just south of the strait of hormuz which is a key maritime passage. on the way in the philippines for midterm elections which could see you president to turn to strengthening his grip on power. stormed a catholic church and killing a priest and 5 other people witnesses say around 20 attackers locked worshipers inside inside the building on fire the government in sri lanka has blocked popular social media after attacks on several mosques and muslim owned businesses an overnight curfew was imposed in several areas sectarian tension is high between the majority buddhist sinhalese and muslim minority following easter sunday attacks on churches and hotels up next it's up front i'm back straight after that with 30 minutes of al-jazeera world news i see that. on counting the cost from union leader to business magnate hang cyril ramaphosa turn around the troubled south african economy as india's economy churns out

a new breed of tech savvy entrepreneurs we find out why the benefits of growth are not reaching everyone counting the cost of energy. with a billionaire for president and skyrocketing inequality can the united states still call itself a genuine representative democracy why has it become a plutocracy and what could be done if anything to cut the gap between the rich and the rest in this out from the special unarmed era doris and after the law for debate one of the biggest issues of our time. inequality in the united states has been rising for decades and has now reached levels not seen since before the great depression in fact the us has a greater share of wealth than income going to the top one percent than any other country in the industrialized world so does the growing number of billionaires pose

a threat to democracy and to the economy or is this just the politics of envy do the super rich actually play an important role as employers as taxpayers as philanthropists and what is the best way to address this growing inequality joining me to debate this arthur laffer creator of the famous laffer curve former economic adviser to president donald trump and co-author of the book trump a nomics inside the america 1st plan to revive our economy and another us editor at large for time magazine and author of the book winner takes all the elite charade of changing the world gentlemen thank you both for joining me out for thank you for having me arthur let me start with you you've heard the statistics you've seen them at the top 10 percent of americans now make more than a 9 times as much as the bottom 90 percent the 3 richest people in the u.s. own as much wealth as the entire bottom half of the population how concerned are you by all of this i am very concerned about the bottom portion i am not concerned so much about the top portion of all i mean i would love to eliminate poverty in the u.s. i'd love to raise incomes of the lower income groups but i'm not one who wants to

cut down the rich i mean i think income inequality is very clearly here and there's no question and growing and what it's. only in my mind because so much growth of government and that's really what's caused a lot of this inequality and the markets are much larger etc but i'm very worried about low income groups and making them better off that's why i wrote enterprise zones and all this to bring the low end of the run but i don't know what the gap is not the issue the gap in 0 is really the bottom i'm really concerned about and the gap is not the issue it's the bottom. you know i think the eighty's called and want their ideas back we are now at a point a crisis point i believe on on inequality american life and i think where the new thinking is the talk of the smartest people who are studying the problem now there's an understanding that you can't fight poverty without dealing with what those at the top have done to engineer that situation so let's talk about a couple things if you use your outsized political influence through donations and

lobbying to push for tax cuts things like the trump tax cut as you know most of the benefits flow to the top tax cuts that you you know were involved in the reagan years in the eighty's and the one percent doubles its share of income and you start to see wages stagnate etc etc you start to see people you know who run a company like amazon only a company like amazon become the rich person the world while workers at amazon are peeing in a bottle because the company doesn't give them enough break time in the relentless drive for productivity i think you start to see that the people down below are not down below because they happen to be down below they down below because someone is actually standing on their back and i think the new thinking now is that we actually have to get people off people's backs and to understand the mechanisms which we can talk about today about what are the ways in which people are are standing on people's backs but this old idea that you can lift people up without dealing with what those on the top are doing and without bringing them down. and i

want to bring also back in just one quick question just to get a prince where we all stand on principle if it stick it on principle if everyone is getting richer but some are getting richer faster than the rest is that a problem for you that's not what's been happening but in principle terms i mean i would need to know the rate of of each you know if people the bottom are getting richer in a faster rate that would be even better but the reality is the average income in $179.00 in this country for the bottom half of americans is $16000.00 after 40 years pretty amazing things happen in the last 40 years the internet genomics revolution you know the store. the average income for the bottom half is now $16000.20 it takes a tremendous amount of rigging to have as much new stuff has been invented in our lifetime and have it not benefit we're going to talk about everything a little bit later in the show but i'm going to make a point that you cannot you are as you know that you cannot deal with poverty unless you deal with the gap you disagree i disagree with that toy because if you don't think rich people need to be made less powerful in order for justice to be done in america today no i don't know what by less powerful means less politically

