The opportunity here to get confused in this debt deal and the fiscal cliff is huge. There’s something that I think needs to be stated and understood. There is not a single tax cut being proposed as we speak. There is nobody, no Republican, no Democrat that is talking about tax cuts. There aren’t any. The reason I’m making a big deal out of this is that Jay Carney and his sound bite from the White House just now, rejecting John Boehner’s latest proposal, is filled with lies about how the Republicans are cutting taxes for the rich. I want you to understand, there are no tax cuts. There are no tax cuts contemplated. There are no tax cuts scheduled.
We have current tax rates. They have been the same since 2003. These tax rates were put into place by an agreement that Congress made with George Bush. They are to this day called the Bush tax cuts, but they are not tax cuts. They were at the moment they were passed because the new rates were smaller than what existed in 2003. But they have been the effective tax rates since 2003. There are no tax cuts, my friends. So when you hear Jay Carney or anybody in the media, or anybody on a cable TV show talking about the Bush tax cuts, there aren’t any tax cuts. And nobody has proposed a tax cut.
What is going to happen on January 1st is that the current tax rates are going up. The question is, on who? If we go over the fiscal cliff, everybody’s income tax rates are going up. The capital gains tax rate is going up. There is a 1% — actually .9% — there is a 1% income tax surcharge on everybody for Obamacare, everybody, no matter what else happens. There is a 3.8% surcharge on capital gains, independent of whatever the tax rate is on capital gains, and that’s an Obamacare tax. So if nobody does anything, everybody’s taxes are going up potentially 4.8%. A 1% income surcharge on everybody for Obamacare, and a 3.8% surcharge on any capital gains. If you sell your house at a profit, if you sell a stock at a profit, in addition to whatever the capital gains rate is, add 3.8% to it. It’s an Obamacare tax. Both of these are.
The Republicans are not proposing tax cuts, and neither is President Obama. When he talks about tax cuts for the middle class as part of the deal, all he means is that the current tax rates will not go up for the middle class. But nobody is getting a tax cut. The president has not proposed one. The Democrat Party had not proposed one. And, sadly, the Republicans have not proposed one. So when you hear people talk about a middle-class tax cut with the fiscal cliff, there isn’t one. It is political doublespeak. It exists by continuing to call the current rates the Bush tax cuts and then claiming that people who will not see a tax increase are getting a tax cut, when they aren’t. Their rates are going to stay the same. There is no tax cut anywhere for anybody any time on the table.