the housing system to get rid of it in one fell swoop. i do not think that is on the president's agenda at all. what he is intending is, for the range of deductions, to arrange it so that it is not so perverse that. . host: considering the state of the housing market, people say that we do not need any shock to the system, we ought to be promoting it. guest: the way to help the housing sector is not to offer subsidies. that is that the troubled part of the market. this is not some disaster shot to the system. again, just getting rid of what is really a perverse subsidy. host: staying with the mortgage interest deduction, we will go through other controversial debate on the itemized deduction limitation, but on mortgage interest, as a country, we have

trimmed this back. why not make further limitations to it, specifically in the area of mortgage interest? guest: in the long run, i would like to get rid of all these credits and deductions and lower the tax rate over all. that would reduce distortions across the playing field. as you point out, canada and australia, countries like that to not have mortgage interest programs in place. home ownership is just as high. the president is proposing these deductions in his new bill and he is making the tax bill more complicated in that way, and is putting limitations on these deductions in the tax bill as well, which makes the tax bill more complex. i do not like his or all policy. he should be reducing complexity and lowering overall

rates. host: there are two sectors of the economy who are already looking at this provision and raising concerns about it. one is charity. "wall street journal" why this could be bad for charity. if they deduct less, they will give less. what is your response? guest: this is something that has been studied, and it does not really support that. the rich do give to charity. it is somewhat subsidized, but it is not the primary motivation. they still lose the money. i do not think that is a cause really for great concern. i think you do have to remember that the changes in the tax code are paying for something. it is not just raising the taxes

on a whim. if you look at the other side of the ledger here, the job creations that will be made, reductions in payroll tax, which is directly tied to creating jobs, when you look at helping the unemployed, all the provisions on the spending side of this, you have to look at it as a balancing act. on balance, there is no question, in my mind, that it is good for the country, could for most of the purposes that charitable contributions care about. host: today we are trying to understand the implications of how he intends to pay for his jobs bill. questions and comments in a few minutes. let me ask you to comment on the over all -- the president's plan will stimulate jobs? guest: i am completely against

every part of his jobs bill. he wants to put in place a temporary tax cut. companies do not hire people based on tempered breaks. they hire people based on looking at their long-term investments. if they build a new factory, they need new workers in that factory and a higher. even if a company would add a few marginal workers from this peril tax cut than they are proposing, wouldn't they fire them in one year once this expires? also proposing their brakes if a company hires people, they get a special $4,000 tax break. at the thought makes sense to me. the president complaints about business tax loophole but is proposing to add new ones to the code. we should focus on overall reductions in the tax rate and making it more efficient. host: limitation on itemized

deductions, two other sectors. comment on charitable deductions and its effect on giving. when there be one? guest: i think there would be an effect. that does not mean i would not get rid of it in terms of overall tax reform. charity deduction is probably less distortion era than the mortgage interest deduction. that causes hundreds of billions of dollars of extra resources to move into one industry, housing. we have seen the problem that that has created. charitable deductions, it does not create this distortion for one particular industry or activity that is really damaging to the economy. i would get rid of the charitable deductions in terms of overall tax reform. i do not see any reason to go picking on and right now. host: the other item is health care. if deductions are limited to 20% for higher earners, here is what is being written on conservative

blogs. if that happens, what effect would it have? guest: it would have a marginal effect. again, ultimately we want to get rid of the distortion that the tax code creates on the health- care industry. but i think we should do that in terms of overall tax reform. i think adding in these sorts of narrow limitations makes the tax code more complex and does not really reform the overall health care system. host: some people get breaks for health savings accounts and their health insurance premiums. what does it do to the health insurance economy? guest: it makes it easier for people to get health insurance. again, what the president is trying to do, though, there is no particular reason why higher

income people should give more help in getting health insurance than middle income people. i think in terms of tax reform, that is the objective. i agree, the tax system is complicated and it should not be made more taut -- complicated. i see it actually as kind of a down payment for other tax reform. you are starting to move to a more level set of subsidization, which is sort of where we end up with bigger and broader tax group. host: let me move on to another provision. this one has been getting a lot of discussion in financial newspapers. that is the president's plan to tax income of investment managers at individual rates and not capital gains rates. they propose that this will bring in about $18 billion of revenue. here is an item, for example, in the "the new york times."