influential but start with let me put it this way the thing i think of most for helping low income is the jack kennedy quote to the best form of welfare still a good high paying job and job creation job growth and income growth i think is the best way i would really telling the poor how do you do you ok how do you do it on this music now if. i'm an eighty's guy but i was born in 1981 both from cleveland we both know i guess how do you know that i need to i want to score some good will do it it's got 1st voice but how do you know it is because you got the gap is what we all love the i disagree about it because it is good economic ideas are good just wonderful the gap has an impact on people's lives the richest one percent in the united states live up to 15 years longer than the poorest one percent yes to get boxes. life expects the united states variable to 28 if you just say well you know where you live but let me just say you know that you're not good at it and you know batters a lot of the ghetto income buys buys life i mean it buys all this look out there is

a lot of ways to get out the got to speak i don't like living in a society affects their health it affects their spirits it affects their mental emotional you know the studies that are being done well i'm going to i've never known a society that doesn't have large income gaps i mean it's been with us for centuries and forever but the truth of the matter is income does get you better health care income does get you more job satisfaction that's very true that's why i want to see the poor get more income that's exactly the reason if they get more income they can get better health care they can feel more job satisfaction that's why i think the problem really is but there was a big supporter of the results for example by kate pickett richard wilkinson in the spirit live and other studies suggest that even if you raise the incomes as long as there's a massive gap society will have problems not believe drug addiction i don't know right now which is a very wealthy man's game to argue they are missing a very fundamental point so you were born in the year 940 is that correct who is that correct on your work i just heard 40 so people born in 1940 in this country

yes at the top of the upper middle class or the. top of the lower middle class of the bottom the upper middle class 10 percent on 90 percent. shared a 90 percent chance of realizing the american dream when the top of the bottom 90 percent chance out earning your parents doing better yes people born in my decade the eighty's. because in many ways of policies that you were involved with in the reagan to this one we disagree but this is where we disagree a little bit where the new people born in 1904 for example maturing into adulthood today. if you're at that top that upper middle class level your mobility has gone down from 90 percent to 70 still good of a better than average shot of out earning your parents people born at that 10 percent level at the lower middle class now have a 35 percent chance of out earning their parents and i think it is a fantasy to suggest that that was not an engineered consequence of policy in an engineered consequence of government cutbacks of austerity of tax cuts you do know

what happened to homelessness in the reagan years you know the data well i do know the data and i lived in california but let me just say that you know still economic growth what you're talking about is economic growth has come way way down from the forty's when you know what i'm talking about but that is what the result i'm talking about captured by the no economic growth if you have no increase in real g.d.p. per adult if you don't you're not going to have a good thing we don't know your cross purposes my understanding of what i'm talking about we're used to be going to say it's not about how much growth you have it's about who's getting the growth so people know about it get is about growth know what about also growth if everyone doesn't have access to what but know what he said was a performer your parents now that is not a relative thing your parents were there you're here it's a time separated thing is what we're talking about now when you talk about time separation the real key here is economic growth and we have had very slow numbers you're wrong it would i would be wrong line and so to the ability to klein in real g.d.p. per adult the trend it is declining the enormously in the last 20 some of your

corporate profits have gone up in this that's true the income of affluent people has gone up and wages of stagnant productivity of the famous graph that you know productivity but it has. going up in the period we're talking about somehow the workers generating that productivity but then the captured if you might of that put just a response and we've created what i. reckon there are these people had no income before and all of us and at the end of reagan day $20000000.00 more had income that they never had before all you look at that it was the reagan tax cuts of the ninety's margaret thatcher in the u.k. running we're going to states which created this explosion of inequality which you know i think it was the explosion of of growth income jobs for the poor of the minorities the disenfranchised people who had heretofore never had jobs now have generally and so you're saying to rich people you can keep way more of your money questions that. will go to you but betty i want to live in the candy land of your mind depending on how to get a reality and i say somebody here i mean a lot of this is been brought about by government because of lobbying and all this

