through a plume of ice and water vapor. the craft will take gas and particle samples as it passes just 48 kilometers before it's surface of a speed more than 20,000 kilometers an hour. more of everything we're covering right here. www.aljazeera.com. >> as certain as the sun rising in the east and setting in the west, there have been absolutely two reliable pillars of republican politics and campaign appeals for decades. the budget must be balanced, and taxes must be cut. tonight's republican debate in boulder, colorado, is focused on economic topics, and is almost certain to feature these

twin policies. does it work? does it matter if it works? cutting taxes and raising dough. that's the "inside story." welcome to "inside story," i'm ray suarez. remember the curve, the simple graph that said at one end, if the taxes were zero, the government revenue would be zero, and if they were at 100%, people wouldn't work and wouldn't pay and the revenue would shrink to zero. there was a sweet spot in the curve. people are rational beings, taxes too high would encourage cheating and drop revenues, even at higher levels of taxation, and lower levels would increase profit making.

creating more tax revenue at lower levels of taxation, and you have a potent set of ideas that has a profound influence on republican politics. tonight, the republican campaigns head to boulder for the debate on the financial news network, cnbc, and all of the candidates will say that less income and profits would be better, even when the government is spending $400 billion more than it collects in revenues. aljazeera's libby casey found that one tax rate is less. >> reporter: it's not just presidential candidates who want to lower taxes. >> i would like to see my taxes go down. it's my money, so the more i can keep, the better off i would be. >> reporter: paying less in taxes means less to a family's finances but other to the nation. >> there's always a tradeoff. >> less revenue for the

government means cuts somewhere, right? whether to mandatory spending to social security and medicare, which combine to take up nearly half of the entire budget, or discretionary spending like defense and education. >> i like care, that's the one that i use. >> reporter: here's how the republicans come at it. cutting tax rates stimulates the economy, which creates more revenue, though the rates are lower, because it creates more to tax. does it work? governor brownback of kansas is trying it, and what he calls his real life experiment. the economy has expanded but so far the tax revenues have plummeted. and he faces a half a billion-dollar deficit. we paid 1 and a half trillion dollars in income taxes this fiscal year. compared to what americans paid

in 1980, it's a smaller percentage. now, the 2015 presidential candidates say that one way to funnel money into the economy, cut taxes on the wealthiest americans. they say that the top 1% pay more. >> they made the same amount of money. >> reporter: but it's not just billionaires in that bracket. the ton 1% includes households making $390,000. and that pays a quarter of america's income taxes. the flip side, as america recovers from 2009 to 2012, they walked away with 90% of the income gain. every tax proposal comes with tradeoffs, and the question is what americans are willing to bargain. >> i think its part of your duty as a citizen. >> reporter: libby casey, aljazeera, washington.

>> joining me now, what we know about the impact on revenues, jare jared meyer, how we're treating america's young, anyoung -- do you expect to hear any he proposals to cut tacks in tonight's debate? >> yes, we're expecting it. i mean four of the candidates will be on the stage have proposed pretty detailed tax plans. i will say that what is slightly different this year, as opposed to the last 20 years is actually, o on the previous years where they were talking about cutting the rates, that's what they were talking about. and here you have a lot of talking about getting rid of exemptions and making the tax base wider and flatter. and that's different, because

they have actually -- it looks more -- the proposals are more like fundamental tax reform than before. >> jared meyer is cutting tacks, should any tax curve have a specific purpose for target, or are some tax cuts better than no tax cuts. >> i think that what we need right now, we need to get the economy going, and letting americans keep more than they earn, and innovation and leadership. those are what we need to be looking at. and lowering the tax rate. this is bipartisan support, and even president obama wants to cut it to 28% in his budget. and this is something where we'll see real movement going forward. and i'm looking forward to the candidates talking about their proposals. >> are we talking about cuts without talking about how we spend the money, and what we spend it o. and whether or not it makes any sense with a 400

plus billion dollars budget gap, to cut revenues forever? >> i think that's an excellent point, and we're talking about just cutting taxes without any serious conversation on what you would have to cut to do that. but i also think that it's important to note that the republican candidates are not just talking about dutting taxes across the board, but really focused on cutting tacks for the top income earners. because the trickle down policies we know don't work. >> if the rich are already now paying most of the taxes, wouldn't any broadly based tax cut involve a large tax cut for higher earners? >> absolutely. but the idea behind progressive taxation is of course that if you pay more of your -- the higher your income gets, the more you can afford to pay.

