event in toronto. airing their spring debate, analysts discussed economic inequality, income disparity. debating for the motion to tax the rich, former greek prime minister george papandreou and new york times columnist paul krugman. arguing against is newt gingrich and andre laffer. this is one hour and 25 minutes. ♪ >> you did not know which one of your arguments would be totally >> he has never said precipitous withdrawal. >> he said immediately.

>> and then you have to come back, you are shaken up. >> tax change. >> you do not know what to say, but you will have to say something. >> i cannot believe i am about to say this but dr. kissinger you have have six minutes. >> would africa be better off? >> it is a hypocritical argument. [laughter] >> you are finding it annoying. [laughter] >> you are all in this. the united states cannot pull itself out by running a surplus unless you find another planet. >> we remain totally unlike japan, a place where everybody in the world wants to come and the place where everybody wants to put their money.

>> we created colonialism and fascism and every bad thing was >> europe. nor are we in the house of commons. >> big deal. >> he will get there. >> it is much more frightening to have a real gun barrel pointed at your face than watching it on cnn. >> the last time iran attacked a neighbor was in 1859. >> imagine a world without religious faith. no scripture, no place to worship, because of that faith

dedicate their lives to others. >> it makes us objects in a crude experiment and to supervise this is a dictatorship. a kind of divine north korea. [laughter] [applause] >> ladies and gentlemen, welcome to the munk debates on taxing the rich more. i am the treasurer and i have the privilege of once again acting as your moderator. he wants to begin tonight of by welcoming you, over 3000 people

i want to begin tonight by welcoming you, over 3000 people to another munk debates. we appreciate your enthusiasm for the simple idea to which this series is dedicated, more and better debate on the big issues of the day facing the world can only be good for us. hello, to the national television audience watching this debate. and across the continental united states on c-span. and hello to you, our online audience watching live right now. it is great to have you as a virtual participant in tonight's proceeding. the presence here on the stage in a matter of moments are four big thinkers. a burning question of our time,

tax the rich more would not be possible without the generosity and foresight of our host tonight. i hope you will join me in a warm round of applause for peter and melanie munk. bravo. [applause] now, we are mere moments from getting our debaters out here on center stage. first, i need your help with three simple tasks. number one, you should never say this in a concert hall, i will. power up your smartphones. we have a twitter hashtag, #munkdebates. you can engage in conversation over the next hour and a half.

we also have another technological innovation we want to spring on you. a qr code. those of you watching can also access our mobile online poll through the following url www.munkdebates.com/vote. if everything i've said sounds like ancient greek. i salute you for your knowledge of ancient languages. do not worry, relax, enjoy the maybe you're tech savvy seatmates can fill you in on some of our online shenanigans.

that moment has, were we start to get our debaters -- has come where we'll get our debaters onstage. please welcome the first -- the former prime minister of greece and one of foreign policy big thinkers, george papandreou. [applause] his fellow debater, a nobel laureate in economics, a tenacious columnist with the "new york times" and a scourge to billionaires everywhere, paul krugman. [applause] one formidable team of debaters deserve another. we have them for you now.

first, welcome the intellectual father of reaganomics, a columnist who has claimed he has never seen a tax cut he did not like, dr. arthur b. laffer. [applause] our final speaker tonight joining dr. laffer is none other than the former u.s. speaker of the house of representatives and recent candidate of the republican party and one of the most influential politicians of his time, the honorable newt gingrich. [applause]

2 final pieces of business. first, i am going to ask our projector operator to show the debate countdown clock. those of you have been to debates before remember we have a clock and when it hits the final moments, it appears on the big screen. we want you to join me for a round of applause during their opening and closing statements. that is going to keep our debates on time and our debaters on their toes. finally, time for a pivotal moment. we are going to see how this audience voted on tonight's resolution as they came into this room. the resolution to tax the rich more, let's have the results. there you have it. 58% in favor. 28% opposed.

14% undecided. let's drill down with our second question. how big that potential swing vote was in this audience. depending on what you hear tonight during the debate, are you open to changing your vote? let's have that number. wow. 79% said yes. only 21% said no. it is a debate that is very much in play. time for our opening statements. the side arguing in favor well will speak first. paul, you are up. >> good evening. thank you for being here. thank you for the invitation. i am delighted to be here in this lovely city. which among other things has a much more interesting mayor.

[laughter] that is not what we are here to talk about. we're here to talk about taxing the rich. there are some big philosophical and social issues involved here. i believe that my colleague is going to address those. i am going to keep my part quite mundane. i want to talk about three mundane issues. the first is, should we be thinking about raising anybody's taxes? the second is, can we raise significant sums by taxing the rich more heavily? and should we fear the economic consequences if we do raise taxes on the rich? on the first question, look, we are living in a time certainly in the united states where we are currently being told there are good, humane things would like to do, but we cannot

afford. we are short on money. the debate involves one which is food stamps which is been a lifeline to a lot of people. house republicans just voted for major cuts in food stamps. would taxing the rich make any difference? if you look at the top one percent in the united states, in 2011 they had a combined income of $1 trillion not cap -- not counting capital gains. if you can raise 0.07%, that would negate the food stamp cuts we have to make. the point is, there's a lot of money at the top. enough to make a significant difference in allowing us to have a better society than the one we are headed for.