stuff that they've gotten all the tax shelters who love it it's warren buffett he pays only $8000000.00 the taxes with $13000000000.00 income 6101 percent of his income in taxes because we don't have a low rate broad based flat tax like jerry brown proposed and i was jerry brown's economists who want to get rid of all federal taxes they have to flat rate taxes want to business net sales or one of personal adjusted gross income 13 percent on the subject of taxes and what would you like to see happen to taxes to try and tackle this problem. i think what is very exciting about the democratic primary that's happening now which feels to me like a way more open conversation with a full spectrum of ideas and we represented some very interesting tax proposals with surprising degrees of popularity in this country so the war and wealth tax is a fascinating idea you know $75000.00 families alone would be would be touched by that wealth because senator elizabeth warren is going to be at 2 percent 2 percent on assets over $50000000.00 and only that which is above 53 percent above

a 1000000000 only that that that's above 1000000000 touches only $75000.00 families and you know this this is a person who is very strong economists doing this work you can. universal daycare on the you can fund a massive effort on free college around that and still have money left over that's interesting idea has a 70 percent marginal rate congressman alexander closer to thank you for the global write exactly you know i think that's an interesting idea i think we're going to have to sit and look at all of these and maybe not do all of them the same because i think i did but i think these are the kinds of ideas directionally that we should that those those who think we have an honest reason one of the reason we're doing this show is because we have a discussion why can't we have an honest conversation about tax rates and about what the rich pay without some people on the i love it getting hysterical so when alexander classical suggested 70 percent dominated the news and we had 2 1 of your friends grover norquist. comparing it to slavery we had a prominent republican congressman suggesting that she was trying to take 70

percent of people's income she's not is she just to be clear you want to start. she's only saying 70 percent on every dollar over $10000000.00 how can anyone be again let's look at how do you need more than $10000000.00 of income why can't you spare $0.73 please about your friend who are grover norquist or anyone else so they're wrong the it was you know the key they're wrong to compare 70 percent tax to slavery i do think that's wrong because i do and all wrong with that idea and i was just getting the idea i don't think the 70 percent of what people pay i don't think it is what they pay what they do is where you have if you don't have it when you have a tax rate of 70 percent you're going to spend 70 percent of your time trying to reduce your tax burden and 30 percent of your time trying to work because that's where you allocate the resources and don't let me finish when you do that you get all sorts of people trying to use lobbyist gamesmanship you know all this. she can't agree with government to do that so i know you're famous for the laugh floor curve laughter i'm a laugh or i'm afraid you're turning into the laughter curve that's ok i got it

before because the reality is. we tried the idea of cutting taxes and unleashing growth we tried it we now know serious people agree on this that allowed the one percent to double its share of the nation and then could i respond that allowed billionaire out of this is how any way you know you're completely wrong on the facts on the research i'm going to look at this nonetheless where you could allow usually an error is to monopolize the american dream and it has i don't know how much time you spend out there actually talking to regular people in the country i've been in indiana iowa pennsylvania ohio nevada recently in the last few weeks talking to people i will tell you when you actually go into real situations and say what's what's your job what happened in job how was your job 30 years ago what happened now how much of your farm make what's going on what's the union situation i will tell you that people are very clear whatever conversation wearing at this table americans on the left and right are very clear that something has gone badly wrong in this country that the that they can't see

the horizon or the denotable is about what i don't know but even republican voters especially if you look at the academic because this is going to get us to i mean the academic literature is very clear the tax rates have had an enormous effect on economic growth government spending does i mean you look at if you tax people who work and you pay people who don't work here you get a lot of people not work you have advised donald trump you have much more with where you are going to go look at you have it was donald trump you were in the book where is it mr you go you've written a book praising donald trump economic policy is going to be what all this is yes very much his tax cuts. 60 percent of the benefits of those tax cuts last year went to the top 20 percent and in the coming decade the top one percent are going to get 80 percent of the bonus but you're so wrong i'm not wrong that's the tax policy center which is a nonpartisan i discover they hasn't been wrong since the fifty's let's read well the tax policy center says this can i say something if you look at the increase in jobs i'll put in a thought if you look at the poor what i noticed the percentage citing resorts then you've not disputed it you get it completely or so now i'm sort of assumption that all the benefits they could be about you know the benefits of the tax cuts of the

