Mar 5, 2014|
Angela talks taxes with Dr. Jose Bautista of Xavier University and fair tax proponent Tommy Berthelot.
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Automatically Generated Transcript (may not be 100% accurate)
If you have already completed your taxes. Did you give any thought to how much time you spent pulling all the implode together. How much money you spent getting help. Shouldn't our tax system be simpler. How about a flat tax or how about a concept called the fair tax. That's what we're going to talk about this hour with two experts. Tommy -- the law does the local district manager of fair tax nation. And doctor Jose Batista. An economics professor in economics division at Xavier university in their business school and I'm delighted that both of you could talk about. I think a very important subject. And an interesting subject I'm gonna -- from the get -- and say I have said openly for a very long time. That it's what in the world is 20000 page is doing with our tax cut out so to think we need to simplify it is an understatement. What's interesting to me or that the various thoughts about how we might be able to do Tom. On the birth a lot yes. I'd like to start with you because and just tell us about what the fair tax. It's. What would become a cop who brought up there actually are without pay it tax code -- her tax. Yeah. And we spend on average. Equivalent of eight years. One given you're just process you know actions. And between very 400 billion dollars just as individuals. Data is lost due to. Basically used Turbotax. That but it sample. To put it -- was that the fair tax is eight. -- -- -- That is revenue neutral not a way it's gonna bring it and the same revenue. That's what this study shows that the current tax. If you can eliminate. The bureaucracy the power. And the conference call and favoritism and all the that we don't complain about the current income tax system. It's gonna eliminate a lot of those and you know we don't sit around complaining about. So you would eliminate. All the forms we fill out all of the with taking out of our paycheck at center and it would be a sales tax. Yes I -- from Utah. -- hurt -- typically a Warner picture that it doesn't get misunderstood at its lockbox I'm not sure but yeah it would eliminate all that stuff. All the comic and an art well I'm self employed are. And ridiculous amount of money keep -- received in trying to. Figure out how -- -- and brilliant column won't let it expand certain investment there are that they are able -- And it just eliminate all that stuff that we complain about in -- captured one day. They're always been criticisms of -- national sales tax tight. Of taxing because it would affect the -- The most. Yeah man and -- -- while trying to be it's safe to mop. Well. Currently. What what -- the thought of it is here consumption tax you would attack would be regret that because somebody can make it. You know 30000 dollars a year and strong support for him. And expanded color and compliment what life. And you're gonna act that we -- It would that your tax that the predate you know the predates bill and to -- square off at that regressive nature. So where were all treated the same and all of us none of the state -- out of the property law. And then. The Hispanic actors that are in the never purchased that we thought. Wouldn't be taken out. And not in the -- and the purchase. And not it'll be included in the capital purchase -- with -- I -- you an example of -- guard out. Together to -- for a home in -- A lumberjack Coventry now -- have to be moved equally and then it's loaded up on eighteen Wheeler so so no. And turn them into about four. When that you know perch shouldn't that tree. There -- enough but the company's internal prop. Eight employees. Their way in their actions. And and then it's eventually did go out a lot cute too. Old people that we -- for -- Dolly. In advance sales tax and we don't recognize that there has -- on average in the added 22 and a half percent -- apt than ever I don't know. Could we just. Whip -- in the purchase price of the product in the -- not be. -- -- -- -- -- -- -- -- -- -- -- -- -- no this is actually a -- I'll bet I. Good that they take -- and they went on prop. OK I just again we're gonna draw this picture for them the listeners out there it's a very it's a very interesting concept. Every month. You would get a check no matter how much money you made is is correct me if I'm wrong. If you make 30000 if you made a 100000 you would get a check every month. If you're a single person if you're Koppel if -- coupled with one child or seven children. You up to a certain point. Because you're saying that to the poverty level. We would have our essentials paid for not being -- but after that. Everything else we bought and whether it's a television -- car refrigerator. Or piece of clothing. We would be text. -- you -- you pretty close. -- I'm I'm in a position market. Look at the actual dollar amount commonly used the figure on those close. They would support -- -- well -- him. Is in the span roughly. 