can you actually collect more money from the top? will raising taxes just drive their income underground? we have a lot of evidence. our top tax rate has ranged from as low of 28% to 91%. a lot ofot of variation. careful statistical work, trying to analyze. it is true that higher marginal tax rates cause revenue to decline.but not much. we have good estimates of how high does the rate have to be to put us on the wrong side of the the answer is at least 70%. probably 80%. we do not have to worry about taxing so heavily that we lose revenue. we can collect more and put it

to good use and were willing to raise tax rates from the top. finally, what about tax rates and the economy? would it have disastrous effects? that's what you always hear. the classic example came some time ago. at least 20 years ago in 1993 when president clinton raised top tax rates. there were many predictions this would have terrible effects on the economy. you knew this was coming. a fellow by the name of newt gingrich said it would kill jobs and lead to a recession and will force people out of work and into unemployment and increase the deficit. i know what your answer is going to be. you are going to say, all the good stuff happened after republicans took over congress and started cutting taxes. that is not going to wash. first of all, during the first

two years of the clinton administration, the u.s. economy added millions of jobs. 278,000 a month before you guys secondly, the tax cuts were small change compared with the initial tax increase. every year, according to cbo, that clinton was in office, the tax rate on the top 1% was higher than it was in any year of either the bush one or two administration. the u.s. economy experienced an epic boom.despite those high tax rates. we are now back to clinton levels. some people figure that it does not happen. by the way, we have had much higher tax rates for our generation after world war ii. it is considered inconceivable now. that did not stop the 25 year period to be the test -- to be the best we ever experienced.

should we raise taxes on the rich? but, for various reasons. above all, because we could use the money. can we actually raise more money that way? yes, we can. should we be afraid that it will hurt the economy? no, we should not. let's do it. [applause] >> very well done. 25 seconds to spare. nothing better than when you find those quotes to turn against your opponents. we like that. speaker gingrich, you are up next. >> let me say, i want to thank peter munk for creating something like this. as a former teacher, when you are talking and you realize a large part of your class is behind you, it creates a certain

tone of anxiety. i am counting on those of you here to watch back. i want to approach this from a different angle. first of all, the debate is not about raising the tax rate. if had 70% tax rates and 90%. you were rich enough, you had really good attorneys and cpas and you never paid them. we had a presidential campaign in which mr. krugman's candidate ran against my party's candidate. it was all legal. it is like the current president's choice for the commerce which turned out to mistake her taxes by $80 million. she is not a big mistake. worth about $1 billion.

comparatively, it will be like me and you filing $300 wrong. the fact is, really rich people do not earn incomes. they get money. that is why bill gates has lots of money. that is why he does not care what the tax rate is. he is not going to pay it. i'm going to make three quick cases. first about morale a team. -- morality. i want to commend the 21% who said they do not care what the 4 of us say.they are not going to change their position. [laughter] [applause] that may mean canadian audiences are more candid.american audiences would have said yes, what not meant it. let me start with morality and practicality and then a question of focus. i love the way it is phrased. raise taxes on the rich. why? what do we mean by rich? you live in a neighborhood and drive a certain type of car. the person next you drives a better car. they happen to like cars.

you happen to like something else. since i drive a better car, should we tax them more? you have another friend that happens to work two jobs and they have a slightly higher income because they earned it. should we raise their taxes? why? this is not about charity and contributions and morality. tax is the power to coerce. should we really say, if you are successful enough, we should rip you off. you owe it to us. how dare you be so successful. if that is the strategy, the right answer is not to go out on a fancy tax rate that lawyers can get around. we know how much bill gates is worth. we know how much warren buffett is worth.

why should they have more than $1 billion net worth? we could get $1 billion this year out of two people. why should they be allowed to be successful? the american answer has been, you know, when has this become a big deal? microsoft is a big deal. it improved the lives of the lot of people. it may have made on particular person successful and encouraged another generation to sound like to invent microsoft. we can send a different signal, you gete your time?if successful enough, we are going to rip you off. i would argue, in wartime and in the crisis, you can say to people, we need everything we can get. as a strategy to say to people in general, if you are successful, we are going to punish you. it is bad. as a practicality, i want to say come to america, be an entrepreneur and create jobs and great wealth and new ideas and we will reward and honor you. we believe that pulls people ahead.

chinese has followed the strategy of creating a lot of billionaires. they have moved people -- 600 million people into the middle class. the price of that was dramatic, radical economic growth. that is good, not bad. i want to raise the bottom. i want to find a way to help everybody. our number one focus is the creating opportunities for everybody and solving the problem of the permanent poor. this is the wrong focus of politics. failingernment today is a bureaucratic institution. look at all of the things you have in the private sector that has improved. look at the handheld device that almost all of you have that enables you to vote tonight. look at all the breakthroughs.

lowering costs and increasing capabilities. look at the inadequacy of government. i will close with one example. the founder of the google driverless car has a goal to lower the cost of college education by 90%. by improving access to learning. there's a world out there that we can improve dramatically. it is not a function of taxation. it is a function of breaking through the boxes we have been in. that would be a better focus than trying to figure out how to punish people for being successful. [applause] >> i can see those republican primary debates have kept you sharp and on your toes. great opening statements. up next, george papandreou speaking for the pro team. [applause]

