All eyes are on Congress this week as markups go on through several of the committees on the reconciliation bill.
What are your initial thoughts on that GOP bill?
unidentified
Well, first of all, I just want to remind your viewers, because Poll Show, only half of Americans are even aware of this, that there's no room for failure here.
It is, if we don't pass this bill by December 31st, on January 1st, the American people are going to get hit with the biggest tax increase probably in American history.
So virtually all of the Trump tax cuts from 2017, that very successful tax cut that really re-energized the economy, that will mostly expire.
There are a few provisions that don't, but almost all of them dealing with average Americans and small businesses would expire.
unidentified
And we estimate, Mimi, that the average family in America will see about a $2,500 increase in their tax burden and their tax payments to the IRS next year.
So we got to get that done.
By the way, almost every small business in America got a tax cut from that bill.
We know that small businesses are really the spinal cord of the American economy.
We did a lot of other things in that bill that I think I'm very proud of.
This week, as you know, Mimi, as we speak, the House members are trying to put together a bill that they can send over to the Senate, get this thing passed.
unidentified
I don't understand, quite frankly, Mimi, why it's taking so long.
We should have gotten this done a month ago because virtually all Americans are in favor of making that tax cut permanent and some of the other things like no tax on tips and other smaller versions of the bill.
So this idea that eligible women are going to lose their prenatal care if they're pregnant, or I've seen some ads saying that rural hospitals will shut down.
unidentified
That's all just a lie.
The truth is that if you look at Medicaid today, and by the way, this isn't me speaking, Mimi.
This is both Doge and also the government's own auditors have found that there's about $150 billion.
Let me say that again, $150 billion of fraudsters who are getting Medicaid coverage, free health care coverage, but they're not eligible for the program.
unidentified
And that includes illegal immigrants.
That includes a lot of employable adults who are just going on the program so they don't have to pay health care.
I mean, how is that fair to me, meaning people like you and me and most of the people watching the show who actually do pay for their health care?
And then we have to pay for the health care of people who are not even eligible for the program.
So if we were to take out the 150 billion, that would leave us with 730 billion.
unidentified
No, no, no.
So that's 150 billion per year.
So if we can just get rid of the fraud, we will save $1.5 trillion over 10 years.
So that would be an enormous savings.
But also, how about this one?
And I wonder what people think about it.
You know, if you don't have kids and you're an employable adult and you're not working, this bill would basically say, hey, if you're going to get free health care from the taxpayer, just like if you're going to get free food from food stamps, you're going to have to either have a job or you're going to have to be looking for a job.
I think Americans are tired of people sitting on their couch watching TV and getting free health care and free food.
So I think most people would agree that we should have work requirements for all these programs.
We want to help people, Mimi, who want to help themselves.
And regarding work requirements, the critics of that say that the state of Georgia did try that and ended up just eligible people not being on the rolls and it didn't really improve employment.
What are your thoughts on that?
And do you know the details of that program in Georgia?
unidentified
Mimi, I'm not familiar with that.
That's the first time I've heard of this.
I'll have to look into that.
But I do know this.
You know, I've been in Washington and doing policy work for a long time.
So I was there in the mid-1990s when Bill Clinton was president, a Democrat, and Newt Gingrich, a Republican, was running the House of Representatives.
We passed one of the best welfare reform bills in the history of the country, where we basically had work requirements for welfare benefits, and they were very strict requirements.
And what we found was that so many people who had been on welfare went into the workforce, they got a job.
unidentified
We know that the amount of money we had to spend on these programs was radically reduced.
But also what we found was work requirements actually were beneficial to the people who had been on these programs.
We gave them training, we got them into jobs.
Look, you can't get rich.
You can't have a nice lifestyle in this country if you're on welfare.
You got to get a job.
You got to climb that ladder.
That's what we need to do with people on Medicaid, food stamps is we look, we don't want people to go hungry in this country and we don't want people to go without health care, but we do want people working.
But if you're talking about single women or single males with no kids in the home and they're not working, I think everybody would agree they should have to get a job.
