make their money selling your private information but i've got a plan that only works inside of our borders. he's wearing a red tide today -- we wearing a blue shirt today we are on the same team. host: thanks for the washington journal continues host: continuing our conversation taking a look at issues concerning campaign 2020 when it comes to economics and tax policies. laura serves as a tax reporter for the publication, good morning. the president talked about the possibility, floated the idea of a middle-class tax cut. what did he talk about? caller: -- guest: he mentioned this before the midterm election

and doing another tax cut specifically for the middle class. at one point he floated a 10% tax cut. this is a political tax cut for the president saying if you elect republicans to the house and keep them in the senate, then you have a united republican government we will deliver another tax cut. that is certainly something possible if they win back the house, but difficult. even under a divided government that is certainly not likely to happen before the next election. host: is this an effort to help at least with the economy as it stands or are there other factors besides politics involved? guest: politics seems to be the driving factor behind this trump has floated this is a way to get voters on his side and say the democrats are going to raise them, i will lower them. but also the issue of whether we will have a recession or some sort of slowdown is a point of contention the white house. you of the president talking abut a tax cut last week. saying it's great, there was a lot of mixed messaging in the

white house is trying to decide whether the economy is strong and nothing is needed or maybe there is a recession and there needs to be some sort of stimulus. >> what was the net effect of the last tax cut, particularly for middle-class -- middle-class families? guest: most people did get a tax cut in the 2017 law. it was a lot smaller for lower income and middle income people, corporations i large cut in toward the upper end of the income spectrum there was a larger tax cut. for many people it wasn't noticeable because it might've been only 20 or $30 in their paycheck and when you think about all the factors that go in to whether you are paying more for health care, whether you are diverting more to your retirement account, it wasn't as much as people were expecting to see and because of the way the treasury managed how they built -- told that out, they withheld less from people's paychecks and

got the tax cut. a lot of people realize the refunds were smaller that they had been in years past. it was a tax cut without people seeing it in their paycheck. guest: what was -- host: what was the result of the tax cuts on the economy overall? guest: it was about in terms of what it cost it's about a one point trump -- $1.5 trillion tax cut and about $2 trillion is what they're looking at in terms of the federal budget. we seem great corporate growth, stock market gains very strong. a lot of them bought back their own stocks, stock prices. what we haven't seen is a lot of business investment. there was a provision that gave companies great deductions if they invest in new equipment, machinery and that was a thinking if you give them the ability to buy the equipment, they will expand businesses, we haven't seen that as much and

that's where some of the concerns about a coming recession are coming from. not seeing businesses take advantage of these tax breaks because businesses are wary about where the economy might be going. >> if you want to ask a question about tax policy, particularly when it comes to 2020 and what both sides are presenting, 202-748-8000 per republicans, --202-748-8001 for republicans, 202-748-8000 free democrats. how much of this is related to the trade between china and the u.s.? guest: it's hard to take any of these one factors and extrapolate them. right is the tax cut went into effect in the beginning of 2018, this was the start of the trade war with china and others. companies are having to totally redo their supply chains in some cases. they are looking for other suppliers, trying to weigh out how long the trade war last for.

about 18 months in, it doesn't look like we are necessarily close to getting a solution so companies are trying to figure out can i take the hit of paying traditional tariffs, do i pass this on to the customers and this uncertainty leads to a lot of inaction on the parts of companies, they are going to wait and see to make that initial investment even if there is a tax benefit. host: for those democrats running for the presidency, what have they said particularly about how they would change the tax cuts this administration and what would they add in terms of tax policy? >> pre-much every democrat across the board as opposed to the law the republicans past. good want to wipe it off the books and start over. that might be difficult because there are things in their people there are some tax cut the do affect middle class and

lower income people and so that's where you see people at elizabeth warren with a lot of different tax proposals out there. tax, thehe wealth focus on people who are very wealthy. $50 million and above. it goes up if you're a billionaire. that would be a real policy shift. we don't have anything like that on the federal level. she is looking at sort of expanding this, this could raise trillions of dollars whether it's increase childcare access or other sort of programs redirecting that money. send giftitancy the should remain a republican, what about the community of those who represent the wealthy community, what kind of hurdles my it face if she does push those proposal should she become president? >> you have some people, those