raises some hackles among private equity executives. what is this all about? guest: basically private equity managers are able to really -- what is really their earnings, what they make for doing their jobs, as capital gains, and get preferential 15% capital gains tax rate except for the tax rate everybody else pays. it is simply preventing them from playing that game and prevent -- paying the same level that other people pay. guest: this is the so-called tax increase on what is called carried interest. a company structured as a partnership -- for example, venture capital -- the managers of these companies get usually 20% on the deal income, investment in company, and it is treated as capital gains income and it is sort of a gray issue. it is a debate of whether this income is really labor income or

capital income. the president would not raise very much money from this provision, and i think it is a little dangerous. companies that are organized like this, venture-capital companies, have been organized like this for many decades and they helped fund silicon valley start-ups like apple and other great companies over the decades. so i think we are playing with fire if we start hiking taxes on businesses that really our job creators in the economy. i would be quite hesitant to go ahead with that sort of tax increase. host: i wanted to put a couple more of the major provisions on the screen and you can send -- call or tweet. the next thing is about corporate jets. it has been quite -- part of the political rhetoric. the president that a plan to raise $3 billion is to limit the tax breaks corporate jet owners.

reading some of the chatter about this on the internet, people who are against it suggest it will do the same thing for the private plane industry that many years ago the tax changes for the boat industry did, which is the press it in a bad economy. guest: he would reduce the depreciation deduction for a corporate jet. this is an odd provision. the president, among his tax increases here, he reduces depreciation deductions not only for corporate jets but for various parts of the energy industry. oddly, at the same time, he is proposing to extend 100% expensing. he would allow certain companies to write off all investments first year on the one hand, but on the other hand reducing depreciation deductions for certain other industries. so, his tax policies are

directly contradictory. i am ultimately for businesses writing off their investments completely first year, which is called expensing. whether it is corporate jets or energy industry equipment, let us try it -- let them write it off the first year and i think we could increase investment in the economy. host: does it make sense to take both the corporate jets and energy provisions all in one? guest: first of all, again, it is a leveling of the playing field. without getting into the details, the corporate jets have sort of got and an access level of depreciation and so we are fixing that and raising revenue. yes, he is doing expensing as well, but -- the is the way expensing across the board which, again, that affects everybody. i think it is correcting some distortions while providing an incentive to invest during this period where we are short on investment.

people are arguing, well, it will hurt the jet industry. we could have the government by every executive in the country his own corporate jet and we would help the corporate jet industry. but it would hardly be a good use of dollars. again, i know we are focusing on the taxes, but the point is how this money is being spent and it is being spent in ways that would create many, many more jobs than frankly any would be lost in the corporate jet industry. host: before we get to telephone calls, let me ask folks to talk about the politics. speaker boehner bank is expected to give a speech in washington and we previewed that with a washington post reporter and jobs -- she suggested he would call for comprehensive tax reform, again, saying no new taxes as the deficit committee is under way. what are the politics of the president's provisions right now. guest: the tax increases will not go anywhere in the house of -- house of representatives. the white house knows this.

a lot of the tax provisions they tried to pass in previous years and they could not get through congress. the carried interest provision for venture capital companies, they proposed that way back into thousand seven by democrats and it went absolutely nowhere. so, i think it is just politics. the president wants to pretend he is being responsible with the budget. proposing revenue increases that make no sense for the economy. they have no chance of passing. i don't like the temporary tax cuts he is proposing, either. the jobs tax credits i don't think make any sense. i do not think it will cause companies to hire. i think we ought to look at overall tax reform, lowering the very high corporate tax rate, for example, would be good long- term reform and something that could also stimulate the economy in the short run. that is the type of reform. host: this morning we see in the new senators such as mary landrieu are concerned about the energy provisions of the president's proposals.

what are your thoughts on the politics? guest: to some extent i agree with chris -- i did not think the white house is when did it as the specific mechanisms be a way to pass a jobs package. there are focused what the -- on what they care about most about, and like they said, the super committee, has other ways to pay for, it is fine with them. i think the white house cares most about creating jobs. and i think they need to pay for creating jobs. and these are the mechanisms they put on the table. i do not think they are wedded to this particular mechanism. that said, senator landrieu is representing louisiana. she is representing energy interests in this case and expressing that concern. i think with respect to those particular provisions, with what

oil prices are today, i do not think the oil companies need added incentives to drill for oil. host: one more and we get to telephone calls. yesterday a conservative group put out a comprehensive list of all 14 tax hikes in the president's stimulus plan. it was appearing all over the internet in various websites. they also highlighted one which they said would raise $4.8 billion of the spectrum tax. a new $4.8 billion hidden tax on wireless consumers levied on users of license spectrum. do you know anything more about this provision? guest: it is sort of like saying the president can launch a nuclear attack on a whim. yes, assuming all the checks and balances within government are completely ignored, the fcc could raise the tax.

