Kiss jobs recovery good-bye?
CEOs warn White House about hiking taxes
- Duration 8:32
- Date May 12, 2012
CEOs warn White House about hiking taxes
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My taxes on investors and kiss a jobs recovery -- by -- group was CEOs just sending a letter to the White House saying quote.
We are concerned about plans to increase the tax rate on dividends and capital gains and the adverse effect is gonna have and our economy and job creation.
On dividends alone president Obama's budget would more than double the rate that higher earners pay from.
15% to nearly 40%.
So are more jobs about to be lost.
Hi everybody I'm David has been welcome to -- on FOX let's go -- focus wind stays or just.
Let's -- -- garbage or Barrett Elizabeth MacDonald Michael Rose again and Rick -- rich -- guard at first you how would this affect jobs in the country.
Well what affect jobs the first thing that would happen is is there would kill the stock market to gain since March 2009.
Would go and reverse.
And as companies saw their stock valuations go down they -- became even more aggressive about trimming payroll so you see that awful spiral happening.
Well Greg -- if -- want less of something get tax it more that's the old adage so it might mean less of a -- in a stock market.
Actually I -- to try going at this a little different way we always have the same argument about under which president was a better was the worst.
Let's try it this way.
Way taxes are higher on dividends what happens well people don't want to receive dividends because they don't want to pay the higher taxes so what happens.
Companies take that money they don't just let it sit there doing nothing be reinvested in their business oh really that's so they can.
Let me finish they do that so they can grow the business.
And in fact increased its share value when they grow the business what happens they have to hire more.
People so yeah hurt your pocketbook a little bit I'll agree to that.
But if you're looking to increase jobs.
It's a great way to do it was Steve Forbes didn't even a Democrat reduce the capital -- that wasn't wasn't that what Clinton did and that partially led to that.
The stock market booming when he was president it did absolutely and what -- describe should get him a good job at a university in fact kind of nonsense -- should get a job.
French government they're about to happen when it's got to pay higher and I Cabrera.
-- a better is when you raise the price and good things like risk taking and success you get less of them.
We tried this nonsense in the 1930s it -- Japan's been trying this since the 1990s for the disastrous result for the economy we've been -- for the last three years hello well GMAC has taken a big magnifying -- to tax policy the United States for the past twenty years that she's been a journalist or what have you found about these things I found that you know what I personally -- Georgia self righteousness continues in Washington.
These aren't paying I don't know I.
Know what responsible budget for -- -- -- K street backed -- -- over them again.
And so I love this debate because that's comes at a time when John Kerry Charlie Rangel and -- -- -- -- done everything they could to reduce and avoid taxes.
But here's what we found is that capital gains revenue comes in more when you cut it.
We saw that 1997 and 200397.
Went up -- -- percent.
And always under the Clinton and went up 21% and then the -- the here's a deal apple Google FaceBook PayPal all Angel investors.
All capital gains money coming -- to fund those companies.
Which critical more tax revenues for the government -- -- and let me go to Victoria mr.
Torre isn't really the only reason we're hearing calls for this is about income redistribution doesn't necessarily affect the economy.
If if if it does maybe it affects it adversely.
But this is this is just put forth by people wanna bring down the income of the richest in the country without care for what happens -- overall economy.
Well they they need to fill their coffers in the easiest way to do that is say you're going after their risk -- it seems like the sort of harmless thing to -- these people's pockets are just flush with cash they won't even notice but the truth is they will notice they will invest differently.
Dividend -- stocks will go down the whole stock market will take a hit like rich said and also the people who really get hit.
Our retire Reid.
Half of all dividends in this country go to people over the age of six -- -- -- those people are going to be sitting on.
Smaller investment fund.
And and they're gonna take the hits on dividends is companies -- are kind of re reassess or given plans.
Companies do respond to the dividend tax rate you can see this really -- -- a graph that shows.
Dividend payouts and the tax rates so Microsoft of the perfect example you know.
Is they dated they weren't issue a dividend and and sitting on tens of billions in cash and then the tax rate went down and they issued a -- OK so Michael -- just making the rich less rich doesn't necessarily help the economy now why do you want to punish the most successful people you want more success -- not less success and to go back to Rick's point.
Look one of the problems is that these companies have all this cash -- their balance sheet that they're not reinvesting in their businesses reckon that's yeah hurting profitability because interest rates are so low.
All that cash is sitting there earning 1%.
I mean if that -- were funneled back into plant and equipment.
Then you get an unemployment rate that would be far below 8% which is where it should be in a recovery on Carolina's second Rick -- taking all of these points because you hold up -- -- -- and that's not an enviable position.
-- all these -- into account how I respond.
Actually I'm going to award one point -- Victoria because she makes a great point and and in the damage this could do to seniors he's got an excellent point.
However I got a call at Steve on something.
The roaring nineties under Clinton happened in the first term that's a fact.
And he did not know he did not lower the capital gains taxes until the second year of a second term.
When a Republican congress forced him to do it history tells us now -- begrudgingly OK that was straight.
Stay that's like the Soviet Union argue in history.
Bill Clinton -- in tax increases in 93 and nine before what happened to the economy had slowed down was starting to recover 92.
Not enough to say but George Bush senior for his reelection but the economy starting to roar ahead in the fourth quarter of ninety till Clinton puts his tax increases and we -- go into another recession he slowed a roaring recovery down.
Wasn't -- 9596.
-- began to get back on track again any Mac you we have another example for mister I know people like to -- -- bush what will we cut tax rates in 2003 job break groove right.
Yeah that's true and you know I absolutely -- -- and also going back to Clinton you know when the 93 tax I came in.
It brought in only a third of what they expected revenues were going to be.
And actually did you know the cuts in the death tax and capital gains taxes brought him -- but the issue is I.
Want our money our tax money waisted -- Linder is of the morbidly obese Fannie Mae Freddie Mac or Buffett's money with -- -- -- -- -- source of money wasted and I don't want you know the middle income people who have capital gains there for a one K accounts there are many ways to either.
-- -- Bill Clinton also did two things that indirectly lowered taxes he advocated a strong dollar policy and he was also big on free -- he was a big supporter of NAFTA.
And that in effect lower prices and acted as a tax cut long before the capital -- of -- and rich color guard let's focus though one jobs and figure out in -- silicon value studies Silicon Valley like nobody else how would that directly affect job growth I mean are there a lot of startups out there is talk about -- dependent.
On on these taxes tax rates being relatively low.
Well you know you want.
Risk capital high risk -- -- how you get everything from apple to Google.
And all that we're seeing is Silicon Valley right now so we talked mostly about dividends but the capital gains rate going up to a nearly 40%.
Would be -- for the kind of venture capital investment that we need to keep America at the leading edge of the global economy.
And Steve look at it -- -- the folks who have signed on in this letter I mean did they go across all industries from Silicon Valley -- energy etc.
I mean they must've looked at the facts on this they did indeed and I know about the price and a burden and what happens when you take risks you're punished for it.
And the fact of the matter is why in the world would you want to lock up company money and companies you wonder if -- -- banks and investors who can put it to work GM in the eighties Harvard did have studied this and reinvested 67 billion dollars they've wasted it.
Better paid off -- dividends what was the work for the company the end of that decade for that 67 billion dollars and -- 46 federal dollars they should be no tax on dividends anyway should be zero because it's double taxation you're taxing corporate -- and then you're taxing the shareholders again.