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Hoover Institution Fellow Edward Lazear on the tax implications for the middle class of Obama’s spending policy.
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You won't remember.
He wants to give millionaires and billionaires 250000.
Dollar tax.
Foreigners but -- blowing up.
We're making middle class families -- -- -- to us.
Well my next guest says the big guys got it backwards as -- it's his spending that's hurting the middle class.
Added -- zero and then you should doubt the former chairman of the president council of economic advisors.
On your bush 43 very good to have you back served -- see you think the president is explaining this in reverse its claim that.
Well he certainly explaining a part of it reverse that the one thing using he's ignoring is that.
Over the past three years we've had a dramatic increase in spending so if you compare the expenditures by the government since 2008.
We're about one and a half trillion dollars above where we would've been at the 2000 and a baseline -- there has to be financed.
Now you know we all know we have a progressive tax structure we know that the top income earners do pay a higher proportion of the tax.
But if you take that top 5% and you ask how much -- they pay.
They pay about 40% of the tax burden that means that the other 60% is paid by everybody else so -- everybody else well.
The people who are in that other 60% have a top earning household level.
The income about a 135000.
Dollars.
And if you look at people who are under a 100000 dollars a year at the family income level they're paying almost half of that tax burden so.
What that amounts to.
Is about 4500.
Dollars per individual in that middle class group as a result of the excess spending between 2009.
And.
I had does that middle class group know that sense that because -- they were so outraged by that.
Then the president would.
He he you know.
The vote would do respect of the late great to senator George McGovern he did -- governor Rendell he's not.
Yeah well you know I I think you're right I think people don't know that but that's the problem the because.
What I think people have ignored is the fact that this burden is not just the burden of the rich it's actually the burden of the middle class.
And that's true by the way even if you accept the president's proposals so you know we know that the president would like to raise taxes on me on the rich -- -- and a little introduction there talked about that he'd like to see taxes go up Biden married couples to 50000 more singles 200000 he'd like to see.
Dividends go up -- ordinary income levels and capital gains go up.
But if you score that you say you know what is treasury what is his Treasury Department tell us that will bring in.
It'll bring in less than a hundred billion dollars a year -- on the -- We're already raising revenues is not gonna move the needle much I mean it.
In order to really get some bang for the buck you have to cut out a lot of -- Well that's right and and if you play this -- -- another way to make your point -- is if you play this forward.
Even with the -- even with the president's.
Rosiest scenarios.
He's talking about 28 to 30% of GDP going -- government expenditures within a couple of decades.
And you know if we were to raise our taxes to get the -- -- level that would mean raising the taxes on the average American.
By about 50% that's enormous and I don't think Americans are gonna tolerate that.
Artist who watched very closely -- thank you -- Figure all this out with the figures.
That was there of course in California --
