>> of just keep the bottle of whiskey with driving. that's a joke. that's a joke, everyone. melissa: that's all the "money" we have to you today. we will see you back here tomorrow. here comes "the willis report." ♪ gerri: hello, everybody. i'm gerri willis. tonight on "the willis report", shareholders robbed and jobs destroyed. a company is bankrupt. why is this ceo of american airlines getting it $20 million paycheck? also, getting the best price at drugstores. the results of a new investigation that all consumers must see. i would say it is a real housing recovery. others say am crazy. a face-off tonight. ♪

gerri: tonight, our top story, an airline ceo defense added $20 million golden parachute flops. defending a merger, but next american airlines chief tom horton severance package calling it his only hangup. that does not mean it is off the table just yet. the attorney is here to weigh in. i have to tell you, as a shareholder i am happy to pay for performance. i am not happy to pay a guy who puts the company into bankruptcy court. is there a law against this and why we reform backers a lot? >> yes. in fact, back in 2005 it was present when she said, you know something, this is not right. company does into bankruptcy. you wanted to come out and be better and stronger. we know that people are going to get hurt, people who put money in. says these executives have negotiated these it ridiculous golden parachutes, they will not make out ahead of the employees and the other creditors, so we're going to put caps.

gerri: the trick is that these guys are saying he should get this golden parachute, this big amount of money, this time of change because it is really the new company, the merged company of american airlines and usair with that is going to pay it out. this seems to me like a big hole that they should not be allowed to use. >> lipstick on a peg, walk like a duck, some like a duck. the bottom line is if you look at noon call its really old coke. that $20 million would be much better serve going to what we pay for baggage fees. next thing you know you'll have coin operated laboratories and pay-per-view if you want to know flight safety instructions. much better served taking care of the people got hurt in making the company back going power, not to get a guy to go away. gerri: at to tell you, donna about those people who were buying these airline tickets. i'm buying the tickets to mind paying the increased fees every year. what about those airline pilots who have been struggling for years.

instead of having a pension now they have a retirement. they are seeing, this has to create a lot of dissension within the company. >> i would respectfully submit that it is as important as the desert. american airlines or amr is going to say that mr. horton, we needed in there. protests making this deal. i would say that the people who make sure that the plane is going to take off and land and the people who are flying in the plane by slightly more important to me. gerri: the u.s. trustee city does not like this. will the prevail? >> it is a very, very difficult call. we will tell you, analysts have said it is excellent creative lori team of lawyers. wait a minute. his money is contingent upon the new deal and the new company is paying it, therefore the bankruptcy court does not apply. it's a good argued that has legs and it is creative. gerri: no disrespect, but it is creative lawyering that is

running this country. >> anybody can tell you what is wrong. what you pay for is what you do about it. gerri: into for coming on. great conversation. appreciate. unbelievable. welcome mat fox business alert. another cash strapped company. according to our present with the "wall street journal," fiscal automotive is exploring bankruptcy in continues to look for a partner. the political connected car company was also backed by former vice president al gore. less than a month the automaker will start repaying some of the $5,209,000,000 federal loan from this autumn the screen pet. who will continue to follow the story. first, we all know it pays to shop around, but did you know the same is true when you are buying prescription drugs? a new investigation by consumer reports found prices for drugs vary widely. it all depends on where you go. for instance, take a look get this. typical monthly refill of the

generic version of the tour, the cholesterol drug will gusty $17 at costco and $68 a walmart. at a national drugstore chain it will set you back $134. take a look at cbs. according to consumer reports you will be charts hundred $50. a total difference of $1,303 which is between the highest and lowest price for a texas same medicine. if you don't comparison shop you could be paying a lot more even for generics. while prices vary so much? >> in every store the pharmacy operates a different kind of business. the pharmacy sometimes generates a lot of money which is where the cash cows are. other times the pharmacy is really just meant to draw people in and get them to buy the stuff. you can see that in the case of costco. it's there to try to just pull

people and even though the pharmacist bill does well revenue and profit wise, they're trying to get you. gerri: sale price it differently. let's give folks an example. had tried called actos. costco 101, walmart 160, right aide. gerri: gerri:. seems to me that most of us have no idea that these price differences exist. >> we did not either. >> asking all these different things. gerri: had the use of this problem? >> that is our number one step. after all of this happened we came out and said not only are people not getting the lowest price, but when we call we asked all the different prices and can see that there were not even giving us the best possible discount. we had to combat asking for the discounted some cases. gerri: people are now used to haggling.