>> thank you. let me thank you, when i was a teenager in canada, it was very hospitable to my family who were in exile because of a so thankship in greece. you, canada. it is an honor to be here with the speakers. we are talking about a very important issue. that is inequality. everybody knows there's a story -- anequality created in the soaring inequality even more than in the 1920s. it has undermined basic principles of fairness and justice in our societies. i am in favor of this proposition because i believe we need to ensure fairness and a just society. i admit, there's a value which i cherish. beyond the moral reparative i

feel that is important, i would like to relate a personal experience to you. when i became prime minister, i had huge deficit made by the previous conservative government. i had to raise taxes. my main task was to revamp the tax system because there were loopholes, lack of transparency, and a lot of tax evasion. the greek people, who were paying for the debt of greece, were at the same time seeing we were paying back our lenders, a global financial system was aiding tax evasion through tax havens. instead of a trickle down economy, we had a trickle out economy.about one third of total global assets are beyond the reach of effective taxation.

$32 trillion is offshore in 2010. revenues are lost. there is so much being lost they could five times deal with the lending goals. so i n i say inevitable tax, also believe in a strong global governance, reform which much transparency, closing loopholes, and affect financial around the world. i believe in progressive it's a blood use line in our soelts. conservative argument is that we the bottom to because of global competition. the say it should emulate

emerging economies with lower taxes, wages, benefits, environmental standards. less education and less of a net for healthy pensioners. hey are basically proposing to undermind this basic bargain that holds the society together. is there another way? gordon brown, the former prime minister of the uk said we need to overhaul our economy infrastructure, invest in high-tech equipment, promote education.y that's bringing our iphones and blackberries and this innovation. and that is what he says is oing be the firepower to deal with the emerging economies of china and india. otherwise, he says, we will have a decline. the ess does benefit from basic bargain. sweden and germany have high

taxes. they have high competitors because they have invested in capital. finally, the -- the thing we you have high-tech, there will be tax avoidance will be he lobbies pushing for changes. igh-end fee is a huge concentration of wealth in our globe.ies and around the politics has undermined democratic politics. and that means that governance -- governance because we are dealing with the public good. and that is, i say, a new threat to our democracies. you put that to ancient reece, how do they intend democracy? what does it mean about democracy? concentration of power. today the concentration of power s undermining the justice

system, our politic, our public good. that's the key question with the here.ps i like to end with a slide if can show it. which shows that there's a democratic demand. the first bar -- that's what the real income distribution is for the united states. the second one what people the distribution is. the third is across the board despite the politics what people the distribution to be. demand is a democratic in our society to have a more equal society. equal and just economy. and i think there's a reason for the because if you look at more equal societies around the show they arethem top on anything, whether it's jobs, pectancy, health, homicide. they are tough. are the most efficient and

most humane societies. that's why we need equality in our societies. >> well done, that's probably in your third or fourth language. impressive, indeed. up next, you're going to get our statements. >> thank you very much. by the way, that was a great one on the mayor. experience.tle i mean, i had little experience just before coming over here tonight. in the the health club hotel. a beautiful city here. thought i'd exercise a little bit. you can tell i'm an exercise freak. i was on the health club working machines. i didn't even break into a sweat or anything. walked gorgeous lady into the health club. just absolutely beautiful. i happen to be with the manager of the health club. i tapped him on the shoulder and

said, excuse me, do you have a machine to attract someone like to someone like me? and the man said, yes, i do in fact. walked me over to the bemo, atm. let me just say all of the aspirations that all three of have mentioned tonight are all correct. this question is what happens in the real world. if you raise tax rates on the moneyyou will not get the you expect and you will probably lose money completely. at the u.s. tax code, we put in the progressive 1913. tax in at that time the highest a ginal income tax rate was high 7%. that rate to ised 19 -- 7%, excuse me, in 1919.

we had a depression going into world war i. a er world war i, we had campaign in 1920 between the candidate, roosevelt moving on to keep woodrow wilson's tax rate high. calvin coolidge wanted to drop the tax rate. to wanted to return normalcy. they cut the highest tax rate in america from 77% to 25%. the period was culled, "the roaring' 20s." production soared. the tax revenues from the of earned income earners went way, way up. the 1929 with the largest tax increase. highest marginal income tax rate in the depression, from 25% to 83%. a depression in this period and revenue trillions the 1% of income earners declined as a share of gdp. post-world war ii

period with truman's cut rate boom, tax rates on the rich went up as a share of gdp. f you look at the period of jack kennedy. jack kennedy cut the highest tax rate from 91% to 70%. s, a ve the go-go '60 beautiful period of expansion. up as enue went way, way a share of gdp. he period i like to call four stooges -- johnson, nixon, ford, and carter. largest asemblance of bipartisan garbage ever put in the united states. the share of gdp declined from the top 1% and the economy was shambles. then ronald reagan and bill two administrations that cut taxes dramatically. in that to 2007 period, the highest -- the evenue from the top 1% of

earned income earners went from to 3.1% of gdp -- a huge surge in revenue from the income earners. we cut taxes from everything that crawled, swam, flew. didn't matter what it was, we cut their taxes. revenues from the bottom 95% went down during this period. you know, when you look at the evidence, the evidence is very clear. rates, you don't get the money. these people as prime minister avoid taxes.n they've got the ways and the means. hey can hire lawyers, accountants, the per dee yam lobbyists., they can raise the income, the tightening of their income. of composition, the volume the income. if you raise rates, they're going to get around it, they can do that. do it is lower rates and broaden the tax rates to collect the money. happened in britain recently. brown was prime minister, cameron came in.

