How far will mainstream media go to disclaim the success and popularity of the Trump tax cuts? Are 50,000 high-income taxpayers on their way out of Illinois if politicians in Springfield don’t do anything to reduce the tax burden? How is that Illinois has poor public services and one of the highest tax burdens? CNN Senior Economist, Steve Moore joins Dan and Amy to discuss.
View full transcript
Proft: Dan and Amy, so since the noblemen and magistrates in Springfield are convening today to vote on all kinds of gun control legislation, I got a question. This guy in Oswego, Dave Thomas? You saw the story, Amy. Jacobson: Oh yeah. Proft: Man armed with an AR-15 helped stop a knife attack during an argument in Oswego. Dave Thomas witnessed the attack, went into his home and got his rifle and ordered the suspect to stop. "I ran back into the home, into my house, to grab my AR-15. I grabbed the AR-15 over my handgun, it's just a bigger gun. I think a little bit more than an intimidation factor definitely played a factor in him stopping." No shots fired, suspect got away briefly before police captured him, stabbing victim taken to the hospital is expected to recover. "The AR-15 is my weapon of choice for home protection," Thomas said. "It's light, it's maneuverable. If you're trained and know how to use it properly, it's not dangerous." And this is just a perfect example of a good guy with an AR-15 stopped a bad guy with a knife, and there were no lives taken, so all in all it was a good day. I'd say so. So does he get to keep his AR-15? Does he get to? Jacobson: Because he's over 21, sure. Proft: Yeah, okay. Yeah...alright. Jacobson: That's a story of a good guy with a gun! I'm glad we brought that story to people's attention. Proft: Yeah...and now 3/4 of the General Assembly will summarily ignore it. Steve Moore, switching gears, our friend Steve Moore, Heritage Foundation economist, Wall Street Journal columnist, joins us now to talk things economic. Steve, thanks for being with us, appreciate it. Moore: Good morning, guys. Proft: So, hey...Warren Buffett, I know he's got that underpaid secretary that he's always complaining about, who pays more...a higher rate of...on her income taxes than he does? Report out from Fox, $29B windfall for... Jacobson: 29 BILLION? Proft: 29 BILLION dollar windfall, BILLION, for Berkshire-Hathaway...so what do you think is fair, since he's a fairness guy, what do you think is fair in terms of what percentage of that he should give his secretary, Steve? Moore: Well look, a secretary's gonna get a big tax cut too, as well. I mean, let's say if his secretary makes $80K a year, she's gonna get about a $2K tax cut. I don't know if you saw the big study...this has been a mini-scandal that's developing, that the New York Times had an article yesterday saying that they found something...they...actually, they looked all over the country to find some middle-class, middle-income person who is gonna pay more taxes, who's paying more taxes under the Trump plan. They couldn't find anyone, so they...they...INVENTED a couple, and they...you know, with all sorts of conditions, they're sort of a "Where's Waldo?" type thing, to find the one person in America who's gonna pay more taxes. And, did you hear about this? So they, they have this, you know, John and Jay Taxpayer, and they said "Well, this person's gonna actually pay $3,000 MORE in taxes!" Well, it turns out one of the top tax experts at the University of Chicago found out that they made a big mistake, and this couple wasn't going to pay more in taxes, they were actually gonna pay a lot less in taxes. And now the New York Times has a lot of mud in their eye. We'll see if they issue a retraction...none yet. Proft: Well, first of all... Jacobson: Oh my...that's SICK! Proft: No, I think that's unfair to the New York Times, let me tell you why. We use composites for Obama's past girlfriends, we use a fictional woman "Julia" for Obama's re-election campaign that, fictional...