actually it is a pretty sensible policy. they are opening up a more of the electromagnetic spectrum and they are going to auction it, so i way to allocate among cellular companies. even if you assume that every dime of this tax is passed to sell phone users it is less than $2 per cell phone per year. and the money is in fact dedicated to being used for helping with the 4g build out and improving that technology as well as doing something the 9/11 commission recommended in terms of rapid responders, first responders, having a part of the spectrum of their own so they can better communicate in emergencies. host: highlighted last week with the 9/11 emergency. your thoughts? guest: the bill just -- , and

fcc to raise a billion dollars a year in cellphone users and spectrum users. again, another tax we don't need. i would also get rid of the subsidies we get to the telecom industry, at that we did not need the federal government to tax or subsidize the industry. it does well by itself. host: let's begin with telephone calls. let's begin with a call from chicago. this is carl, a democrat. caller: i would just like to say, i understand the president is trying to negate the president that a ferry that tax cuts of the solution to job creation. i would like to direct this, however, to mr. edwards. if this is malfeasance that caused this recession that put some money but out of work, and the taxpayers who had to step up

with tarp and the stimulus to get it stabilized. we have done it over the last two and a half years. i would like to know from you -- with business now making profits, now $2 trillion-plus in cash. what are they going to do on their part for the country without an incentive? why should we not expect -- they should step up. the american taxpayers stepped up. why don't they voluntarily step up? this past summer they could say we believe in america so we are not going to let someone else by our treasury notes to raise the debt ceiling, we will, to raise the money. when it is business going to step up and do something for merkel? guest: thanks requested. i think you used the word malfeasance and at the leading up to this there was malfeasance of on the federal

government's side and to an extent by wall street companies, malfeasance -- wall street companies. on the government side, subsidizing the housing industry, keeping the fed reserve interest rates too low for too long, causing sort of a bubble in the economy. so, there is a lot of blame to go all around leading up to the recession and financial crash. you are right now. i think a lot of american businesses, they are profitable. they are making money and sitting on a lot of cash. the question is, why aren't they spending and investing. if you look at the national income accounts for investments by american businesses, building new factories and structures, it is very low. it crashed a few years ago and it remains low. i would argue it is because of the environment out there is very uncertain. the tax rates on business are very high and the united states. so, if you take big american

corporations like caterpillar or intel, they could invest anywhere in the world these days. we want them to invest in the united states, so we've got to give them an incentive. we've got to make the united states the best place for these companies to invest. i think they will start investing. one of the things i talked about a lot is reducing our very high corporate tax rate which i think currently scared away investment by businesses. so, let's get those businesses investing again and they will hire people and they will create greater growth and reduce the unemployment rate. guest: a couple of things. i think that the way to get businesses investing again is to increase demand in the economy. the reason why they are not investing is not because of the corporate tax rate, the reason why they are not investing is they are not confident in -- that there is a market here in the united states. what we need to do is what the president is proposing is input more money and more middle-class

families and so there is demand that the economy for the goods and services that corporations produce. we can keep going back to about cutting taxes which we have gone over and over, but it is important to remember that taxes as a share of the economy right now are at the lowest levels since 1960. we have gone into the recession with the bush tax code and we still have the bush tax code. president obama has cut taxes since he became president. president obama at this point, taxes have been cut more in this -- his first term than they were cut under president bush, just more targeted, to middle- class. so the idea that we will go to the tax cutting well again and that is the key to get businesses hiring and investing again is wrong. what we need to do is pass the debt overhang -- housing crisis, get money in middle-class pockets, get customers back in

the stores and create demand for the products of u.s. companies. host: let me single it out, corporate tax rates the united states has truth because they might get fired. the truth of the matter is the biggest transfer of wealthewersg of the comparative american corporate tax rate is? guest: the rate is high but taxes are low. overall what u.s. corporations pay are not high, in fact, lower than other advanced economies. the tax rate is high. what we had is the situation where the rate is high but there are so many loopholes in the system that companies -- very big and profitable companies sometimes often end up paying no taxes. it is a system that i completely agree with chris is in need of reform, but the problem is not the overall level of revenue. host: anything further to add? guest: we have the highest