>> it sounds so 19th century. in some cases being able to haggle might get the price down so low it is actually cheaper in your copay. gerri: cheaper than the copay. are you kidding me? >> the perfect example is generics ago. $7 it cost coke. most people it's about $10. $3 does not sound like a lot on the surface, but over the course of a year or even longer the savings that of. gerri: a lot of people take to lead the tour for their entire lives. so you have to bring this cost down. >> of the stores that we looked at have some kind of discount generic drug program. a $4 a month toward $10 or -- we don't know why, but don't always offer them. even though they're there and they cover just a tremendous number of generic drugs. gerri: you may not see this line, but you should ask for it. >> the pharmacist may not even asked.

any other discount programs? gerri: the other thing that i saw your story, 30 day window. they often offer the best deal on the 30 day prescription. >> actually, 90. you really want to go for three months. prescription treatments the time you're going to say paying to mexico pays. always be sure to ask, if i fill is for three months and they get -- gerri: any other advice? >> be sure to ask your doctor to prescribe something less expensive. gerri: there are lots of options >> there really are. gerri: not only one drug or ride? thank you for coming on. a great story. people should check out. it a lot more still to come this hour. we are just getting started coming city we always knew was next to impossible to fire government workers. now there are the numbers to prove it. the imf wants you to pay more as -- at the pump. next, what they're trying to do with the new gas tax and how much it could cost you.

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♪ gerri: the international monetary fund is calling on governments around the world, including the u.s., to impose higher taxes on gas and fossil fuels. here at home it will cost you a dollar 40 per gallon or more than a thousand dollars per year. fox business peter barnes joins me with the latest. what is going on? >> well, hey. that's right. the imf is suggesting a dollar 40 per gallon in higher gasoline taxes would help reduce carbon emissions and reduce other taxes like the budget deficit and even traffic congestion and accidents . it mentioned the tax increase idea and a new global study and energy subsidies and fighting climate change. this would triple gas taxes in the u.s. and send the price of gas to the north of $5 a gallon.

the time has come for subsidy reform and carbon taxation. another official says the tax numbers for the u.s. and other nations are just for their permission and will advise any country that wants to give it -- move ahead. >> energy taxation, in moscow, not high enough to pay for things like the pollution the cost of traffic congestion. but specific countries. >> the idea is in part here for now. in a statement the republican chairman of the house energy and commerce committee says good grief. higher gas prices at those who can least afford it. least afford the most and higher gas taxes will be disastrous for the economy, also congress is

now unable to agree on higher gas taxes since 1993. the last time it raised the federal gas tax and the obama administration has said it does not support specific carbon taxes. some consumers were split. >> already expensive enough, and i'm not sure what business it is of the imf to see what their taxes ought to be. >> i think we need to tax gasoline more. we know that the gas tax has not been keeping up with inflation. >> imf says to avoid sharp increases in gas prices that might hurt the economy tax increases could be phased in. gerri: crazy. you are these people who want higher taxes. and never met people like that before. i assume there is some reason that the wisdom is coming in with this report now. what is it? >> says it has been marching in this report for some time. it is dropping it in the middle of these big battles over

deficit reduction here in the u.s. and in the fiscal battles in other countries. it is timely if countries want to look at raising gas taxes to help with deficit reduction. that is one reason for the timing. of course, global leaders are still wrestling and struggling with how to address climate change. gerri: crazy. thank you for coming on. always great to see you. thank you so much. >> thanks. gerri: now we want to know what you think. what is crazier? not levying carbon tax or al gore who supports a carbon tax? easy question. log on to gerriwillis.com. on the right inside of the screen and alice said results of the end of the show. later in the show, i'll break down yet another housing program unveiled by this a ministration and the government red tape that is strangling this country also making impossible to fire people , even if there is good reason. details coming up. ♪

