to and others, when there are things framed on the global context, that requires as you pointed out in the political will not just investment, it's not even just about the money or where it is going to come from in terms of if these things are done, how do you figure out the appropriate allocation and it really requires people i think to think about it before hand. so absolutely i think that there is a place to think about making future investments in the medical countermeasures, but folks need to give serious consideration to what the framework will look like. ..

>> >>'7rgt is a very compelling case. we could do that less directly but it is pretty easy to understand. to see the campaigns in junior high school.

so the political economy at its best is understanding the american people has specific diseases. but we have guessed out very well at talk about the importance. see you have been more involved than any of us. how do we square that circle of the congress that is imperative, results, and measurable now to build over time? >> that is the question in some ways has been haunting me for several years. i have had quite a bit of time to talk to the bilateral response as well as the global fund to fight those three diseases with considerable debate with the global fund to which they should be supported as

opposed to deliver responses to find out why so much more politically attractive with those tax dollars to lead to a specific outcome. i don't think if the conversation will be about a direct bilateral program with the nebulous investment and to be persuaded over time. one of them is to change the conversation. the one thing this crisis is the opportunity to think as protection for the world as well as the problems. because there is an argument people here in the united

statesã that we do want those public infrastructure but we want the cdc functioning. pandemic people forget about the constant drum beat if they overshoots the demand for public action. can we change that or at least make the argument we're safer as the country? so when do we change the of conversation? >> kin you make the diagonal argument? with the series of vertical programs competing against horizontal? key and we invested in the systems as such when we come

back it should treat people with hiv, malaria hiv, malaria, effectively. and with every of other fzveavor to ensure the basic policies. but also with another on the shelf. so with that broad based investments, not exactly but that threat but with that executive-branch with the changing of the conversation. that is much harder with the much more difficult case to make. >> we are near the end.

i know this is your plan. [laughter] but i do want to offer anyone here of a chance for concluding thoughts. >> anything? >> i have said plenty. >> i just urge everyone to follow closely. it is a really important event. other things happening in the world that are extremely important and sometimes they get more coverage or more attention because they're easier to understand. this is a very unusual event that is occurring and one of

major importance for those who work for the living this is like the invasion for matter requires everyone's attention and the maximum amount of cooperation as well. we have to rise to the occasion. >> please thank our panel. [applause] i would like to8+f invite gene to come up with final remarks. >> i will open by saying that i observed from the international affairs, we have come out of that period that is enhanced by the cold

war and to think of international÷ípç affairs as the matter of relations between human beings. with those alliancesx5> between the state from international affairs. we may be on the brink of the new definition of terrorism and with the relations between all human beings and the challenges that come from global climate change, a food and water shortages and infectious diseases. as our panelists observed today, the realities that change may be more honest than the recognition to respond, but i am pleased to say the community in a wider circle have come together today to deal with that issue is no way that the

school of foreign service is is not equipped. but we appreciate those particular a dan and john to help us think about international affairs in a way that may be more appropriate for the 21st century and thanks for being so appreciative as an audience. >> here at georgetown and the longtime economic adviser i think we are ready to go. we have a connection. >> afternoon madam president. thank you very+=z-! for taking the time to be with us here this morning at georgetown. we have people here that are very appreciative of you to take the time to join us today.

so first thanks for being with us this morning. >> good afternoon. it is a pleasure to be here. >> we know your time is very short. >> i said good afternoon but then i corrected myself because we know it is morning. >> your time is very sure we want to ask a couple of questions of the status of the current situation and where you see things going. can you give us an update on the current status of your strategy of the weeks ahead to battle the epidemic? >> the epidemic continues. 13 out of 15 are now

workers. 120-0500 dead. with health care workers we have four major ebola units serving to be able to move around. we still have a lot of people in the community that has the culture predict -- position better still in denial if they go to the church for the mosque or is some extraordinary magical way.

we still have people that are not ready touche trend. -- to go local. we are starting to build and benefit in our community work to take ownership and expand among them. and we predicted very soon as carry through all of us but nothing is done at this time but the structure is in place to have a strategy.lm

and we have been successful. over 300 persons have been treated. so we are very glad with the u.s. responsek5hq to bake a major effort -- to make a major effort. the cdc using resources and awareness can decline as accelerated. it is the objective to get there. >> mentioning they're ramped up efforts as obama announced a new effort involving three it - -

3,000 u.s. troops with beds and field hospitals supplies training so could you tell us about your response to that effort? is it sufficient you can see that impact on the ground? >> but through president obama and the united states we already have received supplies. and he has been around it is doing an assessmentjj and participated in the structure we have brigadier-general rodriguez coming from germany on

friday to discuss how to they can accelerate the efforts. that these being this take time. but they will take time to get that done. but people are dying by the hundreds every day. so when can we get ahead of the acceleration? but given another couple of weeks we should see the major effort to show results >> better president you also mentioned the difficulties communicating directly@5 to the citizens of liberia around the seriousness of the academic -- epidemic love of the claim of what it

ebola is a and the difficulties of burial practices and other things. what about the communication out and what is necessary to better understand the epidemic? >> we have to be in the communities. people who can speak the dialect and know the culture it is mistrust so even with the best intentions they don't know. set the community level said

teachers and communities the it -- those are those in addition to the impact of people and affected by ebola itself what about the health care looking for treatment of malaria or tuberculosis or other ongoing health problems? >> we have a health care system that was not perfect anyway given the fact of rural areas getting people to foster movement with the clinics but now they're now

fearful their walk off the job and refuse to go back as a result. this means lots of people who don't have ebola are dying. there are those because of less access to the hospitals or schools are closed or non functional. so we have have had some reversals in the gains. we're doing well with

malaria. the chance of getting ebola is very high but i must say this has received attention make sure we get the health care facilities functioning again for regular health care and i do believe as a result that with the liberian health care services and we look forward to that. >> want to ask about the economic impact of the crisis. the world take care not what they report the world bank had done calculation is that they predicted how they would be cut in half.

that was complete the optimistic in terms of growth and contracting. and know the chinese close their operations in restaurants and hotels are closing down. activity is way down. what is your sense of the impact? ha day you see that a ha day you see that a reboundñ looking at the operations, a contract of infrastructure

infrastructure, we know there is a price increase with the shipping cost with a loss of jobs. and hotels and entertainment centers because of general economic activity as a reid know what this meansãis per-capita income, will also fall. but but to address this decline the potential has not ben very high in production. of the areas that we look at.

