already. it is it a 35-45 percent rate on difdens. >> thank you for watching forbes on fox. number one business block continues. voting for higher taxes. voters i california chooses to increase their own taxes over the threats from the governor to shorten the school year. we should make it shorter to save taxpayers money everywhere. i am cheryl casone. we have tracey and john and wapeand julian. and tracey. john, you say shorten the school year before raising taxes. what is the problem? >> you know me. i am all about the kids. i am all about the tpayers,

too. we know that public schools have been a failure and short of privatizing them, best thing to do cut them 25 percent. that would be a good start. not only help the kids but improve their education and help the taxpayers who wouldn't be forced to continue to participate in a failing system. >> tracey is all about the kids. yawn thon -- johnathon. >> watch out big bird. i can't believe we are talking about imposing on our children the gross mistakes the adults have made. the education system is not a total failure. there are definitely issues with it but the choice of putting a kid in the classroom or letting them in the street and getting arrested. and that is it a no brainer. raise my taxes 50 percent if you like tompt >> tracey, you

are making an eal - emotional argument. >> i don't think that is true. >> wayne rogers, in california whether it was emotional or money, they voted for a higher sales tax and income taxes and big surprise for many. >> it is the emotional argument that persuaded them to vote for that. but johnathon makes a good point. alternative to not being in school doesn't mean you are a stre criminal. there is a lot of waste in the school system. let me finish. there are subjects that are taught that should not be taught. you know, weaving 301 doesn need to be taught in school. you can learn a lot ofhings. if you stick to the basics,

reading, writing and areth metic. that is fine. there is a ton of things you can cutefore raising taxes. >> julian, what about having kids go back to school the day after thank thank or have a shorter holiday and jewishish-christmas holiday. what about that? >> there is it all kinds of things to do like that and i agree with the point that our secondary education system needs all kinds of reform. in california they had cuts looking at 10 billion in cuts. polls will say that people generally oppose tax increases, but california showed, when you talk about modest and in particular tax increases that are enforced. 3 percent increase for people over $250,000. it is supported if it goes to productive likelet public school system.

>> the public scooms are productive is that what i heard? they are productive? >> if you allow me to finish the point. >> math, science. >> if i can finish the point, john and maybe people would understand if you wouldn't interrupt. the poll ons showublic is willing to accept tax increases for public edution because it is important. given the size of the population that goes to public school. you cut them in californi you will see teacher lay offs and bigger classrooms. >> that is what governor brown, those were his threats. but remember the tax increases are for only for californians making $250,000 and more for million and there is an issue of class warfare as well. >> this is about class warfare. people when they have the

choice choose education over raising taxes if they have to. i think it was an threat by governor brown to get his way. to tracey's emotional argument. i work with inner city kids. we haven't failed completely. but in the inner we are using minority kid toz drop outs. i started my own programn ber mud a. the time you lose them. it is it time what they get outf school and latch key moms get home and during summer. by shorterning that we'll stick more people out. >> tracey, let me take this to you. other states, i mean it could happen in new jersey or new york or arizona, should we this idea be expanded and do

it nation wide? >> two sepate store stores, i understand yawn thon's point to fix the crick lim. >> that is not my point. >> it is your point. johnathon did you go to public school? did you go to public school. did you go? >> i went to public school. it makes no difference. >> you are successful and you are an example of the american public school s system, johnathon. you can't say it is it a mess. some of it is darn good. >> you and john present a false choice. raise taxes or all kids are savages. >> that is not a false choice. wait a minute. you interrupted everybody. you irptrupted every person on the show like a one man band here. i work wit these kids every single day and i understand what i am talk being. the time you lose them when

they -- kid no, sir bermuda. >> shortening the school year you add poverty and incarceration and gangs. >> i think we are overlooking. >> wayne, i know johnathon wouldn't dare interrupt you at this point. what about other. what about other ways that it could have happened in california. they could have raised property taxes and 7 and half property tax it is higher here in new york. other things could have done it was a governor brown bailout. >> people will give money because it is children and school. but there are other alternatives and you can't say every kid who doesn't go to school. what about the parents? where are they? are they going to let the kids as soon as they get out of school. >> that is unfair. >> let wayne finh.

>> the point that everybody is missing here. >> i haven't finished. >> wayne, go ahead. listen to wayne. >> i justant to say you can't say the parents are not ultimate lite responsible and subschool for parentage parents have to take the responsibility andet kid's behavior. you can't ask the school to be a disciplinarian and police force. the schools are there to teach and that's what they do. >> julian last word. >> a mother working two jobs doesn't have an option. and the schools -- a parent not able to do that and shortening the school year is not aood job. >> now, last word to julian. teacher says. >> the point that everyone is missing, the reason state budgets are strapped is that the economies are sluggish.

it is four percent growth we don't have the problem. the issue that is it facing us in the past election is weather we are willing to pay for the government we need. we are cutting 20 billion from the california schools and that result necessary bigger classrooms and fewer teachers. the only small part of the short fall is it 10 billion or six-10 blion made up through the taxings. are we willing to pay for the government that we need? in this case the school system. >> we have to run. ualian over spending was a big piece of the problem in california. you have threeankrupt. take a break. and lending a hand to victims of ser storm sandy.

