President begins push for tax reform

Tommy Tucker, WWL First News
Thursday, August 31st
Tommy speaks to Bob Williams, Fellow at the Tax Policy Center, about tax reform. 

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Bob Williams joins us right now fellow at the Tax Policy Center good morning Bob Rory. On the if you will because everybody has to be vetted now can you tell us a little bit for the listeners about the Tax Policy Center. The Tax Policy Center was founded in 2002. As the organization that would provide nonpartisan information about. Tax system we have in the states since states themselves. To inform. The public debate about taxes of people would know what's going on now what tactical type. And I am very basic understanding before they are about to point to tactics. You know Bobby may have been listening before it seems like it because I was telling a caller before you came on that. I honestly don't moment just paying taxes and account doesn't form and I just look at what they either get back or what AO. And I figure it is what it is and I don't even I know some people obsessed with the public to pay stub and how much is taken out this and and the other thing and I don't 'cause. Yummy and it is what it is our dollar most Americans zinger about how much and I mean that majority lead but unaware of how many how much they pay in taxes. We certainly know that most Americans don't do their own taxes about 60% of it hires somebody like these you. Another 30% use computers software that as a sort of magically behind the scenes. You don't really know the details only 10% of people used pencil and paper with the old fashioned way for the taxes can be fairly simple. The question for the people thick book that tax return after they've gotten it. In see what what's going on and promote people understand the details just as beyond a part of what do you think about. I go from plausible that I ability way to hang on the accountant if anything happens. Come. I mean I know where to start this discussion mom. Does it all come down to. Hum what went wed here talking about property tax to improve drainage in the city what are you talking about breeze servicing roads. Does it all come down to I don't mind. Paying more taxes. Agassi goes to perception if the money's not going to be stolen misappropriated wasted etc. But it I think that the starting point should be we have things we want the government to do the government can do better in the private sector. And and things like national defense. And brought army. Providing postal service's. The very things in the judicial system those things we think the government should definitely do. There's disagreement on the extent of that. Some believe and more support for example for scientific research something that should not be part of the government's. Role but. Once we decided we want the government is something that after the before. And that's what the accidental about bringing money to support the government activities. Then you get the question of okay what kind of taxes you want an intraday outlook. US debt clock dot org to see that the national debt which is different from deficit because that is romp from year to year. Is currently at 191975000492000. From. 34 dollars and it keeps rising rapidly so Bob you know we were talking about. Paying taxes to do what the government does best in terms of defense and I guess paving roads and so forth how do you offset that. In terms of social programs and you know I I don't know where you start with the Israeli navy can help me out with. Appealing to people to get on the pay more taxes or what is a fair way. Our fair way in terms of progressive tax regressive etc. for people pay for the government. We have three primary criteria would like for the tax system. One is that the decision that it gathers money and lately costly way. It is least disruptive to the operation and economy. It doesn't hurt people lose something and it's hurt people and other things that much you wanna do that very very efficient. We wanted to be. Simple enough for people understand the simplest possible went on these complicated. Machinations that forces all that. Hire people to your tax return force and the third thing we want a reasonable distribution. Who pays the tax. The problem is the first two were pretty uniter in the third one we measure we can disagree on what the right answer this. Some analysts feel that a flat tax is everybody's saying the same percentages. Of the people they will not here because low income people. Can't afford the same standard 40% of it come that first board. Of the dollar matter a lot more about solution have a progressive tax system on the higher income people pay a partner here come. Then you get the question how the public more richer people play. And there's just no green. There's no obvious. Answer to which is the better way Saturday. Or political decisions we make up about boxed in by congress. And re digger the tax system. According. What do the numbers they Bob in terms of revenue generated. If it is a flat tax or progressive tax and Alistair taxes like national sales tax and remember that brighten. The the the rates really matter only once you decide how much money to bring him and as a share of income. We need we spend about 41%. Of all the operatives states it's been my opponent what percent. Taxes raised about 18%. GDP of the output. We have this gap between the two about 3% of the total up whatever you were running deficits the front about 3% on average over time. Sort out what is much money as we. One spend that. Says essentially. We either need to be willing do. Except be larger deficits and debt over time and see interest on the horror we need to raise more money for we need to spend less. Any whether it works. Deal but the problem. They each other problems. The shortcomings you preview breed more taxes. It is urges people doing certain things. And the fairness and that is open to question. If you wanna cut spending the questions were spending you cut everybody likes the idea of cutting spending it affects the other guys I'm cutting the taxes that you. But that's not the way it's gonna look belong in the tournament at the obviously. And running deficits forever while we can do it well in low level is certainly problematic in the long run of their high levels of the Congressional Budget Office projects for example of that over the next twenty or thirty years. Our debt as this year. Output although from the current 75%. To potentially under 50%. That's not we don't. In your pocket Bob we get some calls here and Rickie for Morgan's city once talked he says is small business owner to morning Ricky. Good morning gentlemen I don't know what I'm doing fine thank. I'm a small business zone. Side. Not support some monitored by a competent courts were caught Ernie. Thanks didn't want omitted modern art to whatever they're not. So by. My own business luckily Andre. You'd be years local law. We've been there for