but we get from the of world bank that many people come into the country that needs of restoration of power for health care workers or even the u.s. military. so i am glad the secretary is sending a team to work chairman and what measures we could take to stimulate those other sectors. so maybe that the state level but continuing to

operate. >>

>> to not get the vote is there is illness or they have to leave. in the medium and longer-term it is a question to work with us so we can expand production to get the potential. so that partnership that we need and are working together economic reconstruction and recovery. >> very good. last question read have a number of students and under graduates and faculty from around to georgetown speaking directly what could

they do or what would you like us to do as a small community in washington d.c.? >> a good case study. >> always the academic. [laughter] >> the you know, where we are today that measures we are taking? to monitor our progress with our assumptions and projections? and to give us a report where the projections were right or wrong. and who'd to come up with so follow the case. let me tell you i am

optimistic. i know to be returned sharply. there is the other potential area to make up the gap. so to say to them we will overcome the economy to bounce back. challenge me. >> madam president i think all of us thank you for your optimism coming your tireless efforts in this time and your courageous leadership particularly for this present time is an inspiration to all of us. thinks for taking the time to meet with us this morning once again. [applause] >> nebraska only had two democrats to congress in 30 years. the republican first elected

in 1988. 2012 he won reelection by 2%. this year he is challenged by a democratic state senator and here is a look at some of the campaign ads in that race. >> i am from omaha nebraska i work for homeless veterans and signed a contract with united states government we will battle and give our life if necessary. >> talk about homeless veterans with the veterans secretary you don't hear any other senators name. thank you to give us the opportunity to serve them. >> i approve this message. >> my dad flew a bomber over france on d-day and taught me never forget those who serve the nation. my disagreements with our congressman and a personal

but congressman terry should down the every and defended his own pay while soldiers from the battlefield and protecting progression when dash congressional perks. i promise to veterans is why i approve this message. >> fighting to keep their neighborhoods safe and strong secured agreements to strengthen community policing fought for violence against women act. and against him in trafficking to pass the law to start a new fm radio station to give a voice to a community. working hard to keep us safe >> i approve this message. >> i am not running for congress under a political party but want to make a difference for nebraska. washington is not 18 -- easy step.

i will work for dade number one to create coalition in congress to set aside partisanship to focus on solving problems. just like to have done the last 16 years. i approve this message. >> working together changing congress. >> i've recently discovered sees p.m. three i did not know that i have and i've loved and i cannot describe it in a few words.

>> si spee and tries to be non biased and use the republican and independent and democratic lines but the voices are limited i wish you would expanded to more third-party people because the desert -- democrats and republicans are the same and limit them8&m discussions with republican and democrat elected officials and use more independent voice is for discussion. thank you. >> would ever you do, i do not take sees p.m. three off. it is educational. i listen to it mostly every day. i find out more and more about my government and also

bookstand history please do not taken off the air. >> why does c-span favor republicans over democrats? if a democrat say something about republicans they are cut off. c-span is not fair.

>> welcome. they queue for joining us today with a discussion of the tax code::$áñ to a subject n the news today q don't know me i amn)cq the director for at economic policy team here at the center for american progress. we feed there is widespread

improvement also fair amount of agreement but to illustrate this we put together a report with their growing consensus to improve the tax code and it highlights possibles was good tax policy and which is substantial concerns that include simplifying talk -- tax rules and distortions this follows more than 20 years of tax measures reagin divide substantial agreements to cover individuals revision in earned income tax credit. and we list these impacts over the 10 year horizon.

of course, the major differences such as the correct lovell from the marginal income-tax rate the territorial clerk and others that and not so obvious however it could be made it typically better if not made to resolve every issue. we're very fortunate to have three distinguished guest and a moderator who will discuss where they believe we can find a consensus. the first panelist is that president of the american action for with the distinguished career in government and policy work. he served as chief economist

president george bush council of economic advisers , the director of omb to sell some three. chief economic policy advisor to senator mccain during his run in 2008 for the presidency. thanks for joining us today. nextel would like to welcome the a senior fellow budget policy and also a deputy chief economist and executive director president obama is white house task force on middle-class and chief economist to joe biden thank you for sharing your thoughts with us. and our moderator who is that the air bridge is to it and current director of the

tax policy center. with the internal revenue service and the expertise spate of is the tax code. so with that i will turn things over to the panel to let the discussion gets under way. >> thanks for the introduction. i am pleased to be here to discuss a topic of tax reform. i was thinking on the way over republicans and democrats to agree on anything even of the things they agree upon. however with this group we're not talking about politicians that high-level politicians or distinguished

economist. there are those of all sides of the fence to find the area of agreement with their philosophical disagreements. slow to start off with the leading question we although the tax system very few people defend it but there is less agreement on what should be done to fix it or what constitutes tax reform. i will start with jerry if he could to define what he thinks is a major problem of the tax code and what are priorities for reform that i will ask douglas same question. >> i will take about five

minutes. >> let me start by saying banks for the invitation. i enjoy this piece very much it that it was useful compendium of the loopholes how their work and the cost of forgonyq revenue. however i guess having said that i have a number of concerns that frame my view of what tax reform should look like. first of all, to talk about the reality of tax reform that perhaps the table the growing consensus to improve the tax code is too optimistic. [laughter] >> a never agree on anything. >> i am not sure that exist and i hope dug-in is right to.

