Will Obama's $1.5 Trillion Tax Hike Help Economy?

This is a rush transcript from "Hannity," September 19, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: President Obama's disastrous deficit reduction plan -- which is nothing more than a bunch of tax hikes -- includes one proposal that really is not sitting well with Republicans. Now, it is called the Buffett rule, named after billionaire investor Warren Buffett, who frequently claims he pays a lower tax rate than his secretary.

Now, the Buffett rule provision sets a new tax rate for Americans who make a million dollars a year or more. Earlier today, tax cheat Treasury Secretary Tim Geithner promised the administration's plan to revamp the tax code would be ready by the end of the year.

Joining me now with reaction, Republican strategist Karen Hanretty and former vice chair of the DNC Finance Committee Michael Brown.

Mike, I can give you a list of all the Senate Democrats that are saying they are not supporting this bill. They don't believe in this bill. It is dead on arrival. And yet, the president keeps lashing out at the Republicans when it is his party that doesn't like it, why is that?

MICHAEL BROWN, DNC FINANCE COMMITTEE: Well, I think you are having some obviously, some legitimate philosophical discussions about tax increases. And I think you also have to coordinate with it fairness. I think a lot of folks think that the budget shouldn't be balanced on the backs of our least fortunate in our country. And fairness is what this debate is all about.

HANNITY: Fairness. Fifty percent of Americans pay no federal income tax. Half. The top 10 percent pay 70 percent of the bill. The average person that I know that pays income taxes, including myself, I paid New York state tax, county tax, sales tax, property tax, federal income tax. I pay 55 percent of my income. And here come the president taking a baseball bat, and hitting us all in the head saying, we are not paying our fair share. Half the country doesn't pay, how is it not fair?

BROWN: Well, I think you are looking at the fairness argument a little differently, Sean. Clearly from your standpoint, I understand how you articulate it. But I think the larger issue is when you're talking about fairness, most business people, I think more care about less regulations. And that's where maybe some of us do disagree with the president a little bit on making regulations less part of doing business. Because we should make it easier for folks to do business not more difficult. I don't think folks are that concerned about a small increase in their taxes relative to not having as many regulations so they can do business a little easier.

HANNITY: Karen, I just spoke to a guy, he's here in studio tonight. He's 48, he's retired, he was in the oil business, self-made, successful millionaire. And he said, he literally put his hands to his neck and said choking regulation. And this is a jobs killer he called it, this bill.

KAREN HANRETTY, REPUBLICAN STRATEGIST: This is an anti-growth bill. And I'm sorry Michael, but to claim that you know, regulation is stifling growth in America. What do you think taxing capital gains would do? It would absolutely stifle growth in America. Don't forget in 2008, Charlie Gibson, moderated a debate between Barack Obama and Hillary Clinton. And when Charlie Gibson asked -- he wasn't president yet -- when he asked Barack Obama point blank, knowing that if you lower the capital gains rate as Bill Clinton did, as Ronald Reagan did, that you get more revenue. Would you be willing to lower it or do you in fact want to increase the capital gains? And Barack Obama said, I want to increase it. And he wants to increase it, I think he wanted to increase it to around 28 percent knowing full well it would not bring in additional revenue. This is not about increasing the economy. This is about redistributing wealth, which is what he has been about all along. And it is about resenting wealth creators. And it goes far beyond socialism. It is really frightening.

BROWN: I don't think that's true. That's not true.

HANRETTY: Sure it is. What do you think fairness is about?

BROWN: I certainly wouldn't use Ronald Reagan's economic strategy as a success model. The whole trickledown economics clear delay not work.

HANRETTY: Well I'm sure you wouldn't.

BROWN: Why would you think it worked? It clearly didn't work.

HANNITY: Reagan created 21 million new jobs and doubled revenues.


HANNITY: Twent-one million new jobs, doubled revenues.


BROWN: Fine, Sean. Bill Clinton had a surplus and President Bush spent it all. So, I mean we can continue on this kind of debate.

