Live from Music Row Monday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – host Leahy welcomed the original all-star panelist Crom Carmichael in studio to weigh in on the Senate parliamentarian’s decision not to allow immigration to pass through reconciliation and tax deductions for blue state billionaires.
Leahy: That is Senator Bernie Sanders, the Communist from Vermont. And he was hoping over the weekend that they would abuse the reconciliation process to put forth policy issues and get those approved without going through the filibuster.
Well, guess what the parliamentarian has ruled? Not going to let it happen. So that is a bit encouraging. We get into the weeds on this Crom But as it turns out, this reconciliation process is a way to avoid the filibuster in the Senate.
But you can only put content into those budget bills that are specifically budget and not policy. What the left wants to do and what Bernie Sanders wants to do is jam all these policy initiatives into the reconciliation. The parliamentarian we talked about this the other day, is the one who rules on whether or not they can do it.
Carmichael: In the Senate.
Leahy: In this instance, the parliamentarian ruled against what the left-wing wants to do. That’s a good thing. We’ll see how because they’re going to try this with everything to violate the typical regular order by which we actually make laws here in the country. So that’s a temporarily good thing. There are so many bad things going on Crom that we have to cheer those good things that happen.
Carmichael: That is certainly an important good thing. And I think there was that election bill HR1, and then the Senate bill one, and that didn’t go anywhere. And so then they did HR4. And I guess that passed the House.
And then in the Senate, they’re trying to stick that into the reconciliation process. And by the way, I’m surprised that the parliamentarian has said you can’t do immigration legislation in a reconciliation.
And I guess the historical nature of the way we’ve always handled immigration law has never been through the budget process. And so she’s saying, if I rule that you can do immigration, I’d have to rule that you can do anything.
Carmichael: And so I’m guessing that the voting law, I would assume that under the same principle and all these other things that they’re trying to cram through in reconciliation if it turns out that the only the thing that is voted on is the amount of money we spend and the programs that we enact to spend all that money, and then the taxes.
And the tax rates that the House Budget Committee passed or the Finance Committee, whichever committee it is in the House, the taxes that they are trying to impose are not nearly as high as Biden has asked for. I’ve not seen whether or not the blue state billionaires are going to get their tax breaks back.
Leahy: The blue state billionaires. Now that Crom is a phrase that I rather like. Did you make that up? Blue State Billionaires.
Carmichael: If you think that’s creative, then thank you very much. You have a low bar.
Leahy: I do have a low bar.
Carmichael: That is alliteration. I call that alliteration.
Leahy: Because I’ve been writing headlines for stories now for well over a decade.
Carmichael: I would try to remember that rapidly. (Laughter)
Leahy: But anyway, I do have a low bar. I like the stuff you say, Crom. It’s interesting to me. (Laughs)
Carmichael: But under Trump, they took away the tax deduction on state income taxes from billionaires in the blue states and from every state. But it primarily affects the billionaires in the blue states. And Schumer was determined to get that back into the tax code.
Well, if you give the billionaires in the blue states, that tax break, the amount of money that you have to make up by raising taxes on non-billionaires is significant just to get back to even.
Apparently, I’ve not seen any reports but that doesn’t mean it’s not in there that the tax deduction Trump took away from the truly rich is being restored. And so getting back to the taxes, the top tax rate is going back to the Obama rate of almost 39.6 percent.
The corporate income tax is going up to I think it’s 26 or 28 percent. Capital gains taxes and taxes on interest and dividends are going up to about the 28 percent range.
Biden, on the other hand, wanted capital gains to go to ordinary income taxes and include the 3.8 percent Obamacare tax on capital gains. Which is rare but its still there.
Leahy: For those of you who only think of taxes in the days immediately preceding April 15th, capital gains are for investments. You make an investment in a company. And typically at some point, you may either sell it and make a profit or make a loss.
But if you make a profit, that is income that is different from ordinary income where you work at a job. Ordinary income that the highest tax rates can go up to a pretty high.
Carmichael: Under Biden, they want to raise the ordinary income tax rate to 39.6 percent.
Leahy: What’s the highest right now? 35 percent.
Carmichael: 35 percent.
Leahy: But capital gains tax on money you invest and then turns into a profit is 23 percent right now?
Carmichael: It’s 23 percent. But let me say this. I think that in revisiting the tax code, the unrealized gains on multi-billionaires need to be reexamined. (Leahy laughs) I’m just saying because they don’t pay any income tax.
Leahy: Yes. And so when you say unrealized gains, what you mean is if you make an investment in something…
Carmichael: These are the people who start the company. They don’t make an investment. They make a tiny investment. Bezos for example is worth a couple of hundred billion dollars. His investment would’ve been less than $100,000.
Leahy: Because of the way you set up a start-up company and the entrepreneurs get more.
Listen to the full second hour here:
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