years. It's fortunate. But it sits struggle. What church. Everything that he would cheer. Luckily I've been able to give our employees. Change. Bonuses. I'm considered though want the China because may well what 200000 media. But I'm LLC. He gives them and not get paroled. What 1% because it could (%expletive) on. The shipments of the backbone because I employ. At times 300 employees. And my tax rate this. 37%. Well let me let me get Bob's take on that Ricky and hang on what do what do you think Bob in terms of he says he's in the upper 1% but Ricky I guess here at the bottom of the 1% and is a race he's paying the same Bob is somebody it was Macon now on and a million a year excluding capital gains and just look in an income. Well I'm not sure that they can present inside for someone sentiment at a level the ever. Tax rate for people the top of the income distribution the very top. In about 30% 31%. Of total income. Those people the top the top top army more than three billion dollars a year. People or it. Hundred to 200000 arranged tour department. Arranged and the tea around 27 point 8%. On average. And not insignificant but one thing and now though is that you pay them on income. Which is from a business point of view profit. And what you pay yourself as salary. It's a firm has not making money you know pay taxes on. They enhancing and Ricky had 200000 is an on your personal salary yours that offer to sell content in that you saw. A couple of my. Up though so that your income is compete. At the hurt the dollar you put yourself in the proper cure able to pull the company. The small businesses in general 50% of small businesses. Our. And wrote I expect it but take 15% or less than the older of them pay 15% less only 50% pay more than. End. More than 50% or 50% of all income for small businesses. If the people power you know money be in the very top tax bracket to thirty point 6% top tax bracket. So it. Very disparate group that those were getting by the popping a lot of money. And operate on facts and those are doing very well and therefore paying quite a bit attack. Hit the application for you like if you got some things come from your business and some incumbents so editors look at yourself. Means the salary itself which you and compact Raikkonen and nick all the others have in mind you know the victim and higher tax. Let me ask you this Ricky what would you like we've what do you think would be more fear TU. Because you know you put everything that you had up undersea worry coming from you employ up to 300 people. And you feel as though argue took all of these risks. You provide jobs and now somebody's trying to take it from Yale or take too much from you is that accurate. So so what would you like to see what do you think would be fair and a reason I ask you that is a legacy of Bob thinks that something that could work. It filed what if I would either that's great doubt be willing to expand our business. And now what. Elwood expanded facts straight. And if you wanna call it trickle down economics or not but. Do would what is the way to a better stimulate the economy is it through taking in more taxes and let the government spend the money. I guess is a basic philosophical question or given a money back to business owners. And letting them through is Ricky said expand their company is there any clear cut answer. But it's good for businesses that money in this small businesses are really the backbone of our economy every big business started as a small business. The only small businesses you have big business you know an American economy. So it's important for people like Rick and these businesses are present for American businesses on the generate jobs. That problem right now is there's a real divergence between. Some businesses that can't find adequate funding and a lot of other businesses that have money in the bank that they don't know what to do. If you think about the big businesses that are overseas there's more than two trillion power. Profit. The labor overseas leave there and investing to stay because they think it's cost too much to bring home. There's probably equal money locking in corporate bonds at home. The company don't know what to do. They they don't know what to do with because of the uncertainty. The tax situation. Provinces not that it and certainly the economy yeah. It would want to have. Could reasonably big companies are spending a lot of their money in buying back stock and giving lower dividends to stockholders rather than investing in new ventures. If they thought prop the country you'd think he would miss the mountains have been dropped. The people like for years I've got opportunities I could take it and on the pocketed the money. Let me people more and do that well. That the bat that's really hard to. Bridge that gap between them those that have lots of walking around to that those who have good ideas can't get the money to pick it up. You Thomas are quick here CPA town Assurant double WL thank you for calling. I. It. But persons doctors and but special. K. Changes actual. What would he say about that. They certainly knew that accompany tax system. It's much more complicated for very small group of taxpayers. And fairly simple for most taxpayers. Most taxpayers just have. In government job perhaps some interest on bank account. Very little else to complicate the tax returns and it's it's really simple. But for those people who itemize deductions and a couple contributions in these charities the tactic that is government's. Signal or government. Mortgages that today. But afterward about totally opening up figure out how to get the credit and pay the extra taxes that you might and the apathy. It becomes much more complicated. The biggest problem in the system that figure torture. And come to find different ways one you can go with the damages that are on the front that your your tax return the rest it's pretty straightforward. One it's is that. We use our tax system for two different purposes one is support for the primary purpose get money from government help support activities. But the second term is doing with that is a lot of social policy we built social policy for the tax system. To support education we have tax credit for hired this year tax deductions for anticipated it alone. We support. Low income people through your income tax credit support to get the child tax credit. We encourage people save for retirement through various retirement plan the pirate in the raw wires in the four days all the things. So we're doing a lot of social all in the Texas in the complicates. The tax return. But it it the way that congress has chosen to deliberate policy because from political perspective authorities say I'm cutting your taxes. That time I've created is spending programs in the packet thing for the program with a tax cuts but. Accept a more politically popular. Republicans are about this for nine hours and still have questions I'll become back on and I'm glad you joined us today. I.