corporate tax rate in the world at 40%, tied to japan, an average rate in europe is 23% in the global average is around 25%. we are way above average. it means a big multinational who can invest anywhere, instead of investing here, paying 40% corporate tax rate, they can invest in china and get 25% rate, they can invest in canada. it makes no sense to me. we need to become more competitive and lower our corporate rate. host: we mentioned the deficit committee opens -- starts with a closed-door meeting today. as you wa a viewer -- correct? guest: that is what i was getting at earlier, is that the administration has offered these as a way to pay for this, but

they are open to other ideas that may emerge from the committee. host: california, good morning to holly. republican. caller: good morning. this jobs plan is, like everything else he does, ideologically driven. just two cases in point. by the way, god bless cato institute, one of the last bastions of common, decent thinking. taking away the deductions for donations. that just plays into a term that is used in 100 documents of this administration called to the federal family. he wants all help to come from the government. he wants all people to look to the government. as far as the people under water, we have employees, we have a large business. our home is --being able to

deduct a house that we have a underwater and everybody else like us that is making payments on a house that is under water, one of the last advantages we have is being able to deduct. once again, he is striking the people will have something, will have created something, who stand independent of the government. as far as the corporate jets, i wish that i had been able to use mine as often as michelle obama has flowed around the world at my expense in her separate flight even from her husband because she could not wait another two hours -- just god bless america and something has to be done about this juggernaut we have and the white house. he keeps saying the president's plan -- these are the machine that put him in the white house. he is an empty suit but they are coming after the american way of

life. that is their agenda. host: thank you for your call. would you like to respond? guest: in particular the caller made the point that this is an ideologically -- this is ideologically driven. i think one of the telling things about the job creation side of the proposal is everything about that plan is something that has been embraced by republicans at other points in time, and in fact, recently. the payroll tax cuts, it was the centerpiece of what the republicans were proposing as an alternative to the recovery act in 2009. the president has tried really hard to not make this proposal ideological, to make it something that might have a chance of, at least in part, passing muster with the republicans that controlled the house of representatives. because you have massive unemployment and we need to do something about it. host: on corporate taxes, a tweet --

guest: i am not in favor of that. right now the united states has what is called a worldwide corporate tax system. u.s. corporations are taxed on their activity around the entire globe. a system of taxation just about what every other industrial country is moving away from. to tell you how would works -- if you are a subsidiary of a french country in brazil, the french government does not care how many profits you make in brazil. the french government assumes it is good for french industry. in this country if the u.s. can't -- company had a subsidiary in brazil would tax the money. i don't think it is a good system. i think we should follow the system and other industrial countries have gone toward, and that is to allow our multinational companies to become competitive internationally and not to over- taxed them. host: let's hear some provision. a fair

we think it is the kind of balance of trade off. host: to hear a voice on the other side, let's listen to the economist martin feldstein. >> it uses the revenue to finance a new collection of government spending programs, when we need that revenue from reduced tax expenditures to

reduce future budget deficits and to lower marginal tax rates. second, as you know, the president would limit the tax expenditure reductions just to hire income taxpayers, those with more than $200,000 in income. but a long-term deficit reduction requires that everyone shared in that burden. if congress were to pass the president that a proposal to reduce tax expenditures just for higher income individuals, i think it would be very difficult to revisit that at a later time and to extend it to the entire population of tax payers. host: two voices in the continuing debate over tax policy. we have two at the table this morning. we are taking your telephone calls on tax policies, specifically using the president's proposals in his

jobs plan at our vehicle for discussion. a viewer from new york says -- replacing the income tax with a consumption tax? guest: it would really raise taxes on lower and middle income people a great deal and cut taxes for the wealthy a great deal. i think it would be very damaging both to most americans and i think it would be very damaging to the economy. guest: i am strongly in favor of replacing the income tax system which has a strong bias against savings and investment and economic growth in my view, and replacing it with a consumption tax. the consumption tax could be anything, like a national sales tax or the flat tax that steve forbes championed a decade or so ago. hall rabushka flat tax -- this dollars that introduced it decades ago. the consumption tax would be simpler and in my view it would be pro-investment and savings