704 dollar Everett mall on the life under the fair. That could be their expenditures at four. Show so that. The fair tax up corruption and -- -- poor. -- and report treated very aware. We can't equate against each other what I'll eat a pre pay 704 dollars. -- the repressive nature of fair. On our progressive nature shook up. So we're all treated me it doesn't matter if you're and I want to make up now you know it's paid. Number of number -- So we had Silva and then. Then your tax. Impact patient brought -- because taxes will then be -- failed app on your good they are. There's no collusion there's no -- -- -- not an inoperative Scott paid too much. All. It is kind of broad tax they -- Tour. Drug dealers. Illegal activities. -- -- Yeah right you know -- -- -- for so you know Tommy. You know probably -- a lot of -- -- that your bank. And I have had a real art come on in pocket dot act is when they got that cut the grass but short cash. All that well he's now going to be action because you are. How much with the tax me. Now it is their. Six point active and have to 20% in batted in every actually. With the fair tax and ripped up at 22%. And replaces -- with 23%. -- you actually actually so when you go to Wal-Mart and college. It's gonna show them and now going to Wal-Mart is twenty dollars going to. Australia. Now it could include attacks were 23%. People who don't like it wanted to work at 30%. And they factored in some now I am in here and very very dollar and that. 30% and not want me worried that he still represent. Our. Is adequate to 23%. But not at all the purchase part which. Okay and I'm not gonna lead along because we have a lot to talk about. This concept there would be no deductions as we know it now if you own a home you can deduct -- interest if you give -- contributions you can -- do those. There would be no deductions whatsoever. In your annual income tax because there would be no annual income tax it would be your ongoing sales tax. Yes -- and I know whatever the value would -- -- complain about pretty common law. Immediate contacts. -- basically called out -- favoritism. And been able to manipulate shift. And the government uses that you pick winners and losers in. In the economy. I'm -- an example of that action like with a fair tax. In and the reason why -- Flat tax -- the fair tax is because you eliminate all of. Were all treated this -- we're all equal. And he would use that to him one against the other and the politician. -- -- lose their power that they have it and acts to. And given benefits to. Favorable to achieve the pin on your property. You can pick whoever war if you were -- people get too much or. Green energy get too macho. Certain that you get loopholes. That help eliminate. And that doesn't get eliminated under immediate action to include -- Okay Tommy stay with this some don't usually do very well stay with -- we're -- have to take a break when we come back. We're going to continue our conversation about the fair tax. And also I'd get weighed in by doctor Jose Batista who is an economist at -- financial on WW. It is tax time and it is a complicated time it's a complicated system we now have. That just is growing and growing growing and from that. Has come the discussion of a different kind of tax called the fair -- you've been listening to Tommy Bertha out who was with the fair tax the nation. We also. -- going to be talking about a different kind of -- the flat tax. And but I want to get doctor Jose Batista and -- -- again an economics professor at Xavier. To kinda reflect on what we've been talking about thus far with the fair tax which according to Tony -- -- is essentially a sales tax but it would not hurt the poor in that. Every individual or and or family would get a certain check every month. Two to pay for those essentials. Up to the poverty level and after that then it's the sales tax. So. Doctor -- Yes. The points that mr. Burkle -- Brett -- -- very very good points and in the best of all worlds then. You would a fair tax would definitely be a an improvement. Would PX actually more fair than. Then our current system. They're just you know a few things that we have to be very cautious about is that. You know this this amount of this 23%. That and that is being. This being talked about. Whenever. We're told that there's going to be a certain tax rate. If anyone really believes if that's going to be the same tax rate for ever. Paranoid -- days that's that's really wishful thinking to go back to the history of the United States income tax when it was first implemented at after the passage of the sixteenth amendment in nineteen. In the early part of -- century. The the the margin the highest marginal tax rate was 7% and I'm quite sure politicians around that time bandied around. That it was going to be at 7% well it's no longer 7% we know that you know right now -- marginal tax rate is somewhere in the forty. 