first thing he did was raise the highest rate on earned to 50%.arners from 40% what happened, a couple of dip wayptions and revenues went down. look at what happens here in canada. in the recent period, you have rates and corporations for 15%. on stimulus urself spending. better than was far you think he did. your unemployment rate is way it did in the u.s. it didn't go up near as much, now lower than u.s. debt levels, done a much better job. with d to not fool around the ad hoc attack here and there. we need total tax reform. need to tax all income across the board, unrealized capital gains. gifts, all of these things that are done, the tax 501-c-3, all of the gifts that are charitable. slap them all with one last rate

the board. by raising tax rate and wishing it will do some good, you'll fundamental tax reform that we need right now. you.k >> the notion that economics is dismal science. well done. and i think we're going to have time to talk about the economics. but i wanted to start on the many people in our minds about the politics of this debate. the richest 400 people in demand more wealth than $150 million of their fellow citizens.your fellow so outside of any economic why would you --

why would you be opposed to axing the rich and a corrective, a preventive to merica backsliding into the --lded age and the top >> the question back to you in a right which is under what does the state step in and say somebody, we now have decided you are doing too well. you going to punish because you're doing too well. get a little -- > what's the appropriate debate -- >> yeah. >> looking for something like off.d start saying you why do you want to punish the bankruptcy. nobody on my side ever says it's

about punishing the rich. i don't hate the rich, i don't dislike them. best friends. >> you are one. >> i'm trying not to be hurt by that i abdicate. hopefully we can drastically cut the cost of a college education. i hope so. used to have a way in a lower class, working class kids in the could get a good college education which was going to excellent state that were heavily subsidized. that option is largely gone now are gone.e subsidies the state university tuition has gone way up because there isn't money. we need more money. one way to get more money is tax the rich. our oing to solve all of

problems, but it will solve some of it. want to say that the notion that we're going to base our tax policy on the belief that we, a 21st century nation, with all of the institutions that governance are completely incapable of policing tax evasion. we're hopeless -- [ applause ] >> one second. look, there are two totally different arguments that paul has made. the first argument is that, you know, we need all of this money ecause government is so inefficient and the prices keep rising so much. take the case of education. the salaries of faculty members. what happened to administrators. nobody who's for government to talk about the necessary rethinking of how we spend the money. i have a question -- before you tell me i need to raise taxes, are you going to

defend it. the second thing is that i find chilling -- we're in the early an irs scandal in with the irs agents enormous power are saying things like "what prayer were they the meeting." the 83-year-old woman who held sessions, ning coffee what are they doing -- 83 years of age, what exactly is she doing. you may be comfortable, both of you, with a government so guarantee at it can nobody could escape taxation. that's a government so powerful, me what it will do with that power. >> i think -- first of all -- of all, i'm not saying of government or or in favor of markets. greece where we had the state system -- i didn't then.the state that was a very authoritarian state. we need a government that's accountable to

our citizens. what i'm saying is the concentration of wealth today eans the government is not serving the public good. it's serving special interests. that's the problem. and i want to add to that, i don't think you're against government. i think you're in favor of government. favor of in government for very specific interests, for big business. i'm in favor of government that will serve the people and the good.c and i'm not against the americans. i just want to make sure that market also serve basic -- disagrees on you on this. are we wanting them to raise tax rates? the answer to that is that doesn't serve the people. aising taxes is not the way to go to have government serve the people better. creating prosperity is. getting revenues in. tax reform, which is exactly what you talked about. withouta broad-base tax all of these deductions and exemptions and exclusions and

rates. this sh the whole principle. '86 tax we do in the act. you about policies. tax rate to come 50% to 28%. we raise the lowest rates from to 15%. we cut the number of brackets from 14 to four. rate from corporate 36% to 24%. he vote in the senate, 97-3 in favor, including mr. lefty westy. my neighbor, great friend, al gore. radley, kennedy, joe biden, including all of these guys. they all voted for it because it's the right thing to do to create growth and get the revenue for government and need of spending. >> careful economic studies of he '86 tax reform, which, by the way, i did admire. i do believe that equalizing the

tax rate on capital gains and on different forms of income is the right way go. it is. >> however, there have been many identify tempting to the effect of that tax reform on he greater growth good, productivity, output, they haven't found a damn thing. >> oh, come on. it's just not visible. >> show the effects of the 86 tax act. they used the same irs data. you look at all of these. >> we need to step outside. the spread sheets at each other. >> good point. et's time -- we wanted to -- apart from the minutia, it's important. why do you in, elieve that fundamentally, you're going to get this that's going to lift all boats through not taxing the rich. nd why do you think paul

