Plans are out and tax Days coming up on Monday. And when I look
at polling as to what the American people believe about who pays taxes, it
is completely different than reality. Of course, reality and politics often doesn't matter.
What matters is perception. And I saw a Gallup poll about six years
ago, and I caught some of it, and the Gallup poll said American
people said the top one percent pay six percent of the taxes, the top
ten percent of way journers pay twenty six percent of the taxes, and the
rest are born by middle class Americans. Now, nothing could be further from
the truth. It is simply not the facts, because facts are available,
in fact, they're available every year, but the message often does not get
out. Joining you and I now from the Cato Institute, a great organization
is Adam Michelle and Adam Michelle, Welcome to the Bill Cunningham Show. First
of all, can you tell the American people the mission of the Cato Institute
to put it in perspective? Ah? Yeah, Well, thanks for having
me on here at the k Institute, where a nonpartisan research organization and forming
policy makers toward libertarian policies of smaller government, more free markets lower taxes.
In the case of my work, where we work with Congress and inform the
public sort of about the reality exact exactly what you were talking about, what
actually is going on rather than what the perception is. Let's break it down.
We got to talk about the tax plan. Joe Biden, who's an
absent socialist, wants to say that we need to raise taxes on companies corporations
as if they don't pass on those expenses to consumers. But just in a
rough sense, every year, break down the tax brackets as far as who
pays taxes, the top one percent, the top ten, fifty percent.
Tell the American people the truth. Yeah, so the top one percent of
income earners pay it out already six percent of all income taxes. If you
expand that down to the top ten percent, the top ten percent of income
owners pay about seventy six percent of all income taxes. The you and the
United States actually has one of the most progressive tax systems in the developed world,
despite what the President or a lot of other folks would have you believe.
We kind of went over that quickly. I want that to sync in
and what concrete then I wanted to harden the top one percent, which is
about is that about three hundred and seventy five thousand dollars in income four hundred
thousand is out about that number. Yeah, so I think it might be
a bit higher than that now, but that's in the ballpark. So if
you make four hundred thousand dollars or more, the top one percent pay forty
six percent of the income tax. The top ten percent, which would be
something the range of one hundred and seventy five k a year, pay seventy
six percent of the state income tax. And as far as the top fifty
percent of the bottom fifty percent, I think that number breaks down to about
eighty thousand dollars. For those who make above eighty thousand dollars and you're in
the top fifty percent, what percent of the income tax are paid by those
workers? The top fifty percent pay almost all of the taxes. It's something
like ninety ninety eight percent of the taxes are paid by the top fifty percent
of income taxes are paid by a top fifty percent. You have a column
up about paying your fair share. One of the great bumper stickers is the
rich have got to pay their fair share. When you hear that Adam Michelle
or the Cato Institute. Do the rich already pay their fair share? How
much more can you pay? It certainly seems that way to me. A
President Biden often crocked out the statistic that the billionaires of the richest people in
the United States pay an average tax rate of eight percent. If you actually
go to the data released by his Treasury Department every year, you'll see that
the highest earning point zero one percent of income earners in the United States actually
pay an all in estimated average tax rate of well above thirty percent. And
that's sort of all inclusive a payroll income and the rest of it. And
if you go down the income distribution, that tax average tax rate declined until
you actually get negative average tax rates for the lowest income Americans, again showing
how incredibly progressive to the United States federal income taxes. It's fair to say
we have what liberal democrats seek, which is high income americans pay the great
majority. Why is it not readily acceptable to average Americans as to those facts?
Because you can take these numbers, The top one percent pay forty six
percent, the top ten percent pay seventy six percent, the top fifty percent
pay ninety nine percent of the taxes, but people don't believe that right at
all. Yeah, I think a lot of that is because the political class
isn't honest with them. It isn't when we sort of cross out these statistics
that are just simply not based in reality. I think your point that we
have the tax system a lot of Democrats want is really apt and they but
there's a flip side of that orul they point to the way that Europe does
their taxing. They want big government, big social services, and higher taxes
than we have, like a lot of European countries do. The way that
those countries pay for that big government is actually higher taxes on poor people and
the middle class to evalue added tax for much higher income tax rates that hit
much lower down the income distribution. And so the reality of where where democrats
want us to go is not higher taxes on the wealthy, but instead higher
taxes on middle class. Americans and so called billionaires generally have no income which
is a subject to the income tax rates. They have capital gains, and
capital gains rates are lower than the income tax tables. And billionaires of all
the rich, CPAs and accountants money can buy to find loopholes things of that
character that average Americans do not have now. In the State of Union address
about a month ago that Biden stumbled through horribly, he talked about making corporations
and businesses in America pay quote their fair share, and that he wants to
grossly increase the tax rates paid by corporations, by companies, etc. Explain
to the American people, Adam Michelle, why that is a bad idea.
