president, members of congress, , the greated guests people of the united states of america. honor to speakct of behalf of the afghan people in this august assembly. i thank you and the people of this great country for your generosity and commitment to our people. you have supported us with your leadershipwith your in the world community, and most importantly, with the precious lives of your soldiers. [applause] find more highlights from 35 years of house floor coverage on our facebook page. c-span -- created by america's

cable companies 35 years ago and brought to you today is a public service by your local cable or satellite provider. tomorrow morning on "washington journal," house andg and on senate races in next yours collection. discussion on the mccutchen versus sec decision that struck down limits on the total amount of money a person can contribute to federal elections. our guest is the chairman of the federal election commission, lee goodman. of "foreignn policy" magazine joins us. "washington journal" is live on c-span every morning at 7:00 a.m. eastern. right now on c-span, a conversation from this morning's "washington journal" on proposes to change the tax code.

our conversation on this tax day takes a look at the fairness of the tax system. andguests, rebecca wilkins william mcbride. to both of you, thank you for joining us. one of the reasons we wanted to come on was a question pull -- posed by gallup. the question is, he said, do you regard the income tax you have to pay this year as fair? yes, 41% say no. guest: fairness is in the eye of the beholder. it is not well defined. good true, you have got a survey there that indicates most people do not think it is very fair. i think they are right. depending on the various definitions of fairness.

general principle of fairness is that everyone is treated equally under the law. our tax code does not do that and has not done that in a long time. 100 years or more. does note tax itself treat people equally. it taxes income. it taxes people for generating income. it does depend on your income. guest: most people are not upset with the amount of taxes they pay, but they're upset when ge or mitt romney has a lower tax rate than they have. our tax system is not very fair in our view because we believe it ought to be more progressive than wealthier people should have to pay higher. if you look at an income test

come the wealthy pay the majority heard if you look at the tax system overall. the tax system is almost flat. everyone pays about the same amount of taxes as they take in their share of the country's income. the top one percent earns about calmf the countries in the and pay only 24% of the taxes. those who make more pay more taxes, what you think about that? that is the progressive tax. it has become more progressive than ever. wrote -- renowned organization based out of paris looks at tax codes in the developed world.

they found a few years ago the u.s. tax code is the most progressive in the developed world. there are a lot of stories in about people skipping out on taxes. rich people skipping out. on average, there is a burden on the income tax very skewed to the high-end. >> we're making progress as far as taxing people who make more. would you agree? the problem is the other taxes folks pay. on the other coast. on the bottom fifth pay 17% of income. the top one percent pay less than three percent of their income. state taxes tend to be very regressive. aggressiveing a very income tax can you make up for that. apply it to washington. here are we?

guest: we have gone through a time of a lot of gold up, with dave camp's proposal in february. it has not been well received by congress by other party. -- either party. passing more temporary something called the tax extenders list of provisions, this helps is nice, in particular, so i think it is back to normal business. the proposal, one of the

reasons our previous guest told us -- people make a certain type of income when it comes to taxes. that is right. there are so many provisions it is hard to summarize but yes, it does target the rich in many ways. and changes all across the income spectrum. guest: this plan would get rid of a lot of special interest tax breaks. feeling theeneral tax code is about to be overhauled. itn you get to the details, will be difficult. everybody has attacked -- a champion and everyone will fight for their own particular brick. >> two guest joining us to talk about taxation.

if you want to ask them questions about the current tax system we have, this is your chance to do so -- you can make your thoughts known on our twitter page. you can send us an e-mail. a little about your organizations. the center for tax justice. guest: we work to influence cap policy to make the tax system more fair and sustainable. totainable means it is are fairr what you want and and that it taxes people according to their ability to pay. founded in 1937, always

been nonpartisan, nonprofit organization. we have always advocated for according toicy principles laid out by economist 's going back to evan smith. it is on our website. we advocate for simplicity on the tesco, neutrality, transparency, stability of the tesco, and no retroactivity. that means, do not change the law retroactively and change taxes on people for income they earn 20 years ago. seven brackets as we speak. some of the efforts consolidate into two. some things are lost during the process. what about the idea? when it comes to your idea of simplicity, buying a bunch of ax brackets are the benefits?

guest: it is meaningless. what is compensated about the tesco are all the special rules and provisions and credits. we think there ought to be steeper productivity for the code. right now, someone making $350,000 pays the same tax rate as someone making $350 million. we think there are -- there is a lot of room for tax brackets. guest: it is a clear measure of there has been improvement in that the guard.