44%. For average. Just for gross incomes in excess of 300. 37380000. Dollars so I mean that's something that again is -- something to be aware about you know whether or not that's going to be. Change over time another thing is that. The the -- depletion or the elimination of the IRS is something. That you know again those of who aren't big fans of the IRS would probably be hearing about but more than likely. The department of Treasury's gonna set up another -- -- a bureaucracy. Two to collect and monitor the event the collection of the taxes. My research. Said that what they're going to replace the -- with -- -- called it is is going to be called. Either an excise tax bureau or a sales tax bureau are both you're gonna have two different. Bureaucracies. So again innovative it it it's nice to think that they'll be you know an absolute revolution as a result of having a a new fair tax. But again we have to be very cautious of four. You know what what eventually will happen. Let me ask both of view on using just talking about the fair tax concept again and sales tax. After a certain level. Wouldn't that give us the amount of money that we are used to to run the government. Or is it is going to bring in the same amount and just make it easier. For those of us who. Pay taxes. It up any answer that and trucks that three point -- -- peace brought out. A law that this does point to -- now reached or stretch out spokesman revenue neutral obviously when you switch over. In talking about four trillion dollars. There's going to be some variables in it. But that don't research Chechnya shortly neutral but to address -- -- -- things about the brought up and real quick you you're correct doctor that. The difference is what the rate would be when it comes to adjusting rates can match to get 4% or 7% 9013. The differences with the -- and income tax system. You have actually deductions shall we. -- that happening are between an extent are the best numbers income -- capitol steps and so one. You're able to manipulate everything you get favoritism that it has increased. With Astaire track everybody's act -- extreme right so they couldn't go. And Angela are not paid enough taxes. We need to act of war has probably liked the spot or stop and we want attacks -- stop. -- So when they raise taxes they can't do it. Where a trick which is that we're not gonna allow. The depreciation of corporate jet in -- laughter and higher and com they have treated well -- So batter truck back in you know on our -- should -- and down. I don't -- -- the other two that you brought up doctors' lounge Q and about what you know I would really appreciate not huge. -- -- -- Well -- the other point that are brought up what is the replacement with the elimination IRS and if it. More than likely can be established. They're -- that was another. Another agency. With the same or if not similar powers of the IRS to a to monetary beat the receipt and disbursement of the tax revenue. Yet charmed I'm sorry forgot that that are well that's correct but the IRS's eliminate it in -- -- is -- -- The sixteenth amendment has to be abolish the IRS. You know. Vote -- -- -- shot but it subtle methods and got three years. To -- everything opted book that they ought -- -- to rectify everything they'll have thirty years since he's. And the IRS's eliminated in the bureaucracy will be not -- -- back because that'll happen years does. Wal-Mart. Will collect action a lack of advantage -- reason that -- -- And then dealt with a quarter percent for being our count for lack of a better description. The state is that most of the state. The state it will disperse. The funds within the state and then what -- -- it goes the bad. Vs you know local and up to the air and everybody get a piece of lea and I keep up on the way back down. So you will. Me. -- if bureaucracy. Aren't I don't know the name of -- they -- revenue at the state level. -- currently -- we -- It will not it will be not like he intrusion. That we have and the -- currently. When I got audited. I would feel you're a lot -- much so and that. Are all day just back it's with affordable care Iraq now that -- -- to delegated our health records. And bean ball that you you won't have that would that -- act. Because his daughter but on its sales and instead of trying to monitor. All the is that all the individual in the United States. You're yes ma maturity. At the retail out. We're gonna have to take another break Tommy we've got news and John Angel will be right back stay -- office. We are talking about the fair tax. Plan Tommy berth locked part of the fair tax and nation. And doctor Jose Batiste with the who has an economist with Xavier University. Clearly of this would be a much simpler. Tax. And Bob wanna move on very quickly so -- and address of the flat tax flat tax has been. -- bandied about for a long time and it would just be. -- decent just a very simple. Everybody pays the same X amount. Yes and in in the extreme case