This is a RUSH transcript from "The O'Reilly Factor," June 29, 2011. This copy may not be in its final form and may be updated.
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LAURA INGRAHAM, GUEST HOST: In the "Impact" segment tonight: Is President Obama trying to divide Americans according to their class? Here's what he had to say today.
(BEGIN VIDEO CLIP)
PRESIDENT OBAMA: I spent the last two years cutting taxes for ordinary Americans, and I want to extend those middle-class tax cuts. The tax cuts I am proposing we get rid of are tax breaks for millionaires and billionaires. Tax breaks for oil companies and hedge fund managers and corporate jet owners.
(END VIDEO CLIP)
INGRAHAM: There it is. My favorite new class of rich people, the corporate jet owners. And we were surprised to hear economist Ben Stein apparently agrees with Mr. Obama.
(BEGIN VIDEO CLIP)
BEN STEIN, ECONOMIST, ACTOR & AUTHOR: We've got to raise taxes. There's just no way around it. The deficit situation is so serious that while I wish we did not have to raise taxes, we just can't cut spending enough. I wish we could. We can't. We have to raise taxes. Mr. Obama is going to have to do it. I don't know if the Republicans in the House will go along with it. If they don't, there will be a genuine crisis, and I am frankly frightened about it. I'm extremely concerned about it.
(END VIDEO CLIP)
INGRAHAM: So is Mr. Stein in synch with the president? He joins us now from Los Angeles. And by the way, you should pick up his book, "The Little Book of Alternative Investments." Ben, it's great to see you. How are you?
STEIN: I'm great. Thank you very much, Laura. It's a very complicated book.
INGRAHAM: OK, so -- well, OK, excellent. Now, I'm not going to make a Clear Eyes joke, but how do you have clear eyes and actually make that comment about Obama? I'm not going there. But I will say that if -- if he confiscated the upper income earners, right, tax them at the highest rate -- this is Wall Street Journal; I'm sure you read this back in April. The millionaires and billionaires, as Obama points out, and you get, you tax them at really –- what you would call confiscatory rates. It yields at about $938 billion. That's what would come in the federal coffers.
STEIN: That's a lot of money.
INGRAHAM: In a $4 trillion budget, $4 trillion, $14 trillion plus in debt, that's a drop in a bucket. Don't we have a spending problem, not a -- not a revenue problem at this point?
STEIN: No, $900 and some billion dollars is not a drop in the bucket. It's a tremendous amount of money, and I am in favor of greatly raising the taxes on very wealthy people, millionaires and billionaires. I wouldn't raise the taxes on people making $250,000 a year.
Look, it's a basic arithmetic thing; it's not an ideological thing. We are spending an enormous amount of money that we're not covering with tax revenue; we're borrowing it. At some point we're going to have so much debt that there's going to be a crisis and there will have to be austerity measures here just as they were in Greece. A simpler way would be tax people who have a great deal of money, tax them more, let them help pay down the debt. Look, if a person is a millionaire or a billionaire…
INGRAHAM: Well, they are helping to pay down the debt.
STEIN: …who are making $20 million a year, he can afford a tax increase.
INGRAHAM: No that's -- well, first of all, it's their money. So I don't know who's to judge what they can afford or not, but what we do know is that they spent…
STEIN: Well it is -- with all due respect, everybody's -– no, with all due respect…
STEIN: It is -- of course it's their money, but the Congress has a right to tax it and the president has the right to sign that legislation.
INGRAHAM: Well, yes, and right and Ben –- Ben…
STEIN: Yes. Yes.
INGRAHAM: As you know, they pay the lion's share of the tax burden for the country already.
STEIN: But they're not paying enough.
INGRAHAM: So let's -- well, again, to listen to you, I mean, and Obama, I guess, because you seemed joined at the hip on this -- that these people are just like flitting around and they really care about the country, they're not creating jobs.
STEIN: That's not the point.