and help of the economy grow more strongly. host: carl, watching us from san antonio, asked a question what you were commenting. i do believe there should be deduction for mortgage and charitable donations. guest: certainly it is one of the huge problems we have, is the weakness in the housing market. the housing market is not just about construction workers. new housing construction is a big source of energy for manufacturing. as many of the things that go into homes are manufactured -- when people buy a new home, they buy the new things that go into a home. it is a very important part of the economy and one of the big reasons we are struggling right

now. can i turn back to what chris was talking about multinational corporations? it is important to keep in mind that these big multinational corporations that chris is worried about are in fact the ones that are by and large paying the least it taxes right now because the fact that they can shift income back and forth across borders gives them a way to avoid paying u.s. taxes. in the u.s. system that chris began to describe -- he said the u.s. would tax the u.s. company on its income in brazil. that is true. but it gets a credit for any taxes it pays in brazil. so, it is not be double taxed at the benefit of that system -- which, i admit, it needs to be re-looked at, but the benefit is it takes away the incentive for businesses to move jobs in brazil because they don't get a tax break. they pay the brazilian taxes but anything in excess of the brazilian taxes they pay, if

they put the plant in the united states, they pay to the united states. host: the next telephone call is from massachusetts. dave is an independent. good morning. caller: these guys can't really tell you the truth because they might get fired. the truth of the matter is the biggest transfer of wealth from the port to the rich because of bush's patriot act. sitting here with the patriot act and having the technology go to the ridge where the bankers targeted the middle class and the poor. besides, the cato institute is the reason why this policy has been enacted. they were complaining about how all the companies were not able to do all of this business, and all of the sudden a tax breaks come in and we have tax breaks for 10 years. the disparity of wealth is unbelievable. the poor are getting poorer and the rich getting richer, because

the rich elite want to be as rich as the guys in saudi arabia but they are doing basically as same thing to the american citizens as those guys a doing their to the poor people living on $2 a day. ok? so, when you start putting people in jail as opposed to rewarding them for doing the things they have been doing -- you know, technology is a very double edged sword. when you use it for right, it usually works, but when you use it to manipulate or control the masses -- and that is basically what it is. that is why the whole world is having problems. host: i have to jump in. thank you. we understand your points. we turn to you for a response. guest: i understood very little of what had to say. he talked a little bit about the tax code and the rich and the port and seemingly blaming bush for everything. i must say that bush cut a variety of taxes, and statistically, he cut taxes really across the board.

we talked a little bit about some of these tax breaks that people at a higher income levels enjoyed, such as the mortgage interest deduction, but at the bottom end of the tax scales we have a number of credits that have exploded in recent years, such as the child tax credit and the earned income tax credit. these have been expanded by both democrats and republicans over the years and have become enormously costly. so, we have a large amount of new tax breaks at the bottom end of the tax code as well in recent years. host: any comments? guest: no question the bush tax cut disproportionately benefit the most wealthy. host: two views of the present that a tax proposals of the nation's editorial pages -- two views of the president's tax proposals. "the wall street journal" says -- and "the new york times" noted

-- talking to our two guests about their views. host: will go to michigan. caller: i can solve all of your problems. i have come up with a new tax plan. it is so easy. host: we are holding on. caller: ok, there will be only one that loophole for charity. we all know that at the end of the year, the rich figure out their taxes and get a bunch of

money to charity in december. i think that should stay. as far as what they are talking about -- guest: we missed the planet. host: only one deduction for charity. guest: it is sort of econ 101. i go back to something interesting and earlier caller mentioned. it is important to have a large nonprofit charitable sector in the united states. it makes a difference. it does not just come from the government, as it does in a lot of countries in europe. it comes from a very large charitable sector in the united

states. americans, of course, are very generous. guest: i think we are not that far apart on this. it is useful, the effect is probably exaggerated by charities that are concerned about what the impact would be if they got rid of the deduction. i think they are overly worried about it. host: i have statistics from the center for american progress. these are numbers from 2010 and it tells us that tax revenues $2.2 billion while tax expenditures -- guest: within the tax code, there are many provisions that do not have anything to do with the fair and equitable collection to run the government. it is a spending purpose.