so the flat tax being promised by the republicans, is perhaps equitable in terms of everyone pays the same percentage, blue not at all equitable in terms of everyone having to give up the same amount. >> isn't that right? if you flatten the number of brackets, and if you simplify and take away deductions, aren't you in effect down the road talking about rich people, who make a lot of money, paying less taxes? >> they would be less than they do, but the thing that's important to note is that these tax plans for the most part are not just about cutting taxes for the rich. the proposal by jeb bush, double the deduction, for lower income people, it doubles it, and the tax plan has a massive major -- i don't like it, but it has a major child tax credit, which you benefit the

most when you're a lower income earner -- actually, a high income earner, let's be fair. the same thing for donald trump, it excludes a lot of people from the tax roles by allowing a lot of money to be untouched by taxes when you're a low income earner. so we have to be fair. it's not just about lowering taxes on the rich. and actually, this is kind of part of my problem. i have no objection, i guess with progressive taxation, but i do have an issue where how far should we go toe having a lot of people paying no taxes at all? and i'm saying that's a real problem, and the plans are pushed forward. i mean, there are ways to help the poor that actually should not necessarily involve them being completely exempted from taxes. >> but those are the lowest earning americans. >> yes, but there's a case to

be made that this is also one of the ways that you make people aware about the cuts in your government, right? and if you have -- it's very shocking that the republicans, who for the longest time have been the biggest defender of supply-side, and the impact of reducing marginal tax rates on the economy is right, and it's defeating the purpose of supply-side economics by getting rid of so many people, and just doing a tax policy that's kind of strange. >> we'll continue this conversation in a moment. wisconsin has tried it, kansas tried it. the united states has tried it. cutting taxes with the promise of increased economic activity, producing more tax revenue to fund the operations of government. what does the record show? kansas, not only cuts taxes but cuts government services, would that work politically?

would people be more honest about the downstream affect of taxes. it's the "inside story."

>> you're watching "inside story," and i'm ray suarez. ronald reagan will probably make a few rhetorical comments on the forum. reagan spoke of tax cuts and his belief that they would eventually unleash economic activity that made up for

government losses. in the last 35 years, do we have enough evidence to talk about whether the idea works in reality? on the federal level, in the states, when the 2016 candidates talk about the stomach lus of tax cuts? a body of evidence supporting or undermining the case that lower taxes will fund government? still with me, regiony and aber northy and mire. sam brownback tried it and wisconsin as well. >> they are trying to bring more businesses into their area because they want the tax revenue that comes with it, and i think that a better way of cutting out exemption is lowering the rate in general so all businesses can afford to compete. and i think what lowering tax rates does is it allows small businesses and corpses t corporo be on the same footing.

right now, they can work the tax code. but a small business owner can't do that, but when you take away all of the rates and the special interest loopholes that we have in the tax code, that's when you get more even footing. >> all of those exemptions which were put there at the behest of lobbyists working on elected officials to have them pass into law. the tax code doesn't breed in a dark closet and moist viper. to get bigger and bigger. all of those things are bills pass bid members of congress, who rail about the complexity of the tax laws, and complain about the difficulties of having to hire accountants and armies of lawyers to help you navigate the law, and is there a track record for cutting taxes and what is it does for the available revenue for government locally and nationally? >> absolutely, i think you're

right n the last 35 years, we have seen trickle down economics, and the results are in, and it has not been a success. what we have seen for the average american, for everyone other than the top 5%, 1%, they're feeling more economic insecurity. but also, we have seen sluggish growth. the argument is that this would unleash great growth. and that has not been the case. the american people know it. we have a recent poll that shows only 21% of americans approve of trickle down economics. >> when we look at what happens, in the specific examples where it has been tried, can you point to it now and say, i want to do what kansas did? >> no, because these guys, the republicans in particular, they're very good at talking about cutting taxes but they're gigantic spenders, and you can't have it all. you can't have lower taxes and major spending. you just can't have the level of spending of europe and the

tax rates of america. that doesn't work. and this is why, when it has been tried it failed. and i think it's also proven that in a sense, it doesn't work, and it doesn't work because it's great and fine to cut taxes and i'll always be in favor of it, but you have to do the hard work of cutting spending. if you want little being taxes, you have to do the hard work of cutting spending, so that's what i'm going to listen to tonight. it's going to be great to ponder to the republican base, are they serious, and are they actually going to put the spending restraint that is required with the kind of taxes that the they want? >> when we come back, are politicians ready to talk to us honestly on what a much smaller government would look like? or are they crossing their fingers that you'll imagine that it's the expenditures that

you don't like that will be on the chopping block. cutting taxes, raising dough, it's "inside story."