HANNITY: Whoa, whoa, stop for a second. Wait a minute.

BROWN: Stop what? Those are the facts.

HANNITY: In four years, Bush had four trillion that he created in new debt. Obama has that distinction in two-and-a-half years. So, no president accumulated more debt. No president has spent more, no president has created fewer jobs. We've never been.


BROWN: I don't know about that. I think President Bush spent more than President Obama. President Bush spent way more than Obama.

HANNITY: Excuse me.

BROWN: Came with a surplus and left with a deficit, that is not true, Sean. That is not true.

HANRETTY: No, this all comes down to one question -- does increasing the capital gains rate grow the economy or shrink the economy? It is that simple. It will not grow the economy, and that's all that matters right now. Unless you simply resent wealth creators and you simply are looking to score some political points with the liberal base --

BROWN: That Tea Party message does not work.

HANRETTY: Basic economics. You should go take an economics course.


BROWN: You ask business people, what would they prefer? Slight increase in taxes or less regulations? They'll pick less regulations every time.

HANNITY: Can I just say one thing here?

HANRETTY: You can do both, you know, it is not an either or situation --

BROWN: But it's becoming an either or because your party, your party is the party of no. Your party has not come up with any solutions.


HANNITY: Karen, I want to ask you a question. Karen, nothing has worked for the president. James Carville says, it is time to hit the panic button. Larry Summers says there is no adult in charge. You had Mark Penn advising don't use class warfare. The president has doubled down on the rhetoric, doubled down on raising taxes --

HANRETTY: He's doubled down on losing.

HANNITY: -- doubled down on Keynesian economics, and his polls are at 39 percent in The New York Times. So, the question is.

BROWN: Why aren't you mentioning the House and the Congressional poll at 12 percent.


HANNITY: Michael, you're not Karen. You don't look like Karen. Karen is wearing blue, you're wearing, oh, you're wearing blue too.

BROWN: Why aren't you talking about the 12 percent approval rating of Congress run by Republicans? Why aren't you mentioning that?

HANNITY: But the point is, explain the New York 9, explain Nevada, explain the 2012 election, Karen. And this is the point. The president keeps doubling down on what has failed. How does this get him out of the mess he's in politically?

HANRETTY: Well, this doesn't get him out of any mess politically. He's doubling down on losing in 2012. His numbers continue to slide. He's losing support among independents. My goodness, the man is even losing support among liberals. Which is just almost incomprehensible. And then you've got Democrats calling for the president to fire people. Which would be an absolute admission that everything he's done up to this point hasn't worked. Which of course it hasn't worked. This economy is not going to improve between now and 2012. And the president is doubling down on a failed ideology.

BROWN: Sure it would be nice to have a willing compromise party on the other side to help.

HANRETTY: And the Democrats won't support him, either.

HANNITY: How about the president compromise?

BROWN: The president keeps coming up with plan every week and the Republicans say no.

HANNITY: Excuse me. The Republicans passed "Cut, Cap and Balance." The Republicans passed the Ryan plan. Republicans passed plans to drill as was successful in Canada and they are dead on arrival by your party and your president.

BROWN: And you had compromise on both sides of the aisle with everything you just mentioned. Every time the president comes up with a plan, the Republicans say no.

HANNITY: "Cut, Cap and Balance" was DOA. So was everything else.

HANRETTY: Why is it when the president comes up with a plan, Democrats in his own party won't support him. You aren't going to get this jobs bill on the Senate floor until next month. And good luck getting Senator Reid to.


BROWN: When Republicans take their talking points and say no to everything it's easy to do that.

HANRETTY: But the Democrats are saying and the Senate are saying, no to Obama, they are saying hell no, we won't go.


HANNITY: All right. We've got to run.

BROWN: It's interesting that the Democratic Party doesn't have to agree on everything. Your party does.

HANNITY: Michael, Karen, good to see you. I appreciate your time.

HANRETTY: Doubling down on losing.

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