INGRAHAM: They are not spending. Ben – Ben, what -- but what we know about higher taxes, what we know about higher taxes right now is that they do not in any way address the real problem in this country which is entitlement reform, which this president has been MIA on. He's not produced a single plan to address the real spending that goes into the tens of trillions when you -- when you game it out 10 and 15 years. That's the real problem. It's not whether you hit up a gazillionaire another five percent on the taxes.
STEIN: We have to address entitlement reform but whether or not we're going to be able to make meaningful cuts in Social Security, it's highly debatable. Everyone knows that's the third rail of politics in America but we do know that if we tax rich people more, we will raise more money. Look, I live in a neighborhood…
INGRAHAM: What else happens?
STEIN: …everyone except -- everyone except me is rich and so do you and you know very well that if you raise their taxes, if you put a surcharge of 10 percent or 15 percent on their taxes they would still be rich. They would still be able to have families. They would still be able to send their children to…
INGRAHAM: What else will they do? Right, but what else – well…
STEIN: They won't do anything bad. They will just pay more taxes and we'll have a lower deficit.
INGRAHAM: No, no -- do you -- do you not agree that when you tax the rich you ultimately end up over time reducing much of the revenues that would come in for their spending that they make, their hiring and companies where they hire. I mean, a lot of this also is small business owners.
STEIN: No, I don't agree with that. I -- I don't agree with you, with all due respect.
INGRAHAM: Well -- that they spend less?
STEIN: You are a woman of -- well you're a woman of extraordinary intelligence but the data is very clear that we had higher rates of economic growth in the 40s, 50s, 60s and 70s when we had higher taxes. The era of very low Bush 43 taxes has correlated with a low period in productivity growth and a low period of economic growth. You cannot correlate low taxes with high productivity. It just can't be done.
INGRAHAM: One has nothing do to with the rest. Here's what…
STEIN: Yes it does.
INGRAHAM: Here is what -- here is what we do know.
INGRAHAM: Ben, Ben, shouting doesn't make your point anymore legitimate. In December…
STEIN: Yes it does. That's -- that's -- then that's the point. That's the point. Well, it doesn't make your point either.
INGRAHAM: I'm not shouting. I'm actually just trying to ask a question. In December, the president and the Democrats decided to extend the Bush tax cuts. They understood that during a failing economy, a weak economy, a weak recovery, you couldn't raise taxes. By all accounts, the economy is growing at a slower rate than it was even in quarters last year, at about two percent this next quarter, 1.9 percent last quarter. If it wasn't good to do in December, why is it good to do now?
STEIN: There is no data, my friend, correlating lower tax rates for the rich with higher economic growth. We had our maximum periods of economic growth in this country…
INGRAHAM: No, you have to cut spending too, right.
STEIN: …in the entire century, the 20th century when we had very high rates of taxes on the rich. I'm not saying that's a great idea and I don't look forward to higher rates of taxes on the rich. But you cannot say that higher rates on the rich are a bad thing in terms of economic growth. That's just -- the data just isn't there, Laura.
INGRAHAM: Well, Ben, Ben…
STEIN: I wish it were there. It's just not there.
INGRAHAM: Ben, do we have a spending problem? Do we have a spending problem? Is the spending a bigger problem than taxing the rich, yes or no?
STEIN: The spending is a huge problem. It depends how you calculate it.
INGRAHAM: It's a bigger problem.
STEIN: We're not going to be able to eliminate Social Security, we're not going to be able -- going to be able to eliminate Medicare. We've got to do both. We've got to cut spending and raise tax on the rich.
INGRAHAM: Well, $938 billion if The Wall Street Journal calculation is right.
STEIN: That's a lot of money.
INGRAHAM: Well, it's not when you game out over a number years. It's $938 -- $4 trillion budget. We've got to cut spending. Once they show good faith on cutting spending, Ben, I'll have you back, and maybe you'll convince me that you're right. Ben, I appreciate it. It was great seeing you, as always.
STEIN: Thank you very much.
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