Tax breaks for billionaires and mega-rich celebs?
Debate over Obama's selective use of Bush-era tax cuts and tax hikes on wealthy rages on
This is a rush transcript from "On the Record," July 10, 2012. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: The knock-down, drag-out tax battle is traveling from the campaign trial to Capitol Hill. But why did today's Senate debate suddenly turn to Hollywood? We spoke with Senate Minority Whip Jon Kyl earlier tonight.
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VAN SUSTEREN: Senator, Kyl, nice to see you, sir.
SEN. JON KYL, GOP SENATE MINORITY WHIP: Thank you. Always good to be with you.
VAN SUSTEREN: I want to talk taxes with you. And I want to start with what Senate majority leader Harry Reid said today, "Congressional Republicans want lavish, huge, across-the-board tax breaks on billionaire hedge fund managers and people like mega rich celebrities like Donald Trump. Fabulously rich so-called small business owners like Kim Kardashian and Paris Hilton would qualify for these wasteful giveaways."
KYL: Gee, I hardly know where to start. First of all, Republicans are not proposing any tax cuts for anyone. Let me repeat that. Republicans are not proposing any tax cuts for anyone. What we are hoping is that President Obama and Senator Reid will not increase taxes on any Americans.
What the president proposed a couple of days ago was that certain Americans would have their taxes go up. And unfortunately from our perspective it's very bad for the economy because those are the very people who would be creating the jobs and the economy, mostly small business owners, the very people two years ago the president was unwilling to raise taxes on because, he said, and I am quoting, "It would be a blow to the economy." Well, economic growth was over 3 percent, today, it's under two percent. So if it was true then, it is even more true today that we shouldn't raise the taxes.
VAN SUSTEREN: The very fact that have you to explain that you are not seeking to cut taxes on anybody suggests to me that the Republican Party has lost this ground game on the PR because the way -- people call at this time Bush tax cuts. That happened 12 years ago, but that's what people are referring to now. Would you agree that the nomenclature or the war on words is that the Republican Party is losing this one?
KYL: I don't know if we are losing it, but you're absolutely right President Obama insists on calling our ideas something that they are not. He keeps talking about Republicans wanting to cut taxes for the rich. Nobody, I will repeat it again, is proposing cutting taxes for anybody. What is going to happen automatically on January 1 of next year is that everybody's taxes are going up because under the law, as you point out, the ratings that have been in existence for a decade, those rates will automatically go up unless Congress and the president stop it from happening.
That's what we are asking to happen -- just don't let the taxes go up, Mr. President. That will hurt American families and jobs and American competitiveness. Just don't allow the tax rates to go up on anybody. By the way, what he is proposing is not marginal rates, but things like the death tax. So if you are the child, you have a brother and sister and your dad owns a plumbing business and he dies, you are faced, underwent his proposal with a 45 percent tax rate on the income subject to the death tax, in other words what the value of that business is minus the exemption, 45 percent tax rate. Is that fair?
VAN SUSTEREN: A couple of issues. One is the impact and doesn't have, the president's proposal on the economy and business owners. The other is whether or not the people making over $250,000 a year, whether that would have a significant dent in handling our deficit or whether or not it has a political motive. I suspect you think it's a political motive, but does it make inroads in dealing with the chronic deficit problem?
KYL: It doesn't raise enough money to do that. It's detrimental from two standpoints. The most difficult is that it takes money out of the private sector that can't then be invested to hire people or create more product, in other words to help strengthen the economy. Secondly, it gives more money to the federal government to spend, and I don't think most people think the federal government is very wise in what we spend these days. Third, it doesn't raise all that much money. We would be much better off leaving that money with the small business people who earn the money, let them invest it in their businesses. That will do a lot more to get money to the treasury than taking it from those people today, because as their businesses grow and expand, they will have to pay greater income taxes. That then helps the government.
VAN SUSTEREN: The Democrats and Republican, depending who you talk to. The Democrats say they have a very small impact on small business, very small percentage of small businesses. You talk to the Republicans and it's strangling every small business person. How do we know who to believe on the numbers game?
KYL: Here's the truth. In terms of pure numbers, my wife was a small business person. By herself, I said, if you make more than $1,000 in a year, slow down, this isn't to make money. It's for you to do something that's fun for you, you enjoy doing. But it was never going to make a lot of money. So yes, it is true a lot of really small businesses, one-or two- person businesses are not that impacted. But how many are? Almost a million. How much was revenue coming from these pass-through entities is affected? Over half, 53 percent. The bottom line is the companies that really create the jobs, the bigger small businesses, are the ones who are in fact hit by this very, very hard.
VAN SUSTEREN: How do you deal with the political implication, because the Democrats are going to say, we are trying to get the middle class a tax cut and the Republicans only want it for the rich and the hedge fund and the billionaires, that's the message?
KYL: Let's get back to the truth. They are not giving a tax cut to anybody.
VAN SUSTEREN: That's the message have you to deal with, though.
KYL: That's right. And I am doing it right here. Nobody's talking about a tax cut, including the Democrats. We're talking about keeping the tax rates where they have been for a decade, since 2001 and 2003. These are the so-called Bush tax cuts. But we are not talking about reducing those, or cutting more. We're saying leave that in place, don't raise it on anybody. And neither the Democrats nor the Republicans are talking about reducing taxes below that until we get to next year, when both sides have talked about fundamental tax reform, where we might be able to lower rates by eliminating so-called loopholes. But in terms of net revenue, it's the same to the federal government. You are not really talking about cutting taxes there.
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