So the United States competes for businesses, for global talent, for investments,
for jobs with other countries all around the world. Businesses can quite easily move.
They did this a lot before the twenty seventeen Tact, that they were
inverting their head courters to Europe. So when you raise the business income tax,
the corporate income tax above the sort of art average of our largest trading
partners, you start losing investment and jobs and businesses. And so Biden wants
to raise our corporate income tax rate back up, so we'd have about the
second highest rate in the developed world, putting us back into that world.
Pre twenty seventeen, when businesses we couldn't leave the United States fast enough.
So by doing so, companies would leave the America and the United States and
go to Mexico, go to Taiwan, go to the Philippines or whatever.
And secondly, isn't it true that if companies corporation's income tax bill goes up,
do they increase the cost of goods and services to sell to the public,
which means inflation would be in a runaway mode. So most of the
corporate income taxes actually passed on to workers in the form of lower wages.
It does get passed on to some investors and does go into higher prices,
but most of it actually shows up in a way of hurting workers, both
in the form of slower wage growth and fewer jobs. And so when you
cut the corporate income tax rate, it's actually a benefit to working Americans here
in the United States. And that's what we saw when it was cut in
twenty seventeen, and what I would expect to see the reverse of if we
were to raise it back up to sort of internationally high levels. And you
have a posting about energy subsidies win the spending madness at twenty twenty four some
of your I'm going to share that with the American people, But can you
talk about what's happening in California with their governor Kevin Newsom, who is perceived
to be the President in waiting because nobody with any common sense whatever thing that
Kamala Harris could be the president. But nonetheless he wanted to give more money
to low income workers by taking the minimum wage from twelve bucks an hour to
twenty bucks an hour, and then it goes up from there. And in
fact, the twenty bucks an hour to a McDonald's worker does not take into
account the taxes that worker is liable to have the employer spend on like unemployment,
workers compensation, all that stuff. So the twenty bucks an hour is
even a lower. Why is it a bad idea for government mandates to tell
the fast food workers, We're going to pay you a lot more money.
And isn't that a good thing? Yeah? Well, when you raise the
minimum wage, especially as high and as quickly as they have in California,
it leads to additional automation and the pushing out of those sort of starter jobs
that help you get that first rung on the ladder to then earn higher wages
in the future. So often what we've seen after these types of large minimum
wage taxing large minimum wage increases is that it hurts actually the people, the
exact same people that you're ostensibly trying to help. And so instead, I
think we should be focusing on pro growth policies that allow businesses to expand and
hire more people, creating additional opportunities for those workers in lighting markets push wages
up rather than government mandates. You know, it's a perfect example of the
law of unintended consequences. The intent was to put more money into pockets of
low wage workers. In reality it caused them to be unemployed, and more
ais being used and production methods are being done by machines of one type or
another, and therefore those it intends to help it hurts. Secondly, I
see that the Inflation Reduction Act Whenever, which is passed two years ago by
only Democratic votes, and you have a posting energy subsidies win spending Madness of
twenty twenty four. The results from the spending Madness suggest that the highest priority
budget cut for Congress is the vast corporate welfare unleashed by the IRA is favored
by the Inflation Reduction Act. And you note that the economy was flooded with
at least one trillion dollars and more spending and narrow tax breaks for corporation across
many industries. Why are the energy subsidies when we think about cylindro et cetera.
Why is that a terrible idea? And why do the Inflation Reduction Act
actually increase inflation? Yeah, the name of the bill is perhaps the most
laughable part of this whole thing. It was originally supposed to include about just
a couple hundred billion dollars of tax credits I shouldn't say just, but tax
credits for these types of preferenced energy and types of energy. The cost is
now balloon to well over a trillion dollars, likely one point eight trillion dollars
over ten years. Some of these things are ultimately made permanent. So this
is one just additional inflationary spending sort of going out going out the door.