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[ male announcer ] help brazil reduce its overall reliance on foreign imports with the launch of the country's largest petrochemical operation. ♪ when emerson takes up the challenge, "it's never been done before" simply bemes consider it solved. emerson. ♪ gerri: red tape allows ineffective federal workers to keep seeing green and not the door. why it's so hard to fire government workers and 60 seconds. ♪

♪ >> from our fox business studios in new york, here again is gerri willis. gerri: well, if you want more proof of the government's inability the cut spending, take a look at the red tape surrounding federal workers making it nearly impossible to

fire anybody at all. with more on this, president of citizens against government waste. welcome back to the show. great to have you here. i read these numbers that simply blew me away. apparently the federal government in fiscal year 2011 fired only one-half of 1% of its workers which is truly surprising when you consider that the private sector fired five times that number. what's going on here? >> very unfortunately federal employees are more likely to die of natural causes than to get fired or laid off. that is so absurd that number is . the federal trade commission and communication commission to mind three dozen employees between the agencies. did not fire a single person. small businesses administration, at six people laid off, 17 passed away out of the 4,000 employees in the year. it is just a very difficult thing. gerri: surely some of these people are not performing.

if the private sector is any case study at all, why can't these people be alerted? >> part of it is the process. supervisors have said it is difficult to get through it. it takes almost a year. there are appeals, still the from the employees. the rules are very much on the side of the employees. the merit system, mayoress systems protection board was created to help protect employees, as the because of political retribution that could have come from the head of the agency. that is really long gone. what it has turned into is an extremely difficult process, even if someone is performed poorly. most times they just end up not firing and sticking them in a room somewhere in not giving them any responsibility. gerri: it's like a lifetime employment guarantees if you work for the federal government, as you said. one example comes to mind. remember the gst worker, the fellow who did the conference in vegas. he retired with full benefits. he is not working, but he is retired. he has all the benefits.

>> said he was not fired either. he was -- this was a better deal for him to simply retire and collect the benefits. he should have been fired. gerri: the federal government and another story and now you'll want to talk about is holding on to 55,707,000 properties, buildings, space in buildings that are vacant that we are not even using. why are they doing this? what is the point of that? >> well, when you say the range of 55 to 77,000, that is, of course, one of the problems. they don't even know what they own and even when they know they make claims about the facilities being in good shape, the government accountability of this study 26 buildings, a sample of just all the buildings and found 23 were completely mislabeled. rat infested, in good condition, and there again, the process is so convoluted to unload the federal property that it takes sometimes ten years and it -- as

it did with the steam plant. keeping it in the federal listing. gerri: how much we paying to maintain these properties? >> almost 2 billion per year. all of the properties. it begins save a billion over two years can and unfortunately the red tape keeps it from happening. gerri: thanks for coming in. appreciate your time. the debate next.

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♪ gerri: many economists are pointing to a housing recovery, something we will debate in just a moment, uncle sam, the government seems to think the market still needs help. another government program is being rolled out to lower monthly mortgage payments for those payments. here's what makes this program different from so many others the government has already rolled out. those with mortgages backed by fannie and freddie will no longer have to provide documents proving financial hardship. proving financial hardships. under this streamlined program borrowers would get their payments reduced the loan and forgiving principal. it's not free money.

some will have to go through a trial period where they make at least three payments. now, all of this stems from the obama administration pressuring fannie and freddie and the federal housing agency to do more to help homeowners. >> right now there's a bill in this congress that would give every responsible homeowner in america the chance to save $3,000 a year by refinancing at today's rates. democrats and republicans have supported it before, so what are we waiting for? take a vote and send me that bill. right now overlapping regulations keep responsible young families from buying their first home. what's holding us back? let's streamline the process, help our economy grow. gerri: now, ed dimarco did not like that plan, so he put out a new one. forgiving these delinquent loans would forgive too many payers.