we call those tax expenditures because the purpose is more like the purpose of the government expenditure than anything having to do with the tax system. we just happen to implement it through our tax system. it does not make any difference whether the government since you a tax -- a check to help pay your mortgage or reduces the tax. what the statistics point out is that the tax expenditures have grown and grown. we are at a level of a trillion dollars. it is eating into the revenue we collect. host: i would also like to show you the irs charts of 2011

individual income-tax rates. the tax rate is 10%. the next level is a 15%. 25%, 28%. those making $174,000 are taxed at 32%. those are the published tax rates. what is the real picture about what people paid? guest: listened to the rate schedule. it is very complicated. there are six rates under the current code. had an the 1980's, we bipartisan tax reform in 1986 that reduced the whole structure down to simple rate structure of just 15 and 28%. the congress at the time got

together and reduced a lot of these tax expenditures that michael talked about. and used the money to lower marginal tax rate and simplify the code. that is the direction of tax reform we need to go down the road of and to simplify the rate structure. host: mississippi, david, republican. caller: good morning. can you c.m.e.? -- can you hear me? we have tons of people in prison for taxes and i did not know we had a -- we have tons of the poor in prison for taxes. we cannot go after their bread. they can put all these little people in prison. you 05 thousand dollars and i said, ok. he said, i just want you on the

role. my idea is to put everybody in prison, give us three squares a day. get rid of all these corrupt irs people. he did read of all these organizations that destroyed the people. thank you. host: are there a number of americans who are in prison for taxes? test coat he indicated that the irs goes after a low income folks. -- guest: he indicated that the irs goes after a lull in, folks. the problem is across the income specter. you have all these refundable tax credits that there is an enormous amount of cheating on. at the high end, it incentivizes people to avoid paying taxes.

a tax reform with lower rates to reduce cheating across the spectrum. host: the debate over the tax cut -- bush tax cuts, this threshold has been 250,000 for couples. what is magic about those numbers? guest: i do not think there is anything magic about it. i do not think there is anything magic about it. i think it is at a level where, you know, the richest 2%. it is a wealthy segment of the population. people get upset -- they think they are not rich and they do not feel rich. what is important to realize is

the way the tax code works. people making 300,000 a year do not pay much more under these proposals that it everyone over 250,000. it is on their marginal income. you kind of forget the truly wealthy, and up having to bring in a swath of people that are a little below that to make it work. i do not think there is anything magic about that. guest: ibm for fairer taxes. i do not think we should penalize people at the highest earners in the economy mood generally are some of the most productive people in the economy. if you look at people who pay the highest tax rates, they are venture capitalist and doctors and people like that. i did not think we should be punishing them. postcode our next call comes from mexico.

-- host: our next call comes from new mexico. call " i find your position on carried interest amusing. you talked about high earners and productivity. i would like to point to a specific example. john paulson bets on the subprime crisis and he walked away with $40 billion. his share of that was $4 billion. he would pay 15%. his company, though one vehicle he used, abacus was a synthetic debt obligation. this was simply a back. there was not any tangible property or anything involved.

most recently, his hedge fund in 2010, he walked away with $5 billion. betting on betting in not having anything tangible called their is some how productive, i do not see it. i see the only way that you are really going to address these people who do nothing but make that -- bets is somehow capture their money in the tax system. we have been unable to do it otherwise. we are unwilling to reach deals with these hedge funds. host: just for the sake of time. guest: he seems to be -- he has an example that i am not familiar with about a high end, person. i do not think that is the prototypical type of person who lives in the top end of the

income tax spectrum. i think steve jobs is more of a typical example of someone who is in the highest earning part of the income tax spectrum. steve jobs or bill gates, they have done enormous things for the economy. i do not begrudge the making billions of dollars in the least. the current tax code will be punished as these people at the top. they pay a much higher tax rate than people in the middle or at the bottom. i do not think it does the economy any good to punish them more. guest: on to the current system, that is not true. -- under the current system, that is not true. people make a big deal about the bush tax cut on the bridge. it is punishing these people. here is the reality. at the rate of increase of income of the richest one%, it is about equivalent of a one

time 10 month payment for that. when you stack up against the metal -- the middle-class, it is a matter of we have to pay for these things, we have obligations as a country, who can afford to do it? a 10-month pay freeze for that class of people is a modest ask. host: here is a comment from a viewer. our next caller is from maryland, a republican. caller: good morning. what i wanted to say was in the history -- never in the history of our country have we cut taxes during the time of war. and we have had two wars. we gave them a blank check. i saw a hearing they said bags