-- he is right. but it is certainly true among the people in general that's there is a growing consensus to clean up the code but it is also wrong of beneficiaries of the current system and ask yourself this question. are these beneficiaries to invest serious money are they more powerful or less powerful of? this is the optimistic framing of the question. it is what i am concerned about in answer to eric question i take a lot of what david put forth there are a lot of good ideas.

as the report shows a lot of good ideas that are awfully close neighbors to the ideas and the president's budget. from my perspective in and terms of cutting through the garbage of the code is the ada to cap deductions for tax expenditures. that has been there for years and has gotten no the of the may 1 as far as i can tell. so three percentage points is nothing to negotiating a solution. is administration is closer to 40 so certainly my first point there is a growing consensus of those to think

intelligently about the problem that seemed to be more powerful than last. -- than less. i do taken issue but i will quote from the report. even as the anti-tax ideology has revenue the report says to put forth of== plan of 1.4 trillion over two years that is admirable due to constraints but congress could make limited actions to the tax code so they can raise revenue with the expansion of the of legislation but no net effect on revenue door choose satisfied the protection pledge. i disagree. i think even if we can close

some loopholes even with those rates lower blocking higher revenue will scale to the needs of the higher revenues of budget sustainability down the road. there is a strong case to be made in order to achieve sustainability, i agree with paul? man who writes long term budget projections are boring and like science fiction. but i do think looking at any realistic base line, you may convince yourself correctly the near term is sustainable but outside that 10 year window. there is a sustained ability problem but the suggestion that net neutrality is the

reject on the personal side were than the corporate side. >> here is a chance to be here today and it shows the important contribution but stipulate at the onset that is something very difficult to get done. in that time it had a handle of a genuine tax reforms so this is tough to get done. if you think about it this agreement is less important than a compromise. unable not say that is the one but instead to hammer out a compromise where

people will walk away disappointed. but it is important it gets done. but the major empowerment is the vestedex interest but the public doesn't have a lot of appetite for this. we did polling for tax reform last year. at the time when people just filed their taxes there was no real enthusiasm. indeed there is suspicion with the focus groups we learned there are two words you cannot discuss and it is tax and reform because they think it is the trick and they don't think there will

walk away paying their fair share but it is a trick. this is a tough environment is always hard. rivulet gatt provision by provision you find out we will not get the agreement. i am eternally optimistic to better than you can. i hope we gatt as a better design task analysts' of flaws from the current system does sooner we get started the happier i will be. >> let me try to turn this to the substance of what is desirable been removed back to the politics. >> 1986 looking at the lower

tax base to keep revenue and distribution the same there is not that intent looking at revenue or distribution. i take your point about the poll results today but there is no reform in 1986 either. i will let you address that but i will finish my question. >> this is a big difference starting in the late '70s there was a series of politicians on both sides of the ideal. richard gephardt and jack kemp and ronald reagan who's spent a lot of time arguing

the tax code has implications that is interfering with our abilitysú and the broad public education it was a decade we have not seen that type of activity. if you want to get a real tax reform we have to have a much more prominent discussion about the changes. >> can i ask you a question? it sounds like what you are saying is different politicians who can work together but you are not saying the public but it seems like the politicians are more likely to work together. >> i do want to get to the substance but not politics. you basically say tax reform

is not worth doing unless you raise revenue? >> i think if it is revenue neutral and also i should be clear i agree about compromise. i want to state the preferenceo6 but as i(@hzç saidt is in pursing the revenue positive but there is a wine that makes me nervous because i don't think that is adequate. but to get into the weeds if that is where you want to go. >> did you look through the list of proposals that there are any egregious with the benefits or e fax of the

economy? are there some that should be left alone because they are desirable? are there things that are not on the list? >> it is the great lesson. so to talk about a couple very difficult to find a policy person to have of bigger subsidy for insurance wide tax! one forum of conversation? so it seems it would be easy to do.

i have the scars to prove it that how you doing matters. there is that even in agreement with republicans is it is standard deduction? said tax code? the funeral tax credit? so 100 percent reform will take a long time. it is not even one side. there are some that many don't think of as tax expenditures. said don't endorse the move. i come from a perspective the tax system as a whole in to a consumption tax. to do that you want to return everything intoon the

of large i.r.a.. tax as it comes down at the end. that structure is with the depreciation approach to recovery. i also think look at the other investments when you get accredits because the idea is in the physical capital investment so i would endorse that there will be a lot of debate about that. one that is flatly wrong is the idea of the bank tax that is said new tax said has nothing to do with anything and is the tax on of sector of the economy but

that is rare they treat for that reason. and regardless of where you are. is with a carried interest. but that is right. not at the capital gains rates but no deduction up front. you have to have different and right. compensation is giving them something and should be taxed then at the end when is increased in value is when you tax it to.

taxes is inconsistent with any principal tax reform. >> to local lot when you go through this them learn they are hard tax problems when you combine those with politics it is difficult. >>. >> look at the heart attacks problem that i agree with a and the idea of4i capping deductions is appealing to me. with the deductions of personal income 40 percent verses 25% and you cut through decisionsgf which expenditures you want to get rid of.

i know in the president's budget the numbers in this report raises 500 billion. some other pieces ofbñ the report if everything is hard with the egregious nests of the neutrality principle you don't want to the tax system for tax avoidance reasons for that i appreciate going out today. but you have the most wanted on the fbi's list. is very distortion very.

according to a new paper he just gave the paper but we show the marginal tax rate on corporate investment with debt finance it is very careful dash 60%? the marginal tax rates of equity investment is 37%. that is the marginal tax rate on finance a set -- investment but if i told you that you think the economy with that tax code you could have problems with excessive leverage? i suspect he would hurt your neck. that seems the obvious bias

the magnitude of those deductions. there is a long for a more interesting conversation how to defeat the deferral or to make important contributionsly the administration the way to thread the needle. i a agree with the spirit to broaden the base£=x by not favoring one side over another. here i argue about those city is but particularly the favoring of non wavering. my final concern like with

business tax reform then neutrality principle to become pastors to look at the sheriff tax receipts that paid the corporate tax used to be 90 percent maybe 20 or 30 years ago when those incentives have the signed economic -- neutrality. >> guide is have one more question. those that and i of relatively little -- have

little with charitable donations. [laughter] my question is and i guess we talked about the overall limitation. do you think those tax expenditures with the case by case basis or as jared suggested? back. with that non tax policy objective that they have it is the matter of legislative policy as hell hole to drop of wind. and to draw a line whoever

gets over the finish line does not matter. . . i have worked with politicians enough to find that claim

doesn't quite resonate to tell you the truth, the claim about how they cannot own this but the minute you start talking about the mortgage interest eduction many of them just kind of clam up and have a hard time hearing you which is why i do like the more more broad across-the-board approach of capping deductions. i will say that i'm comfortable with reports recommendations on all of the things you mentioned but if i can be totally honest i would say that state and local is something i would like to think more about. i could certainly, if we were going to go in that direction i'd i've wanted to be very gradual because there's a case where there's considerable differences among states so i want to try to balance that more gingerly. >> is this an area, it sounds like both of you are saying similar things except maybe a little different emphasis on strategy. >> before we leave the