they will absorb the losses, and their money is really our money. the two companies owe taxpayers more than $135 billion from the bailout, don't forget that. these programs are just more incentives for homeowners not to pay what they owe. this administration keeps helping those that are not helping themselves, and this is not making the economy better, it's just making more people dependent on the government. and once you get a handout, the only thing it accomplishes is the desire for more handouts. all right, this comes at a time when home prices are up 8% in january year over year, and that is good news, my friends. prices are up as much as 23% in phoenix, 18% in san francisco, vegas, detroit seeing big jumps. joining me now, the ceo and founder of real wealth network and robert shiller, a yale economist and co-creator of the case shiller home price index which is followed by many. robert, i will start with you.

is this a real recovery? >> well, i think home prices are likely to go up this year, maybe into next. but i still worry about price declines. i don't see -- you know, this is a government-supported recovery, and the government may not be there, may not continue this years into the future. so i think there's still something to worry about. gerri: kathy, is there still something to worry about? >> it depends on where you live. we've spent too much time talking about a housing market. there's no such thing. there's a lot of little markets, little neighborhoods, and the last time i checked people still like living indoors. our population is growing by 1.5% every year, that's four million people. if you count a household as two and a half people, that's about two million homes that need to be created every year.

there's demand for housing. i don'ti don't see prices goingn for a while. gerri: all right. you guys disagree. of robert, back to you. you know, recent numbers from your index, s&p case shiller reporting tuesday prices in january were up 8.1% from a year ago, and there was a big gain in december as well. so is this a head fake? what's going on here? you say the market may not be in true recovery, that it's just a government-supported bubble. but the numbers seem very positive. why? >> well, the numbers are positive. i guess -- i don't know. you know, nobody knows exactly why. i can see the government support. it's, you know, fannie and freddie and fha, and then the federal reserve, they're all trying really hard to get it up. that also creates a positive psychology. we did that before with the home buyer tax credit, remember in 2009? and that caused prices in san francisco went up over 20%. but when they withdrew it, they

came back down. i think as an investor you always have to accept uncertainty. i'm not saying i'm sure that they'll go down. i think they may continue to go up for years. but it's risky, and nobody knows. gerri: well, you know, there's another critic, criticism of the market out there. it's not just government support, it's also this idea that the people investing right now are investors, and maybe they'll buy enough real estate, and they'll stop buying. we're still waiting really for those first-time home buyers to get in the marketplace, kathy. what's going on with that? why aren't we seeing any people who actually plan to live in properties or fewer of them than usual coming out into this marketplace? >> oh, it's so frustrating. it's because large hedge funds have come in, they've realized that housing is a great deal right now, that cap rates are good, and what that means as cap rates is it's actually more expensive to rent than to own. and so if you're buying as an investment, you make the difference, you make money every month. hedge funds are in. they have cash. they have billions of dollars.

they're buying everything up. my message out there is if you're a seller, sell to main street, sell to a family, not to a hedge fund. families are getting beat out. gerri: families are getting beat out, but, you know, robert, the way i look at it is this: we still have mortgage rates at lows so attractive, you know, our parents would have said, you know, you can't buy a house with a mortgage for 3.67%. yes, you can as of this week. what's more, prices are still low relative to the highs we saw in the marketplace only a few years ago. so it seems to me like a perfect storm of pricing that eventually will attract people. is housing a good investment, mr. shiller? >> i think that it depends on your circumstance. if you can take out a 30-year mortgage now, and if you think you're going to stay there for 30 years, i think it is attractive. even if home prices go down. you might, you know, be saving two percentage points on your mortgage every year for 30 years. that is up to a lot.

and so, you know, i'm saying that they might go down a few percent. the mortgage rate trumps that. gerri: all right, kathy -- >> and so -- gerri: finish your thought, robert. >> yeah, for those people. but if you're thinking of flipping a house, the mortgage rate isn't so important. and i think, by the way, that these people who are buying houses as investments are serving the nation in a sense. it's not evil to buy a house as an investment, and they're converting them to rentals in many cases which is useful because people want that. gerri: but kathy, you know, the idea of housing as an investment, that's something that i have always embraced. and what we've seen in this marketplace in the wake of 2006 is really an anomaly, unusual. the this isn't a normal path for housing prices. do you think you have to wait 30 years to see a return on a house? >> absolutely not. the federal reserve has stated that they're trying to create inflation, and housing goes up with inflation. so we're going to see prices go up because that's what the government wants, and the government gets what it wants.