And I have to say that, you know, when I helped write the original tax bill that we passed in 2017, I was the loudest voice for getting rid of the state and local tax deduction.
I want to make sure everybody knows I was listening to your conversation with the congressman earlier about raising tax on the rich.
unidentified
Well, one good way of doing that is to get rid of all these loopholes in the tax system.
And so let me put it very simply: there's no reason why somebody living in a high-tax state like California or New York or New Jersey or my home state of Illinois should get a bigger tax cut than somebody who lives in Florida and Texas.
unidentified
Look, if you want to live in New York, it's a free country.
You can live wherever you want.
But if you vote for policies that have very high state and local taxes, why should people in other states have to bear the burden of that?
And so what we're doing in this, what we did in this bill was we said we're going to give you a $10,000, you can deduct up to $10,000 of your state and local taxes.
For people in most states, that's no burden at all because state and local taxes are pretty reasonable.
If you live in those really high-tax blue states, your taxes are probably a lot higher.
If you have a problem with that, take it up in Albany, New York, or Springfield, Illinois, or Sacramento, and get those politicians lower your taxes.
But here's the thing: the most important thing I want people to understand.
If we bring back the salt deduction, Mimi, that would be the biggest tax cut for millionaires and billionaires in American history.
Because today, because of our tax cut in 2017, 91% of Americans don't itemize their deductions.
They don't take the salt deduction because they just check the box and they take the standard deduction.
The people who do itemize their deductions today, there's some exceptions, but overall, most of the people are taking itemized deductions are millionaires and billionaires.
And so my point would say, hey, let's just get rid of it.
That's not going to affect the middle class much at all, but it will force higher income people to pay their fair share of taxes.
unidentified
And then we could actually lower the rates some more.
But there's no reason for the salt deduction to be raised.
But the reality is that because you've got about five or six Republicans who want the salt deduction raised, they're probably going to have to make some accommodation.
I think they probably will double the salt deduction from $10,000 to $20,000.
The tax cuts that you're mentioning that are going to be implemented in December, if they do come to pass, if this bill doesn't pass, are actually sunsets from the previous bill that Trump passed in 2017, which you were a part of.
unidentified
So it feels as though you're misleading people by saying, oh, no, well, for some reason, taxes are going to go are going to go up, but you guys said that.
And it's mainly for the middle and lower class that those tax increases or cuts are going to be on the lower and middle class.
Secondly, if you're worried about government health care and overabuse on government health care, why don't you talk about Walmart and McDonald's that are the biggest users of government health care because they do not pay for their employees to get health care?
Well, look, I can't.
I don't know about McDonald's and Walmart.
Those are mostly kind of starter jobs for people, and I guess they don't provide health care.
But I will say this.
This is a really important point, Mimi.
The Trump tax cut is set to expire.
This gentleman is right at the end of this year.
And nobody wants that to happen.
I mean, polls show overwhelmingly about 70% of Americans don't want that tax cut to expire.
I don't know, sir, if you do, but most Americans can't afford to pay $2,500 or $3,000 more in taxes, especially after the big inflation that we had under Biden.
unidentified
So we've got to do this, in my opinion.
I think it would just wreck the economy if we didn't get this extended.
You're trying to report somebody that's collecting benefits?
unidentified
Yeah, how do you do that?
And they're capable of work and they're healthy and they should be working.
If the question is, you know, how do we find the fraudsters that are just ripping off Americans to the tune of half a trillion dollars a year?
We have to have people monitoring these programs.
We have to have people who are stealing the money from these programs should be put in jail, in my opinion.
I mean, we have rampant fraud.
Nobody in Washington, and I blame Republicans and Democrats, Mimi, for this, to allow this to happen.
A half a trillion dollars a year.
Some of these people, by the way, don't even live in the United States, for goodness sakes.
They're getting Social Security checks.
They're getting Medicare payments.
They're getting food stamps.
And many of them aren't even in the country.
So we need to make it a top priority for the country to make sure that only the people who are eligible for the programs are getting the money.
This was true of the PPP program under COVID.
This is true of food stamps.
It's true of unemployment benefits.
Nobody is minding the store and making sure that only the people who are eligible for it get it.
