Would 'fiscal cliff' tax hikes stifle job growth?
Will Washington avoid disaster?
- Duration 8:46
- Date Dec 8, 2012
Will Washington avoid disaster?
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Do you that the unemployment rate is dropping.
Capitol Hill signaling.
Tax hikes are cutting that kind a key conservative leaving the senate for the private sector as -- couple.
Reportedly cook -- A doomsday plan that would give the president that tax hikes he wants so -- taxes go a lot.
Will jobs go down hi everyone I'm Brenda -- -- -- disposables and then let's get right.
-- -- -- And double the bears this week we've got Gary these met Kevin Smith Jonas Max Ferris along when Todd -- -- and Julian Epstein.
Welcome to everybody okay talk if taxes go up get ready for that unemployment rate issued after -- You got that right Brenda it's not only going to go higher we're looking at hundreds of thousands of jobs that will be eliminated.
Because of higher taxes.
You can't just simply look at small business owners small businesses.
Comprised of two thirds of all jobs created in this country over the last ten years if you're gonna raise that personal income tax the tax it's gonna hit -- small business owners.
They won't have enough money to go out and hire we all have to be prepared because the labor picture is gonna get really fragile real quick -- -- great.
Now what at a certain point on this show and elsewhere we just have to stop -- opinions and start you -- using facts.
I mean -- definitive study that has been done on this one that.
By the nonpartisan agency that Republicans and Democrats agree to be the ultimate authority is the Congressional Budget Office they looked at this question.
And they found that raising the top -- the rates in the top 2% we'll have virtually no impact on GDP and virtually no impact on job formation.
The Republicans in congress didn't like that study so they asked -- -- the congressional research service to review the data and come up with their own conclusions and guess what.
The CRS looked at this and said the same thing that'll have almost no impact and job creation almost no impact on GDP formation.
Almost all of the economists seem to be unanimous about this that the Obama plans to -- the -- 2% let me finish the point yeah.
That the Obama plan which raises the rates on the top 2% on the top 2% we'll have virtually no impact on job for.
Resembling -- -- remark about Saxon opinions we have both of us on this show well let's see the data -- -- -- key you go right to it.
While only you know Julian has his study in the you know the other side has another study Ernst and ya know they don't.
Did this very young record -- Louis Julian you got to let me finish at a packed.
They have a study say that the -- and taxes on the rich would cost 700000.
The CBO which -- -- like said that just.
If we allowed all of the the bush tax cuts -- not expire.
And the via -- AMT the Alternative Minimum Tax would be -- that's one point.
Eight million jobs so no matter how you cut even if we just looked anecdotally which I know Julian doesn't like.
-- is a wealthy guy he -- a lot of money if he's gonna have less money to his bottom line next next year.
I guarantee -- we'll have to cut back on the landscaping that he does and probably the guy that drives his car and all that other stuff it just doesn't make sense from wherever you look at the numbers are where they look anecdotally it doesn't make sense that people's bottom line will be cut.
And -- we don't -- there obviously will be resolved and -- This huge problem we're gonna do it's likely -- -- don't have some the -- -- -- there's a huge from a and.
-- started inside people that out yeah okay I will get back -- we only TJ because we like UK.
Now don't have any attempt to shrink the debt is gonna hurt the economy in the short run hasn't it.
Definitely you can fit a driver and a Smart Car that's part of the problem.
I don't know how else it's that they're both studies to -- their CBO says it will remind people and there's ones are less because it to -- -- -- -- we just to raise the tax at the high -- which is not enough tax revenue to close the huge deficit -- That might not have a huge effect on the economy.
However if taxes across the board and -- suffered at the spending cuts that are automatic in the defense -- -- defense is she alone is looking at hundreds of thousands of job cuts.
Next year if those if those mandatory cuts go into -- fight about certainly are.
So it's both the cutting and the taxing because we're going to focus on where the tax.
Bottom line to -- point the government takes money out of the system by cutting spending and or raising taxes and runs a smaller deficit.