[laughter] you know, that's the bottom line. and mr. shiller is absolutely right. people can lock in these low interest rates for 30 years. can you lock in your rent for 30 years? i don't think so. so, you know, if you're going to live in it or not live in it, let's say you need to move. you buy a house, you've locked it in at these low interest rates, you could probably rent out that house and get twice what you get in rent for what you pay on the mortgage. that's cash flow. that's good investing. gerri: all right. well, we'll agree to disagree. [laughter] kathy and professor shiller, appreciate your time. >> thank you. gerri: well, we had a scary sight in puget sound today. engineers are assessing the stability of the area after a large landslide knocked a home right off its foundation and threatened others. take a look at these pictures. thankfully, nobody got hurt as an older man was rescued from the damaged home, 33 others were evacuated about 50 miles north of seattle.

the northwest insurance council did issue a statement warning standard homeowner insurance policies specifically to exclude damage caused by earthquakes and landslides, so we'll follow up on that. and when we come back, a shocking story of government handouts in connecticut, and tax time can be particularly confusing for those of you who own your own business. we'll have tips for the self-employed next. ♪

gerri: more good news for you, we havet one, but two new records on wall street. first, the s&p 500 closing at a new all-time high today, beating its 2007 record. the index gained a half a percent or today to help beat its previous high by four

points. meanwhile, the dow continues to break records three weeks after beating its 2007 mark. it rose 52 points today for yet another all-time high. now,,this despite another anemic gdp number. the government today reporting the economy grew less than half a percent last quarterrer. unbelievable. by the way, the markets are closed tomorrow for good friday, so you don't have to worry about that. meanwhile, with tax day almost upon us, we're covering your assets with a few last minute tax tips for the self-employed. maybe you just started a company, you need some advice. dominic, president of diversified financial consultants, with some tips. let's take a look, fuel, at the number of -- first of all, at the number of self-employed americans, 22.1 million people in 2010. and i know a lot of people have started working on their own because of this economy. these numbers are going up, up, up. 14% of the civilian work force. you say you need every piece of data to prove your receipts, prove what you've spent and what's coming in the front

doors. >> we've just come through the great recession. millions of americans got laid off. through necessity or entrepreneurship, they created their own companies. so they're used to having pay, taxes taken out of their paycheck, withholding happening, their money gets paid in automatically, now they're on their own. so you have to act and smell and operate every day like you're a business, and a lot of this has to do with taxes and how you pay the it in. gerri: you've got to track everything, keep every receipt. what do i hold on to? >> you need to track your revenue coming in. if you're operating a bakery or you're a contractor, you're really brilliant at what you do, you may not be brilliant at bookkeeping. you have to keep very accurate records. income coming in, expense going out. and i mean everything. if you went in on tax day, if you took a train, if you spent a dollar to try to generate revenue to go see a client, to do work, to do business -- gerri: bought a pen, a pad of paper, it all goes down. >> you write it down. and don't wait until the end of the year, don't wait until the

irs auditor is sitting in front of you. gerri: you probably should be filing quarterly, right? >> great point. this is a big problem. people are not used to not having their taxes taken out of their paycheck. you've got to set aside, park those dollars aside, make estimated tax payments on a quart he basis -- quarterly basis. gerri: you know, for individuals often the home office is a big fat red flag to auditors. but if you have your own business -- >> it's legitimate. it's a legitimate writeoff. if you operate out of a bedroom, a spare office, the portion tha3 is actually used for work you are allowed to deduct. a portion of the mortgage interest, a portion of the real estate taxes, a portion of the electric bill, the heating bill, you are allowed to deduct it. don't get greedy. there are a lot of legitimate deductions. this is not a place you want to -- gerri: this is where it ets complicated, though, because i've seen some of the metrics. you're taking a portion of what you're paying to heat that house -- >> correct. you actually look at the square