krugman and george were wrong. >> let's go back to the point the prime minister made. this is to understand the kind here. 400 families have a lot of power. fine, you want to raise their up to take away that power. you want to take enough money way from bill gates so he doesn't have power? that's like $53 billion to $1 billion. a billion, billionaires have a lot of power. you get down to a question. about.re we talking what are we trying to accomplish n terms of the signals we send about the kind of society we're in. the primary reason the poorest trapped inmerica are poverty because government fails them. fail vernment schools them. the neighborhoods fail them. the opportunity to have jobs them. the public safety system fails them. i would like to see a politics how radically do we have to reform the experience to oor americans in order

break out and give them a chance to genuinely climb. 'm more interested in the next 1,000 people rising from poverty than i am in trying to go out who i can mebody reach into their pocket and take money from. nd i would argue that $4 trillion a year, the problem with the u.s. government is not absence of money. it's absence of competence. [ applause ] >> if you go to europe. canada is pretty much in that sense a european country. seeing that of course if you haven't been competent in government, you can have good government that's democratic. transparent about a government. a transparent government is not simply to weaken the which i tion of power, do believe affects politics. i've been a prime minister and i know how media and politics can be controlled when you have such amazing concentration.

when i want, however, is through this is to empower our citizens. today, actually, i should say they're not free, .hey're very dependent they're dependent because around huge unemployment the world and developed growth. and they're not getting the basic needs. services that they want. n countries where they do have higher taxes and government and the services are good, you have education, good health care, and at the same time, a of cohesion and the most highly competitive economies in world. why? because we have invest in the human capacity. these people aren't dependent. they feel very independent and and move innovative forward. >> two more quick interventions.

we'll move on. that's not saying we raise tax rates. we all agree with you. said.thing you how do you get the money. by raising the tax rates, you won't get what you want. -- they've been the biggest tax cutters. have you seen their performance recently. happened in what sweden. the best way to achieve your dreams and your goals of a truly democratic is by lowering the tax rates, broadening the tax everyone pays their fair share. you get the revenues and you create barriers. they're not in favor of a flat tax. tax rate. good and recently the inequality the last for sweden in few months, the rise in riots in has created some of the suburbs. so i think we have to see is a is one esive society that's placed. krugman. >> i've seen two things. theis a history of taxes in

economy and all i can say is true.of it is -- -- america has become among the advanced countries, america has the land of least opportunity. country where people who start at the bottom have the least chance of making their way out. people are more trapped in poverty from generation to generation. in the bottom percentile. of that is not because government is failing -- doing the job. it's because government is not children job because don't have adequate nutrition. it's very hard to work your way up to get a good education and way up to middle class if you're hungry all the time. a lot of kids in america are time. all the it's hard to work your way up if you're sick and not treated. children don't have adequate health care. the reason they're not given general ngs is not philosophical principles or the way it's sold. money.e don't have the

we can't raise money by taxing the rich because if we do that, destroy the economy. it's certain and it's a part of our story. to transition on it. let's go to the first of the video interventions. e did it last time with success. going to experiment again. he contributor, former u.s. treasury secretary, former economic advisor to president barack obama. let's listen to larry summers. >> yes, we should tax the rich united states. the united states we have growing pressures on if public population over retirement. or past rising in things to buy. a television set that changed by of 100 over the last generation. the public sector buys health

care. have rising tempers. that's going to put pressure on sector.ic some needs to be met by cutting wasteful spending. isn't that much to cut. revenues will have to increase. from? should it come on grounds of fairness, it should come from the wealthy. changes that major have taken places -- it should come from the wealthy. the top 1% has gone from less than 10% a generation 20%. to more than and it should come from the wealthy because they're the ones been able to escape and avoid the most taxation over the years to arrange inappropriate tax loopholes and tax expenditures. speaker gingrich. come to you. this is a key part of this here in specially canada. aging society, shrinking we're ce, a sense that all going to have to pay more to cope with demographic challenges much of the west faces.

so is that why you have a history given the not for this side of the debate and you said, we're right. everyone is going to play more including the rich. examples.take two krugman's ll, dr. appeal to children who do not get adequate food in a country has a women, children, and infants program, it has food stamps, prenatal care, a program pecifically designed for children. despite spending billions of dollars, you may be commenting ineffectiveness of government to reach every child, but not because we're spending a of money to ensure every nutrition.ood one thing there that i thought i don't think t larry understood he said. and he said the difference in health carerice and

is changed by a factor of 100 -- meaning televisions today are 100 times less expensive relative to health care than 1960 -- or y in 1950. he doesn't stop and say, gee, able in theat we're private sector to produce, for xample, hand held computers called cell phones at declining costs with rising capability and can't in government control their end get the same kind of breakthrough. i'm arguing -- we're on the edge if there's the courage to we t of a breakout of how think of all of government. i'll give you a specific example. conservative and therefore supposed to be pro defense. but l people i'm a hawk, i'm a cheap hawk. you could have 20% out of the more agile, ve a more effective, better defense it.artment if you modernize before i raise taxes to pay for inefficient