of money was given out. yet we want to blame obama for everything. at least health care is helping people. money that was squandered over there did not help anybody. and they still hate us over there. i think it is sad that obama gets the blame for everything. host: we will go from -- go to a call from baltimore. you are on the air, a democrat. caller: my question is for mr. edwards. mr. edwards claims he wants a -- $8 million tax return -- a

million dollar tax return. i did not think it is fair. talk about charity. charity is not supposed to be deductible. it is supposed to come from your heart or your conscious. -- conscience. the american people pay for deductions. bank of america, they got a lot of top money for the government. host: thank you for your call. your response? guest: the caller pointed out some companies that apparently paid no taxes in the current year. that is true. one of the problem with the corporate tax income system is that it has a very high statutory rate.

companies do not pay any tax, perhaps they are not profitable. general electric, for example, did not pay any taxes last year. you have a lot of corporations, wal-mart has a very high tax rates. they pay an enormous amount of taxes. it is a very uneven system. we should go to a simplified lower rate system and that we businesses would pay more consistent, but reasonable rates year after year. host: businesses create jobs if people buy products. guest: i think he designed the obama plan. that is a big part of what the president is proposing. you have the payroll tax cut. there is also the individual tax cut on the worker side.

he extend unemployment benefits so unemployment workers are not forced to constrain their spending. he puts a lot of money into the economy by investing in our infrastructure and putting teachers back to work. this is not the time we really want to be laying off teachers. it is an excellent time to be doing what investments we need any way in terms of our national infrastructure, both expanding its and repairing it. interest rates are low, we had an idle work force who want to work. we have contractors who want the job. that is the president's plan and i think the caller has captured the spirit. host: we are only on the air for two hours. the house is incessant -- the house is in session early today.

that is their major legislation today. next call, missouri. caller: i would like to make a suggestion how we can create permanent jobs. i am a baby boomer, also a small-business owner. a lot of my friends and they're getting to the age where we are ready to retire, but we probably will not. the government should give us three extra years of credit toward social security. if you were 59, you can retire at age 62. it would make some of us in the incentive to retire and create jobs you are currently laid-off. how would you pay for this? i have a number of employees who are ready to retire.

they cannot because there -- their 401k's are down. guest: i think that is exactly the opposite of what you want to do. there is going to be a huge increase in the amount of people who are retired and fewer and younger workers to support them. i think in the long run, we should reform the social security system so that it does not encourage people to retire early. the courage -- the current system encourages americans to retire earlier than they should. in the future, the number of young people to support retirees will be dropping. that will create a large cost on young working families. we should reduce barriers to people working longer in their lives. after all, people and their 50's are very productive and very knowledgeable and skilled people that we should keep in the workforce.

guest: i do not think as a long- term plan that would be a good idea. but i propose the exactly -- exactly what you are suggesting, in the short term. there is not enough employment available. you have people approaching retirement age who are in a situation -- if they are unemployed, it is unlikely they will ever get a good job again. i think something like that right now would make a lot of sense. host: a tweet -- next call, cleveland, a democrat. caller: good morning. bush gave two tax cuts. one was 2003 for jobs.

$3.50 trillion was given to the republicans jobs creators. by 2008, we had 99ers. people ran out of their unemployment, which means that they were unemployed to 2007. i am tired of hearing about the republicans and job creators. where is the $3.50 trillion? that is taxpayer money. where is our cash? where is our jobs? somebody needs to go to jail. i am tired of the jails being filled up with the poor people and the rich people are skipping away with all the taxpayers' money. you guys are not credible

anymore. republicans are not credible. where is our money? host: thank you. guest: i'd probably agree with the callers that republicans lost a lot of credibility during the bush years. some of the tax cuts or important for economic growth. other tax cuts, like expanding the child credit, i do not think did anything for economic growth. i also agree with one of the prior calder's that pointed out that bush spent a lot of money on wars. that has damaged the economy. we spent over $1 trillion all of the last decade. that money was sucked out of the private-sector economy. it damages growth and job creation. bush made a lot of mistakes. unfortunately, president obama is making a lot of mistakes as well. host: the number of people applying for unemployment

benefits last week jumped to the highest level in three months. the labor department says weekly applications rose by 11,000. that included the labor day holiday when applications typically drop. in this case, applications did not drop. the adjusted value rose. applications appear to be trending up. the four-week average rose for the fourth straight week to 419,500. would anyone like to comment on that? guest: i think congress and the president are not very good at micromanaging the economy. president obama has tried everything to try to micromanage businesses and hiring and demand and that sort of stuff. it does not work. the government is not very good at. we should focus on long-term reform. there is much more agreement of what we need to do in the long term. by putting in place long-term a