footage of the room. so if it's 100 square feet and your house is 3,000 square feet, you going to deduct that portion -- gerri: and it's fair game. >> you should do it. gerri: i want to talk about retirement planning. you said being self-employed is a great opportunity for retirement planning. >> great opportunity. and we have a number of self-employed individuals who have gone through rough years. all of a sudden 2012 they had a great year. they show up now, oh, my god, what do i do? sep plans, simplified employee pension. you can still do it for 2012. 2013, simple ira, solo 401(k). you can get upwards of $50,000 in a -- gerri: so sock it away. >> sock it away. and a lot of people are thinking, i can't worry about retirement. how about saving 30, 40 cents in taxes of every dollar? really, really focus in on that one. gerri: and let me tell you, i know so many people in this situation who are so focused on paying for their kids' education. why don't you save for yourselves? because your kids are not going

to pay for your retirement. >> we try to give our clients a tax reason to put those monies away. it's really powerful. they actually do it. they save huge piles of money. gerri: dominic, you rock. thanks for coming in tonight. >> thank you. you have a great day. gerri: you've given people a lot of good advice. some 22.1 million if they're watching. [laughter] >> thank you. gerri: and taxes are a major reason why many are migrating to other states with lower tax rates and fewer regulations. in tonight's top five, the freest states. number five, oklahoma getting high points on fiscal olicy thanks to low taxes and debt. however, it gets low marks for government spending. number four, new hampshire. in this state used to be number one but slipped in 2010 after the legislature hiked taxes. it still scores well on personal freedom. and number three, tennessee. the state is actually number two when it comes to fiscal freedom with low tax collections and low government debt and employment. it helps that it's a right-to-work state. and number two, south dakota. they actually ranked number one

on fiscal policy with extremely low levels of taxation and spending. and the number one freest state is, get this? north dakota. look, besides being number one, the state is also the most improved and wins for being both economically and personally free. the least free state in the union, the one i'm sitting in, new york. yes, my friends, not free. can't drink a 16-ounce soda here. forget about it. still to come, my two cents more on waste, fraud and abuse that would make the shrink of a treadmill -- shrimp on a treadmill look like a good investment. and speaking of waste, the biggest casino in the country is asking uncle sam for a handout, and not only are they getting it, they want more. details next. ♪

gerri: up next, indian tribes taking handouts from the government even though they run multibillion dollar casinos.

what's going on? answers in two minutes.

gerri: jer time for this day in business. could you imagine washing all your clothes by hand every week? how would it even be possible to get those tough stains out? well, thanks to nathaniel briggs, it was on this business day back in 1797 the washing machine was patented. early washers were manually operated or by a low-speed single-cylinder gas engine. but by the 1900s, whirlpool started selling electric washing machines. by 1940, 60% of homes had a washing machine featuring a power wringer. today washing machines use 30% less water than older models. there are even smart washers that have mini computers and

sensors making the whole washing process faster and easier, and it all started with nathaniel briggs who patented the washing machine today, march 28th, 216 years ago. we'll be right back with my two cents more and the answer to our question of the day. stay with us. [ male announcer ] how can power conmption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand t connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. twe price. invest with confince. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone

who's lived well into the 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the moneyou need to enjoy all of these years. ♪

gerri: welcome back to "the willis report." we're bringing back dominic from diversified financial consultants to talk about people who are leaving new york state. your clients, your customers. >> yep. gerri: because they don't like the high taxes here. you said it just happened today. >> not so much they don't like the taxes as much as it's an affordability factor for us. we had a client come in today, 62 years old, dom, i'm ready to

collect social security, what's my budget? so we look at their cash flow, their social security, the amount of retirement income they're going to get, and the question becomes can you afford to live in the state of new york? gerri: i've got the tell you, what tax rates and tax levels at over 50%, more and more people in this state and in california and other high-tax states are finding they can't stay -- >> they can't stay. gerri: -- where they raised their family. they've got to live. >> here's a woman who's got adult children, and she has to look at leaving. her real estate taxes awere over $7,000 a year. add in cost of homeowner's insurance, car insurance, state income tax, utility costs that are some of the highest in the country, you have no choice. as a financial adviser, we go you could stay, but are you going to have the quality of life that you want? gerri: no. >> you can't. gerri: people go to florida, north carolina, south carolina, texas is very popular. >> one of the lowest tax states. and yet you wonder, well, how does a new yorker end up in texas? from firsthand experience, well, hay do well.

