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Will Obama Really 'Spread the Wealth'?

This is a rush transcript from "Your World With Neil Cavuto," November 4, 2008. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Now that Barack Obama is in, will spreading the wealth be next? Senator Bernie Sanders hopes so. He is one of two independents in the United States Senate.

Senator, you're an important player right now. How are you going to use your added stature? Because obviously Democrats clearly — not that they have any concern of losing you in the fold, but they want to keep you happy, right?

SEN. BERNIE SANDERS (I), VERMONT: Well, Neil, you used the words spread the wealth. And I'm sure you are aware that during the Bush administration, we really had redistribution of wealth. The only problem was, is that it went from the middle class to the top 1 percent.

Video: Watch Neil's interview with Bernie Sanders

I mean, under Bush, for example, the top 400 families saw a $670 billion increase in their wealth while median family income declined and millions of Americans saw a significant decline in their standard of living.

So if you're asking me, do I think we should begin reversing that, that we should begin paying attention to working families and the middle class, that we should try to undo the fact that under President Bush...

CAVUTO: Well, well, Senator, I know what you're saying, but this phenomenon was going on in the Clinton years, right, this disparity between the rich and poor?

SANDERS: No.

CAVUTO: Yes, yes, it was.

SANDERS: Well, yes, yes, but — but — but — but...

CAVUTO: So, I'm not — I'm not — I'm not going to play the political game.

SANDERS: But wait a second.

CAVUTO: I'm asking you this: Do you think that you can rectify gaps in income by taxing the upper end to bring the lower end up?

SANDERS: Well, first of all, let's be clear what's going on right now. You have the top 1/10 of 1 percent earning more income than the bottom 50 percent. We have by far the most unequal distribution of wealth and income of any major country on Earth.

CAVUTO: So, tax the upper income more, right?

SANDERS: And that is bad — Neil, Neil, that is bad from a moral perspective. You, I hope, are not happy that we have the highest rate of childhood poverty while we have seen a huge increase in billionaires.

So from a moral perspective that's wrong, but it's also wrong, in my view, from an economic perspective.

CAVUTO: OK, OK, I understand where you're coming from.

SANDERS: You're not going to have a stronger...

(CROSSTALK)

CAVUTO: I understand the moral thing.

What I'm asking you, Senator, though, is the way to rectify the gap between rich and poor bringing the rich down; in other words, taxing them more?

SANDERS: Yes.

No, it's — look. No, the way — look, let's remember that under Dwight D. Eisenhower you had a marginal tax rate for the top — the wealthiest people in this country of 90 percent. By the way, under Eisenhower, the economy really flourished. The rich did well, the middle class did well, and the poor did well.

What we want to do is to obviously create an...

CAVUTO: You don't want to see a 90 percent top tax rate, do you?

SANDERS: No. No, of course we don't. But what we want to do is create an economy that works for everybody, rather than just the people on top.

Now, I know that Senator McCain was talking about socialism and redistribution of wealth. What was he talking about? All that Obama is talking about is going back to what Bill Clinton did in 1993, raising...

CAVUTO: But, Senator, with all due — with all due respect, that's not what he's talking about.

If, for example, he gets his way and some of his campaign programs go through, one was not only to raise the top tax rate to what it was with Bill Clinton, 39.6 percent, but to raise the income threshold by which you're taxed for Medicare and Social Security, perhaps another 8 percentage points...

SANDERS: Yes.

CAVUTO: ... which conceivably could bring the top rate over 50 percent.

Now, you're quite right, that isn't 90 percent of what it was or 70 percent when Jimmy Carter was president, but it is getting close to that again. And is that where we're going?

SANDERS: Well, first of all, Neil, 50 percent is not 90 percent. It's not close. But what we have to...

(CROSSTALK)

CAVUTO: Well, what is an adequate top level for Bernie Sanders? What's a top level?

SANDERS: Look, Neil, what this — Neil — Neil, I'm not going to develop tax policy in a three-minute segment on your show. But what the issue is, we...

CAVUTO: Why not?

SANDERS: Well, hopefully we put a little bit more thought into those things.

(LAUGHTER)

SANDERS: But what I want to tell you is that what this election is about, what Obama's victory was about is the understanding that, in fact, we are one nation, that it is not right that you have people on Wall Street who are making billions of dollars...

CAVUTO: I understand.

SANDERS: ... as they...

CAVUTO: Senator, I understand everything you're saying.

SANDERS: All right? So, we're trying to do things in a different way.

CAVUTO: All right. I understand what you're saying. And I mean this with respect. I covered you since your days as mayor in Burlington, Vermont.

I'm asking you this simple story — this simple question. If — if — if it's not 50 percent at the top end that's excessive, what is it?

I mean, that's what we're looking at for the top end, and it might extend beyond the top end.

But I have heard some prominent Democrats, Senator, tell me, "Neil, it was 70-plus percent when Jimmy Carter was president, so we have a ways to go."

Was that their way of saying that 50 percent is the floor?

SANDERS: No, I don't — who were these prominent Democrats who said that?

CAVUTO: If I told you, I would have to kill you.

SANDERS: Well, They — we don't want to do that.

CAVUTO: No.

SANDERS: But, you know, before you make those statements, I don't know that that's an accurate statement of what people are thinking about.

CAVUTO: But you just said, you were bragging about the fact 90 percent — it used to be 90 percent, so consider yourself lucky.

SANDERS: I gave you an indication that...

CAVUTO: I know.

SANDERS: ... during Eisenhower's reign, the economy did very, very well, when you have that as a marginal tax rate. That's what I said.

CAVUTO: But you're not saying it should be 90 percent?

SANDERS: No, of course it is not going to be 90 percent.

CAVUTO: All right.

SANDERS: What I am saying is that the time is long overdue that we start protecting the middle class, we end the disgrace of millions of our kids living in poverty...

CAVUTO: All right.

SANDERS: ... and that we start addressing the real problems facing this country.

CAVUTO: All right.

You always speak your mind, and you're always clear. And you're not like these other wormy politicians who don't any questions.

Senator, I always appreciate it. Thank you very much.

SANDERS: Thank you.

CAVUTO: Senator Bernie Sanders.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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