>> c-span, where history unfolds daily. 1979, c-span was created as a public service by america's cable television companies. and today, we continue to bring unfiltered coverage of congress, the white house, the supreme court, and public policy events in washington, d.c., and around the country. c-span is brought to you by our cable or satellite provider. >> we are here with scott tax foundation. index? guest: the state business tax climate index, which is a mouthful, is our annual taxmeter ranking of state systems. state tax systems are complicated as a general rule. there are a lot of brackets and

complex provisions. what we do with this publication each year is boiled down over 115 of those into an easy to understand overall ranking of your state's tax system. we are not just looking at tax collections, which is often what you hear about in the news. we are really trying to get into the nitty-gritty of what about tax systems matter, how broad is the tax base, and how low is the tax rate. we reward states that have a neutral tax system, broad-based, low rate, which is the general agreement of what makes a good tax system. host: what taxes are you looking at? are you looking at corporate, individual, unemployment? --employment? guest: we're looking at everything. individual, sales, corporate, property, and unemployment

insurance. we have rankings for each of those components. if you are interested in one particular tax, you can look at that. we have an overall ranking where we take over 100 variables we look at to examine. we maybe even give some options for improvement for policymakers to look at in their tax system. foundationthe tax have any political or ideological view about taxes in this report? we are an independent organization, nonpartisan. sometimes people don't know exactly where to put our analysis because we do want from bases and low rates -- broad-based and low rates because that is the most efficient way to collect for government services. critical of some things that my friends on the left might be critical of. we have things that will hurt

your score if you have carveouts or itemsess firms, that are designed to shape individual or business behavior using the tax system. our view is we need taxes to fund government services. we should be collecting and levying taxes in the broadest soe, lowest rate possible that businesses and individuals can go on with their lives to their own desires. host: here is the question, what states rank well and what states don't? bottom 10 top 10 and can be quite instructive. there are the usual suspects, whining, alaska, south dakota, florida, montana, hampshire, oregon, utah, nevada, and india. there is a lot in that top 10 list. a lot of states in the top 10 go without one of the major tax

types. for example, wyoming does not have an individual or corporate income tax. florida, people know there is no personal income tax. have allindiana, they the major taxes can but they withthem on broad basis low tax rates overall. example, generally thought of as a high tax state, they go without sales tax. think that improves their competitiveness dramatically. they come in seventh in the country. host: what are the 10 bottom states on your list? guest: usual suspects, lowest new jersey, california, new york, connecticut, arkansas, iowa, louisiana, minnesota, ohio, in vermont. in new jersey and california, if you live there, you know the tax

system is marked by a pretty narrow tax base and quite high tax rates. my whole family is from new jersey. when this comes out every year, i get a couple of phone calls reminding me it is probably a pretty good metric because from their understanding of the is not so great. you also get a state like louisiana, which is a low tax collection state, very complex tax system. the sales tax is unparalleled in louisiana compared to the rest of the country. there are multiple baskets of transactions that are taxed differently depending on which parish you live in. to trackle t complex issues like that as well. are looking at business taxes, not individual taxes. how do these categories, explain the difference in those categories and how it affects the index?

guest: that is a really good question. you have to remember that when most of us think about business taxes, we're thinking about corporate income tax. businesses pay a time of different tax types. they pay individual income taxes because a lot of pass through organizations, whether it is an s corporation or sold proprietorship or llc, they pay their taxes through individual tax income returns. we account for that by monitoring those taxes. , although businesses consumers pay the sales tax when we purchase something him that tax is collected and remitted to the tax collection authorities by businesses. there is a lot of overlap between the taxes that are paid by individuals in the taxes paid by businesses. a lot of them are kind of both. the corporate tax, while it is

mostly unseen by us as individuals when we are interacting with the business tax environment, it is paid by people. it is passed on to workers in terms of lower wages, shareholders with lower dividends or payouts, and consumers in the terms of higher prices. host: we want you to join this conversation. we are going to change the phone lines a little bit. if you are a business owner, whether it is a corporation, small business, home based business, business owners call in at (202) 748-8000. if you don't own a business and want to talk about this business tax rate index, we want you to call in at (202) 748-8001. once again, if you are a business owner, call in at (202) 748-8000. at (202)else, call in

