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-- -- first story tonight.
Is what everyone's mind these days and that's taxes and editorial in the New York Times regularly got our attention.
Because it keeps opening the door to a brand new wave of taxes net -- used in this country before.
Like that that tax 77% of Americans saw their taxes go up this month.
And it may be just the beginning here to talk about what it would mean.
Chief global strategist with -- of the capital -- -- -- -- or Charles let's it is back from the University of Chicago.
And Spencer patent chief investment officer Steele -- investments is here as well.
Guys what do you think I mean he opened the New York Times.
And they're just opening the door to a home.
New wave of taxes and there's the carbon tax but that tax Peter what you -- so excited.
Are you thrilled about this is -- a great idea.
Well personally I got bad news for the middle class if you want all this government.
And you have to pay for and the truth is if we don't slash government spending.
Then we have to raise taxes on the middle class but of the problem is there's no guarantee.
That the higher taxes will go to reduce the deficit.
The government might just spend it -- -- -- -- blue we just raise taxes on the rich the top 1% and all the money is already been spent on relief paper arcane sandy.
Yeah now that's -- -- your professor lips and I mean.
What do you think having you think and we give them or more money they're just gonna spend that are you think that they're gonna actually sit down and pay their.
I'd say America's -- that already.
Does get not just fat but to -- I love it.
Too -- are ready I think dead.
That it's exactly right.
What's the marginal.
From a marginal dollar of taxes raised.
Is it less than a dollar I would say about three years out it will be more than a dollar so if you raise a dollar.
In tax in tax revenues from higher taxes as -- As of well actually for many -- and I expect it will happen is that the dollar will be spent and end the day it's not just a guest.
In Illinois we -- -- state income taxes about 75%.
Three years ago to three years ago we spent all that money look at those states around the United States now with high taxes.
Do we any of them have big budget surpluses.
Now don't know nobody gets right now Spencer let me ask you eggs I want to make sure everyone knows that that is -- value added tax it means that everywhere along the way you just add on a little something for the government.
It it basically ends up really hitting.
Lower income and middle class people the most because on the margin you it's a larger percent of their income what do you think it means for the economy if we add a value added tax to everything we all go out -- -- -- It's a disaster -- mean anytime that you're charging the consumer more to go to the government it's that you're you're gonna have a serious issue with a government that has no control over its balance sheet.
And I find that so interest thing that you know they Occupy Wall Street movement was all about the 1%.
And how they -- the problem.
And now you've heard President Obama speaking lately about how we're gonna tax the top 2% and you're seeing that number grow.
I would bet my left arm that by the end of his presidency we're going to be talking about the top 5% of the top 10% and that number is gonna keep growing because the problem with socialism and those type nanny state beliefs is that you're gonna see.
Running out of other people's money that's the problem that's that you you can.
-- -- what always happens in the end Peter let me ask you why does a value added tax a bad idea because to a lot of people might just sound like.
Another sales tax we have sales tax everywhere it's a pain in the neck but it doesn't seem to be got bigger problem.
While the value added tax is not a good idea.
I don't think it's a bad idea if it replaces the income tax I think it's better to raise taxes through consumption.
Then by taxing savings in common what are the odds they're going to be -- problem is it's not an -- -- -- -- I got attacked there's no way -- -- -- on top of the income tax.
And and and and that that's gonna be the problem is we're growing government instead of addressing the real problem which is spending you know President Obama says he wants to protect the middle class from higher taxes well the only way to do that is to protect them from bigger government because the middle class -- -- paper get big government and right now because we're running these huge deficits the Federal Reserve -- all kinds of inflation to monetize those deficits and that's attacks on average Americans who see the price of -- go off the price of gasoline go up prices are rising because of big government and the inflation that is used to finance -- Professor -- and I mean what about a carbon tax that -- -- a lot of people like.
Big companies and polluters and and people that are using carbon are going to be the ones -- have to pay the tax.
And it wouldn't impact all of -- what impact would -- have an average person and what about the economy.
I think that what you re saying was exactly right.
You can look at these taxes individually and you could say that some of them would be a good idea.
On their own basis for example of bad.
Or are carbon tax my on their own basis be a good -- the problem is if they pile on top -- -- others.
Then there -- problem why is a carbon tax potentially a good tax.
Because of water call extra nowadays carbon imposes a lot of costs on other people.
And instead of indirect taxes for cafe standards for cars and so -- The easiest thing to do the simplest thing to do -- today just in effect -- -- more expensive.
But the problem India is in these things just become -- revenue stream right -- add one more thing one more thing about the carbon taxes.
What they do is they often by grand fathering -- current polluters they're -- giant giveaway.
To the friends of the current -- This region point that no one talks about that's a great point is people get grandfathered and they're clearly -- -- -- all -- -- -- but.