it's everywhere and who pays the same tax rate. That's why it's called a flat tax that the concern about the leave the flat taxes there is the the vision that the president the supposition that. They give in marginal tax rate is too high. And so therefore you know if if fun. If government revenue is is put on me. Understand from zero tax rates to a hundred protects very well in both extremes nobody's gonna work and you know a 100% nobody worked at 0%. You have people working but the government doesn't collect any revenue so somewhere in between there you know government revenue peaks well. The where where be marginal tax rate actually is. That's where it's believed it to be too high and greater than that maximum bit where the government collect tax revenue. The belief is well if you lower the tax rate then you'll get to the point where government will be optimizing the amount of money that it takes India Texas. Now it has to be made clear that. Is the purpose of any tax system whether it's a fair tax where it's a flat tax. Whether it's our current Texas that you know in it in calls it in all district complexities. What is the objective is the objective for the government to collect as much money as -- can or reason the objective to. Inflict harm. On the on the highest on the ball from the most wealthy people. Or is it a have a method to distribute. Income fairly or is that you know as as the as the purpose of the fair tax is it to even out. Text text payments according to according to consumption or think according to spending. That has to be made clear before you know you get into well this one's better than the other. Because if you have one kind of tax system but it's not achieving the objective of which. You know that the country wants to come in two months ago Denver going to be -- -- -- for example -- president the president has made it clear. -- you know his his his objective is to provide a more. He's an equal distribution of income and therefore. He. He he is often proposed higher tax rates on on the wealthy well therefore you know he -- that for that reason he's flatly against the via the fair tax and he's even more against -- having a flat tax where the tax rates would be lower and -- have. -- -- paying. The same marginal tax very. It's just it's very complicated to me in the simple brain. But I know that our tax system is broken that if we have to spend what we're spending to get it done. But it's taking a higher and higher percentage of what we make. But something -- the matter everybody should participate. In this country and some people who don't make much money if it's very little should be something. That rich people should pay something to it it's just like it's and it's morphed into something that is uncontrollable. That now perhaps we need to look at it as people are wonderful opinion poll. Opinion column -- by Dave Camp who was. The chairman of the house Ways and Means Committee who has a nonpartisan group looking at how to fix -- he calls -- are appalling tax code. Something's gotta give. So that issue is how do we best to -- correct. In asking the question what is the goal. Is it to get enough money to run the country is -- to re distribute things is it -- -- because again if if if the purposes just to generate in you know as much money they. You can do it you can do really in the extreme you can take. For example you know the president just proposed a -- a fortune and four trillion. Dollar budget. Well he get that you get 300 million true portrait 333 million. And divide that into the four trillion you come up with some like twelve or thirteen thousand dollar per person now. You assess that. All in each person which equates economists called a ahead tax or a poll tax. And obviously politically it's gonna be in its premiums that means. The uproar that something like that would cause where you're assessing the same tax on a newly born child and and -- went on on its deathbed. Well obviously something like that is not tenable but. We -- come close to. You come close to something like that it's there okay well that's not tenable well what is the best substitute for that well a flat tax seems to be. You know a close substitute for that and then he say well okay if if if if if we're gonna have a flat tax wealth. I don't like this part of it and so therefore there's been some massaging of what. What do you -- is flat attacked the example -- the definition that I just gave duke. Is the extreme where there are no exceptions no deductions. And -- everyone would pay any seventeen or what you know whatever the proposed. Marginal tax rate would be but their other proposals there other proposals that would say okay. We'll have the marginal. Marginal -- marginal tax rate but after excluding different forms of in different different forms of income. No we'll have another alternative where. Will allow for deductions on or real estate. On real estate interests. Or charitable contributions. Or you know if you when