jobs they are how it works come all come on that's why we did the tax dollars and so it's like i like to lots and lots of money on the basis of tax cut but down the line someone may get a job we equally benefit when someone's got a little and big other job you know lots of people have notified me oh it's a very specific knowledge of unemployment of a total of one percent of the it or 80 percent of my business alone ok with those at the lowest rungs up the ladder have had the lowest unemployment rates they've had more to grow ask about unemployment but i'm telling you but that's what we're going to do that you may want to talk about the distribution of tax am i look i'm going to do talks about to get jobs who gets the income increases that's what i'm after now you can be after the just even if they're probably paying jobs people in america job better than no job if they don't well i'll have a job maybe for you in a nice suit sitting here it's better than no job but i will tell you i don't do you get out there and actually talk to people all the time and i've been doing it for a lot more years and you guys just you know i was and still is in utero look the

reality is. a lot of these jobs you talk about. are increasingly contract jobs rather than jobs with any kind of security they're good jobs for young people all the indicators around homeownership down entrepreneurship down we think we live in the startup age no young people about half as likely to do a startup today as they were when you when you were architecting the policies that resulted in the situation and probably if you continue it doesn't matter of you do it personally but if we continue to cling to this idea that simply leaving business people alone in an era in which so many people have started to feel that the american economy doesn't work to your point you know that actually if you think about how donald trump ran as opposed to what he did there was a 2 party consensus in the 26th election a milestone american history where both parties both contenders ran against the role of financial capitalism in screwing american community ok that is the new i

don't sense about let me just we're going to move on to you on and you've written a lot about philanthropy to a lot of rich people would say justifiably so but we do a lot of good work with our billions the bill gates the warren buffets of this world and so we're helping fight malaria we are helping build hospitals there's a zuckerberg hospital. what do you say to them when they make that point we all know we're not just innovating is often some on the right would say in creating jobs we're also doing a lot of good deeds with this money and others on doing you know philanthropy is trickle down economics with a cherry on top all of these super mega billionaires many of whom i did this reporting with you know have foundations and give huge amounts but what is so remarkable about it is the as the philanthropy has gone in there do gooding has grown the inequality has grown and so the question is what's the relationship between these 2 things and i think the argument and conclusion of my book through reporting is that this extraordinary elite generosity that marks our time is actually how we maintain a system of extraordinary is

a word surely. and i can he answer that i mean this is exactly correct what you're talking about is exactly what is real god is for 501 c 3 you get a deduction there which reduces your adjusted gross income by 30 percent of the amount you gave to taxable income and these guys have used in this all the time here's it to avoid taxes and you get no doubt please let me just give you one more effect please you know you have no capital gains taxes on unrealized capital gains if you give away a dollar stock that's now worth $100.00 you get the full benefit of the 100 you don't get any of the tax this is fraud of the 1st i mean because of the tax or because you know a lot of these people are telling me i'm going to eat when you see a lot of people saw what happened in front of me yes notre dame cathedral they raised billionaires in from it's raised a 1000000000 dollars i think in the space of 2 days to help restore that cathedral a lot of people again on the left on the right will say so in 2 days you could raise a $1000000000.00 when you want to for something you want to spend on but then you claim you can't afford to pay the taxes or it's going to hamper your business or

it's going to totally evasion surely that undermines the idea that if you raise taxes on the rich they're going to all run away all right you're totally right i think it is you can give away a $100.00 and really lose something like $9.87 because of all the tax benefits you get from that you shouldn't have that if you give away charity you should give it away and after tax dollars that's the way it should be done that's what i would jerry brown we have a low broad race based flat tax of 13 percent period no deductions no exemptions no exclusions and then warren buffett would have paid instead of paying $8000000.00 he would have paid $1600000000.00 but now we didn't do it by rates because frankly he doesn't but just to the point a little further if we did a wealth tax if that money is in fact lying around get around it to $1.00 of them if we did a wealth tax and let's say we found a way to enforce it do you truly think if we taxed fortune's north of $50000000.00 or a $1000000000.00 many people reported on many of them i will tell you do not think america would would would would be in trouble many of them. i don't want it to

happen but many of them will tell you privately they think america be better off on the other side of it they're not going to they're not going to agitate for it do you really think america would be worse off if we taxed those fortunes versus and that's just as a stand alone or what do you do with the money or do you lower other taxes now we've got to do various things with the money you can do a universal daycare that's the proposal on the table you could do free public college i think america would be a lot worse off with a 2 percent black and let's admit a 2 percent wealth tax let's hear the sound although i know we're running out of time when you tell us describe or said one of the things it's going to be very difficult to do though right when bernie saunders a self declared socialist who's i think 2nd in the polls right now in the democratic primaries when he says he wants to break the quote in this country number one is not an accurate description number 2 can you do it is it possible to do that i think we do live in a functional oligarchy and i think that's something that americans need to understand because whether you're on the left or the right i actually don't think

