Charlie Rose Asks Chuck Schumer About Tax Hikes Creating Jobs, Lets Senator Dodge Question
On Monday's CBS This Morning host Charlie Rose tossed Sen. Chuck Schumer (D-N.Y.) a softball on whether he believes higher taxes on millionaires would create jobs, but the senator only chose to address the second part of the question on income inequality. Rose did not follow up and later Schumer argued that the taxes would create jobs but certain conditions should be met.
That was not the only time Rose let Schumer off without a follow-up question. Schumer insisted the tax revenue should go toward building infrastructure and student loans to create jobs, but added that it would not solve the whole deficit problem. Rose could have challenged that liberal assumption by pointing to the failure of the Democrats' stimulus package, but failed to do so.
Rose's two-sided question to Schumer about the "Buffett Rule," which the Senate Democrats are pushing for a vote next week, was "do you believe it'll A, create jobs? Do you believe B, it will somehow reduce the inequality gap in America?"
Schumer did not immediately address the first question, but answered it later, saying that "at minimum it brings in $47 billion."
"Now if you put that money into, for instance, keeping student loans at a low rate, they're at 3.4 percent now, they're going up to 6.8, you'd create a lot of jobs over the next five years. If you put the money into building highways, roads, and bridges, which many of our colleagues in the House are stopping, you'd create a lot of jobs," the Democratic senator continued.
Rose wouldn't challenge that line, however. CBS correspondent Jeff Glor asked a tough question instead, about notions that taxing the ultra-rich was being politicized into a campaign strategy by the Democrats.
The largely soft interview began with an easy question from Rose for one of the leading Democratic senators – explain the Senate Democrats' "Buffett Rule" legislation. "Just for purposes of explanation, explain the 'Buffett Rule,' because everybody talks about it and we know the essence of it, but what is it?" Rose asked.
A transcript of the segment, which aired on April 9 on CBS This Morning at 8:01 a.m. EDT:
CHARLIE ROSE: Billionaire Warren Buffett struck a nerve last year when he said that America's wealthiest people should not have a lower tax rate than the middle class. Now Senate Democrats are pushing for a vote next week on the "Buffett Rule," a proposed tax hike for people who would make more than a million dollars a year. New York Senator Chuck Schumer is a prime mover behind the proposal. Senator, good morning.
Sen. CHUCK SCHUMER (D-N.Y.): Good morning, nice to be here.
ROSE: Welcome to our table.
SCHUMER: – on your nice new show and nice set.
GAYLE KING: Welcome. Welcome.
ROSE: It is good to have you here. Just for purposes of explanation, explain the "Buffett Rule," because everybody talks about it and we know the essence of it, but what is it?
SCHUMER: Well, it's very simple. First, if you're a very wealthy person, we have nothing against them, God bless them. They made a lot of money. But you have the opportunity to take advantage of certain tax breaks that average people don't. And as a result, a large percentage of people who make lots of money, millions and millions of dollars a year, pay an actual tax rate of 15, 20, 22 percent, whereas –
ROSE: Because most of the income is from investments, rather than ordinary –
SCHUMER: Investments, or they take advantage of different –
KING: Capital gains.
SCHUMER: – capital gains and dividends account for a lot of it, but other deductions too. There are all kinds of deductions. There's a whole industry of accountants and lawyers who do this. So we're simply saying that 30 percent should be the minimum for all income over $1 million. There's one exception in the bill that Senator Whitehouse – he's our leader on this – has put together, which is charitable deduction. We still want to encourage very wealthy people to give as much to charitable. But everything else, there's a 30 percent floor for only their income over a million. Your first million goes by the regular rules.
ROSE: Alright, do you believe it'll A, create jobs? Do you believe B, it will somehow reduce the inequality gap in America?