that's ical system running behind reality, i want pentagon.l the then come talk to me about taxes. i have to be omfortable with the poor governance. we spend billions in multiple bureaucracy. krugman to get . the job done. [ applause ] >> actually we spend -- we spend fair bit, but we spend on helping the poor. well under hat this does.hat canada we're not that generous, we are not. our the least generous in country of helping the poor. as it happens -- to pick a on the -- which is firing line, by the way, your party. one correction. as a -- as a "new york imes" columnist, i'm not

allowed to do endorsements. you have no idea who i favored elections. year's probably not mitt romney. proof.have no i have every idea. >> this is true. stamps t happens, foot on the firing line as we're talking about cutting the agricultural bill and the paul ryan budget calls for savage cuts in the food stamp program. that's the program that the government does very, very well. bureaucracy is minimal. to the right people. there just isn't enough of it. ensure not enough to that everybody who needs nutritional acisse tans receives it. small.o health care, good job. medicated a surprisingly sufficient program. better, by the way. health care is one of the areas where government consistently is ore efficient than the private sector. but, again, not enough. f we're going to use

electronics, why can't we say phones?s against cell that doesn't change much either. that's a really, really bad argument. >> let me bring george papadreaou into this. contest of this debate are these gentlemen wrong saying, look, these systems aren't working. they don't need more money. reform.ed overhaul maybe they need financial pressure. the fear of the reduction of funds in order to reform themselves? >> well, to the first point -- campaign was to change government and make it transparent. but if you talk about government i had to cracy, now, that is bureaucratic

inefficiency. that's what i was fighting in greece. capitalism.ng joint we had to change. i had to bring in a prescription cut out 30% of the waste which i did.

i would add one other thing. it's good education, like many you have in europe, businesses that are able to fire people very easily. welfare state says i'm going to train you, retrain you. i'm going to get you back on the job market. going to be better then. what that does -- that is a boom business. and that's why both businesses are competitive. i don't want to punish business. to make sure that the moneys are used in the right way. if that means higher taxings. capacity to have the of our society to create the capacity of our citizens to be and capable people. >> i agree. well, this is all off of the point. is raising tax rates. john f. welfare as

kennedy said is still a good high-paying job. people better to get off of welfare by jobs. people don't become prosperous they become t, prosperous with jobs. >> i agree with you making better.ng efficient and what we can afford in this society. we all want -- we want to free the prosperity. naacp ls the head of the by the way. he said blacks are hired last and fired first. the blacks are going to get jobs and keep them, there are so many jobs around they have to hire them. prosperity is the answer. it's the answer to all of things. answer to tax revenue. provide reason we can more service. don't kill the prosperity. work and people who pay people who don't work -- do need to say the next sentence

to you? come on, help me on this. you've had your time, but i want to give paul krugman in on.s and then move >> i think, again, i'm disappointed that sort of cosmic nature of these arguments as if we're talking about kinds ofg -- as if the tax changes that we might be ontemplating are things that could have stopped -- stop jobs trying to invent a computer in their garage, right? talking about punitive taxation. some more.ng about i think we phrase it as if it's if we have to, as have no attempt at progressive attempts to provide benefits in that progressive you have to have taxation at levels that you have to detroit stroi everything that's wrong. we do know, the

scandinavian stories come in. 40% of s that collect gdp in taxes. they function. they function very, very well. you right away a notion that taxes are in extremely destructive. they can't be right. question is how can you focus on the rich. there's a lot of evidence that we can do a significant amount by focusing it -- having taxes, not some of it, but all of it. are we for a free society or not. we want to go to taxes. >> first of all, the question is rather global. tax is more. little more, not more. they're rich enough to move from the families. give me a specific example. a 75% tax on on the wealthy, too much, too little.

it's clearly leading a number of to decide theyen like luxembourg. krugman world view? it.france can't do france is one piece of europe nd it's too easy to move to luxembourg. if all of europe did it, it would be workable. the united states did it, it would be workable. revenue laureate, the turned out to be 33%. 50 highest revenue. optimal. >> but in any case, the point is we used to have that by the way. had tax rates in that range all through that great postwar growth. am i suggesting that the united states should have the tax rate,

no. doesn't have chance to happen. do i move in that direction? no. that's okay. i'm doing is crazy? >> no. >> i'm sorry. useful ink this is a dialogue. if -- if you're going to go to i rate, if you could do it, imagine why, it would be the 1950s style. 70% with large enough loopholes and nobody faded. be a cleaned out system? you get 73. > at 73, you get some differentiation for capital income. but not nearly as much. the e way, if you look at effective rates of taxation s.re, the top .5% in the 1950 they were high. they were over 50%. >> almost always that way. minutes remaining here, i want to internationalize this debate a mis. and not just about canada the united states, it's a conversation that's happening around the world. the that, i want to go to final video contribution tonight. a big one from asia.