individual income tax that think it's important when you get to actually doing it is important to recognize the facts on the ground up by one of the things that have happened over the decades we have systematically taken takes -- taxpayers off the road. i personally blame the rating guys for this because the income tax for inflation which was a great policy idea but it used to be the case that every couple of years inflation would push people into higher tax brackets in both parties could give everyone a tax break which is always popular and have me go do it and put that away. the only way to get a tax rate was to take them off the rolls. in the process we have transformed the individual income tax into a surtax on high income americans. >> let me agree with you. >> for having done that i think we do have to be more cognizant of the economic lives of high income americans in a high tax code that can actually be enforced in the biggest problem

you have now is the differential treatment of investment income in income tax, the alternative minimum tax and the new aca tax on high income americans. there are three different taxes floating around there and different declarations of income and different taxes that have hit them. that's just a disaster. >> it sounds like it is slightly discomforting to have so much agreement here but it does strike me that doug is agreeing with a point that i made earlier about the importance of broadening the base for not favoring a particular type of income and here i will perhaps surprise some of my fellow progressives by saying i definitely agree with this problem that doug surfaced about folks coming off the rolls with the way i think of it is well

lots of progressives talk about the need to achieve a more sustainable budget passed in the way i did in my introduction it's almost always framed as that's why we have to tax the top 1% and the top half of the 1% on all of that. in the near-term i completely understand that because that is where the growth is gone but i don't think we can achieve budget sustainability. in fact i'm sure we can't on the basis of just the top 1%. it may satisfy a certain amount of pitchfork or he and i'm very sympathetic. it's also important to push back against the deep inequality of income and wealth inequalities that have grown grown in the pre-tax system but just looking at the mass of global income and the need for the kind of sustainability that i have set

which isn't just me budget deficits but to me demographic of challenges and climate challenges and public good challenges and cyclical challenges and poverty. that's just not achievable by the top 1% alone. >> let me just follow on this 47% issue a little bit. my organization is probably responsible for that and by the way the numbers 43 now and projected to go down in the next few years. the child credit is a fixed dollar amount and rising as more people have been paying taxes but another kind of angle is a lot of reason the numbers are so high is we decided to do welfare and that's a pejorative word, low-income subsidy programs like the end and there comes tax credit in the child tax credit to direct outlays. i guess you want to ask both of you to respond how does refundable credit affect the way

we perceive the tax system and should this really be part of the tax reform discussion or should be put this off to the site in some fashion and kind of in our minds treat things as expanding when we look at what the tax code is actually doing? >> i think these matters are perception of the tax code and for reforms because always in every policy discussion there's a distributional question whether it's income distribution across state distribution. distribution matters to people and the information has got to be in this discussion so the difficulty is i believe that our current budgetary treatment is just wrong and i would love to see it changed. i think the way and we are going 100% equal and i apologize. the way these things work if you have a refundable credit and

says you have a $100 in tax liability and credit of $150, the first $100 of that is a reduction in taxes in the last 50 shows up as spending outlays. i believe it should all be outlays. i think the way the book should look is that person pays $100 in taxes and the government spends 150 and sends them a check. the reason i believe that as we make a commitment at the beginning of a fiscal year to provide that credit regardless of what they earn so we don't really know it's going to be $100 in tax repaid. i think we should just say we are committing this 150 and budget it that way. it would change the way we think about distributional tax reform. there are a lot of low-income people paying taxes and i think would change the debate somewhat. nothing changes that dramatically. i think it's really important. we know -- is very successful.

it's not an issue of the efficacy of the policy but how it spills over into getting the tax roll down. >> first of all let me just say i completely appreciate and accept the contribution to the debate that your team has made with the 47 and 43 but it's very very important to always point out and reiterated in underscore that it's not the case that 47 or 43% don't pay taxes. >> personal income taxes. >> personal income taxes. it's very important to say that because you have to look awfully hard to find someone who doesn't pay taxes whether it's payroll tax which workers pay all of them including the self-employed or state and local ephedra. so with, and we have done this at the center on budget, we have looked at the share that is finding its groups of students, low-income and disabled and just

to be very clear about that. i think that when it comes to the refundable particularly they earned income credit, the child tax credit and i'm not just talking about the original ideas but the extensions that were done under the recovery act that i would love to see made permanent, here i think we are talking about policies that are spending through the codes. i think the implication of eric's question and doug's comments there and alan greenspan -- alan greenspan is right. i think these are very important forms of spending and very venerable ones and in fact you would be hardly -- fairly hard-pressed to find arch conservatives who have anything negative to say about a very robust unearned income tax which is an extremely important way for workers to boost a low

income working mom with a couple of kids 4500 or $5000 year and in fact at the end of the airport there's a smart poll by bipartisan support to extend map particularly the part that goes to childless adults. it's another smart pro-work policy helping to offset some of the very damaging trends to earnings and employment opportunities for those at the bottom. >> the topic of business taxation i know you guys want to talk about that. i guess the president has proposed a business only tax reform and that has been discussed. it's not fully fleshed out but that seems to be the direction he wants to go and of course as the individual and business combine. there's talk that it might be easier to get tax reform and individual stuff out. i guess i want to ask jared to

start is it feasible or sensible and forgot to comment after business tax reform alone and is there any concern with having the corporate rate lowered and the individual rate remaining the same and what happens when those are different? how do you deal with that? >> well it's a good question. look, these days whenever is anything about feasibility a lot of peoples eyes roll so if we talk about what's feasible right now we'd have a very short conversation and the things that the administration can do alone in this space. i for one welcome the emerging changes but was kind of surprised to see that done. i wrote a piece about it in the "washington post" so you can see where i'm coming from and it's important change but that's not the way i think we should do a tax policy just to be clear about that. i do think you could do them

separately and while it's not ideal for the very specific differentials that you upset i think one of the themes of my comment is the minute you start having differences within the code in this type of income is preferred over that income you have created lots of interesting defining the income at the lower rate. so i do think the differentials are problematic but i don't think we are getting rid of them anytime soon. i don't know that we hardly ever have gotten rid of them in separating texas i think we have to accept that and ask about the realm of the possible. it seems to me that both sides, both sides really pretty energized around reforming the corporate side of the code, the business tax code. i say that in this kind of growing consensus discussion with the caveat that i began with which is it's harder when you start actually talking about

