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CKE Restaurants CEO Andy Puzder on how the tax increases in the fiscal cliff deal impacts consumer spending habits.
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Effect -- middle class and everybody striving to get into the middle class protective as many American families of those small businesses.
As possible.
We could protect middle class families tomorrow.
Our goal here.
Is to prevent.
Taxes from going up on anybody we -- there for the middle class.
Well you heard it once here edited a gazillion -- -- the whole deal this whole -- thing was about protecting the middle class the middle class.
Getting the middle finger in the end because it's not just a very rich getting hit by tax hike.
The majority of Americans -- coughing up more -- People making 50075000.
Dollars they'll be bank.
At least another 822 bucks a year and the higher the salary of the bigger tonight that's the bad news for UNC case sensitivity -- says.
It could be bad news for the economy and welcome to you obviously have gone about the payroll tax cut that -- went bye -- So by definition that affects eighty plus percent of American households so they're going to be -- on average 800 to a thousand bucks more at a minimum.
Would that have an impact on your fine eating establishments.
But I don't hopefully won't have an impact on us and and it was good to be here -- in the history of but.
How -- -- week we sometimes we'll get trade down from.
From restaurants that have higher prices so -- trade down to -- -- -- I think it I think it's bad for the economy because of people have less money they spend less money.
When they have less money businesses underperformed when businesses underperform.
They don't hire when they don't -- the economy is bad when the economy's bad everybody suffers so I think this is up.
This tax hike -- -- what's really.
People making under -- 113 thousand dollars we'll -- eight.
Flat 2% increase in their taxes because of this payroll tax -- payroll taxes there's no deductions there's no line that's.
So you make a 100000 dollars are going to be can't -- thousand dollars more in taxes than you did last year.
Now I don't hostile but a lot of feelings don't even know about this in when I raise it would demos only the fat cats -- got screwed.
And not me and all that so so date when I when I explain them.
Well this payroll tax cut that you've been getting used to the last couple years it's going bye -- and you're gonna pay more and I think what people see that.
In a paycheck and started the year it does have a psychological of a credibility goes so far the numbers are substantial enough to dramatically Alter consumer behavior.
But it doesn't do a lot for consumer confidence.
Are you -- somebody that's making 50000 dollars a year and you give them a thousand dollars that's meaningful.
You take a thousand dollars away from and that's also meaningful and that's exactly what this -- it's amazing.
That they can characterize this as a tax cut when they've literally increase taxes on everybody.
And I think when you looked at expendable dollars you look at the dollars that people have this bad.
I think the people to get hit the worst are -- 90% of American workers.
But make less that that report less than a 1121000 dollars a year in taxes are gonna get hit -- it is hard.
And it's just amazing to me that it could be characterized it had been able to pull it off in the press.
You know I could deal with cut taxes going on my -- -- -- included -- if it's.
If there was some quid pro quo we hear of another words -- -- for the -- And that I soil comparable cut in spending to offset what was happening to my taxes ready -- other taxes going up.
I don't see that back with a -- like 41 to one tax -- over spending cuts.
The fact of the matter is that a lot of of folks.
And getting -- -- in the whole country is that gonna end up getting.
Well as I think as you noted earlier that those those cuts are talking about -- in the future.
Right now spending is going up so you have taxes going up -- spending going up we didn't address the complexity of the tax code.
We didn't address the deficit problem we didn't do anything to reduce our debt.
And -- what we have the only good -- -- -- under four trillion dollar yeah but it we couldn't do it under extreme duress like the environment around us so cliff thank.
My guys what would make us -- change our behavior I'd I'd I don't see anything that would do it sort of like a nuclear Armageddon.
Iraq I'd I had a discussion with a group of people and a former president about a month ago.
And and he was very clear is that what congress can't lead.
Congress isn't built to lead the people believe the house and leave the senate.
They can't lead the country.
You need the president to take a leadership position on these issues -- -- he doesn't take a leadership position on reforming entitlements and that their code in the debt it's not going to get done.
So we was not an -- and regular the president was a -- -- that.
Well he's he's a president that doesn't like to be involved in politics -- just wish that there is a rebuttal wanted to be involved in politics at all a Republican okay.
At a very good guy okay.
So what now -- -- we talk about your industry bureau is very.
Bananas that this you don't just think about -- -- about the country don't but I can't imagine it's an environment which people would feel.
You know compelled to spend they didn't do so over the holidays we know that on -- I see little -- said -- even with you know.
Big sales and discounts for them to do so now especially when their paychecks are gonna get small.
Exactly they're gonna have less cash in their pockets it's going to be more difficult to get the things they like for our industry for -- food in particular -- we're convenient we're fast.
You can get food for about what it caution at the grocery store about a little less and you don't have to look at the council preparing it.
So sometimes when there's an economic decline we can see our industry do very well as a bit as opposed to some other segments of the restaurant industry.
But this is scary for everybody when people have less money it just is -- -- for the economy it's bad for jobs it's bad for everybody.
Doesn't have to be handy if you bring back picking up demands -- -- minutes is suggestion that we that we haven't had coming up that you're going to like it's got a young woman named Nina and Dolan and I think you'll find it great I think you have to do for the country.
Andy I'm doing it.
-- for the country and up any positive thank you very very much liquidity that -- -- slow -- it's anyway.