>> new weapons with systems, and funding for fundamental reading programs. the federal government spend an enormous amount of pun every year, and for decades, it has not been able to collect enough for what it spends it on. candidates for federal office say that it's easy, but it's never as easy. from the manhattan institute, still with me, and jared, earlier, you were making a case about citing and enterprise, and i agree that tax laws and

rates have a lot to do with those decisions, but don't other things? because scott brown back and walker have made cuts to the state parks and the university systems. do bosses have a concern about bringing their family to kansas city, or menominee falls [ audio difficulties ] >> i think that the important thing to look at, if you look at the states that don't have tax cuts, people are moving away, because when tax rates are as high as they are now, and you add a state burden on top of the federal one, it takes a hit on what the people

are able to bring home. >> aber nathi, how about the proposals about what to do during campaign seasons, they're often so vague. >> that is a great question. and i think you hit the nail on the head. it's a lot easier to say, we're going to cut your taxes than take away this government service. there's always a government notion that if we cut tacks, we're going to have more revenue, or the private sector is going to step in and fill the gap. and that's not what we're seeing. in kansas, their revenues have dropped and their job growth is below the national average. there have been huge cuts to education, to infrastructure, to things that grow the economy and create jobs. >> contrasting quite often in

minnesota, where taxes have remained high and spending on government services have remained higher, with wisconsin, where there have been reduction in tuxes, and there's more economic -- in wisconsin. >> wisconsin or minnesota? >> in minnesota, there has been more job growth and a lower rate of unemployment. >> i don't know those who cases, but i think it's also important to say that not all tax cuts are equal. right? when you think of the bush cut in 2001 and 2003, the first one was not really a tax cut. it was sending money back to people in the form of a tax credit. and this one won't have the same impact. so i don't know the case of the two states enough to talk about it. but prosecutor other factors

that influence economic growth. >> one of the other, was the tax credit, which was the beloved of the republicans, and now they want to bring lower income workers back into the paying roles instead of the receiving roles. is that going to discourage or encourage at the lower end of the income spectrum? >> like you said, there's a bipartisan support. and the conservatives really like it. because it's seen as a good antepoverty program. and i just wrote a study, and we actually looked at all of the faces of the earned income tax credit. and the majority of people, it's true that it encourages

work for low-income people. but there's a majority of the people who are the recipients of the earned income tax credit, and they are in the face of it, where it discourages work. so i think that conservatives can oversell that aspect of the earned income tax credit. >> neil, we have only a few seconds left before we go, and do you expect to hear more about tax cutting as this political season rolls out? >> i think that from the republican candidates, we'll continue to hear the same tax cutting policy that's we have been hearing for the last 35 years, and i think that the people are readier in something new. >> i would like to thank my guests. ali velshi is in boulder,

colorado, the site of the debate. and he has a special pre-debate show coming up after the broadcast. ali, what are you working on? >> what i'm working on is managing my expectations. i have a broad sense of what they're talking about, but i'm hoping that they will be forced by the moderators of this economic debate to put some meat on those bones. i'm not holding my breath. it's too early to make sense of some of these candidates for positions on some of the issues like income equality and wage stagnation, like taxes, like death and climate control and change and energy policy. there's a lot of broad generalization that you hear about. and they all the growth to increase and jobs to be created and unemployment to decrease. so do we all. and the issue is how you get to

it. they will talk a lot about taxes tonight, but not talk about how we'll get tax reform, with you you have not seen since the reagan era. what is is it that you're going to do when the congress cannot even pass a budget to get comprehensive tax reform done. i'll talk about it at 10:00 eastern, and then after the debate at 10:00 eastern. >> i'll be back in a moment with a final thought on taxes, spending and government. and spend us your thoughts on twitter, aj "inside story" am. follow me on ray suarez "inside story" news. and follow us on facebook. tell us your own experience, and we would love to hear it. >> coming up at 7 p.m. eastern on aljazeera america. it's debate night for the republicans, we break down the tax plan from the presidential

hopefuls and how that could affect your money. climate change. how the republicans view the growing concerns, and plus, raising the minimum wage. the impact on immigration, and national debt. all of that coming up.

>> maybe you've heard the old saying, everybody wants to go to heaven, but nobody wants to die. in 2015, millions of americans don't want to pay taxes, but they want the things that tacks buy, and that's only possible because somewhere along the way we lost sight of a wide definition of the common good. in a baby and bath water moment, leveled by political campaigns. one of our two political

parties reinforced the idea that taxes are way too high, much higher than they used to be, and you're getting ripped off. well, you are getting ripped off, but only because we postponed an adult conversation about what taxes buy, and we went ahead and spent the money anyway, on everything, without stressing the corresponding idea that you and i have to pay for all of those things. the idea of doing without has been a phantom, make believe. buzz we collected less money from ourselves and continued to look on as the government continued to buy all of things it did before. and more. our legs are now caught in a trap of politicians and our own making. we have gotten used to having it all without paying for it all. and paying for it all is now portrayed for us as paying, not responsibility. and there's little sign that's going to end during the 2016 campaign. i'm ray suarez, and that's the

"inside story." the news continues. >> tonight, your tacks, your jobs, and your family's future. it is all politics and it's all your money. live tonight from boulder, the ten leading republican candidates for president meet for their third debate.