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Author Ed Conard on the president’s push for more revenue through the removal of tax deductions.
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Of the economy both President Obama and Harry Reid want more quote revenue.
I'm saying that means -- taxes the president goes so far to say that his policies will cause the economy to grow in 2013.
Joining us now is Ed column he's the -- to all of unintended.
This is the former managing director at Bain Capital has a name that brings about.
By Ed let's suppose that the president gets his way.
That we trim loopholes is -- to raise tax rates anymore he's not gonna do that he's gonna trim loopholes.
The end result being he takes more money -- wealthy people.
What does that do to the economy does it grow it all -- Well I think it slows it down but gradually over a long period of time.
And so I think there's other factors in the short run of the president's betting on that may boost growth in the short run but in the long run if we consume.
Income that would otherwise be invested as equity that -- -- business risk.
Which ultimately grow as our economy of course -- -- -- if you look at US vs say Europe over the last two decades you can see that affect significantly is number of hours -- increasing productivity.
In the US relative to -- -- growth rate.
The employee health.
What would -- it is that we've already had a 200 billion dollar.
Take out from the economy with the tax increases that went into effect and generally the best Social Security taxes higher rates on the rich.
If we add mall you saying that that slows down but only in the long -- -- I think it slows us down gradually sure -- other factors because you if you invent the Internet or something you gonna get growth rate or.
Or things like that if you're coming out of a recovery in the recession could you get some increased growth from a sure there's other factors besides taxes which weigh on the economy but certainly the eight -- taxes are significant factor I think the president.
He's betting that other factors will buoy the economy in -- short run and offset the reduction that would come from increased taxes and then he can say see taxes no matter.
We all know that of course they well along but let us bring in Don -- because you and I have argued about this a lot of it and many many times -- but I think we both agree.
That raising tax rates on the rich is not the way to go I think we agree on -- -- -- -- what the president is now saying is that not raising tax rates anymore on the rich but taking more money off wealthy people by trimming the deductions that's available to them.
I'm saying that's another negative for the economy at this moment in time.
Do great well I think any increase in taxes right now -- -- negative to the economy I thought the president also was saying that we need more revenue so hopefully he's talking about.
Expanding our economy and in those of us who I don't more money that we can pay more taxes thinking hold on -- -- -- he is I think that they're talking about accommodations and I think senator Reid clearly did you do already think that when the president talks about more revenues he's saying we gonna get those revenues from growth I think you know combination and we'll remain -- tax closing loopholes.
And hope and I'm hopeful.
That are either looking and expanding our economy which heavily -- that's the focus through gotta expand the economy.
And his way of doing it is to take -- more initial tax revenue expanding the economy we contracted.
In the fourth quarter of last -- -- -- -- all relative I would agree with you that we can't start if we started the top.
In terms of tax increases we just work our way down ultimately -- middle class is gonna happen with the of the policy is to raise revenue by tax increases.
The wealth around to the middle class and the middle class -- have to pay more.
And that's when the -- brought to its -- but.
But it takes time.
And a lot if you -- a lot of well yeah I'm here to seize the wrong track -- exclude -- or not it's not an approach that is going to be effective.
So alternately if the on this -- Democrat estimates -- President Obama is not an -- I don't comment I've been an agreement since day one higher taxes -- are not the solution especially higher taxes was not significant.
Entitlement reform.
You know significant spending reform that we do not restructure.
How we spend our money it doesn't matter we go below 75% tax rates would -- strangle the economy because will keep -- taking money from those who were productive.
And and then spreading -- out to the rest of the country -- -- -- US tax returns for the individuals need to be more honestly need to list Uncle Sam as a dependent.
Because that would show you what's really going on we have -- entitlements machine as a pundit recently said in Washington DC.
Social welfare programs are now showing up two thirds of the federal budget.
Up from a third in 1960 if you wanna pay for that you do -- to raise middle class taxes or cut them.
Okay.
Back to you -- What do you think he's going to be -- growth rate this year.
Well I think it's gonna be anemic.
Won't be.
I think we'll get a little more rebounds a little bit higher in the last year but the -- much two and a half percent maybe -- I think to get there yes so my problem is with the with sexually.
For mediocrity yes certainly you know we've been told that that the recovery is proceeding along on track and thinks he okay he could be -- But don't sit back and enjoy this modest rise.
I think that's the exact wrong way to -- I think we should settle for mediocrity but you do.
No I don't know I don't think -- that's what the president saying -- vote with all due respect I agree I disagree on tax increases but the president certainly wants to see robust economy.
The challenges is that our government does need to help those who can't help himself.
But many of our time with systems are just outdated Social Security is just outdated.
-- from when it was created look at the very life expectancy of Americans on Medicare -- way it is administered is out dated.
-- Medicaid is out dated.
Many of these -- good point assassinated today and they didn't mention any of that -- is anyway as a -- -- -- -- comprehensive reform and that's the Republicans and the -- Hello look at cutting Republicans on -- how is exploding the Republicans allow this to happen -- -- latest.
Bailout right away that I feel great to have not -- -- I'm fine and and it wouldn't -- any politician in America today and that includes a Democrat like you.
You -- I want to reform entitlements you will be demagogued two deaths fell obediently I didn't even know what Republicans -- have to play a certain reality in -- must you Republicans would have been blamed.
For any tax increase that would've occurred on the middle class that we couldn't really.
Hold the line in this circumstance why weren't they couldn't be Democrats -- yeah -- revulsion and that's why care affordable and risk that impression -- easy no real address the president said.
Pounds off entitlements we're not gonna have it it's an investment don't reformist DEC -- this -- -- don't reform entitled we said hands off.
-- he's getting pretty confident fighting -- yeah president's dared to his role in part.
Is to protect all Americans especially the -- most needy Americans how we go about doing that.
No one has all the answers normally don't have all the -- -- I you don't I don't -- collectively constitute -- -- -- we do it all growth.
You have corn grow this economy from protracted period of time -- -- 56%.
If you do that you help everybody.
Every well I don't know you -- help because the last took the last economic run didn't help everybody.
There were many people that behind us countries that simply can't we have 4% unemployment low we had a radical -- high number of the other person.
Only a 40% more hours worked for working age adults in Germany and France have two day without unemployment rate -- helps everybody.
We hope one million elementary immigrants and -- -- -- -- -- because we couldn't -- -- either that I'll let you know.
Now people I don't know its educational thousand it doesn't help those who don't know if -- -- But above -- means -- must look at let's look up.
Well let's look at breasts -- press did you would you say that African Americans in this country have had a fair shake for the last 300 years of the country's history.
003 so let me this note to self professed revenue as well look at no excuse me do you think this time.
Today now yeah we can usually -- -- -- why did we don't I don't listen I'm gonna.
Auto -- and -- I'm out of time I'm flat -- -- talk we will get back to this model means you witness for the -- get back to it.
At college -- also that we may bring you back with a fair let's talk.