taking goodies away from people who price them. my tax expenditure is your job creation program but i do think if you look at the details of obama on international issues and maybe there are some space between them but in a climate of compromise and a climate where it's widely recognized there's a 35 pretense --% statutory rate in reservation i think that would be something we could do. >> let me start with the diatribe. what the treasury did is nothing short of appalling. it is i think an inappropriate use of their powers to take yields that are in play right now. good policy lays out the rules and then firms can plan a properly and make the mergers and acquisitions and go on. so i have zero interest in a

treasury that acts this way. i think it's a bad precedent. it's also, let's be very clear, all of this centers around the fact that the u.s. corporation income tax is out of step with competitive realities in the world and it doesn't matter who initiates the transaction. what matters is the point when a transaction is being discussed in the two parties won in the u.s. and one on the outside look at it you will always be better to headquarters outside of the u.s. because nearly everyone else has gone to a system that taxes income only once in a place where it's earned and doesn't try to put a second layer of tax back on the u.s.. german firms are now buying u.s. companies. >> it's not really a second layer of tax. tracing attacks. >> they have the distortions on

repatriating the earnings and it's out of step. everyone else is gone and they stirred -- steer one oecd company a year. they are out of step with it. instead of the u.s. firms initiating the transactions the headquarters are going to go. this isn't going to change anything on 10 versions. it's not going to change the fundamental problematic is a long way from the point of view of the ultimate reform. ultimate reform lowers the tax on repatriation on the territorial system. this is all about paying more income tax. some poorly and it goes the wrong direction road foreman doesn't solve the real economic problem. i think this is a seriously important area of tax policy right now. >> if we are going to do that we have to recognize that people

are collectors of taxes and what you want to do is have something that's neutral across all corporate forms. there were great developments from that point of view because we are only taxing individuals returned. it's having the appropriate tax rate applied to the business earnings. the goal then is to see if you can get c corps. preform that mimics that an assigned tax liability correctly at the individual level. that's a hard thing to do. and so historically it's never been done. the easiest way to do that i think is to go back to the original idea of expensing all the investment, don't allow the interest deductions and i could chew essentially a natural treatment at the c corp. level and then tax the interest and dividends at the individual level. that's how you get there. politically i think it's going to be very hard. i do. >> would that be revenue-neutral or how would you pay for that?

>> i'm less worried about revenue neutrality in the corporate side. if we are going to get the rate down to competitive one today, say 25%, it's going to be hard making a revenue-neutral. that's all there is to it. >> so that's a business only reform. >> it runs right into the problem that you are cutting taxes for large corporations and not for us america's farmers and workers and the policies are just toxic. >> i will let jared comment. >> first of all i do see in version critique is an odd one. i hate it, it's terrible. it's just a terrible precedent. it's awful and it's going to do all these distortions and it's

not going to do anything. though seeming consistent to me. i don't think it's going to do as much as i would like you to do as much as they love in our shimmer or some of the proposed legislation which is the right way to do tax policy or the optimal way to do tax policy but in the absence of a functional political system, a congress that can get around those obstructionists and work together i think the administration has a very important responsibility to try to protect the tax base and it would be negligent of them not to have their something they could do about it which by the way brings us to another idea that territoriality is somehow the only way to go. i would point out to listeners of this discussion on a very important initiative that's being undertaken by oecd countries. most of the country still the territorial system although it's one that they are continually trying to adjust to avoid the

very kinds of space erosions base erosion profits shifting. these countries are trying to find out in a territorial system they can avoid the pricing problem that the cap reports articulates. i would be quite wary of moving towards a system like that while it looks to me like other countries are recognizing it as a key source of base erosion. finally, if you listen to the discussion of all the problems with her corporate tax code in those problems are real and they are are deep and it's way too complex, probably you don't need to know any more than the fact that ge's which one i growth made toasters and jet engines had a thousand tax lawyers, it's critical a thing to recognize that american corporations have never been more profitable.

in 2013 the last full year of data at the corporate profits has share of national income was the item record going back to 1929. not only have they recovered from their losses and they sustained large losses in the downturn but they surpassed their prior peaks. that doesn't mean our tax code doesn't need to be fixed. i myself have emphasized many important fixes to the corporate side of the code. the idea that her corporations are somehow being deeply thwarted in their competitiveness completely is polite but the data as well as by the way -. >> ' aversions and i will let go. if you look a what the treasury actually propose they are proposing that they have the power to recharacterize transactions that were taken before a merger and acquisition internationally, some after and in some cases with guidelines that are founded on nothing that i can identify and some simply

judgmentally by the treasury. i don't think that represents the tax loss that will create a lot of uncertainty in companies who have found economically beneficial merging partners. i just think that's a bad precedent procedurally and it's bad tax policy. >> well, let me just agree with one thing. here's what i don't like about it because again i think it's suboptimal second-best envy of is negligible not to take these factors in my view but here's what i don't like. next administration comes in. it may be in administration of the other party. i've been in these administrations as well at the beginning and one of the first things you do on day one, two or three is you for reverse the second -- executive order if you don't like the last guy or gal in place. he start doing that with the tax code it's terrible.

i take your point on precedent but i don't think the administration can buy a place it on its hands and allow this to occur without doing something. >> okay i suppose we could spend the whole time talking about inversions. i think you have made your point and i will not weigh in. you probably know where i'm going. >> no, no exactly. >> in any event we are going to talk about policies interspersed with one more substantive question. should we be thinking about new taxes like carbon tax or mutual transaction tax or something else or are those just so off the map that we can even talk about them?