(Moore laughs) yeah, you have Pajama Boy to sell Obamacare. We like fictional characters, and so using a fictional person to argue against tax cuts, however erroneously, that is, that is standard operating procedure these days, Steve! Moore: I mean, this was follow up from, I think, I believe it was USA Today, I might be wrong but it was one of the major newspapers...issued a similar "study", and I use that word with quotation marks around it, right before the tax cut passed that found one person, you know, that was living in Boston, MA, who had an income of $300K, and was living with his mother and didn't have a house and all of these things, and AHA! This person is gonna pay more taxes! It's like "He's left-handed, he's bald, he's dadadadada....", you know? But look, 90% of people are paying less taxes right now, there was a good story, a cover story, a front-page story in The Washington Post yesterday, Democrats are pulling back on the tax cut message, because they thought this tax cut would be extremely unpopular with voters and now they're finding out that the vast majority of voters in their districts kind of like tax cuts for businesses and families! Jacobson: Wow, so I mean, or...so, do we...do you think we're going to see even more tax cuts in the future? Because even my Democratic friends do like having more money in their paycheck. Moore: Well, you...look, I don't think there's going to be any more Federal tax cuts. I mean, I think the big issue, and this is a big issue for the state of Illinois...you know, we cap state and local tax deduction at $10K now. Many people, many many many people in Illinois pay a lot more than $10K in their property taxes each year...will there be a big tax cut coming from Springfield? Because, if there isn't...Art Laffer and I just completed a study...we think there are going to be well over 50K people in the next two years, high-income people, are gonna move out of Illinois, and they're gonna be moving to those wonderful destinations like West Virginia and Kentucky... Proft; No question. Moore: No, but they're going to Florida, they're going to Tennessee, they're going to Texas. Now, that's going to put an even BIGGER hole in your budget! Proft: Well... Moore: Right, Dan and Amy? Do you think Springfield, the people of Springfield, get it? Will they pass a tax cut so people stay in the state? Proft: No. No. No. No, not with the current leadership, because they don't care! They've been chastened by the electorate, the electorate loves what we're getting here. And, you guys, you and Art Laffer, put together that Rich States, Poor States ranking every year. (Moore: Yep!) And it's interesting because US News just came out with their ranking of the states by a bunch of categories and the ones I want to focus on...Fiscal Stability and Quality of Life, where Illinois is, not unlike it routinely is in your surveys, Steve, 50th in Fiscal Stability and 47th in Quality of Life, and Quality of Life has everything to do with Fiscal Stability. Moore: Well, it also has to do with things like the quality of the schools, (Proft: Yeah, right.) the fiscal situation such as the tax burden, the quality of public services and they're all bad. And I gotta tell you, two or three weeks ago I was visited by the...what's her name, Jeanne...the woman who was running for... Proft: Jeanne Ives. Moore: ...yes...and I was EXTREMELY impressed with her! And you know, everybody I know is...there's a buzz about...I don't know about Illinois but around the country there's a buzz going on about Jeanne and how this conservative who has free-market conservative solutions to the problems of Illinois...I don't know, is she catching on there? Because there's a real buzz around the country about her. Proft: Well, that's encouraging to hear. I think she is catching on, although again the Illinois Republican Party is the Junior Partner to the Chicago Democrats, so... Moore: *laughs* Jacobson: Nice analogy! Proft: So, you know, there's been a bit of a headwind, bit of a headwind she's running into, but appreciate that perspective, Steve, as usual. Just one thing on the rankings though is...you...speak to the Rich States, Poor States ranking that you do and...and the methodology and kind of the meaning for...for families. Moore: So, I'm trying to remember...I know Illinois is in the Bottom 5, I think Illinois ranks...47th...so you're not as bad as...take a bow...you're not as bad as Maine, and you're not as bad as New York, and you're not as bad as California. But, things are bad there, and you know, your tax burden is through the roof, you have poor public services. Here's the thing: You get poor public services, AND you pay a lot of money for that stuff! So it's the worst of all words. Your regulations are too high, and as I've said SO many times on your show over the years, Dan, Amy...until Illinois becomes a Right to Work state, where workers have a right to join the Union or not join the Union...you know, a lot of businesses