748-8001. once again, we are always available on social media, on twitter and on facebook. havewhat about states that strong commodities like oil, energy, wyoming, north dakota, alaska? how does that affect their position on this index? guest: there are a couple people every year we put this index out, they place calls or emails and remind me that not every state can be like wyoming. their tax system misread you have a lot of oil. system is great, but they have a lot of oil. that is not really great advice. find oil your state. those with massive reserves are able to levy straightforward tax

systems across the major taxes. to your question of how do we examine resource taxes and there's not a veritable right now, because we are looking at the general tax system. if you were to open up a contract,e store or a because those taxes are so specific and we're not the index. generally, we find that those states that are able to from that helps them not levy other taxes. host: how have the tax changes by the administration affected these rankings? guest: there was a little chaos begin the year. system offtheir tax

of the federal tax. the way individuals expect that is what we use software there prepare our to taxes, there is a cute little image that says not transferring your taxes from your federal returns. lines from federal return are being moved to the state return. the calculations change in some cases dramatic weight in the last year. dramatically in the last year. states are seeing more revenue coming in unless they make a change to their taxes. activity on were reform than we

normal year. those are states like kentucky, georgia, idaho, and a couple of others that because their tax ned byad been broade federal tax law, they came through and get other reforms. from let's go to antoine california. and i want good morning. caller: good morning. host: go ahead. caller: i want to know the difference between new york francisco. and san guest: those systems are kind of similar actually. they are both relatively high. i don't have the actual rates. in new york, there is a statewide rate of around 4% local add-ons.

in california, the statewide rate is around 7% local add-ons. those are relatively high terms of sales tax. will we have seen that on the sales tax is a problem where creeping up ever so slightly each year, year over year on verage, because the sales tax base has been sort of eroded away because our economy is changing. the it was created in 1930's, they were on the sale of goods. for a long time, that worked. most of the economy was transaction of goods. now we have a more service-based economy. ofvices represent about 2/3 final consumer products, and our sales tax for the most part is not track or does not collect sales taxes on those ties of

transactions, so unless they go back and do some sort of broadening of their sales tax, we see rates creep up over time, and that is one of the issues in california. host: let's go to bill, who is calling from illinois. bill is a business owner as well. built, good morning. caller: good morning. categoryif you have a where the state just treats you like a jerk. if you own a business and you purchase equipment, you own a tax, which is similar to sales tax. in illinois, if you end up with use taxedit in your account, you would think you could call up and say you know my thousandse back, and you are correct, but

no, they tell you you have to wait until you go out of business or you have to plead poverty. categorywould have a -- is the state tax department on the business side just a bunch of jerks? fairly?treat business in other words, there should be a category, are they working ?ith business and i have got to say, i think illinois, you should throw into the bottom of the heap there. guest: that is a good comment, and i hear you on that one. one of the things that is hard to measure is how taxing authorities run their operation. we have certainly, in my travels to states, i have seen some states that do it better than others.

did mention one application of the sales tax to intermediate business transactions. one of the things we do look at is to make sure that when the sales tax is applied, it is only applied in that final level of consumption. that is really what we are trying to tax with the sales tax in this country, when a consumer buys something, there should be a sales tax applied. one of the areas where states get into trouble is that they try to apply to sales tax multiple times along the production chain, and that could result in pyramiding where you have taxes stacking up on other taxes before the product is ultimately sold to another consumer. there are some states that have issues with that. host: this is an annual report.

other states that are moving up and down the list from year-to-year, are there some stay out of the moving low, for the ones who are lower starting to move higher on your list? guest:. yes. this year, the big mover was kentucky. they actually conducted revenue positive tax reform, meaning they brought in additional revenue from changes that they maintain their tax system, but they did so in a way that product tax bases overall -- broadened tax bases overall and lowered their index. it went from 29th two 23rd. they were able to change their multirate to individual tax system, to a single rate tax system, moving from 6% to 5% and also made changes to their business taxes and some other changes that were designed to lower the cost of capital in that state.