>> do you want me to go first? you know again i think it's so far off the map we shouldn't talk about it is really not the way to think about this. i think we talked earlier about the 86 reform. that had his eye recalled a four-year run or somewhere between two and three. have a long runway suthers absolute nothing wrong with talking about aspirations. i see some things, i would disagree with doug's contention earlier that and i'm putting words in your mouth so correct me. anything by definition should be off the table, i definitely don't agree with that. i think there's something, i think one of the things while i stress the importance of neutrality in a tax code that is not having a tax code that incentivizes decisions in tax avoidance as smart economics so it will inversions of a good example of what i'm talking about it you think they are

negative negative externalities within any economy with the tax code can play an important corrective role. we have this -- i've written about this significant increase in dark pools fueled by a high-speed trading, high-frequency trading which looks to me looks a like nothing with productivity and contributes to volatility and a lack of transparency creating some of the volatility that have taken the markets off the rails time and again over the past few decades. a small transaction with a few basis points would be a good idea. i think a three basis points transaction tax would raise over 300 million over 10 years. that's real money and i like that idea. the only thing and i will give doug a chance to respond, i hope we can talk a little bit in this space about -- i notes gnarly

and in the weeds but that's where we are actually going to see new tax policy discussion pretty soon. >> okay. i didn't say anything about no new tax bases. i don't think anyone should even consider that. >> i thought you said you liked that. >> it's a very nice thing on a fat tax and my preferred consumption tax over progressive tax but if you say that it's over. so i didn't say that. >> understood. >> second is i believe when you lay down the principles of tax policy you should tax real economic activity the consumption of goods and services, the wage earnings of people's labor to capital income

where you are taxing real economic activity for the purpose of raising revenue and not taxing financial transactions as much as you can because it is the taxation of a financial transaction particularly differential taxation that returns capital dividends and capital gains that transforms you know the favors of tomorrow into tax accountants of tomorrow. you are going down the wrong path. up something else you mentioned was the carbon tax. it's a consumption tax, consumption of target and -- carbon. there's enormous literature that says if you want to do something on carbon the most economic and efficient thing to do is use the carbon tax to reduce taxes on capital and labor. i am all for that so that gets in their great the lower the payroll tax and the corporate income tax is the literature

says you should do. it makes a lot of sense. it solves the political problem in a very clear way which is there is no way you'll ever get a carbon policy to pass on a stand-alone vote with this congress and the foreseeable future. it's not going to happen in the same way you are not going to get most of jared's friends corporate income tax down to five or 10% by numbers. they need the money to get their rate to five to 10% and you dragged a progressive to the lower rates they get their carbon policy. that's the coalition of the grudgingly that walks away irritated but it gets the deal done. >> other than they -- there's a lot to like in there. there's a lot to like in your rap in your wrap. let me ask you about a you about

the tiny cornerback to to see where you come out. this came up a few weeks ago. i mean the carbon tax. there was a discussion to increase the federal gas tax. it's been 4 cents a gallon since 1992 or 1993 or something and interestingly there was a bit of a democrat republican coalition or at least a couple of members on opposite sides of the aisle who proposed an increase in the federal gas tax which is a dedicated tax to fund our highway infrastructure which i actually believe his something eric has written about. i think such dedicated taxes are smart and good policy. the connection between what you are doing to the gas tank and what you are driving on many go on the highways. i thought this was a very good,

smart idea. i will say to my chagrin the white house was not very embracing of it at all and politicians run away from such things that the one thing people see everyday is the gas price. i thought that was a nice little corner of the carbon tax that had some promise. i wonder doug agrees. >> it's actually a big issue. we sort of wandered into a key moment of choice on the future of highway finance. the tradition has been financing with the user fees and the user fee is the gas tax and have a user pays model for finance. that's not really what's going on. it has really become part of the general financing of the government.

and rather than how it happened by accident i think the congress needs to choose. one model is have a user fee and get a user fees that can fund the necessary investments in a sustainable way or put it through the general appropriations process. and funded out of general revenue but there needs to be a choice. what's going on right now is not good policy. if we are going down the user fee routes these are much better than the gas tax. there are very clear advantages to vehicle miles traveled that can be differentiated by axle weight and actually more closely mirror the dash so you're paying for what you damage. those are places to go but i think just raising the gas tax doesn't solve the fundamental question of financing and doesn't get the right user.

>> bill clinton said don't let the best be the enemy of the good. i just gave you an example of a republican and democrat who in this climate came together and suggestively think is a smart idea and you are saying it's not optimal. let's join around and that was in the realm of the possible it discourager's me that i was a very lonely voice out there trying to boost that. >> we weren't too involved although there have been some proposals offset with various income tax which strikes me as getting into the round of her liken it to trust fund if you can do that. >> wet snow what we are trying to accomplish at the outset. >> i agree with that.

that's a fair point. >> i would like to open it up to the audience for questions. >> somebody ask about extenders. >> i write first tax next so i get a bonus for asking about extenders. hopefully there is a recorder here otherwise this is a pointless exercise. >> who are you? [inaudible] >> my question is this is kind of a big picture question but i'd hope it doesn't turn to beg like a oh yeah it would be nice and i really want to know what you think in terms of the realm of the possible like you are talking about. tax reform is difficult anyway. why not just try to remake the system in a fundamental way? is going to be hard no matter

what. >> this is kind of hypothetical but what do you guys think? >> i don't think it's hypothetical. how does tax reform get done? number one was a public education as i said. you need to be cognizant of what's wrong with the current system and that's going to affect all of them. number two copper essential pieces white house leadership. the white house has to take the lead because only the white house is in a position to make sure the other party says this is necessary and only the white house can disappoint their own party and say to them look we will take care of you sponsor your turtle migration whatever is important to you. only the white house can make that bill.

so the white house leadership is essential. the third piece, the treasury eric wrote a transformative plan. it was as close to an income tax as you can get and it swung for the fences. it's swung hard enough for the fences that the white house itself -- but the white house modified it and sent to congress. i think that's an important step because at of the white house isn't sending up something congressman can't go home and say look i don't want to do this but the president asked. you need to give them cover. ask them to do hard things plus they get to fi fix it. this bill is flawed in each committee gets -- so i think swinging for the fences and important thing. it's not what comes out in the end but there's a place for it. >> maybe i'm too much of a creature of -- and i apologize if my vision of swinging for the

offense fence is more of a bond that i actually thought that dave camp kind of swung for not the fences but hit something that looked like a -- i was critical of the plan for as much as i praised some of the courage because the way it was structured it actually started out revenue-neutral and lost its revenue neutrality after the first decade. i was extremely clear to me and both myself and my colleagues did the analytics to support that claim. i'm not saying it's perfect but we kind of did what the cap books did in this piece which is let's take out all this stuff that everybody agrees is distortionary. i very much would support a discussion like that but camps