the dean of the school of public policy in singapore. him via up with satellite recently. et's listen to his intervention. >> thank you. of t 20 years ago, i group chinese economists met a group economists in terms the they explained to economists what reforms they would undertake. finished, with some repidation, he said, citizen, do you realize if you realize, reforms arry out these in china there would be rioting. and the chinese said, we hope so. that's exactly what happened. producedprogressed, it at largest number of -- but

the same time, china turned out largest public reduction program in human history. million people out of poverty. a new middle class. you can see that as long as he rise in equality also benefits the majority of people, the people of china and asia accepted it. >> good point. debate.tant one in this papandreou george weigh in on this. why is the china model wrong? poverty.eople out of we'd kill ourselves for that gdp growth right now, wouldn't we? >> absolutely. i disagree. i don't think it's because of inequality. i think the chinese government industries.vily in it brought people out of poverty, yes. rising in equality in

china is facing a steady -- it's a dead end. the se firstle of all chinese realize -- they don't have a pension or welfare system. child per family worked, there would be a big gap in the younger generation and the older ration. they have a big problem there. they have a problem with needing needs of a new working class. we know it here because we know the companies iphones, e apple, the the other industries, they are sking for better conditions thirdly, they have a major environmental problem. they realize they need more

a better reate society. i don't think it's inequality to help them. inequality that's underminded a society. i feel the chinese will move to a social system that will help chinese people. > you mentioned china in your opening statement. papandreou thinks the model isn't open. it's in serious trouble. of its ownonsequence success. you have a china with so many ars, a problem with air pollution. you have people so many people working they have a problem with transportation. china with so much of a need of need to services they go to the policy which is, for example, you don't want several dead pigs floating down the river. unlike 60 years ago, the chinese

generated enough wealth that they can actually deal with problems eneration of would have been starvation, slavery. people who had no hope, a level poverty that's unimaginable. big problems, big country. to have big solutions. >> the central planning of government in china? >> not talking about that. billionaires, the better, china doesn't allow inequality. go after the rich the way you would want. -- said last time on these anyway. latin america looked at this. spread ago wide acceptance of the liberalized markets. don't worry about inequality. you'll get the wonderful asian takeoffs. didlatin american companies that. they liberalized, some good things happened. no take off.

growth didn't take off. really disappointing. after a long time, trying to out what do the asians latin americans didn't have, they had wealth educated populations and really infrastructure. just having policies to let providing rip without the other things does not produce growth. since the last ten years or so, ountries like mexico have started to tackle equality seriously. its's working. is actually -- inequality coming down. poverty is falling fast. the gofrt action for marketplace. and it looks like that is starting to improve the growth of pect as well because better nutrition and better education. the actual lesson is not -- inequality in china succeeds. you need to look at comparison. out letting the rich is not enou-- the rich run wild not enough.

>> the rich doesn't run wild. but we're talking about raising flawed system where all sorts of income are taxed. are gouging the system, not because tax rates are too low. ou haven't defined income properly or put it in the right context. it's tragedy what is happening. ut without what happened in china, they did three things, tax cut, sound money, and free trade. three pillars that supplies the economics. decisions and problems we're talking about are those of prosperity, not economy. china was educated but now they're in really bad shape. now have options. > you get to settle the scores with each other in the three minutes each. the pposite order of

opening statements. art, you're up first. >> one example of man who's been to raise tax rates on the rich for a long time. he is one. is warren "bue-fay." he's a french foreign person from nebraska. buffet, by the way. me and my friends think we should pay more. letters to "the new york times." that letter said that he paid a in le less than $7 million taxes. but that was 17.4% of his income. of his alf the tax rate secretary. i'm a math whiz. $7 million income and 17.4% tax and got that his little less than $40 million. now that's a large, large level of income. tell you what also happened to warren buffet in that year of 2010 where he

$40 million in in run - his wealth realized capital gains, not unrealized capital gains rose by $10 billion. bill and melinda tax foundation which were free were only $1.6 billion. gave toknow how much he his sons' and daughters' tax are.pt foundations the income is what you spend, what you give away, and the increase in your wealth. his income in 2010 was $12 billion. he paid $6 million in taxes. .06% of his income. that is not fair. tax rates he wanted to raise were the ones he doesn't have to pay.

dilemma.e we shouldn't raise tax rates as they stand. we should change the tax code or lower the tax rate. if we had a 12% tax. flat tax jerry brown's when he ran for president. jerry brown's california when he 1992.or president in we had two flat rate taxes. sales and one on personal growth income. no on other taxes, none. he did a 12% tax on warren buffet, it would be 1.44 billion. that's what i consider fair. thank you. . >> fighting words. next, george

papandreou. >> i don't think paul is asking to punish the rich, we have so have so much we wealth whether it's the united states, china, europe. a huge amount of wealth. is highly unequally distributed. and all we're saying is part of amazing wealth in the hands 100 to 1,000 people around the world, could go a long way. major issues we have to deal with. climate change, unemployment. in my country, young people have unemployment at klose to 60%. is that a sustainable society? to give them the trading, the hope, the prosperity. talking about a small of their wealth to make

societies more efficient and prepare for major challenges the generations will face, which is climate change. certainly, in all studies, we that higher equality -- any side, category.tter in any life expectancy, math, literacy, mortality. teenage births, obesity, even happiness. even the rich live longer in equal societies. so we're not punishing them. benefits.get finally, i want to give a personal experience. i was first exiled, the pleasure coming to canada. and in canada, i came from a ountry which was not only a dictatorship, but there was no contract. there was no bargain between

society, citizens and the different facets. have a just society, we will have class four. to complete it. a cohesive society. i found it here in canada with of the difficulties and i know canada does go through the it's a society that welcomed refugee, migrants, integrate e to because it respected, it helped, it invested in us. human capacity. that's all i'm saying. some of they to use wealth that exists to invest in capacity of our society and of our citizens. doing so, we will not only have a more efficient and better economy. better ve a much economy, a much better society, life. better thank you.