that's our self image i think our self image is a place where everybody ends up where they end up according to how hard they work and the reality is in the o.e.c.d. the rich countries america is basically last. at social mobility we are actually the place least likely in the rich world and so it is an oligarchy and you're also you're on the right of the spectrum i'm a kid i'm going to kind of miss a lot of the right and i'm going to i'm going to join the rest of the spectrum but can you there from the way you'll sit and. do you accept that america has become or is becoming an oligarchy as and says as buddies a life is good flute has been never been more prevalent than it is today and that's the real power of the rich and volatile part of a lot of groups and policy no the rich what about the rich as well but i'm talking about specifically the rich well. the rich are more important to them in a good goldman sachs is more important than how would you how would you briefly cut down the power of the rich in the u.s. i would do it would lower a broad based flat tax the way jerry brown propose we went from don't want to make the rich less rich oh bucks less rich i thought you don't want to make them less

rich just so we open the show you know you know i was a blessing in the sense they're paying more taxes that's your disability but i don't know what i was able to pick up the phone to senators and governors is still have the ability to fund certain politicians that's not going to change is it you know i still get upset a lot of republican and democratic voters and i don't know that in evidence of a near etc because i don't know of in any society where you don't have the more powerful agreed but in america it's worse for the other sunday that i support and that well you know i don't think the amount of money and having a holiday worth in one is if you looked at the o.e.c.d. studies of elizabeth warren's 2 percent wealth tax you've seen that there were 13 or 14 countries that tried it now there are only 4 and they've had with respect we moved on a lot of us about the power of the restaurant and that's why you don't think i talk so what i'm asking is how you would reduce the power of the rich would you where there is a lot of power of the rich by not having tax codes in their way and i would buy a low rate broad base but they would still be rich according to you but they wouldn't therefore they would still have control over the way to go since no but they wouldn't be able to influence the tax code which is where the rich really get their power you know the way the rich companies get their powers by lobbying

government and having government as their biggest come you know with a look at the washington offices of all these firms and all these rich people that's where the problem lies so your solution. is cutting taxes for rich people is a no no my just to have a low rate broad based flat lower rate than their current rate is unfair but nobody does to be new down you know you know there is a much higher on their income but it would be lower statutory rape but there would be no deductions exemptions or religion i want to add that i'm not a political question not a question about tax rates you've advised donald trump and i advise jerry brown and we went from. donald trump by the way no ok so you have to tone for what you believe anything to a point of not as important as dangerous president american history. before we start a whole new disk i. o. a job that we're running out of time just to bring about the suffering of the fact that donald trump as pointed out saying i will take on special interests i will drain the sport i will stop goldman sachs i will pick will stand against the banks

i will stop the rigged economy i will speak for you and then he assembled the richest cabinet in history filled as a ministration with goldman sachs personnel was at a betrayal of white working class voters and this was the for you is what you just said and i think he has spoken some example pledges about gold you know you about the billionaire look about the bankers the facts of his god i think that's what he wants people in his cabinet i don't think so i don't think there are too few either i mean you think it's just the goldilocks perfect just right now no i didn't say it was that i don't think billionaires are the criteria you do is for their there are lots of billionaires i think would be awful in the cabinet i think this cabinet done a great job in creating a political economy of their representation of different economic strata don't that doesn't mean i don't think that's what he should have said about a lot about this campbell but that i think his cabinet is a great cabinet and i think we've got it right out of one very brief question to both of you looking forward i know you love to do predictions what is going to happen to the american economy very briefly especially what we talked about today in terms of the power of the rich inequality in the next 51015 years and i don't look at the inequality in the power of the rich and i think if we keep these

policies we're going to have nice solid economic growth and prosperity will hit the lowest income echelons and i'm very excited about moving forward in these areas the last word i think we're living in a very. time where a 40 year era that you were involved in starting the reagan era is actually finding finally coming to an end each of capital defined by this march in government unshackling business created huge and growing inequality is what most americans to feel the society is a work for them anymore and actually both on the left and right there's a tremendous new consensus emerging that we need new economic thinking that everything you heard today belongs in a museum not in the future and and the reality is we're going to get there one way or another we're out of time we'll have to leave it there. thank you both for joining me on the show. up front we'll be back next.

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