But two, it makes energy markets less efficient. It's Washington choosing the type
of car that you're going to drive and the type of where your energy gets
to, rather than the market and in consumer demand choosing those sort of the
cars and the energy that is most sustainable for the economy. And so it's
just another form of central planning industrial policy out of Washington. All right,
let's get onto the issue of borrowing about one trillion dollars every one hundred days.
If you take and you know the numbers, if you take Social Security,
Medicare, medicaid, if you take interest on the national debt, federal
retirement programs, and the defense budget, which those items are really never cut.
In fact, they have to go up in a sense, that's about
eighty percent of the budget. And so how do you get to a balanced
budget when you have are going to add about twenty trillion dollars to the national
debt over the next ten years, and we're talking twenty thirty four, we're
going to have accumulate national debt in the range of fifty five trillion dollars fifty
five trillion dollars, which is completely under sustainable, that is Banana Republic.
How do you get to a balanced budget when you have over eighty percent of
the budget is to areas that are sacred cows. You know the answers.
You can't have sacred cows. Everything needs to be on the table, and
if it's not, then we're going to continue to sort of spiral out of
control. So if you take those mandatory spending items Medicare, Medicaid, social
Security, and interest on the deck, leaving defense spending off to the side.
Just those pieces will will will be larger than all the projected tax revenue
coming in the door in just a couple of years. And so that tells
me that sort of spending growth is the problem, and we have to reform
every single one of those things you mentioned. Otherwise, taxes are going to
have to go up on middle class Americans and that will be that will ultimately
be painful. To go back to your first point, I want to make
this a parent to the American people. The top one percent pay forty six
percent, But what percent of total income in the country does the top one
percent earn. They earn about twenty six percent of the total income, and
they pay forty six percent of all taxes. So that sort of gets again
to this point of the wealthier paying much more than the share of the income
they're earning, and more than their fair share by that metric. So the
increased taxes that must be increased in the middle class, and that's a problem.
Right. Let's talk about if I would have you on with me in
five, six, seven years, from now, let's get out the crystal
ball. Let's say Joe Biden slash slash Kamala Harris win November the fifth,
and let's say the Democrats take over the House and they keep they keep the
Senate, and they go back into another inflation Reduction Act mode and continue to
gallop federal spending out of control. How can you determine when the debt crisis
comes? And secondly, Adam Michelle, what will that look like and how
will that impact average Americans face. We've got to get a handle on that.
Yeah, well that's the the trillions of dollars. That's the trillion dollar
question is when when the when that true fiscal crisis hits. And I wish
I knew, there's no one really knows when that tipping point is. But
we can't continue to have a two trillion dollar gap between the revenue that comes
in the door and the spending that goes out the door. Eventually something has
to break and uh and and that will be It's going to be painful.
It will look like higher inflation, it will look like dramatic, uh necessary
cuts to to to government spending. It will also into probably entail higher taxes,
on not just those earning over four hundred thousand dollars a year, but
every single American. There'll be slower economic growth and and a lot of pain.
And so that's why making those reforms of the budget now is so important.
The sooner we start these conversations and actually start making reforms, the easier
it ultimately will be all right. Once again, Cato Institute, c Ato,
Cato Institute. I encourage the American people at Target the website, lots
of good stuff there. This is the most predictive financial crisis ever to strike
any country. I've been talking about this for the last ten to fifteen years,
and the next five to ten years will be utterly ridiculous. When it
comes to federal spending, I sense that Joe Biden slash Kamala Hair slash Gavin
Newsom has no clue, no desire to cut federal spending at all. They
want to increase taxes. We went over who pays the taxes, and that's
impossible to cut any more muscle out of the body of those who have high
incomes. And once again, Adam Michelle, thank you for coming on the
Bill Cunningham Show. And Adam you're a great American. Thanks for having me
on. It was a pleasure. God bless America. I let's continue with
more. The facts will set you free. Those are the facts, and
what will the American people do? Bill cunning and the Grand American with you
every day on news radio seven hundred WLW. Meanwhile, in the untended forest,
little red riding Hood is heading to the Three Pigs Place. That's right,
the youngest one has a cute little tail. Aren't you supposed to visit
your grandmother? You had a falling out. I want to listen to Eddie
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How many times can you listen to Enter Sandman? Well? Pigs like
Eddie and Rocky. Let's just say they listen whole hat Eddie and Rocky This
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