they did so and brought in additional revenue that was brought forward to prison reform, which is an issue that thateally bubbled up in state, where pensions are a big issue in needed to be addressed, because they were growing at such a ingrained that they would not be able to make those promisesor bring those to pension owners in the public sector. host: anyone going be off the direction? guest: new jersey. my family will be so upset with me for new jersey to hike individual and come taxes and also corporate income taxes. they have some of the highest corporate income taxes and personal income taxes in the country now. they have some of the more progressive structures, meaning where ae a narrow base firm that have lower profits and in particular year pay a much lower rate or sometimes have little to no liability, whereas

if you are a bigger firm, you are paying real large liabilities. at some point, because they are getting in the tens of percentages -- and remember, this gets stacked on top of your individual tax burden -- firms are required to move if they are taxed too heavily in a particular jurisdiction, particularly the marginal rate, meaning the tax that applies to that next dollar of business activity, the tax that applies to the next dollar of profit. so businesses can find a way to locate somewhere else and incur a lower cost of doing business, often times they will do so. host: new jersey's governor, bill murphy, actually had a tweet about it. he tweeted "new jersey has been ,argeted by the gop's tax law limiting tax breaks for -- the

s.a.l.t. deduction to pay for tax breaks for corporations and the wealthy. now they are trying to make it permanent. no. we will continue fighting washington on this unfair and unconstitutional tax on the middle-class taxpayers." do you believe it? guest: one is a deduction for state and local taxes paid. this is only available to you if meaningan itemizer, you do not take the standard deduction, you actually adequate bunch of other deductions. t. deduction as it is called, the state and local tax states that have really high taxes tend to have residents better taking that reduction with greater frequency and a greater magnitude when they do take that deduction very so there has been some concerns

from new jersey and new york residents in particular that this was a targeting of their residents in their state. some extent, i understand those concerns. i do not think the election itself is actually reasonable, because you exist in the united states, you exist as both a resident of the state and a resident of the federal government. it seems appropriate to me that will those jurisdictions can levy taxes on you, and they do not -- you do not need to offset those taxes against each other. because you get those from the federal government and your state and local government at the same time, so it seems appropriate that those two consent on top of each other because those layers of government both give you something. host: let's get a couple of questions in. let's go to gary calling from virginia on the line for us.

gary, good morning. caller: good morning. i know you are mostly involved with state business taxes, but this question concerns the huge federal debt, which i believe has exceeded $21 trillion and climbing, yet we have a tax cut that is supposed to ask more revenue to the treasury. i'm wondering if you can whiten us whether or not the gap between what we are spending and taking it is narrowing, stating the same or getting better. guest: the caller is correct. tax legislation to increase the debt overall and increased the deficit going forward overall. there is a question about when a time of reckoning might come, get too largers and we cannot pay our bills. and the state level, states balance their budget each year, statess possible, and

are able to do in year-over-year. problems in such the tax system, particularly volatile taxes unelected corporate income tax or tax revenues derived by capital gains income. swingcans somewhat wildly with economic sessions and such, and it is hard for states to plan around for budgeting purposes for tax collection. this is one of the reasons we see at the state level moving away from the more volatile tax instruments. corporate tax, for example, 16 states have cut their corporate is in the2008, which middle of the last recession. i think that is one of the reasons is to try and help with that smoothing effect, the ability for states to have a balanced budget each year, and trying to make sure that their revenue instruments are

conducive. host: let's go to david, who is calling from berlin, new york. david is a business owner. david, good morning. caller: good morning. can you hear me? host: go right ahead. caller: good morning, america. good morning from greenpoint, brooklyn. mayor de blasio susan amo yesterday he established an advisory commission to develop recommendations to an on the city's taxinform the property system. the goal is to make it f more, simpler, and transparent while ensuring there is no production revenue used to to find potential city services. guest: that is a good question. new york has traditionally had very large property tax burdens, across the entire state

, not just in the city. there is a relatively new that we foundap in our index is actually starting to do some work. it has slowed the growth in property tax collections within the state. one of the bigger problems in new york is not necessarily what is going on in the city but how a texas and that, in many ways has been structured around the newomic activity around york city impacts those in the state. when we talk to those in the state, this is the number one concern. it contains governor andrew cuomo did was look at a corporate tax reform that was the state moree business friendly, particularly with upstate in mind.

