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Harvard University Economics Professor Robert Barro on the steps to boosting an economic recovery.
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Well stocks are down this quarter way down incomes are down -- that in this latest month.
More than just a little bit on consumer confidence of the debt but people are still feeling just and communities -- a little time expression for not so good.
But the president still confident that things will get better my next -- said.
Maybe it's time to scrap -- Mr.
President and start over with some big things Harvard University professor Robert about joining me now armed.
-- -- Yesterday's Sunday what would be a couple of the big things you'd recommend.
-- on a crisis it really is a potential for doing something serious.
So tax reform He wanted to -- very basic Q1 lower marginal tax rates you wanna get rid of a lot of these tax expenditure items.
You wanna get rid of the corporate income tax which makes no sense.
To get more revenue just.
You -- headline that hit.
Getting the the the corporate Gupta just -- on the books that would that would be a -- and that would get Republicans probably.
That would make Republicans happy on the other side to get more revenue I would -- be willing to accept as part of a package something like a value added tax.
I consult the non cash cutting marginal rates what would you to do -- -- to that will rates and -- -- come down and then this business.
The swap would be -- the united tests.
-- the deficit commission was pretty good in terms -- cutting the structure of marginal tax rates on the income tax.
And making up the revenue there mostly by eliminating a lot of the tax expenditure items like home mortgage interest deduction and in another words in -- -- to.
Just do provide that stick you also to provide the -- and the -- would be.
The marginal rates come down the corporate tax goes -- But these other things go simultaneously.
But because of the path of entitlements even if you have serious reform there I think it is true that you're gonna need more revenues.
And that's why I think it's part of the package something like a value added tax makes cents.
Now when I recommend that I get tremendous flak from conservatives they absolutely hate the idea of this.
My well -- right people have to bend on something here.
But and I see much more.
Momentum for what you're proposing professor the name the president -- So I think it's a given He won't do that I think it's a Gibson as you that it was stated Republicans wouldn't accept.
So I'm looking at fourteen months of this nothing getting.
It's a difficult economy I can't be optimistic about the president moving in a way that we get things done I actually think he's the main impediment to doing something basic I can't see him.
Changing his basic view points enough to get this kind of overall package and because to pursue what you're doing and He loses his dates.
It depends on how you think about the overall package I mean it is more revenue Hanoi.
Understand -- ability to have our lines are ready.
-- stronger professes advice and and cutting out that it didn't you know corporate tax and he's taking our taxes for fat cats and bringing them down.
And the headlines going to be and he's he's essentially initiating a sales tax that.
It's going to be regressive.
Depends on how you do it you can make a consumption tax more or less progressive.
Most efficient one is one that's just a flat rate on everything.
You make it more progressive you can do it by exempting certain items.
Food for example housing.
What I like about what you're proposing those.
You know a lot of Republican friends are they don't like Texas -- -- we -- -- look at the -- said something like -- because you -- one of the -- -- its -- -- It takes money out of the underground economy the people aren't paying taxes are dodging taxes -- fans my taxes.
This is something every woman.
Up to.
One and a good things about a -- -- attacks to ways designed it's very good for enforcement it's because that thing gets reported various stages.
That are essentially incentives.
Provide the information that the government -- -- the people down the line we're doing so it's a much more efficient form of tax much more more difficult to evade.
And this tremendous experience for this kind of tax 'cause every other developed country actually has this form.
Grab they're not there -- also known as themselves and not necessarily a good reason to know you have to do it I agree with that professor very good thing thank you very very much.
Great to see you have been there were writing this down licensing.