SCHUMER: Yeah, look, one of our great problems in America, which people don't focus on enough, is that middle class incomes have actually gone down. Median income went down over the last decade. But the income of people who are in the top one percent or .01 percent, has gone way up. And this bill is a question of fairness, making people believe in the code, and it brings in some revenues, no question about it.
ROSE: Sitting in that very chair recently was the mayor of this great city, Mike Bloomberg.
KING: Mike Bloomberg, yes.
ROSE: I'm going to show you –
KING: We'll show you!
ROSE: Here's what he said.
SCHUMER: We'll see.
MICHAEL BLOOMBERG, mayor of New York City: If you just raise taxes on the rich, you only raise a de minimis amount of money. Most of this country is middle class. And that's where most of the tax revenue is. So if you want to raise $4 trillion over the next 10 years, which gets you halfway – only halfway to a balanced budget – everybody's taxes have to go up.
(End Video Clip)
KING: Your response, Senator.
SCHUMER: Well I love Mike, and I love the "halfway," that's the only part of Boston that's left in him.
SCHUMER: But it is true that the high-end people are not the whole answer to the problem. But they are gaining a greater and greater percentage of income, it's not – it's no longer that they're just, you know – for instance, the top, I believe the top one percent in income made 23 percent of the income last year. So you do get some money, but it's also a question of fairness. For the average family who's struggling right now, their income is going down to at least the think the system is on the level, they should be paying less than the people who make the highest income. In terms of job creation, you asked about that, at minimum it brings in $47 billion. Now if you put that money into, for instance, keeping student loans at a low rate, they're at 3.4 percent now, they're going up to 6.8, you'd create a lot of jobs over the next five years. If you put the money into building highways, roads, and bridges, which many of our colleagues in the House are stopping, you'd create a lot of jobs. So if you don't want to do more deficit spending, and there's a consensus there, you've got to find the money somewhere and this is a logical place to do it. But no question, Bloomberg is right, it's not going to answer the whole question. That's not an argument against it. You've got to start somewhere.
JEFF GLOR: But the notion that it's been politicized, that targeting the ultra-rich as a campaign strategy –
SCHUMER: You know, this is such a bogus argument. We have believed, as a country, that higher-income people should pay a higher percentage of income since the 16th Amendment, which was 1912, it came in with Woodrow Wilson and the progressives. And you know, some of the people who, I guess, believe that well the way to get this economy going is reduce taxes on the wealthiest people make that argument, but there's no class warfare involved. It's a question simply of fairness. And the bottom line is most wealthy people I talk to say yes, I shouldn't pay a lower rate than somebody who's my secretary. Some, and they're very powerful, and that article in the New York Times talks about them, say I don't want to pay any taxes. But they're a small group, they have disproportionate influence, obviously, with the Super PACs.
KING: Let's talk about the fairness of baggage fees, for just a second. Because everybody – I was flying recently, and I was asked –
SCHUMER: Of cabbages and kings.
KING: Gayle King here. I was asked to pay $25 – I know, I got the joke. I was asked to pay $25 and I started thinking, now what is this covering again? I understand that you disagree too with baggage fees. Because?
SCHUMER: Look, what's happened is there's competition in the airlines because of the internet, and you can go on and find out the best cost. So they try to hide the fees in other places. And now they –
KING: Not so hidden.
SCHUMER: Not so hidden.
SCHUMER: But, when you go online they'll say the price of the ticket's $300. Now for each bag you carry on it's another $50. That raises the price a lot. So the only thing we're asking for right now, we've asked – I've asked all the air lines to make a commitment not to charge for carry-on baggage. The big airlines, to their credit, have made that commitment. But the smaller airlines are doing it. We can't stop them. I don't think we should pass legislation for this. All we want is the FTC to require disclosure. And when they say the cost is $300, plus $50 a bag. And let people make their own decision.
ROSE: The New York Times, you've mentioned this a couple of times, with an eye on the general election super PAC aims blitz at Obama. Are we looking at not only the most expensive, but also perhaps the dirtiest campaign we have seen?