idea idea was dead the afternoon of the day he presented it and not because of the opposing party but because of his own party. so while i appreciate your suggestion and i think that we should start a dialogue as i suggested to take a long runway that swings for the fences i think it's not really helpful to jump into that discussion without having the political discussion and how do we get from here to there so the idea can have some sort of a reasonable audience which they don't now even in their own party. >> just to add one comment. i left during the process but that was probably the most politically naïve exercise ever done treasury turning over the problem with almost no guidance from the president. everything else was left free. in retrospect the politically naïve exercise started the

process. so maybe a little bit of political naïveté might help. >> please identify yourself. >> i am frank manheim from george mason university. i would like to get to the personal income tax because that seems to be the critical barrier and it appears that just as the corporate taxes is an extreme tax in terms of other country or personal income tax may be the same thing. what i haven't seen done is an analysis of where the income of the highest tax brackets goes. the administration seems to talk in moral terms. it's not fair. people should pay their fair share of taxes but if you look at the income of high earners it has been established that of a lot of it goes to expenses and

of course a major portion to investments much of which may be trading income rather than wealth building investments in plant and labor and so on. so i'm wondering if we don't need an in-depth accurate survey of where the money goes as you go up the tax bracket. >> that's a really interesting question and i would first of all refer you and you may know about the survey of consumer finances aspires to be this the survey you are describing for the federal reserve every two or three years. it's every three years. the conservative consumer finances which is intended to give you a granular look at the uses of particular income at the top of the scale. i commend that to you. wear your question leads me in terms of this conversation is a

broader macroeconomic observations that i'm obsessing with these days and talking about in writing about on my blog jared bernstein.com. it doesn't seem like we are world awash in savings and deferred earnings in the conduct of our conversation. awash in savings, awash in laudable funds and yet awash in weak demand. figuring out and on doug's comments about smoothing the road between investments, investment income and investment possibilities so figuring out how to connect those two days disparate facts of life right now. a lot of laudable funds. investment levels that looked low to me. a lot of investment needs either public or private but certainly in the public space in terms of

public infrastructure and very weak labor demand. that's a marriage that should happen and they extend the tax code can facilitate that's a great inspiration for tax reform particular in the corporate side but on the personal site as well. >> jerrett is just wrong. part of it is just strategy. you should not design a tax reform for the problem of the moment. you should design a tax reform to give you a tax code that is durable and has permits and raises the revenue for the long-term. i thought your comments were a great lesson in tax policy because they echo my views. number one you want to tax people based on what they consume. what do they bring, import, whatever, tax them on the consumption consumption. don't try to tax financial transactions. that gets into trouble to get the financial peace out. the money is too easy to move its incredibly expensive.

it's never done effectively. it's getting harder in the digitalized world and focus on the real things that improve the direct capacity of the economy. those should be building blocks in tax reform. >> that seems extremely orthogonal to the comment that i'm just wrong. i think a lot of what you said, a lot of what you just said is what i was trying to say in the sense that -- i where we may disagree is where our productivity investment visa gratis. we may beat differing in this and i think there is -- to tap. i'm not the only one that thinks that. >> forget the merits of that. that's not taxable. the suspending tax. >> tax reform is hard enough. you can't turn it into

macroeconomic stabilization long-term supply-side investments on the public sector welfare policy. you have made it to heart. you are missing my point. my point is that there are trillions of dollars locked up overseas for example very much as a function of the tax code. they should be unleashed through the tac score into the concrete about this and you may not like the president's plan but as a transition to the international taxation including the minimum tax i mentioned there is 50 billion of one-time savings plowed right into infrastructure investments of very concretely there's a plan on the table to do just that. you may not love it but it does link tax reform to these ideas. >> has wanted to make one comment. i thought it was a very interesting question because usually when we look at taxation of high income people we think about distribution and we think about incentive and save and invest in support. this is a question of what happens if high income people get more money?

what do they actually do with the money? i think we probably don't look at that kind of question very closely and if the income distribution are unequal are they giving it to charity or spending it on yachts? it's an interesting question for examining how progressive we want the tax code to be. >> as i said earlier my view is we do assert tax on high-income people that's another economic lives. >> let me get to summer questions in the back there. >> hi. i'm joe kennedy with information technology and innovation program. i have two questions. how much of the burden of corporate taxes going by labor

and second as i think everybody agrees that if you get good corporate tax reform and also individual reform and will have to pay positive effect on the economy internet and traditional scorekeeping we don't count any of that. my second question is how much of that should we count? the camp proposal got a score from the joint tax that had significant positives effects, dynamic effects and should we say that none of that counts for were some portion of accounts or what? >> those are great questions. before he turned over the panelists i would say on the first question about who pays the corporate income tax, there's probably not in agreement on this panel. we say labor bears 20%, capital there is generally 20% and corporate equity 20%. the reason for that as i

described in a paper on our web site and how we came to that conclusion. my colleagues might have totally different views on that. >> i will see you and raise you an turso links. i recently investigated this question on the blog on my site and i think as many different analyses as i could find. the average is 20 to 25% range in terms of labor bearing the burden that there are others as well. >> it's clear there's no consensus on this. i'm at the event of the spectrum. i think the majority is borne by labor. we see these companies lose national competition. we lose the best jobs with the highest compensation and fringe benefits. it's a labor law, there's no doubt about it. they put it at 70/30 on their

model. >> they actually don't. they are displaying the uncertainty about this but i think it's a real concern. >> i like that book. >> first of all and doug and eric should correct me if i mistake this but it's very important kind of discern what cbo does and what everybody else does. i think the fact that cbo does incorporate behavioral elasticities in their estimates but doesn't allow for dynamic supply-side effects in economic terms such that you could count on getting a bunch of revenue back from tax reform, it's the right way to go in my view and i'm quite strongly taking a position.