firm like -- long-term reform, it would help in the short-term as well. caller: of good morning. this seems to be a very simple way of doing things. the marginal tax rate for the wealthy is around 36%. as a percentage of the total taxes that we pay, it is insignificant. when warren buffett says he pays 16% on average for his taxes, there is something wrong. somehow, we are going to take the marginal tax rate down to 17% in order to get rid of the upper end taxes. miraculously, all these benefits are going to occur. when you are earning money outside the standard paycheck, there are all kinds of deductions that you can take. the average guy cannot even think about that.

this is a ridiculous simple- minded think that all the sudden, we will get more revenue. it is idiotic and a waste of time. we need to get the tax rates back up to where they were. host: any comments? caller i think the caller is on to something. i disagree with chris that there is some miracle from lower marginal tax rates. i think we have a system that is a mess right now. i do not disagree with that. there are a lot of inefficiencies. some of the things that the president is proposing in its revenue base is to paper his jobs package starts to get at that. some of the upside down subsidies, and i think we need to straighten out the tax system. i do not think we need to drastically lower income-tax rates. the wealthy invest and hire

people because they can make a profit doing that. what is going to determine whether they will make a profit is not their tax rates. what will determine that is whether there is demand for the products and economy is going well. the key to that is a strong middle-class. that needs to be the focus of our tax system and of our economic policies in general. guest: i would like to comment. the colored race to the warren buffett comment. warren buffett -- the caller raised the warren buffett comment. in general, that is nonsense. that might be true for warren buffett in particular. if you look at the overall data from the congressional budget office in terms of overall federal taxes paid, the top one% in the country pays a 30% tax rates. in other words, add up all of

the taxes, the top one% pace 30%. look at the middle of the spectrum. they pay about 14%, according to the cbo. the tax rate at the top and are much higher than people in the middle and the bottom. there are exceptions, but those are the overall averages. host: let's give it $3.40 trillion in tax rates to the top 400 families and keep our fingers crossed? caller: again, i disagree with michael. people at the top end are the most productive, the most skilled and most knowledgeable. you're talking about surgeons and people like that. they already worked enormously hard to in the ad an enormous amount to the economy and create jobs. they already pay a higher burden on other people. i think it is costly for the

economy to burden them with additional taxes. guest: i do not think drawn money at them is the answer. i think it has been a tried and failed strategy time after time. in general, throwing money at them is not the answer. host: just a couple of minutes. caller: good morning. ok, why is -- when it is the smoke screen going to come down? our economy is not stalling because of taxes. our economy is suffering, a 15 million people out of work. it all boils down to these wto treaties that we are giving our

jobs away to china. this jobs bill has three more fair trade deals in it. why doesn't anybody address the real issue? if everybody that was working and paying taxes and 40 million were still working in the united states, we would not have a tax problem. thank you very much. guest: i think there is a distinction between a long-term trend and the immediate crisis. the reason the unemployment numbers are spiking this week, that is not because of jobs moving overseas. that is a long-term trend and we need to look at currency manipulation and everything that goes on in international trade and the problems that are there and the damage it has done to the u.s. economy. but we do have a short-term cyclical problem right now that we need to address. that is really what the president's job creation program

focused on. it is about getting people back to work. it creates a circle that people are back in their jobs, they are working, which creates customers and the store, which means businesses have more faith in hiring and investing will pay off for them. we can end up turning this thing around. one quick additional point, it is important to note that when the president started the policies, we were losing over 800,000 jobs a month. for the last 18 months, we have had private sector job growth. given the whole that we are in, that is not good enough. we are not where we are -- it does not mean that the president's policies have been a failure. you have to look at where we were. host: we have time for one last caller. caller: i am tired of hearing

these global companies referred to as americans. i pay taxes because i am a patriot. we are now going to pay higher bridge taxes. one of the reasons -- host: we are out of time. guest: the reality, most of this globalization has happened not because of government policies. it is because of the advance in technology, the lower cost of shipping them around the world. international trade has exploded because of freedom and the advance of technology. the trade deals or a minor positive benefit in my view. globalization has been very positive. host: thank you to both of you.

recognizes the gentleman from which is currently numbers,