who are saying abigail disney, the heir to the disney fortune, warren buffett saying we should pay more taxes, we are saying give us a wealth tax. it's my patriotic duty. i want to give back in that way and this is how the system should be structured. then you have other saying wealth tax is a bit too much. howard schultz was exploring a presidential run saying i agree the wealthy should pay more, but a wealth tax is a bridge too far. that's where you will see kind of a division in democratic hands, you could see there being support of this getting through. the issue is is it constitutional. when you look at the taxing powers congress has, it's not clear they can do this. it's very likely this will be challenged up to the supreme court. host: if you go to our website and you want to learn about the candidates, particularly what they are saying and what they have said well on the campaign

trail concerning tax policy, you can go to the website their and go to the box on the top there and type in tax policy 2020 candidates. you can see every thing dave said and a lot more. that's available to you at c-span.org. offy in minnesota start us on the line for democrats. go ahead. >> this goes back to your previous guests and the current one. talking about tax cuts for the middle class is ridiculous. we should be talking about a raise for the middle class. ansing the minimum wage $15 hour. you can't do it overnight, you have to do it gradually so demand stays -- supply remains ahead of demand. , thise main thing is doesn't cost the taxpayer a penny. and it will raise the demand

area and suppress economic -- in suppressed economic areas and take the pressure of the cities. so until we have increased demand and -- in depressed areas, nothing is going to happen in this economy and that so-called professor you had talking about moving more people to cities which would make the situation 10 times worse than it is today. host: laura davidson, go ahead. guest: one of the things we are hearing from the people is not only the tax burden but also as the caller mentioned, the wage growth for the middle class is very much stagnated. decade, that past has not grown where as you've seen a lot of income distribution shift up that way. that's where policymakers are combat income to inequality. that's we are hearing from elizabeth warren and bernie sanders were looking at an array

of proposals that would help get the u.s. more in line with other countries that have much less income inequality essentially that are talked about. host: if you are off of twitter says if you want higher taxes, you want corporations to be less competitive with others in the world, is there a sentiment among corporations there? guest: before the republican tax law, the corporate was 35% which was very high in the world. we cut that all the way down to 21% and that puts us in the middle of the pack. democrats would've agreed to a corporate tax cut but not as far maybe 28 or 29%. ifs is really the question we had back three or four years ago, u.s. companies were leaving and going overseas because of corporate tax rates here. a lot of pharmaceutical companies also went over to ireland with a tax rate is 12.5%. 2017 andress did in

they didn't hit the quite right balance is they try to make company stay here and manufacture. have their research and develop and tear but some say with republicans was too much of a giveaway and still gives them incentive to go overseas. a lot of democrats are talking about how to be increase some rate but also make it possible for american companies to stay in america. host: let's hear from tracy in maryland. i'm worried about the deficit and the debt. why isn't the president addressing that? guest: this has been an interesting thing. the president has come up several times again spending and timeeficit, but time after is different spending deals and budget deals have passed congress. we've seen these have been record large deals. this is kind of the perennial issue you see. whatever party is in power, they

seem to forget about the deficit and debt and whoever is in the minority is complaining. of the biggest complaints about the 2017 tax cut is they didn't have enough offsets, it doesn't really contribute to economic growth and that would be one of the biggest arguments democrats make against another round of tax cuts, especially under present trump's tenure saying this is a political tactic used to persuade voters, it's not anything that will help grow our economy or deliver the kind of economic change we are looking for. host: democrats line, hi. hello. my question is not exactly what you were just talking about, but i'm the only person i know who said all for the tax information .

