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Treasury Secretary Timothy Geithner on the President’s effort to reform the tax system in order to reduce the deficit.
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-- political sides are already gearing up for a major battle over president Obama's new plan to slash three trillion dollars from the nation's deficit.
It is time now to turn to our interview with Treasury Secretary to Treasury Secretary Tim Geithner.
Our own -- Peter Barnes is there with the Treasury Secretary.
Peter.
The president once again is asking -- Families that make more than 250000 dollars a year to pay higher taxes to increase tax revenue from them -- -- do this by allowing the bush tax -- to expire.
They -- do this by limiting deductions.
Some of these.
People some of these families are entrepreneurs small business owners this would reduce the resources available to them over time for.
Research and development job creation and expansion how does this package.
Not hurt.
-- -- -- Gonna say the and this at the present objectives little different He did.
We did today was asked congress to legislate comprehensive tax reform individual and corporate so that we can lower tax rates.
Like cleaning up a lot of the wasteful subsidies and spending in the tax code.
Try to make nice it's more competitive improvements has for investment.
But also make the tax system more fair.
-- -- all Americans.
Tend.
To do that.
You gotta do conference of changes and we can -- the Texas and we have.
Gets in the way of growth I think in the eyes -- really everybody and we're trying to fix that now what He did today's to say if we're unable -- -- -- -- as a tax reform.
Here's.
A set of proposals for how you couldn't.
Help contribute deficit reduction a way that's also we can reasonably good for the economy over over time as objective is compress -- reform.
They can lower rates broaden the base make -- is more competitive.
-- congress fails to act.
Then his view is that a minimum we -- it tax cuts -- the top 2% of Americans.
I'll let them expire at some go back to where they were just a little over a decade ago.
Those affected a very tiny fraction of American small businesses only -- 2% of small businesses over the fire for some but it does affect of about 50% or so of the revenue.
And end the employees at those -- -- again I think it's.
88.
Basically a political mess about effect to give it this way when in the late ninety's when those rates prevailed.
He'd had the best record of job creation investment growth productivity growth we had in generations.
So what he's doing is again -- even congress can't get its act theater to do conference reform is He suggesting it.
We shouldn't let those tax cuts expired just gonna affect a small number of Americans small number of small businesses they only take effect starting in thirteen.
Very very small African economy all in the service of course helping the country go back to the -- -- -- because we that we know these deficits if we if they really no place.
We'll hurt growth in the long run -- the people who oppose this tax changes.
Have to answer the question.
Where will they get the deficit reduction because we can't go out and borrowed those hundreds of billion dollars from the markets over time.
And I think -- find it hard to justify.
Doing much deeper cuts on Medicare beneficiaries to pay for very expensive tax cuts just benefit a very small fraction Americans.
But the last time they did the tax reform in the when you're -- text changes -- referring to the economy was not in such a fragile state in the in the mid ninety's it was 96 or so.
And it -- then these changes would raise about one point two trillion dollars from.
These families and these taxpayers of who make over 250000 dollars in the year and here's some of whom.
Our small business owners entrepreneur -- How Eric -- -- small fraction of small business will be affected but again let's put in perspective.
But again governing is about choices.
We recognize we don't have -- -- resources we're trying to figure out how to do things to make the economy stronger in the short term.
And stronger over the long run.
And what the president proposes a way to bring our deficits down over time.
With -- -- tax reform and some very tough reforms on the spending side.
That'll help make sure that we're growing in the future we preserve some room to invest in things that matter right now like the jobs package.
Like stronger -- spending investments.
And generally what we're trying to do is to try to make this a better place to invest so we increased the odds in the future.
We're making more things United States recruiting more things United States exports are stronger that's a desperate.