>> helping families pick up the pieces from sandy. fema is accused of dropping the ball. private workers and supplies are flooding in to help our fellow americans devastated by the super storm and it could help rebuild the entire economy . how so? >> i think there are examples of this in the past. the size of the storm predicts

how quickly you can recover . hugo that hit south carolina some years ago, the recovery that came back was stronger than the economy there before . replacement of older things and new investment made in the area to bring the area back. that encouraged the economy. economic affects were more positive than negative when it happened. that happened and apparent lie happening now. enough services to recreate long island and new jersey and it is going to take time to do this, of course and median affect is bad but ultimate affect is good. >> tracey we talked about the home builders and there is going to be so much new home construction because of the storm. we knock them down and rebuild it and call it a thriving economy. in the end of the dayt is

zero. look at all of the loss. the patriotism we can't put a price on that. we come together. i for one. i am going to forego my vacation because i need a new roof. you will see industries hurting . home builders will do well. but what about the other stuff that is displacing? >> julian what do you make of that. because of the torm and the population in the country consumer spending will get a hit. >> i think tracey is right and i disagree with wayne with all due respect. rebuilding never makes up with the economic loss . we are looking at 50 billion worth of loss says here and only eight billion that is insured . and while you get some

economic stimulus. but shops that are closed for many, many weeks if not months and the economic dislocation that occurs is outmatched by the rebuilding efforts. >> excuse me, let me ask that . that is it a generality. if you look at kathryn -- catrina it is true and hugo not. >> will the neighborhoods come back stronger? >> no, i don't think what they will. i think what julian and tracey are saying is right. it is it a loss. you have a short-term boost. but 8,000 outof the state workers and that will benefit short term. but a storm like net is actually a loss for >> wayne, i kind of support what you said here. i found heartening that the corporations were giving.

jp morgan and walt disney and they gave a million and cash on the sidines put to work. it is not a theory, but a fact. it has been a boost in the economy and other disasters it hasn't been. >> can i break n. >> john than, please. let somebody else talk fumpt want to make a point. make it on your time. if you study the disasters they have different consequences. >> johnathon? >> it is the broken window fallacy that julian alludes tompt destroys wealth and replaces it and yes, tractor and plywood. but it is the new wealth that is not yet seen is lost in

terrible tragedy. economic cost is a terrible tragedy and i am betog the east coast and i think it may take couple of months and years. >> we are tough around here. >> coming up. 401 k balances hitting record highs. if congress goes off of the cliff, you will need to know how to protect your hard earned money from doing the same. find out how, next. and more in

a moment. stay with us. . >> fears of the fiscal cliff smacking stocks this week and comes as we fiped out the average balance of a 401 account is record high. what should people do to protect themselves from this? >> doing what i am doing lately. i am putting it percentage wise in cash. more americans are saving because they arecared of what is going toappen. bad for the short-term economy. captital gains and dividends tax is raised it will be bad for the stock market. >> investors will be discouraged from paying in to the stocks especially those

with the dividends. >> as stupid as congress is. they have to do something about it and reach across the aisle and eventually find a solution for this. john makes a point about this in the sense that there is it of course in a 401 k your cash does grow without taxes and sooner or later it is taxes. >> the point you are making is good. you will have to look for something else and the stock market will suffer. it is uncertainty. >> and going back to the value of these tocks. they are going down. >> that's the concern . we need to be clear that dividendses . it is it a dividends tax. and when they figure it out and they will. let's be clear. we are jumpinglet gun here. they are. they got to compromise and i

have to be marsha brady on this and believe in a compromise. go revisit and reallocate it. >> johnathon. >> viewers are in a tough bind. they are finding a government thinking day-to-day and week to week lucky. will taxes hurt wealth creation across the board? i think it will result in inflation and investors need to start getting out of the bonds. >> and julian what do you say to people that are discouraged? >> write their congressman. the fiscal cliff, i don't think it will be one. it is unpopular for both sides of the aisle. and unlikelet budget enforcement act. to you don't have strong enforcement. it is it easy for congress to

get pas this. the fiscal cliff was a republican idea because the republicans want tod etend the debt ceiling and this was the way to do it and everybody is it saying it is it a bad idea to do that when the economy is over the gdp. that is the argument president obama was making. >> julian, thank you for coming. >> thanks for having me. >> the votes no one is talking about. all taxpayers should be

>> time for what do i need to know for next week? >> we have two wins ts week. jersey voters that pay more for their benefits and collective bargaining is not a constitutional right. >> i like that. john? >> i love to read. being to the south mainly small word lots of pictures. a great college division, and i love the store and stock. >> i like that. wayne? >> for john particularly if he's caught up on little things he should be looking at technology. look at xlk. it is an etf. >> johnathon. a lot of naystayers say dollar days is over. it is at a 20