'This Week' Transcript: Senators Charles Schumer and Jon Kyl

KYL: Jonathan, it's exactly the opposite. The higher you set that level, the less small business you're going to hit. And you're exactly right, and Chuck was right back when he talked about a million, because the increase in the tax rates for individual taxpayers sweeps in about a million small-business owners. Remember, about half of small businesses are women-owned. And it sweeps them up because they don't pay corporate tax rates; they pay as individuals.

KARL: But -- but...

SCHUMER: Wait a second. That's counting big hedge funds as small businesses, big Hollywood productions, like Oprah Winfrey, as small businesses. It affects very few. We all know mom-and-pop small businesses, the dry cleaner down the street and others, don't make millions and millions of dollars.

KARL: And let's remember. All the tax cuts are set to expire on January 1st, so I've got to ask you, Senator Kyl, a lot of Republicans, a lot of your colleagues, people you greatly respect have said, you know what, why don't we do $250,000? We've got to do what we can do.

Let's take a look. Senator Cornyn, who's going to replace you as the number-two Republican in the Senate, said, "I believe we're going to pass the $250,000 and below sooner or later. We really don't have much leverage there because those rates go up by operation of law December 31st. I would focus on areas we have more leverage."

So why would the president agree to raise that limit a dollar when you have so many Republicans that have said, you know what...

KYL: I don't think you have "so many Republicans." That was one statement, and the context of it was, what is realistic as a deal, given the president's adamant position that he wouldn't compromise on anything above $200,000?

Let's just get back to the theory, because Chuck had it right the first time. The more people you sweep up in this big tax increase, the worst it's going to be for the economy, the worse it's going to be for small business, and most importantly, the worse it's going to be for workers.

Let me just point out two interesting statistics. Over half of the dividends paid by corporations go to people 65 years of age and older. In fact, a majority of adult Americans own stock or -- let me just make this point -- so when the dividend rate goes up to 68.6 percent, which is the combined corporate and dividend rate, A, corporations aren't going to pay dividends, and, B, if you are one of those seniors that get a dividend in your retirement, you're going to be taxed 68 percent. And, secondly, the death tax, 55 percent rate...

(CROSSTALK)

SCHUMER: Let's go to the death tax.

KARL: Quickly, and then...

(CROSSTALK)

SCHUMER: Six thousand of the wealthiest, wealthiest estates are the difference between what President Obama wants and Jon Kyl wants. It's $119 billion over 10 years. For those 6,000 estates a year, to give $119 billion away and instead take it out on cuts on Medicare and -- and -- and roads and education is unconscionable.

(CROSSTALK)

KARL: So but -- but can we look at the -- can we look at the bigger picture for a second? We've known for two years that these tax cuts would be expiring the day after tomorrow or at the end of the day tomorrow. We've known that these automatic cuts, the so-called sequester, this was going to be happening for more than a year.

Aren't you a little embarrassed as leaders in the Congress that it has gotten to this point, that tomorrow is New Year's Eve...

SCHUMER: Yeah.

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