would be ao brackets further simplification. but you're right that we have software now and most people use turbotax and something like that. that is not the biggest sort -- source of complexity. biggest source is the stuff is mrs. have to put up with current that is arcane stuff like how many right off for your investments. over -- other complexity for individuals, the credits they received, the earned income tax very little understanding of that by the recipients. fraud in that of program as a result. qwest should it be maintained yaks --? --guest: should it be maintained? guest: no. there is 11 billion a year due

to improper payments. you make changes to it as far as businesses and how they are tax? the complexity there is many fold. labor cost in businesses, they write is off immediately. expenses,investment equipment, machines, computers, must be written off in years and decades. this is complex. i do not really think the fraud is driven by complexity. there is fraud in all levels of the tesco. tax is costingre the u.s. treasury about $150 billion a year. people cheating on the eit's the, they know their cheating. just like those filing false returns in getting millions of

dollars in refunds. the problem is the reinforcement from the irs to combat that people areake sure only taking the credits they are entitled to. you keep cutting the irs's budget while giving them more and more to do. it will unfortunately suffer. let's go to a call. republican line, go ahead. caller: thank you. do they tax all rich people the same? you failed to mention warren buffett. clinton andsident his wife hillary. these are very wealthy people. you only mentioned mitt romney. there are a lot of wealthy

people. do they all get taxed the same? they do not. you are working, you get a much higher rate. i is mitt romney because it was a recent example that was well-publicized. warren buffett pays the same rate as mitt romney. president obama pays a much higher rate because much of his income is earned income, like salary royalties instead of investment like dividends and capital gains. it does not matter how much you may, whether $20,000 or $100 million. if your income is from work, you will pay twice as much in contact many would for investment. guest: on twitter, it was just asked that it is dividends and gains. guest: i would agree the whole tesco needs a serious overhaul. tax dividends have been the case since thel gains

beginning of the tesco 100 years ago. that is the case in most countries, that there is a lower rate on the sources of income. there already tax once before on orbit income tax. whatever is left after that tax is distributed in shareholders. most companies have been reducing the corporate income tax era that is the source of a lot of jobs. and the source of a lot of investment. the u.s. has not performed the corporate tax code incorporations. we're left with the highest tax rate in the developed world. 60% left over for shareholders. host: what is president obama's thought on changing that?

out hishe president set framework for corporate tax reform which proposed bringing to 28%. down he proposed corporate tax reform be revenue neutral so it does not raise revenue. in order to bring the rate down, you need significant changes. a system butg to even slowing down and having businesses write out their investments over longer years. i would like to address the corporate paying tax first. since this is a test justice on a tax policy recently published a report where they looked at the fortune 500 for five years, 2008-2012, among that -- the companies consistently profitable over the five years, the average corporate income tax rate they paid was 19.4%. of 35%.r half the rate

there were 11 companies in that group that did not pay any tax in that one year. 26 of those corporations did not pay any income tax in any of those five years. earned $170, they billion. also, corporate stock, a lot of endowment funds, pension plans, and a lot of it is not being taxed at the corporate level at all. the double taxation argument does not really apply in a lot of instances. that is one measure of rates. you can look to economists for other measures. economist at oxford university. every year, they publish a comparison of corporate tax rate across the developed world. the u.s. comes up with the highest corporate tax rate. after japan.

statutorythe highest corporate tax rate. the u.s. overtook them when japan reduced their rate. rateok at effective studies and we have the highest tax rate on average in the developed world. variation across countries and effective issue is they are more or less profitable. you do not pay taxes and we have no office. half the countries have no problems in one year. the study rebekah is referring to was done in a very atypical time. losses written off over many years. you have to look at the economic studies.

caller: good morning. tax system issive not much more than this. we can think about it. corporations and business do not pay taxes. the progressives, they will take money from the rich and give it to the poor. you take money from the rich and tax the oil companies. corporation and mine go up. when you start talking about all this progressivism is great, maybe you ought to think about what socialism does across the ocean and tell people the truth

about these taxes. there is not much evidence that taxes influence rises. companies compete based on prices in the market. corporate income taxes are actually borne by shareholders. the people that own stock in the wealthy.re very research papers show about half of americans do not own any stock at all even in their retirement plans. when we think about competition between companies, we think about it as a good and because a bettercompetition is service at a lower price. think about competition. what does it mean? tax rates go down and down and the country with the lowest tax rate has the worst load, the

worst military, the least amount of health care, the worst public services. is that the kind of country we want to live in? if you want to live in a low country, you should move to small yet. --other examples of local local tax competent -- countries , the u.k. has a corporate tax a -- tax rate now. this is the average corporate tax rate in the developed world. it is 25%, compared to 40% in is the. very this developed world. they have health care. by many measures, the health care work better than ours. they have plenty of tax revenue. they get their tax revenue from other sources. we do not have to rely so taxes. on income the corporate income tax is self-defeating at a high rate. the corporation found ways allowed -- around it.

