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Former Goldman Sachs Vice Chairman Robert Kaplan on how the election would affect potential increases in taxes.
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All right the former Goldman Sachs vice chair Robert Kaplan who says this is not a red or blue issue this is simply -- -- green issue your green your money your country five months problem line.
And right now at a time either we deal with this so we're facing a wicked hangover come.
New Year's state Robert -- -- had to get out of and the likelihood of us addressing remotely any of -- Well I think we're going to address that.
And I think the stock market.
Is worried about Europe but it's priced as if we will address it.
I think -- more stock market would be a lot lower.
They if it didn't believe but you know unites about this before but markets can be disappointed and I know markets run up on.
What looks like patchwork agreements to keep Greece together Spain together Portugal together.
How many times have you reminded me that those can be very short line.
Well I think we're in a lot better shape than the situation they're -- in Europe because there's an agreement.
On a number of big things there's an agreement about the middle class part of the bush tax cuts right to disagree minutes on the high income parts.
There's an agreement actually on entitlement reform on Social Security the disagreement is on Medicare and Medicaid but I think they'll their -- be a basis.
And I'm just on the -- and I put on the -- -- that that that alone.
Is is is is -- no deal right I mean -- they are really opposed both sides and you know I know there is some -- -- -- candidate who want to even the Republicans look at.
Raising taxes but there -- don't know -- -- -- That is why we have elections and I think what you're gonna hear in this election in this in this debate.
Both sides we know we're Romney's coming from we know were Obama is.
That we don't know where each is on entitlement reform we don't know -- each is on infrastructure spending and stimulus.
And we probably know where -- is on regulation but I think the election.
Whoever wins if Obama wins I think the Republicans in congress will be hard pressed defy them.
On on coming up with a compromise they're probably won't mean the high income tax cuts will -- -- laps and the middle cup cup class tax cuts will stay.
We'll got off anyways on the Internet but women you're not include the possibility of in that scenario the Republicans gaining the senate then all bets are -- I think if the president.
Current president wins.
I believe it's going to be hard for both sides not to make a -- I believe they will make a deal.
When I really -- now flip to the Mitt Romney -- potential win then.
-- that I think.
The country.
What I would say it's probably more likely that all the bush tax cuts will be extended.
At least for a year or two until they do more comprehensive -- Reform.
But I think that's more likely ironically if Romney wins I think he'll be as likely to do infrastructure spending as Obama.
Maybe he'll do it better but I think that'll be the a surprise.
And I think he will certainly tackle entitlement reform.
You know I think.
You will always tried to -- what's your near term worry -- it's all these rates and all -- a backing up what could simply planes LaGuardia.
So did the big issue I guess sort of the thorniest one is what to do about those upper income rates -- standard -- right.
If you -- to be a betting man is -- a lame duck session that will probably.
Extend them a year or.
Leaving aside who wins -- all that did did it that it's it's very likely.
Everything's extended except those for the rich betting which position.
-- who wins the election.
And -- know what will know in December who that is habits if its Romney they're gonna get extent that I believe whether they captured and senator now.
Yes I -- believe that.
That's because I think the Democrats will feel.
That if if for Republican wins the White House -- feel that there's a mandate this is why it's very important in this election.
That these issues get explicitly discussed could you really want the president to have a mandate and the only way he can have a mandate.
Is to be clear about what he would do if he were elected by the -- we're certainly -- -- -- -- elections good.
-- -- Goldman prospective -- be curious with the markets like the assurance.
Of knowing that all the rates are extended a year.
Including for the rich and then serious tax reform is considered.
Next -- would they jump on that.
My own view is no interest I think the markets ironically.
Want to see this deficit.
Under better control they -- tax increases alone won't do it -- but they think it's part of the puzzle.
So I think the market in my own view is the market -- to react better the high income tax.
The taxes going up.
And some entitlement reform.
And a package of other activities that got us -- -- -- -- more stable.
Trajectory to reducing this deficit no I don't think the market now believe.
That tax reform -- I think it's a bit of a red Herring.
So the markets because they really don't understand how you gonna do something.
-- raised any net revenue and are you really gonna get rid of popular deductions like the mortgage deduction.
It's very interest -- and hope not at all influence for your locale in Boston Massachusetts.
I'm kidding Robert thank you very much good seeing you again --