side of the 1040, it has categories with the different amounts that you deduct. it gives you a category for 1954e born before january but it does not tell you what the amount is to deduct. it sends you to the information book on page 34, there a big blank space where they have taken out evidently omitted the onlineph and i had to go to find out it is 13,600. the people who print the tax forms and the instruction book to correct that mistake. i am a widow, i've been married and i hate that

i have to pay more and more taxes when the president doesn't pay taxes. host: thank you. specificallyt know on your situation of what deduction you should or shouldn't take but this has been an issue with the irs in the past year and a half, they had to redo all of the forms the agency puts out in the past tax season the irs realized there were some problems with the instructions, they weren't clear. they are in the process of redesigning several of these, so next april when you are filing, make sure you are getting the most recent one, the instructions have likely been updated. it's a consomme involving -- it is a constantly evolving process. host: another viewer says quit blaming tax cuts for the --

it's the spending cuts. guest: paul ryan, who quit after realizing he wasn't going to be able to make the cuts to medicare and medicaid, it's difficult to do politically speaking. people of medicare and social and those are basically ballooning costs, but how do you do that, something the readily every voter will be brought down on. that's when you see people saying i don't like the debt, but at the same time they are unwilling to make cuts to the sacred cow programs. host: the tax cuts thanked on 3% growth in gdp. is that happening, what happens if it doesn't happen? guest: we've seen several strong quarters into the tax cuts but it's unlikely, some of these estimate look at 3% to 5% which is incredible. that would be off the charts.

so what is likely is these tax cuts will not pay for themselves. more in theg growth 2%, two point 25% range. we are already seeing signs of slowing. if that becomes a reality that could add -- these cuts could add more to the deficit. host: our republican line we will hear from daniel in jackson heights. i'd like to get to a fundamental issue about what taxes are for. give 12 years we of public education to children and we assume those 12 years are necessary for them to be functional in our society however it turns out we feel that one today needs a college education so we have a student loan program that is a windfall for banks and most people go into college.

after that we have schools were you acquire your professional skills. does not existea in the rest of the world because once you finish or 12 years of public education, you go onto your professional education and so the question for me is if we are paying all of these taxes, what is it that we are paying for? we are paying for somebody else to manipulate for profit. are we paying them to do something functional for people putting or are we just them in for a rainy day? it has become very confusing situation. why do we have health care for elderly and we don't have health care for overpopulation. host: thank you. guest: the caller brings up something that is kind of two hot button issues. cost of college education, the explosion of college debt or

tuition as well as having to move to some sort of medicare for all system. what we are seeing here is really that debate among democrats of should college be free, you have some who say this is not feasible, we can't do that and then you have others, who are making this essentially part of their campaign and really the question is how does this get paid for, what sort of taxes do you need to offset this and that is really kind of a dividing line and that's what we are seeing play out between the different candidates and that will be an interesting thing to see where the party lands. host: someone on twitter with another irs question saying what happened to the idea of completing a tax return on the size of the postcard? guest: that is something the republicans promised going in, they sort of achieved it. they had it on a half sheet of paper but there were all these different attachments if you had

any sort of minorly complicated thing, you had to fill out all these additional forms. the irs said we are just going to make it back to more of a two-page form like in the past. .nd have everything most people are filing online anyway but they headed in one place. the postcard is no more. host: charles is next, independent line. caller: just a comment first off curve didn't-side work in 1947, it didn't work with reagan, he raised taxes more than any more non-war president never prayed use the effective rate to raise taxes and now we are seeing this play out again and look where we are. main building.ng another thing i want you to comment on is we have a debt and

deficit, we understand the deficit, in majority of that is for medicare and medicaid and things like this, but on the other hand we have to raise money to pay the debt, now with most of americans only having $400 in their bank account, where you going to get that money? this is why i agree with elizabeth warren, let's take five cents of every dollar and also, china is going to graduate more people this year with masters degree than our whole country is going to graduate people with degrees. we need free college, we need to be able to compete. guest: this is really kind of where things are headed in terms of what are all of the things we could do as a country and what are our priorities. when you look at something like medicare for all, the cost of that over a decade is about $30 trillion which is a massive

some, it could be done, it would likely need tax increases for everyone, not just the wealthy. but that's an amount of money that could be raised when they talk about this saying yes your taxes would go up but when you take out the cost for premiums and out-of-pocket costs and all of that that you would come out better ahead, when you run the numbers a kind of depends on who you are and what kind you have and what you are paying. but that is a cost that could be if you look at the numbers, you could come up with that. looking at free college tuition or childcare or things that have a smaller price tag. versus $30 trillion. if you're looking towards a larger social safety net, those would be the entrees into that. somethingook at kamala harris or joe biden have talked about as a public option.