speaker, your final words. unemployment in greece is a tragedy. ask what's the underlying lesson we can learn about a system is failed so decisively the young people don't have a job? i'll give you two examples. was inspire bid the last message from singapore. i had a chance to spend time minister who had developed modern singapore. and he said what's the key to successful? so he said, i was a graduate tudent in great britain in the labor government in world war ii. i watched everything they did to create a socialist society. when i got to be prime minister of singapore, every time i say, tered a problem, i'd what would the labour government have done. exact would do the opposite. i want people -- i want more

et's favor freedom, the permanent tension in every society. works? bridge in china. societies.famous mount a tribe by coercion to society. equal he had driven intellectuals out the the farms. in his d chaos late career. -- at great cost to himself, three times imprisoned was arguing that what they were doing was against functioning.le were in the more famous speech, he said, i don't care if it's a

white cat, i care that it catches mice. hat he was saying was revolutionary. he was saying to the communist lecture meina, don't aboutology, capitalism works. give people of china job or hope, they're going to throw us out. risked his life there. he spent 20 years in that. i have a problem with the chinese dictatorship, there are achievements since world war human have helped more beings than the application of free trade, hard money, and the work really le to hard and rise. would rather see the 600 million chinese rising in a society of inequality than see in a society of equality.

>> you get the final word. moment i'm t the feeling that there's been so many straw men out here that hazard.a fire no one is advocating a society equality.e no one in this group at any rate. nothing like that. i want to say a word because i of time on the eurocrisis. if you think it's that excessive government, whatever, that greece is proving an ideological point, what about ireland? suls taned the low especially for the euro in the case of apple. all around hailed it as the role model, shining model said george osborn before he became the chancellor of chequer. they're not as bad as greece. that's what they're going to run as - not quite as bad

greece. that's not what it's about. [ laughter ] about?t are we talking >> god knows the former speaker f the house, i of all people shouldn't have to say, politics the art of impossible, policy is impossible.the we're not going to turn the united states to cuba. do, hopefully what whatn do is something like actually president obama suggest in the last several budgets hich was closing more of a loophole for the rich to take advantage of. i want to say the two great sins 2003 cent history are the bush tax cuts, which gave special treatment to dividend the e, and that cut in

capital gains tax rate in the '90s that was under somebody's in the house, i can't quite remember who. a few extra se income from the top 1%. that we'll do. it will solve all of our problems. it's a start for reducing the excessive power. of the matter is that in the past, we had more progrelszive taxation. the 1930s with a much more progressive tax system than we had before, we came out with the -- the society that as 't quite as plutocratic it had been before. that i like to do. i'm not worried about us sliding guilded age. we have slid back already. eve clawed our way back to the kind of society we used to be.

ast few weeks in the city of toronto, the equality of public debate, the quality of executive leadership. so you've given us a nice respite from that. this, countless others in the city remind us despite what happens in city hall, despite an international reputation that we may have to unwind, we are a city of sophistication. substance.ity of we are a city of civility. we thank peter for reminding us -- thank you.

now for the crucial part of tonight's program. e're going to review quickly the audience vote at the start of the evening. strong tonight with support for the motion. have those numbers up yet. resolved, tax the rich more, over 50% were in favor. 58%, 28% opposed. 14% undecided. number of you that would change your mind over the course f the evening -- i like newt gingrich's remarks. adamant, you were not budging. see if you were budging or not. you has a second ballot in your program. please use that, vote wisely, once. we'll announce the winning results in the south lobby a p.m.e before 9:00 you can purchase books for mung debates. watching of you

on-line, the show continues. town hall starts now and it's free cast. the your analysis with debate with fellow experts and one another. ladies and gentlemen, thanks for debate.great let's vote. glad you're here. thank you.

now, people from are going to look at a world that's dominated by the original packages. they've been waiting for years to see the package blow apart. starting to see erosion around the edges, not through a business ange in the model or technology, but for the leakage of people out of the very slow and accumulating rate. over ten years, that will be a ery large audience that the programmers and the entertainment industry will have serve.ress and have to >> we are trying to set up an pportunity for broadcasters to turn in some of their rights if they choose to to decide to to a l share or to move

different part of the spectrum. and in return, get a part of the auction proceeds as we rearrange he spectrum, turn it around, and sell it to the wireless companies for flexible use, broadband. be mobile >> more of what's happening from oday's cable industry from the communicators, monday night, 8:00 eastern on c-span 2. "q&a," richard baker discusses "the american insider's history." the book was co-authored with neil te journalist, mcneil. > richard baker, senate historian emeritus, author, co-author of the american senate, a brand