if you were a sea corporate crm, therefore waterways -- corporate firm, there were four ways. the reform was not the best thing in the world, but it did improve new york's state tax climate rating from 54% to 48%. new york used to be a below was ranking, and now they bring a little bit better than new jersey and also california this year. host: let's go to air in who is calling from cincinnati, ohio. aaron, good morning. caller: good morning. taking my call. i think i am only hearing half of the story here. and a a question comments. i will ask the question first, comment.let me make my one, which states are providing the best services, clean stuffng water, preventing

from the and jumped all over our environment, the health care. and also, what above the federal, state, and local tax policies all combined? to need to work together to provide the important social services, environmental services that we need to survive as a civilization. you said early on that you cannot use the tax system to influence policy. but throughout many years anyway, we have used that system to try to do the right thing in our society, so anyway, which states provide the best services? go ahead and provide a comment on this total -- we need to look at the total policy together in this country, federal, state, and local, and maybe those

systems contradict each other but do not complement each other. i do not think i am hearing the whole story from you. thank you for taking my call. guest: thank you, aaron. that is a really good question, and it is not something that we measure in this particular index. it is probably a good topic for future studies. one of the things we're trying to do here is make sure that people are equipped to understand the cost side of the government equation. there is the cost to the government and also benefits that we get from the government, which you touched on quite nicely. one of the things that you do not want to be in the situation is having a government that is very costly but then does not give you good services. and sometimes we find ourselves in that situation, and that can be very frustrating. the best combination of course would be to live in a state where the cost side of the equation is relatively low and the benefits side of the equation is particularly high.

one of the things we're looking at here is how efficiently that revenue is connected. really have an ideological stake in how much revenue is brought in, and particularly with this or o report. revenuebring in tons of with a broad-based income tax or a broad-based sales tax with a low rate. subprime states that ranks so well as massachusetts, because there is a flat income tax with relatively few deductions, exemptions, and exclusions. it brings in quite a bit of revenue, but it is not very distorted to labor decisions or business decisions. host: let's see if we can get one more quick question and from jimmy calling from maryland. jimmy, give us your question. caller: i just want to point out with this program started, the guy said he was nonpartisan. that is not true. this organization is funded by the koch brothers, the founding

members were alfred sloan, who was part of gm, another guy from standard oil, and a guy named brown. o this guy is clearly not nonpartisan. he is very right wing, and it is a very right-wing organization. guest: i am happy to address that. we have thousands of donors across the country. a lot of them are regular taxpayers. 1/3 of our funding from individual taxpayers. 1/3 of it from charitable, nonprofit foundations. and the remaining 1/3 from business owners. it is a pretty mixed fundraising base, and we do use that to make our that we stew word independence and certainly treat our research that way. host:

announcer: c-span's "washington journal," live every day with news and policy issues that impact you. coming up this morning, that 2018 midterm election and the future of the republican party. msnbc national political correspondent steve kornacki discusses his new book, "the red and the blue." be sure to watch "washington journal," live at 7:00 a.m. eastern this morning. join the discussion. announcer: sunday on newsmakers, emily's list executive director emily came looks at the midterm elections, the impact of women running for congress, and the candidates her group will be supporting. she's interviewed by amy gardner of "the washington post" and julie by glitz of "the wall street journal." watch "newsmakers" on c-span.

then, c-span's campaign 2018 coverage continues with an ohio senate debate between incumbent democrat sherrod brown and republican congressman jim renee c. they will meet in cleveland. the debate starts live, sunday at 6:00 p.m. eastern on c-span. announcer: tonight on "afterwords," gina loudon, fox news guest analyst and member of the trump 2020 campaign media advisory board on her book "mad politics: keeping your sanity in a world gone crazy." she is interviewed by representative louie gohmert of texas. >> is president donald j. trump crazy? >> crazy like a fox, yes. i believe that narcissism is a spectrum -- and most of us who

put ourselves in the public eye have an unusual sense of confidence, and there's a reason. if you want to call it narcissism, i don't have a problem with that. is it a dangerous narcissism? i don't think so. but are there dangerous sorts of narcissism? absolutely. we've seen it in politics. but i don't think our president is in that category at all. rs"ouncer: watch "afterwod tonight on c-span2's book tv. announcer: c-span, where history unfolds daily. in 1979, c-span was created as a public service by america's cable television companies, and today we continue to bring unfiltered coverage of congress, the white house, the supreme court, and public policy events in washington, d.c. and around the country. c-span is brought to you by your cable or satellite provider.

announcer: on saturday, president trump met with pastor andrew brunson and his family at the white house. the pastor had been detained in turkey on espionage and terrorism related charges. on friday, he was convicted but released on time served. this is 25 minutes. [indiscernible chatter] >> thank you very much everybody. this was a long journey, but for andrew, it has been a very interesting day, because from a turkish prison to the white house in 24 hours. that's not bad actually. [applause] and i want to start by saying