just will not move into a state that is not Right to Work! That's another way that the dominoes are falling all around you! I mean, Michigan is now a Right to Work state, West Virginia is now a Right to Work state, we're working on Ohio, Wisconsin's Right to Work. I mean, you're gonna be an island of Forced Unionism, and that doesn't work for the state! Jacobson: Oh, you're not making me feel very good about living in Illinois... Proft: No. Although the Supreme Court could help us... Moore: I love Illinois! I'm a Chicago guy! I love Chicago, I think it's one of the greatest cities in the coun...in the world! You know, it's being ruined by politicians in Springfield, and you know, people around the country get it. You know, Madigan has run that state...the Governor doesn't run Illinois! Right? It's run by Madigan! How long has Madigan been there, 30 years? Jacobson: Somewhere around 37... Proft: More or less...he gets a lot of help from Establishment Republicans though, Steve, as you know. (Moore: Haha! Exactly!) That's the problem. Moore: YOU NEED A REVOLUTION! Jacobson: We need Jeanne Ives! Proft: The Janus case, Steve, the Janus case could help do for Illinois what the politicians won't, can't it? Moore: Sorry what was that? Couldn't hear you. Proft: The Janus v. AFSCME case? The Fair Share case before the Supreme Court? Moore: Oh, that's a huge one! And the Liberals are going crazy, because I think the Liberals know they're going to lose that. This is about whether people should be forced to pay Union dues, government employees. I say no, if you don't want to be in the Union...look, if the...the First Amendment talks about Right of Association, right? You're ...you have the right to associate with groups you want to. But, the First Amendment also says you have the right of NOT associating, if you don't want to associate with some group, you can't be forced to. And in the case of Unions, even if you don't want to associate with the Union, you're forced to. And that's why I view this strictly as a First Amendment case. I'm not anti-Union, if people want to join a union and pay dues, and have collective bargaining, I don't have a problem with that. What I do have a problem with is forcing people who don't want to be in the Union to pay dues, especially when the money is going towards political views that they don't agree with. I mean, 40% of Union households voted for Donald Trump, but yet the Unions are out there trying to destroy Donald Trump! Proft: Speaking of Trump, he announced he's running again in 2020... Moore: What a shock THAT is! Proft: Yeah, right? But as he's...as he's putting his Cabinet together, you want me to put in a word for you for Treasury Secretary, or what do you want? Moore: Mmmm...yeah, Cabinet Secretary would be either Treasury Secretary or Commerce Secretary, so I could reverse the STUPIDEST thing that Donald Trump has done since he's been President, which is these idiotic steel and aluminum tariffs, which are actually going to COST American jobs, because it makes everything that we produce in America more expensive and less competitive. So President Trump, if you're listening to this show, DO NOT GO FORWARD WITH STEEL AND ALUMINUM TARIFFS, you're going to actually hurt the manufacturing base that you're trying to rebuild. You agree with me on that, right Dan? Proft: I do. Jacobson: But you're actually also going to hurt the consumers, because...canned vegetables...everything that is canned that we buy, those prices are gonna go up. And beer is gonna skyrocket, Dan, so get your 24 cases of Miller Lite right now! Proft: I...uh...only drink (?). Moore: Well Amy, you get your A in Economics today. This is all going to be pushed onto consumers, just to make things more expensive. And think about this; automobiles, manufactured products, machinery, all that is made of steel. How are we going to compete in global markets when we're using steel that's 20% more expensive than any other country? It just doesn't make any sense, even from a jobs perspective. Proft: All right, you persuaded me. Secretary of Commerce Steve Moore... Jacobson: Yes, I'll do that! Proft: The only problem is that I don't believe the Secretary...the Department of Commerce should EXIST, so we're gonna have to traverse that, but... Moore: *laughs* I'm with you on that! Proft: ...Steve Moore, CNN Senior Economist, Heritage Foundation, Wall Street Journal. Steve, thanks for joining us, appreciate it. Moore: Take care guys, have a great week!