That means people are gonna be out of work almost by definition in the short run but in the long run.
It's a healthier economy doesn't go down the path -- Greece is running a deficit was a great play in the long run.
Greece would have very low unemployment right now but they do not so yes we're gonna help fight back over 8% if it all happens the way the worst -- -- -- -- in five years we won't be not able to borrow money.
Okay -- you can go ahead -- -- twelve.
Result the Ernst and young study has been debunked over and over but don't always other point for the yes it's true it's -- let these bush tax cuts.
If you let the bush tax cuts expire the -- -- was Republican study guys and they found the same things CBO if you let the bush tax cuts expire and everybody closing the million tax then yes you would have some negative economic impact.
But the two most definitive studies that have been done recently including the one the Republicans asked for.
Show that on those top two rates.
The top 2% if you let the rates go up you have virtually no impact.
To Jonas is point -- mates exactly the right point that if you raise taxes a lot and cut spending a lot.
The in the so called austerity plan yes you will have a negative economic impact.
But that was the Republican conservative approach in 2011.
Democrats were for putting more money into the economy with the stimulus.
Republicans want an austerity so Jonas is point is that it is is is directly argument against what conservatives were pushing for our right tell that.
What's the question.
-- -- -- -- -- -- Look at which we did a survey of 15100.
Small business people who -- more in the 2% other -- have a revenue or earnings more than 500000 dollars.
I would say that this is the actual statistics that we got said that beat the businesses are never gonna make -- business was much more about.
Health care costs Obama could care that it was -- -- marginal rate going up because the small business person can.
The manipulate that number like nobody's business -- -- advantages of taking risk and it's all business -- But oddly obamacare side we -- we had no -- of probably 75% people said that they would affect their hiring and that was a much bigger issue.
That just that marginal rates.
And time -- we are seeing many polls come out that show the small business owners right now are starting to cut back they're not spending as much.
That's right look -- to India and if they need to add jobs report that for November if you look 57%.
Of the jobs created.
-- of the seasonal variety -- low the low wage workers so going forward you can only suspect that there is jobs will be eventually -- -- up hitting the unemployment line.
But more quarterly small business owners are staying away from hiring right now for various reasons lack of demand but they can't access credit.
And they also understand that the tax implications that they're gonna have to face going forward.
Just doesn't make a lot of sense to go out and hire just.
I don't think we should worry about a small increase in taxes and the unemployment rate which might have -- marginal rate where it didn't.
Big guarantees a long term solvency of the nation in the treasury so that's the goal here at -- try to should -- close all the loops and won here.
Then we'll have a very high unemployment rate is some tax increases do -- point only lead to -- -- increases in unemployment it.
-- -- -- -- Look I mean everyone out of the conservative argument was that if Obama.
Got reelected the markets would tank the jobs numbers would be terrible we had excellent job Summers there were reported yesterday morning.
When Obama came into office remember we're -- -- 9% everybody negative nine GDP.
Broke every once said the stimulus would fail we're now what about two point seven according to the Commerce Department was seven.
Percent GDP right now so GDP is and above what probably something positive -- -- positive twelve swing out so you know everyone keeps talking about how this Obama plan isn't gonna work cut it.
Give -- -- that it isn't gonna work but the data it seems to show the difference which is the president Clinton's point.
If you want to live like a Republican vote for a Democrat because of -- about our economics.
-- -- Ground Gary -- down.
Well I I you know and joins very good at raising the straw man I don't recall everyone saying the market was gonna attack you Obama's reelect this in this state that and -- -- -- tank.
That's kind of silly the other thing is every time the tax rate has been tried.
To really stick it to the ritual we had 91% tax rates during FDR cheers when they tried to stick at the richest failed miserably and they've gone back.
Angela and ended up lowering the -- so it was such a good idea I'd look for historical examples where work it hasn't worked.
If paper Julian once so much the Clinton tax -- that's fine I'll go along without it we had the Clinton -- government spending which we don't okay.