Befuddled Bob Schieffer: ‘Why Do These Rich People Need Another Tax Cut? They're Already Rich’

“Why do these rich people need another tax cut?” Bob Schieffer demanded of his guest on Sunday morning’s Face the Nation, Republican Congressman Paul Ryan. Conveying his no-so-profound economic reasoning, Schieffer saw a pot of money to be absconded: “I mean, they're already rich. They seem to be doing pretty well as it is now. Why cut their taxes some more?” After Ryan explained his proposal would maintain current tax revenue levels while eliminating deductions and loopholes used by the wealthy, a baffled Schiefier ruminated:

I guess the part that I don't quite understand – and I take your proposal to be a serious one – but the part I don't understand is if the country is going bankrupt, if the country needs to borrow 40 cents of every dollar that it spends, how do you help that by reducing the amount of taxes that the richest people in the country pay? It would be seem to me that's where you get revenue. How do you justify that?

In the next segment, with Senator Mark Warner, Schieffer also hit the Democrat from the left on hiking taxes, after describing him as a “conservative” from “a very conservative state,” even though Virginia voted for Obama: “Senator, you are a Democrat, you are a conservative Democrat from a very conservative state, Virginia. Do you think that we can solve the deficit problem without raising taxes in some way?”

From the Sunday, April 17 Face the Nation:

BOB SCHIEFFER: You have two very different approaches that are now out there. The President wants to raise taxes on the wealthiest Americans. He wants to keep Medicare in place. The big part of the savings in your plan is to do away with Medicare, replace it with private insurance that would be subsidized by the government, and you actually want to lower taxes on the wealthy, even lower than the Bush tax cuts which were enacted during the Bush administration. I guess the question I would have, Congressman, why do these rich people need another tax cut? I mean, they're already rich. They seem to be doing pretty well as it is now. Why cut their taxes some more?

CONGRESSMAN PAUL RYAN: First of all we're not talking about cutting taxes. We're just not agreeing with the President's tax increases. I guess that's the new definition of tax cuts. We're saying keep tax rates where they are right now. Get rid of all those loopholes and deductions, which by the way, are mostly enjoyed by wealthy people so you can lower tax rates. We're taking a page out of the play book of the fiscal commission, the President's fiscal commission supported by a majority of Democrats. Broaden the tax base, lower the tax rates for economic growth. A simpler, flatter fair tax code more internationally competitive so we can create jobs. This isn't tax cuts. It's tax reform targeting our revenues at where they are right now. We're just not signing on to all the tax increases that the President is proposing. On Medicare let me just the he will you, no change would occur to anybody 55 years of age or above.

The problem is Medicare goes bankrupt in nine years. Unless we do something to save it, it won't be there for future generations like my generation. The ideas we're talking about for reforming Medicare is a system that works just like the one that I have as a member of Congress that federal employees have. It works like the prescription drug benefit works now for seniors which has proven to lower costs and expand choices. And also it's an idea that has come from both parties in the past. It has traditionally had bipartisan support in the past. I would simply say the President had one idea he gave us on Wednesday which is have this board of 15 people that he appoints ration and price control Medicare for current seniors. We just don't think government rationing on Medicare is the answer. We think we should keep the promise to current seniors and people ten years away from retiring, but then reform the system for the next generation so that it is safe and solvent for current seniors and for future generations because Medicare is going bankrupt.

SCHIEFFER: Let me go back to what you said there at the top. You say you're not for cutting taxes. But am I misinformed? I thought you were talking about lowering that rate for the top income taxpayers back to about 25 percent, so isn't that a tax cut?

RYAN: In exchange for losing your deductions. So in exchange for using the loopholes and deductions that mostly higher income earners use. What we're saying is keep tax revenues where they are. Don't lower tax revenues but clean up the tax code so that it works. If you have really high tax rates what you end up doing is penalize small businesses. You have to remember, Bob, most successful small businesses file their taxes as individuals. Most of our jobs come from these small businesses. The President is proposing to raise the tax rate on these small business to 44.8 percent. We don't think that's good for jobs or economic growth. When we tax our employers a whole lot more than our foreign competitors tax theirs we lose, they win. We don't want that. Just like the fiscal commission, the bipartisan fiscal commission said, lower tax rates, broaden the tax base for economic growth and that's exactly what we're proposing.

SCHIEFFER: I guess the part that I don't quite understand – and I take your proposal to be a serious one – but the part I don't understand is if the country is going bankrupt, if the country needs to borrow 40 cents of every dollar that it spends, how do you help that by reducing the amount of taxes that the richest people in the country pay? It would be seem to me that's where you get revenue. How do you justify that?

RYAN: Two things. Two things, number one, we don't have a tax problem. Our revenues are going back to where they have been historically. We have a big spending problem. Spending is growing at a very unsustainable rate. Let's focus on spending....

— Brent Baker is Vice President for Research and Publications at the Media Research Center. Click here to follow him on Twitter.

Brent Baker
Brent Baker
Brent Baker is the Steven P.J. Wood Senior Fellow and VP for Research and Publications at the Media Research Center