those are also less expensive proposals that you could try and forces, thaty the would be a way to transition at which is ansive cost little bit of a way to test out some ideas going forward. host: joey from -- were public in line, hello. caller: good morning. the so-called lie of tax cuts for the rich is baloney. i make six to $5,000 a year on retirement and now i'm getting $44 a month more take-home which was my money to begin with. i'm happy with the tax cut and as far as income inequality, i've got a 29-year-old girl living ups there's who won't go to work. there will be income inequality if you don't get off your but and go to work and listen, you don't need a college education.

i was a union ironworker for 41 years, made a lot of money had no college debt because i didn't want to go to college. so many people don't belong in college, they are not mentally able to pass the courses. so go into working. he sees he is getting 42 extra dollars every month which is about in line for a middle people,but for a lot of personally i don't check my pace of every couple of weeks and see that, but to that point about did get a tax cut. host: stephanie in pennsylvania, independent line. caller: thank you. theuestion is is it true tax rate on overseas earned

profits is 10.5%? but.: yes, the way the tax law works says if you operate in the u.s., your tax rate is 21%. if you make some thing in the u.s. and sell it overseas, you basically get a deduction so it lowers it to between 12% and 13%. overseasif you operate and have facebook has a lot of algorithms and ip's in ireland. in that case you have to pay if you are in a zero tax country of the pay 10.5% to the u.s. government. if you're in a country that has a low tax but not zero, you have to pay tax to that country as well as a certain amount to the united states to get you to that 12% or 13% range. this is what has been criticized heavily, people saying look, companies are able to find games and loopholes to pay less when

they are operating outside the u.s.. host: did you have a follow-up? caller: yes i do. first i think that is ridiculous , but my follow-up is the small businesses who hire the most people in this country should get the lowest tax rate and i think their tax rate should be capped at 10.5% and for the other companies, i think the tax rates should depend on how many -- on the percentage of the u.s. citizens that they hire as compared with the total companies and make sure you adjust for them hiding people as independent contractors. the caller- guest: brought up the pointer small business is getting lower tax rates and this is one of those things that's kind of a no-brainer. we should tax them lower than larger businesses but it's

really hard to do technically because most small businesses aren't corporations, i pay my taxes to government, the way a lot of small businesses are structured, say you have three owners, they each divide the profits among themselves and pay those on their personal return. so they are basically paying small business taxes through the individual side of the code and so the tax rate is whatever their personal income tax rate is. so the tax law gave them some of the tax cut. depends on what tax rate you are paying is a small business owner. so that could be as high as 37% or as low as 10%. as percent deduction. this proved for congress to be the hardest thing for them to accomplish because it was difficult. people owning truly small businesses and summer hedge fund equity private equity managers making millions of dollars a year, so how do you make those

groups. host: she is a tax reporter. let's go to mike in dallas, north carolina. caller: i've got two comments. my first one is on social security. social security would have been great if the government would cap their hands out of it. my second thing is is there anything stopping warren buffett and all these millionaires are saying we need to get the tax rate, is there anything stopping them from voluntarily paying off taxes towards paying say the federal debt? guest: so no there is not and that goes for anyone. if you feel so inclined you can send the treasury a check and they will accept it. where the conversation is coming from, the patron millionaire group saying tax us more is maybe you have a handful of

people that say i want to put this down payment on the debt or pay for info structure project, but in terms of long-term sustainable growth in terms of where is the tax money going to come from they are saying we have to make it a law, we can't just volunteer or some sort of charitable thing needs to be set in stone. host: what does the irs defined as wealthy and how many of those types of people exist in the united states? guest: they don't put a definition well -- wealthy or small business. someone in new york, someone earning $200,000 is kind of middle income. but for that you are one of the higher income earners. that is really difficult thing, but where the top tax rate kicks in his $500,000 a year. as we are paying that 37%. you look at taxpayers. i don't know how many tax returns are filed at that level,

but if you look at is very much an expert into line and there are very few people earning $1 million or more. able to go down. sometimes and you go through the data they have to redact things because there are so many people at the top levels to figure out that persons tax information because there's only a handful of people who file returns. host: line for democrats, hello. is the taxquestion cut did not work for all people, what you have is you give corporations so much money they modernize their industry and then they eliminate jobs so it is not creating jobs. if they do create some, it's and it isnizing temporary jobs.

