying more than that. And now I may be wrong, but I think you are a little less wealthy than Warren Buffett. That's just a guess.
(END VIDEO CLIP)
INGRAHAM: Joining us now from L.A. is economist Ben Stein. Ben, it's great to see you, as always. So, Ben, can...
BEN STEIN, ECONOMIST: Always a pleasure.
INGRAHAM: …can Buffett just cut the Treasury a bigger check on April 15 if he wants to? I think the answer to that is yes. So why doesn't he just get it over with and start giving more of his billions to the federal government to solve all of our problems for us?
STEIN: Well, that's kind of a superficial question from a very brilliant woman.
INGRAHAM: No, it's actually a real -- that's a condescending answer. It's a real question. Why won't he give more money to the federal government?
STEIN: People pay taxes that are required of them by the law. That's the standard way people pay taxes, and he gives an enormous amount to charity in any event. But, look.
INGRAHAM: The government is not a charity, is it?
STEIN: No, no. But it's similar to a charity at this point. It's a way of transferring money from well-to-do people to less well-to-do people. By the way, something Mr. Obama said was kind of silly himself, which was looking out at the audience saying most of you pay more than that. Well, actually about 50 percent of Americans don't pay any taxes.
INGRAHAM: Pay nothing.
STEIN: So that's a little bit wrong, too. But anyway, we have a situation where very rich people are paying a lot less taxes, less in taxes than they were under Ronald Reagan. I don't think Ronald Reagan was considered an aggressive tax raiser. Why can't very rich people pay the same marginal rate that they did under Ronald Reagan? I mean, we need money desperately in the federal government. The rich people have got it. Why can't we go back to the Reagan rates?
INGRAHAM: Why not tax them at 90 percent then? I mean, why -- here's...
STEIN: It's fine with me.
INGRAHAM: Ben, you've lost your mind on this. I don't get it.
STEIN: I'm a lot older than you, Laura. So I can remember in the '50s when the marginal rate was close to 90 percent and, you know something? We were a very prosperous country with very rapid rates of economic growth then. It doesn't affect…
INGRAHAM: So that's our pathway to economic success. Let's just...
STEIN: No. No. No. Not at all.
INGRAHAM: Well, I'm going to say one thing to respond -- you will have plenty of time. Just one point. There actually is a provision in the tax code to pay more money to the federal government if you wish. That was actually a serious question. It wasn't a frivolous one, No. 1. And No. 2, you make the point that, well, it's good to -- rich have money, why not give it to the government? OK, let's accept the premise of your thought there. That assumes then that that extra money, that extra cash will go toward deficit reduction and that would be good for everyone. But there's no indication, especially when Democrats are in control, that that extra money is going to go to anything except extra spending because they have shown themselves entirely capable of spending a lot of money all at once. So would you not agree, Ben, even in your evolving days of your, you know, of your, not senior years but your middle-aged years…
STEIN: No, my senior years.
INGRAHAM: …wouldn't you agree that that money is not going to go toward deficit reduction, it's just going to go to more liberal spending?
STEIN: I would say that this is a problem for both Republicans and Democrats. If you look at the chart of federal spending under Mr. Bush, it's very, very steeply upwards…
INGRAHAM: Well, I criticized that. I'm with you on that. You are right about that but now the Republicans are getting serious. They are trying to get serious about spending cuts. We can be critical of them but they are trying.
STEIN: They say they are. They ran up the deficit something incredibly fierce under Mr. Bush, whom I love. I consider him a great guy, but they ran up the deficit. Then they said whoops, now we want a balanced budget amendment. Look, I agree, totally agree there should be measures in place to make sure that government spending is controlled. And I am in total agreement with the idea that the hardworking people of America should not be taxed to death to support bums and ne'er-do-wells. That being said, people who are billionaires, who have incomes of $10 million a year, they can easily afford to pay more taxes. Absolutely lock in place provisions that require cutting government spending, but let's tax the rich more. They just don't pay enough in tax.
INGRAHAM: The numbers though don't really add up to all that much really, right? Even if you doubled the 21 percent rate…
STEIN: Well, it depends.
INGRAHAM: No, but if you doubled that rate that Buffett cited in his piece today, the one that Obama referenced, if you double it to say 40 percent, I think the amount ends up being in about $40 billion. And our deficit is about $1.6 trillion just for the current budget year. So it's some money, but even if it went to deficit reduction, which we know it's not going to, it's kind of -- it's just a drop in the bucket. The math doesn't add up.
STEIN: But we know if we kept the taxes at the level that they were under President Clinton, there -- we would now not be running a deficit, except for the problem of the wars.
INGRAHAM: We'd have fewer jobs.
STEIN: Well, we don't know -- see, that's the problem, Laura. We don't know that's true. There is no clear data that shows that higher taxes correlate with fewer jobs. There is just no data. We have the lowest unemployment we have ever had in World War II when we had very high taxes.
INGRAHAM: Well, there was also a lot of other things going on there. We had a huge manufacturing sector and the Cold War raging.
STEIN: There's always a lot of -- absolutely.
INGRAHAM: Ben, we want you to move back to the East Coast because I think you've been out on the left coast too long. Come back. We want you to come back.
STEIN: I have a home right near you.
INGRAHAM: OK. All right. We're ending it right there. Ben, great to see you, as always.
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