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President Obama warning that the US economy could head south of Washington doesn't find a way to avoid the automatic tax hikes and spending cuts set to start in the new year.
But we found a CEO who says she's not that worried -- the deal isn't reached right away and it might actually be a good thing to be pushing up against this fiscal -- Joining us now is Bill Harris CEO personal capital and former CEO of PayPal.
And into a great to see yet you've seen in the coming at -- -- first of all we we get word that today.
But people are more optimistic the market was up as a result.
However we haven't haven't heard any real talk despite coming up against the cliff which you say is a positive thing because -- force be -- do the right things -- spending cuts.
And if we look at what happen.
In 2009 -- we get this extra 800 billion dollar stimulus thing.
Rather than being a one shot deal that has continued every year 20092010.
And it guess what it adds up to about.
What our deficit is until you deal with the fact that they have continued.
This 800 billion dollars in stimulus until they cut that out.
Are we going anywhere.
I think the real objective the thing we have to do as a company as a country is fix our fiscal house.
In order to do that we have to reduce spending we have to increase taxes there's no two ways about it.
And the great thing in my view about the fiscal cliff.
By the way what we're looking at right now is what I was talking about before -- you can see 2009 I was supposed to be one shot deal and 800.
Billion dollar increase in spending but it continued 201020112012.
That's what has to be -- -- -- it all has to be addressed and what we need is comprehensive solution that will last for a long time.
The world both right the ship but also give a certainty and give us an understanding as business people and as consumers as -- you know what.
But what status we will have from a tax point of view from the spending point of view over the next number of years.
That becomes the big problem for anybody trying to run a business they don't have a tax plan -- code that they can really count on but putting that aside as it.
As we balance -- like you say that we need to on the spending as well cutting that.
Lot of people don't even -- ending the war which is at one point four trillion so far yes I mean -- you for fat factor that again.
Absolutely I mean how did we get where we are.
In 2000 we had a surplus.
And we've had been ten years of increased spending both the domestic and military.
And we've had dead decreased tax revenues and so what we need to do is.
Right that ship we need to solve put our fiscal house in order.
And it means both increased revenue for the government and decrease spending for the government military and domestic I don't -- entitlements.
We just heard today news that Disney's accelerating its -- is increasing and accelerating his -- of a dividend to December 28.
Try to get those those earnings in before the end of the year do you see a lot of businesses doing this taking their profit now because they think taxes are going up.
Certainly it makes sense for individual investors.
Not necessarily for companies but for individual investors to.
On particularly in capital gains to recognize capital gains this year not next because regardless.
It's likely the tax rates will be increased teach people because used to run into it.
-- teach people what to do about 401K changes that anything regarding IRAs.
All of that stuff people are worried that the laws might changes or something they should be doing proactively yes.
In normal tax advice is defer.
Income and accelerate.
Losses at towards the end of any year.
In fact this year is just really opposite exactly accelerate your income.
To the extent not not don't sell things that you don't wanna sell -- things that -- thinking about selling sometime in the near future -- -- before January 1.
Either way short term capital gains we had a business small business owner on yes and her biggest concern was that that might be taxed as regular income which could go up to 40%.
Is that a concern a lot of smaller businesses well short term capital gains have always been taxed at ordinary income rates but they're concerned that it's gonna go up these are all it's gonna go up from 35 to 39 president and happens or whatever.
Whatever solution whatever solution comes down.
Short term capital gains its in its equally important to recognize short term capital gains if you're going to recognize in the short term.
Before January 1.
Given the general notion however is that.
-- -- to what extent is our tax rates driving.
Capital formation and that job creation.
I don't think they are as important as.
Making sure that we have a strong economy and and strong economy economy depends upon a balanced budget.
So that's the thing we really have to be worth getting going -- agree we agree.
Could also it's good to see -- thank you very much excellent to have -- coming --