so what is going on is we have big businesses who do not want to contribute to their own hard forwhich makes it everyone else in the deficit goes up. it's like we sold our country to rich people and everybody else does not matter anymore. guest: this has been this one of these issues and the criticisms. as a corporation you can fully write off if you buy a more efficient machinery for your factory floor, maybe you needed five or six workers and i you need one, they are able to get a full deduction on that in the first year. in years past he might've had to write that off over seven or 10 years. some people are saying we are incentivizing people and on the flipside we haven't seen businesses take advantage of that. companies are skittish about spending money.

they are worried about a trade war, potential economic slowdown. there's this counter wind saying maybe i will hold off. for the short term maybe those workers keep their job but in the long term we are seeing companies are able to do a lot more with fewer workers particularly in the manufacturing sector. it's not so much jobs being outsourced, that is one thing happening go to mexico or china, but also companies just don't need as many workers as they did 20 or 40 years ago. host: republican line. caller: good morning. i wanted to make it basic point that without campaign-finance reform, getting money completely , we talk about and everything else, as long as these politicians are going in with an average of $200,000 and coming out with 6 million.

nothing is going to change. it needs to go back to the way it was previously where it just off sales tax and such. people know the history about progressives, you can look this up, a pbs documentary called prohibition. the progressives and the ku klux klan which were married the hip wanted redistribution of wealth and the federal government said wait a minute, 89% of our revenue comes from the production of sales distribution and purchasing of alcohol, what will we do? they said income tax. but let's take all the money from the middle class. my point is it needs to be with sales tax. if you are a poor person paying sales tax at the register, at the end of the year they make a system where if you make a certain amount, you get it back in rebate. will person who is rich pay a lot more taxes in sales

taxes because they are buying more. they're making transactions on wall street. the people that are rich don't pay income tax, why are we talking about it? they have a capital gains tax. host: thank you very much. guest: the caller brings up something that we are seeing a lot in european countries. moving away from corporate income taxes and individual income tax into a value added tax. this is a tax on every step of production. you have the widget and to add another widget, that's a tax. and he goes to the end seller. republicans proposed a version of this, there was a lot of opposition in their own party. democrats have been looking at this for a long time as a way to tax consumption versus income. which is more of an efficient way to raise revenue. republicans in general are largely opposed to this to really expand government looking

at shrinking the size of government, that's not something -- we see in europe especially corporate income tax rate on this value tax. in terms of a straight sales tax, democrats don't like that because it hits your lower income consumers. could funnel that into programs for lower income people. host: , live every day with news and policy issues that impact you. weing up tuesday morning, will discuss campaign 2020 and u.s. immigration policy. posting with a washington reporter, executive director

benjamin johnson and jessica vann of the center for immigration studies. watch c-span's washington journal live at 7:00 eastern tuesday morning. join the discussion. >> the u.s. senate comes back into session on monday, september 9, with two important issues on their agenda. avoiding the government shutdown, an anti-gun violence legislation. but before senator's return to washington, get a behind-the-scenes look with c-span's history program this sunday. here's a preview. >> the first government under inch we lived was created mutual concession. >> thomas jefferson question the need for a senate. >> lets follow the constitution. specs that establish the senate to protect people from their rulers and as a check on the house. >> the fate of this country and

maybe even the world is here in congress and the united states senate. >> the senate, conference and compromise. see spans video archives and unique access to the senate chamber. we look at the history, traditions, and roles of the u.s. senate. sunday at 9:00 p.m. eastern and pacific, on c-span. >> in the wake of the recent shootings in el paso texas and dayton ohio, the house judiciary committee will return early from the summer recess to markup three gun violence prevention bills which include banning high-capacity ammunition magazines, restricting firearms from those deemed by a court to be a risk.