corporations are everyday, almost every day or every week, there are headlines of a reparations leaving the u.s.. just yesterday, walgreens was in the headlines for considering a move to switzerland. it is for tax purposes. the problem is not just that it causes a loss of tax revenue in is, it moves that some jobs and over time, it moves the whole company. you can destroy a company through taxation. that we willies mention, switzerland, ireland, they do well because they are parasites on the rest of the world. rates and tax

artificial shifting of tax rates and they propose tax rates i a lot of money. european countries that have a lower tax rate than we do, as an average, also have very stiff value added taxes. in france, the value added taxes now are 20%. every time you make a purchase, you pay an additional 20% in taxes. us going i cannot see to consumption tax area we have to figure out where we can tax. if the -- a study is published every year that shows where countries are and how much they collect in taxes as a percentage of your product. the u.s. is 33rd out of 35. fewer taxescollects as a percentage of their economy than the u.s. does.

john, you are on with our guest, our independent line. caller: the problem in the united states is that the filthy rich bloodsuckers on the high politicall offices in the states and in the nation. rich,ield for the filthy mr. mcbride, is just giving you the same old worked over complete ohlone. the cure for u.s. economic problem's is to tax the rich. they are getting away with murder. amen. >> we do tax the rich. the average rate is 25%. it is actually more than double the average income tax rate across taxpayers. the oecd and other organizations have already a very progressive

tax system, the most progressive in the developed world. we are shifting most of the tax or an to the high-end. the top one percent pays a greater shares than the bottom of the 90% combined. it has been increasing through every administration over the we continue to make the federal income tax code more and more progressive. so i think, like the corporate out ontax, we are maxed taxing the rich through the federal income tax. it is self-defeating. the rich find ways around it. it does not raise enough revenue. we have many problems with deficits resulting. tax evasion, avoidance, tax planning. say the rich find ways around a bit it goes to her point that even if you pay a top rate of 25 chances are you are not paying the actual rate of

25% or so. ,uest: the actual rate is 39.6% so they bring it down through various ways. they can move their money around. that is the problem with an income tax, particularly one with high rates. they find ways around it. guest: i have to agree with a call on several points -- the real problem with tax reform not being done is the way campaigns are funded. one of my favorite bloggers last year said members of congress ought to wear a nascar uniform every day with a logo of corporate sponsors who support them on their uniforms. wealthy and corporations have a lot of influence in congress. they have a lot of power. they spent a lot of money library -- lobbying and they get the tax rules they want and they also can afford very high price tax lawyers to do planning to help them get around the rules. making the tax code simpler

would actually help a lot -- not in terms of rate but in terms of rules, because when you have a special rule for a certain type of income or taxpayer, then people try to manipulate their transactions to fit within the special rules so they can get that low rate. while we look at averages, and sometimes they tell us something meaningful, a lot of times they don't. the average tax rate for the wealthy might be 25% but we know a lot of people are paying much less than that. there have been well-publicized cases. host: reggie from norristown, pennsylvania. democrats line. caller: can you hear me? host: yes, go ahead. caller: a couple of questions. you put up a graph on the state taxes on the last segment and you said pennsylvania was three percent.

there is also a county tax of 2.1% you pay on top of that. i don't think that is fair. a surrounding county two miles east of me that pays no tax -- and that is a rich area. i live in a blue-collar area and we have to pay an additional tax on top of the state tax, and another county next-door timmy pays no taxes on the county tax. and another question. overseas taxes and products. that companies that go overseas and make their products overseas -- or sell their products overseas do not pay taxes. -- from 1969other saying the irs, tax from companies outside the u.s. of citizens. what happened between 1969 and

today and how, we did not enforce that rule for people trying to evade taxes by going overseas? host: let's talk about the state income tax. we think about the total federal level but you have to think about state the local tax and how they contribute to the overall tax responsibility. mr. mick arrived. guest: we told what the taxes and their are states that the local income taxes. that is a whole layer of complexity that is unnecessary, that the caller is right about. it is very difficult to figure out these multiple layers of income taxes. whether some are written off against others, etc. base of income, the different definitions of income, it is very, very complex. itsincome tax is, by nature, very, very complex. it really shouldn't be at the local level. it is an absurd layer of complexity.

guest: i do agree with that. it is unfortunate how our tax system has developed and that there are so many different jurisdictions that impose tax. but the states that do impose an income tax tend to have much more fair systems. the states that rely instead on sales tax or property tax or tend to taxof taxes low income people at a much higher rate than they tax high income people. so the income tax is a way to make up for that. host: good morning. joining us from massachusetts on our independent line. go ahead, please. caller: good morning. like most viewers, i am totally before to buy all of these percentages and statistics being thrown around. i suspect it is deliberate. it sort of reminds me -- there are lies, damn lies and then statistics. if the one