And look, if somebody is stealing money through these programs, it would be like, you know, if I walked down the street and put a gun to somebody's head and said, give me $100 and stole it from their wallet.
Tariff Turbulence?00:07:35
unidentified
That's what's happening day after day after day.
And Trump is saying no more.
We're going to do something about this and hunt these people down and get the money back.
Steve, your thoughts on President Trump's tariffs plan so far, you called it tariff turbulence.
unidentified
Yes.
Maybe it should be turmoil.
Listen, I'm a much more of a free trade guy than Donald Trump.
And you know, he and I, he knows how I feel about that.
And uh, but I also believe that because we all, everyone benefits from trade.
By the way, trade is the essence of what economics is about.
If I trade with you, Mimi, and you have something I want, and I have something that you want, and we freely trade, by definition, we're both better off.
And that's what makes economics important.
It's what raises the living standards of all Americans.
And so we have benefited from trade.
The fact that we can get low-priced things from Vietnam and we can sell them things.
But Trump is right that the United States, we have the lowest tariffs in the world, virtually, of all the major trading partners.
And what Trump is saying, just so people understand, is if we're our tariff is at, say, 10%, and you know, Canada or Korea or Japan at 30 or 40%, in some cases, in China, that's over 100%.
unidentified
That's not fair.
And we're going to force those countries to bring their tariffs down, Mimi.
We've got two big deals in the works with the UK and with China.
unidentified
We're saying to China, either you reduce your tariffs on us or we're going to impose high tariffs on you.
And so far, at least, it looks like Trump is prevailing on that because China, if China can't trade with the United States, they're going to go into a Great Depression.
They have to trade with us.
And that's one of the reasons I think they blinked here and why we're going to get a pretty good trade deal with China.
I agree with you that they need to eliminate these tax loopholes.
For years, we've heard that Warren Buffett pays a lower tax rate than his secretary.
But there is a loophole in the law where he only took a million dollar salary and the rest of it was stock options, which he only paid capital gains tax on.
And also that carried interest provision that Trump originally wanted to get rid of, but even Republicans in Congress blocked him from doing that.
Also, corporations that own subsidiaries, if their subsidiaries lose money, they get to deduct those losses on their tax bill.
And that's the reason why they pay no taxes.
But even small businesses take advantage of that.
One of the things with this new tax bill, unfortunately, from what I heard is that the provisions for the work provision don't kick in until 2029.
And Senator Ron Johnson has been also complaining that they're not really making any cuts.
What I believe President Trump is trying to do is he is trying to increase business in the United States with these agreements, bring more revenue in so that we could pay for these things because he understands that even Republicans are reluctant to make cuts.
And that seems to be the plan.
And I hope he succeeds at doing that.
Thank you, Steve.
Thank you.
Well, let me just respond to that very quickly because I was listening to your show earlier, Mimi, and we've had a couple of calls on this already.
And it's not surprising that people are falling for this because the media keeps saying it over and over again, that the Trump tax cut was a tax cut for the rich and that the rich are not paying their fair share.
unidentified
And I just want, because these numbers just came out a couple of months ago, Mimi, these are the official government statistics from the IRS, which collects the taxes.
Today in America, the top 1% of Americans, those at the very top of the income scale, pay a higher share of the income tax than any other time in the history of the United States.
One out of 100 people pay almost half of the income tax.
And that went up after the Trump tax cut.
So it was at 40%.
In other words, the top 1% were paying 40% of the income tax before the Trump tax cuts.
Now they pay 44%.
The top 10% pay 90% of the income tax.
So the idea that the rich are not paying their fair share.
Now, look, there are some people who scamming the system for sure.
And that's one of the reasons I'd love to see a flat tax where you get rid of all the deductions, all the loopholes, all the special interest lobbyist provisions that helped some people avoid taxes.
But my God, I mean, Warren Buffett has paid billions and billions and billions of dollars of taxes through the companies he owns and through his individual tax.
The idea that his secretary pays lower taxes than him is ridiculous.
It is simply not true, especially when you take into account all of the taxes paid by the businesses that you own.