U.S. Senator Mitt Romney (R-UT) joined Special Report with Bret Baier to discuss how Democrats’ tax-and-spend proposal will hurt the economy and do nothing to the address challenges Americans are facing—from empty shelves to the increasing prices of food and gasoline.
A transcript of the interview can be found below and the full video can be found here.
Bret Baier: First of all, before we get into the nitty gritty and the details here, you know, there’s a lot of optimism being projected by the Administration and Democrats on the Hill. Where do you see these pieces of legislation tonight, at this time?
Senator Romney: Well, I think the Democrats are pretty desperate. They want to get something done for the President because he’s kind of circling the drain with the electorate and the country and as a result they’re willing to do almost anything, I think. So I think you’re going to see legislation passed, but the real problem is the legislation is not popular with the American people and it doesn’t address the concerns people have. They’re concerned about inflation, they’re concerned about empty shelves, and this legislation makes things worse, not better.
Baier: Now let’s talk about this new pay-for structure. It is a proposal to go after unrealized capital gains. Some people are calling it a wealth tax on about 700 billionaires. Why, in your opinion, does this not work?
Romney: Well first of all, it’s not a good idea to tell billionaires, “don’t come to America, don’t start your business here,” to tell the Steve Jobs and the Bill Gates and people like that “this isn’t the place to begin your business, go somewhere else.” That’s a bad idea. But number two, you’re going to tax people, not when they sell something, but just when they own it and the value goes up. And what that means is that people are – these multi billionaires are going to look and say “I don’t want to invest in the stock market, because as that goes up, I’m going to get taxed, so maybe instead I’ll invest in a ranch or in paintings or things that don’t build jobs or create a stronger economy.” That kind of distortion of our economic system is a bad idea for the entire country because frankly, we depend upon people of means to invest in enterprises, to invest in the stock market. That’s one of the reasons the stock market keeps going up, which is good for all of us. The idea that somehow there’s somebody out there that’s going to give us stuff for free – it’s just not going to work.
Baier: Looking back at the alternative minimum tax, the AMT, when it was first created it was going after a very small number of people and then over the years it expanded to roughly five million people under AMT. Is that what you see potentially happening here?
Romney: Well that’s of course one concern, which is not only will you convince billionaires not to invest as much as they have in the past in starting businesses, or starting investments in the stock market, but instead you’ll have more and more people that get hit with a tax – the idea of taxing people as the value of something goes up, not when they sell it but just when the value goes up, that’s a pretty dramatic change, and the unintended consequences from that kind of change, I don’t know if the Democrats have thought through. And whether it applies to 700 billionaires or 700,000 Americans, ultimately the idea of taxing people based on the value of something going up suggests values will keep going up. What happens when they go down? Are they going to get a refund check? Are they going to get paid interest for not having had the benefit of their money during the time when they were taxed when it went up before? There are so many problems with a dramatically new tax scheme that I don’t think the Democrats have thought through, you know, I think it’s a big mistake. You know, I know a lot of people recognize that with nature everything is connected, and that if you change some portion of our natural system, why, it could have an impact throughout our natural environment. Well, the same is true in the economy. When you change dramatically an aspect of how we tax people, you can expect a lot of unintended consequences, and this new tax idea is not a great idea in my opinion.
Baier: You know, the President keeps on say that this is not going to add a single dollar to the national debt, and this all going to be paid for, even though the pay-fors have changed dramatically in just the past few days. You do a lot of reaching across the aisle, talking to Democrats, do you think moderate Democrats, like the senators Mark Warner, like the Maggie Hassans, like other senators, are going to go for this big change on this issue?
Romney: Well I think they look and see that the President’s in trouble, they see that Democrats generally are in trouble politically, and they’re probably feeling a lot of pressure to get something done. And there are some senators that say they won’t raise the regular tax rates, they want a new tax of some kind, so that they can, if you will, hold fast to their original commitments. I think they’re making a mistake to raise taxes. I think they’re making a big mistake to put in place a new tax scheme that could have a significant impact on the economy, and I also think they’re spending money in the wrong ways. Look, they’re adding to inflation, and instead of dealing with something like the emergence of China as a global competitor, we’re going to be giving out two years of free pre-k. This is not the answer to the problems America faces right now. So it’s raising taxes at a time we shouldn’t, and it’s also encouraging more inflation, and it’s not addressing the real problems our country faces and that the American people are concerned about.
Baier: You know, President Obama went after you as a Republican nominee in 2012 on this issue of taxes and that you were paying less than a nurse or a secretary, and it is the same messaging that they’re using today. Here’s Senator Dick Durbin: “You ought to pay some taxes. If you can build rockets and take your friends up for a little shot into space, shouldn’t you pay a few bucks in taxes? I don’t think it’s unreasonable. Same thing holds true for these corporations. When we look at the biggest corporations, and most profitable in America, too darn many of them pay no federal taxes. What’s going on here?” So is that attractive politically, Senator?
Romney: Well it’s obviously been working for the Democrats for a long time, and it’s simply just not true, which is that people pay taxes and the higher income people in America, as you know, pay a higher share of their income in taxes, as they should. As a matter of fact, we’re one of the most progressive, meaning one of the most highly-taxed, high income people, in the world, among developed nations. And likewise, our corporations all pay taxes on their income. They follow the rules. They report their income in the way that’s consistent with those rules, and they pay taxes if they have a profit. If they don’t have a profit, they don’t have a tax. So these are obviously diversionary things, and the reality is that people are paying their fair share. If there are some people getting around the law somehow, there’s a loophole, fix the loophole, but don’t create a new tax which is going to encourage high income people not to invest in starting businesses, not to invest in the stock market, not to create more jobs here. That is a serious mistake.
Baier: Last thing, I want to read these tweets from Larry Summers, obviously a prominent Democrat, has been in several administrations, talking about inflation. “When the Biden Administration formulated its budget in February, it expected two percent inflation in 2021, I was warning about inflation. Their forecast is no longer operative. In May and June, Secretary Yellen expressed confidence that inflation would be to the two percent range by late 2021 or early 2022. Now this forecast is no longer operative.” He goes on to say, “In a CNN interview Secretary Yellen asserts that inflation has decelerated. This is a bit misleading as the three month and 12 month CPI inflation rates are both around five percent on an annual basis.” Again, Democrat Larry Summers. Finally, your thoughts about inflation and where we are as a country on that issue?
Romney: Well I think it’s hard to predict what inflation is going to do in the future. We’re seeing it now and people are seeing it in the prices they pay for food and for gasoline. But $1.9 trillion that the Biden Administration put out in January, now asking for trillions of dollars more, I hope you understand how much a trillion is. A million seconds ago, it was early October. A billion seconds ago, George Herbert Walker Bush was president. A trillion seconds ago, a trillion seconds ago, Neanderthals walked the earth. So a trillion is an enormous amount of money, and the Democrats, are adding fuel to a fire, creating more inflation, and it’s hurting the American people.