it's not true and just to clarify it's not true that there is no dynamic because there are behavioral effects registered in the scores. but they don't do is allow for the feedback effects that end up making predictions about gdp growth. there's nothing wrong with other folks running around and doing that and i know james did that a little bit with camp and i know paul ryan very much enjoys that exercise and i expect to see a lot more that from him. but when i see the magnitude of the dynamic effects there it looks very much to me like extremely exaggerated impacts in order to make the numbers at 25% being revenue neutral and the dynamic effects of the package. that's a very dangerous way to

go. if you are concerned about fiscal rectitude down the road. >> do you have experiences with this as cbo director. >> to correct the record i was the congressional budget office or not omb and i supervise the first dynamic scoring or macroeconomic analysis of the president's budgetary analysis. cbo holds the the size of the economy fixed and the whole idea of putting in growth effects is the line that becomes dynamic scoring. i am a proponent of this because i believe we should indicate to policymakers everything that's different before and after the policies they are contemplating and enacting. if it includes more economic growth or less economic growth more tax revenue or less tax revenue that's information that

is valuable to them an utterly important. there is no reason not to put it in. how you put it in this very important. this is called scoring and scoring is different than forecasting. it's different than conventional academic modeling. it's scoring and when you go into the budget world you venture to call them the scoring colds and import one. says we are going to treat every proposal the same. scoring is an arbitrator that some level but you do the same for fun. here's the best analogy. football games you get six points for a touchdown. i don't know why why. you get one point if you kick an extra point and to if you run or throw it. i don't know why but the fact that those arbitrary scores are the same for both teams across all games played in overtime allows you to compare policies proposals in the same way. you always do this the same and

you do exactly the same way and you will get more information to the process that's good and you will treat all all proposals fairly and that's essential. >> i think we have time for one more question. i will call on you. >> my name is maryanne or mary and i'm an independent observer. my question it doesn't mention here the growth historic proportions of income inequality right now. what do you think about a negative income tax, a refundable negative income tax especially for the young better under employed or unemployed or part-time employees. i was at the debate of the merry zero candidates and there was one gentleman who said i only earned 5000 this year.

it would be minimum standard deduction and exemption for 2013. why wouldn't that young man not be able to claim the government that refund? the other question i have and this idea has been around for a long time, at least 100 years. the other question i have is the gdp is about 17 trillion? the budget is about 14 trillion. what is the proportion of personal income taxes that go into it and corporate taxes? so 14 trillion for the budget and 17 reducing. where does the government get and the other questions was this minus 60% on finance debt.

>> i will talk about that but don't you want to go first? >> web server the first question. we can refer you to places on revenue. >> i think you may have been thinking the debt. actually the debt held by the public is somewhere around $10 trillion but anyway at any rate, negative income tax and you are right, eric can help you get all the numbers you seek. i think that, at the center on budget where i work we think a lot about antipoverty policy and one thing that i have observed, you can't miss it if you hang around this town and think about property politics is the thrust for the last 30 years has been towards work for able-bodied working age households, work is a path out of poverty.

and in that spirit things like the earned income tax credit, the refundable child tax credit, what i called earlier to refundable's i would add the minimum wage but we could argue about that. in the tax code is kind to refundable's certainly function like a negative income tax but they are not for everybody. i'm okay with that. >> on that note of agreement we should quit. by one clock we are done by one clock we have one minute so did you want a very quick one? >> i am a cpa with a small cpa firm and i think i have an understanding of what individuals go through. just one quick comment.

i think tax reform might be a good idea but people are resistant because you were going to have major reform in the next year something else. it's just like i don't care if i pay $4 a gallon for gas but i don't want to be $6 on begin in $2.50 another week. the other thing i wanted to say is that i think everything should be open to taxation. not just consumption. i don't see why a person like can get a billion dollars of that work and not pay tax because it's kept inside his hedge fund. everybody hates taxes. why not a net worth tax? you could set the limit, $50 million. >> i'm going to have to cut you off. any quick response?

>> what taxes are an popular property taxes are probably the most unpopular so i'm not sure that is a route to getting tax reform but i do understand your point but i do want to say one word about the durability of reform is very important. one of the sad things about the 86 reform as it unwound relatively quickly. there were many diagnoses of that the key part of that is you can't be independent of what jarrett is talking about unless you fixed the spending side to match the revenue side. you're inevitably going to have pressure for revenue which leads you to open up the tax code in the minute you open it up the integrity of the reform starts to be unwound. the key is the willingness to get the tax as well. >> i think you make a good point and i like your idea about a net worth or a wealth tax.

i will note that the way you queued up is exactly right. on its face consumption tax of course is regressive in the sense that those with lower incomes consume much more of their incomes than the wealthy. doug did mention a progressive tax and i can be done so i take your point and i like your point but i will just leave a restart or at least where which is ask yourself why do we have such in my view such a tiny and ineffective estate tax? where we have an inheritance tax and when we have a net worth tax? the answer is because the folks who are defending the status quo have more income than ever. we have this toxic combination of wealth concentration at the top for scale and money in politics playing a greater role than it ever has before. while i like the way you are thinking about this i think it sums right into the very political constraint that i started up a conversation with.

>> if it were that important politics that romney would have been the nominee. >> on that note of disagreement on this and agreement on the previous question i think the two panelists for showing there can be some areas of agreement at a high-level discussion. [applause] >> i recently discovered this c-span3 that i didn't even know that i had and i loved. i can't describe in a few words. it's right up my alley. thank you. >> c-span tries to be nonbiased and they try to use the independent and democratic and republican lines but really there's no democracy. the voices are limited.

i wish you could expand the voices to more third-party people because the democrats and republicans are basically the same and also if you could limit the amount of discussion to have with republican and democrat elected officials and use a more independent voice port discussions. thank you. >> please, whatever you do, do not take c-span3 off. it's very educational show. i listen to it almost everyday and i probably have learned more about my government and also books and history. please do not take it off the air. >> why this c-span favor republicans over democrats? why this c-span letter

republican colon and demonize everything against the president and cut off the democrats saying something about a republican. they are cut off. c-span it's not fair. >> according to a new report from centers for disease control that could be 1.4 million a bullet cases in liberia and sierra leone by the end of january at the outbreak isn't effectively control. that's next on c-span2. then we would hear from anti anti-aids director dr. francis collins. he joined us on this morning's "washington journal." later tonight we will bring you a debate from northern virginia scond tenth congressional district.

this is an open seat because congressman frank wolf is retiring at the end of this term. here are some of the ads airing in that race. >> barbara comstock wants to make abortion illegal even in cases of rape and. just like the right-wing republicans in congress, they want to overturn roe v. wade. so does she. >> i think roe v. wade should be overturned. >> barbara comstock noted with right wing republicans women seeking abortion to undergo ultrasounds. that's all i need to know. >> trash talking politics from john fales. john faust attacks sex is bizarre insensitive and ignorant. don't be fooled by faust. barbara comstock is an award-winning legislator who gets results. comstock broke the law that protects