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Michael Linden of the Center for American Progress and Curtis Dubay of the Heritage Foundation debate the impact of tax increases on the economy.
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-- -- Well president Obama's new -- on taxes says that voters face a choice between two very different plans for the country.
Governor Romney's plan would cut taxes for the folks the very -- he says that if we do our economy will grow and everyone will benefit.
We tried that top down approach it's what caused the mess in the first place.
The president wants to quote as the wealthy to pay just a little bit more here to debate both sides of that choice -- -- -- director for tax and budget policy at the Center for American Progress.
Courtesy -- senior tax policy analyst at The Heritage Foundation you know.
Let me start with you on this when Michael because here's the thing I mean the president is basically saying.
That we need to tax that top 2% but nothing is really it looks like -- to be done between now and when that fiscal cliff pets at the end of the year.
Do you agree -- to secure the president's statements.
But I got bigger the president's stance and others point out that the senate actually passed a bill.
Last week that would extend the middle class tax cuts.
For everybody -- everybody making under 250000 dollars and actually everybody making more than 50000 dollars up to that 250000 dollar threshold.
And let the their tax cuts on -- income above that expire so if the house went ahead and -- that is well the president can sign and we could avoid all this mess again to the.
Chris you know very well that's not gonna happen.
Yeah there's no doubt the thousand -- and there's good reason right.
Because raising taxes on job -- like the senate voted to deal would destroy jobs accounting firm currency young says that president Obama's tax increase plan the senate passed.
We're -- 700000.
Jobs there's thirteen million Americans looking for work today adding almost a none of that number is just unconscionable.
Well Michael let's look at the facts here to get -- yeah I would likely to -- us.
A look at that if the bush tax cuts expired -- it -- political football is passed back and forth between on November that's probably what's gonna happen.
Capital gains I -- -- -- that investors are gentlemen.
Capital gains taxes here's -- the jumps going to be now to 50% sitting at a 20% and how accurate dividend investor -- many our viewers are everybody.
You're gonna go from 50% to 43 point 4% that is January 1 2000 at thirteen Michael how can that be good.
For the economy and -- for investors.
Look there is this theory out there in the world that I'm sure Curtis is gonna argue that if you lower rates on capital gains you'll end up with.
Enormous new job creation in better growth but let me just say that we are currently capital gains rates that are lower than they've been in 75 years.
And we've had -- -- its job creation of any expansion over the 20012007.
Period that's and we lowered capital gains rate it didn't result.
You know John 300.
-- and I don't.
Connecticut for the quick facts -- capital gains are gonna go back to 1997 levels.
Yeah right.
Yeah evidence okay that the which is lower than they were inaccurate Adrian lower than they were in also in in 1986 when they were raised by -- right that's gets right Ronald Reagan the point is.
-- have low capital gains rates for the past ten years and has it helped us with our economy now the 20012007.
Expansion was the worst expansion.
In seventy years of course there's just no actual evidence that lowering rates for capital gains -- actually do what Curtis says it -- Let's look her hasn't -- the financial crisis of 2000 it wasn't exactly predicted or plant floor and economic theory books.
Well that's always bits of 0107 with a lot better and economic expansion -- until today.
There's no doubt about that.
The reason why you wanna keep capital gains rates and dividends rates low is it because it's not because we want to protect investors.
It's because they want as much investment in the -- economy as possible.
Lower rates on capital gains lower rates on investment lower the cost to capital entrepreneurs investors and -- and business as we keep the current possible -- get.
What we're not you won't say we're not talking about we're not -- not cutting capital gains rate and interest rates here which are not not raising them with the big difference.
My girls how do you account how do you account for the fact that when we lowered capital gains rates in the past we haven't gotten more investment investment has not responded.
In fact there's no correlation between capital gains rates and overall investment in the economy how do you account for that I mean your theory says that lower rates should be more investment but that doesn't.
Happen but can -- interrupt and disrupt what they know let me address -- because another piece of -- I didn't bring up was that that the tax on small businesses I mean that is.
That has backed the way that small businesses most in this country file they will be paying.
More taxes come January 1 2013 Curtis I'm sorry -- that I had to bring up.
Right but that's I didn't -- -- not 90% of small businesses don't make more than 250000 dollars a year in profit and so they won't see their taxes go up at all.
That's mostly just red Herring so that people who wanna have low taxes on the very very wealthy can try to avoid talking about low taxes on the very very wealthy -- Then there's advertisement sure go ahead -- -- current there's -- This then the red Herring argument -- the hike you're right it's a red Herring president Obama's -- saying that.
His tax increase would hit 9 December 2 on December sort of small businesses.
He's exactly right most of those small businesses however are people -- items -- -- not eBay or a lawyer who has a sign up for was houses says he's open for business.
The small businesses that employ workers are the ones -- going to hit hardest by his tax increase.
They are almost all income earned by small businesses that are flow -- Kennedy's.
And they do almost all the employing that's what that there are -- study told us they employ more than half the private sector workforce.
President Obama's plan is -- directly to hit them hardest which means -- have a maximum.
Negative impact on job -- Michael.
Others this report the repeat that almost all small businesses won't be affected at all and again I'll point out -- let it -- -- job creation Michael -- bringing up that issue of job creation refinance manages it not as a percent haven't got -- that part of the same -- what he's saying is that.
Those those small businesses that are actually driving revenue in driving investment and the ones that are hiring creating jobs aren't gonna get those -- X let me just point out two things one.
If -- a small business that makes less than 250000 dollars a year in profit not in revenue but in profit you'll not see a tax increase at all under the president's plan.
Number two when we had higher rates back in the 1990s we got better job creation and we've had in the past twelve years so how do you explain that -- how do you explain your theory that lower rates to lead to more job creation.
How do you explain the George W bush administration and the Bill Clinton administration -- What do you think it's interesting liberals always make this argument that we need to raise tax on cigarettes or oil to discourage people from using oil are smoking.
But it comes to income they never they never brought bring argument over -- think you'll be raised taxes on income -- to get less creation of of course we're gonna get a sort of our economy of course higher tax and income.
Refuse to Tennessee creating -- it's just common sense.
What -- -- didn't like it might -- And enables it yet I'm glad I got around that we'll sit beds.
If I'm wrong and you're right is something does happen between now and the end of 2012 when it comes that fiscal clip I want to have you back on the show and apologize but I will buy you dinner as well steers plus and I hope you'll be back in the showing if I'm wrong.
If you know what absolutely -- the Clinton -- as -- -- Donna thank you very much good at about the shows on debate.
The -- Michael's gonna keep track of that phone --