he's in some even me wanna go back to the negative income tax that was proposed by. In Chicago Chicago economist Milton Friedman. As they wait to it would eliminate poverty back in the 1970s. So these different forms of these different tweaking. On the same thing. Our role debatable and so therefore you know it leads we've you know even a -- com. As a mark how complex city in what was originally perceived as well this is simple way to resolve the problem. Why don't choose and I. -- -- -- -- A part coming are coming answer your questions and I'm uncommon practice a lot in. Almost four -- -- -- -- trying to figure out how to lead this country and actually -- -- songs and word about me. But it did a couple of things that it her all income tax cut programs the issue which says he got bigger -- Is he who writes that the nation has the power. And make it a lot. Packet that you are trial the. People both an option party groups you know the personality. Call girl did or has recognized that we need to take some -- attack on the doppler. And that. We need to do away strengthen our economy strengthen our country. In that we're trying to achieve and that's where our content. And if you look at. You look at -- -- you look at the look at what they're trying to do -- cigarettes. And changing tax. They want they want slow down consumption of cigarettes. And it -- in the attack treat. Or cure rate action news com. Would you stop. And then you run into the issue law. Question a lot of people think in country company to lead the United States because you can go do it cheaper labor. But it'll recognize that. You you're you're at a 40% disadvantage. By importing people in the United States -- -- -- country. Income tax. What Social Security. Payroll tax and I got happy. -- 10 what channel. -- -- like -- call there are kind of cult that they think that fight attacks if you're reported a bit advantage. Because now have the tape that if I go to conference. -- sure that you make United States that are eight and because. We're not implemented -- In that building that the president spoke out at eighteen under. Corporate headquarters are in the -- The -- -- well the biggest action. Are angry with the. Tom I'm gonna I'm -- to cut jobs again one or break we'll be right back. According to Nina Olson the national taxpayer advocate of the IRS. Americans spend over six billion hours. And a 168. Billion dollars every year to file their taxes. Comment yes it's a little too complicated. Tommy birth along with the a fair tax nation doctor Jose Batiste with the on. An economist with Xavier University were talking about fair tax flat tax were talking about. Changing -- system. That that needs to be change but whether these two or not is the question so I'm gonna ask both the view. We're all talking about this but is it realistically gonna get done can congress. You know closed their eyes to the many that don't want change. I have an effect Angela it's a great manager in election year there is no there is no appetite to to have a full blast discussion on. On me on Texas. Because the the definite. Issue that will come up will be people will be asking -- You're proposing this year proposing that while I was gonna impact me. You mean you're going to be taking away my -- My a my real estate interest deductions of what about my terrible. My charitable contributions -- be taking that away from me that the bottom line is it -- it might be fair but if I'm gonna wind up with a larger. Net tax liability. I'm not I'm not gonna buy into that -- if that's what you are -- proposing mr. politician and I'm not gonna vote for you. And so therefore I don't see much Avaya. Discussion coming up by definitely night during this election here. -- -- -- I was calmer somewhat agree or disagree. With the rain and keep the public can make bracket not that they actually. -- with their -- taxes and actually may actually make a -- You know what it actually. Bugs. I did a lot though there are a lot of different people like kicked off with an outlook. In the -- You're old enough to remember segregation. Now segregation in the civil rights movement in -- people. Now whether or not you agree or disagree with videos movement. You've convinced me -- -- -- grass roots and what rows upon brought on the spot and what you the candidate common ground. In March in the street. It took our. Oh. Is saying we now is on it yet they won't do it because. We hear written. The joy your power and influence that they. Matt Howard who. Odd then vote on both sides of the Tom here's somebody who say when you the you won't go -- -- or how the politicians. To hear it in the American revolution. On that note -- wanna thank you very much I really appreciate that we're gonna get -- back. Doctor Batista I can't thank you enough we're gonna get you back to. This is an ongoing discussion and I hope others will join in thanks so much we'll be right back thanks so much for joining us today now let's go to the newsroom and Dave --