they're happy. it takes a transition, but not having that cost for all the items we just describe canned, particularly real estate taxes and income taxes, frees up cash flow to give them a better quality of life. it's a hard argument to pass on. gerri: it's a hard argument to pass on, and you're talking about retirees here -- >> retirees particularly. gerri: but i've got to tell you, even if you're not a retiree, even if you're employed, this is something you might want to start thinking about. >> gerri, we have high net worth clients, and at some point -- we're talking about particularly income taxes at this point -- even if i can afford it, even if i can write the check, is that the wisest use of my money? is that the best way -- [laughter] gerri: taxes are never a good use of your money. >> how about california, right? i can move right across the border to nevada, live a really good quality life and save myself a bundle in income taxes. it becomes a wise use of your money, and paying state income tax, sorry, sorry. gerri: and real estate taxes. >> real estate taxes are

horrible. gerri: that money just goes away. it's not like you earn something on it. >> when it comes to seniors, you can justify it when you have kids in the school district, you're raising them. there's an expense, and you should pay your fair share. but now you're a retiree, budget, cash flow is limited. those numbers get really astronomical. gerri: what kind of advice do you give these people after they're retired, they move out of the state, what else are you telling them to do with their money? how are they managing all that wealth they've put together, they've set aside? they're probably really nervous about it, or what are you telling them? >> we have very actively managed, very boring, conservative portfolios. gerri: i like boring. >> we're not here to get anybody rich or poor. in our case it's about imagining wealth. and we tell -- managing wealth. and we tell our clients there are going to be good days and bad days. we don't want to make emotional decisions. ride out these waves, be prudent with the capital making a reasonable return over a long period of time. gerri: and are you tell them to

delay tapping those funds? >> we they've them a reasonable cash flow from your portfolio that you can take on a monthly, quarterly, annual basis. if you exceed that number, you're really going to set yourself up in trouble. maybe not today, but tomorrow you certainly run the possibility of running out of money. gerri: what is the formula that you're telling these people they need to understand for how much they should have saved? >> the general rrle of thumb is you look at your cash flow needs, and that really shouldn't be any more than 4-6% of your total retirement bucket. so if you had $100,000, that's $4,000 a year. $200,000, $8,000 a year. there's a real calculation based on a projected rate of return that you give the client cash flow on a monthly. the problem is when they start exceeding that cash flow, you really run the probability you're going to run out of money. gerri: so you have to be good. >> you have to be fiscally responsible. [laughter] you have to be prudent with your money. we've talked about that for

years. gerri: dominic, you are a lifesaver. the company's diversified financial coosultants. thank you so much. >> you have a great day. gerri: you too. all right, poll results now. former or vice president al gore says it's crazy that we do not have a carbon tax. what do you think? which is crazier, not having the tax or al gore himself? here's what some of you are posting on my facebook page. ray writes this: gore and the rest of the progressives are nuts to think they can change behavior by increasing taxes. and john agrees: al gore, he says, is nuttier than a squirrel. that's one of the best e-mails i've ever seen. all right. we also asked the question on jerry willis.com. 4% said no carbon tax, 96% said al gore. here are some of your e-mails. richard from michigan writes: if paul ryan considers our average social security benefit of $1200 a month an entitlement the government can't afford, what does he consider the average congressional benefit of $3300 a month for which they have contributed little or nothing? grand larceny, pardon me, we can

afford? you don't hear any democrat or republican talking about cutting those payments or increasing their contributions to the plans. and dean from iowa asks: if you were on a plane and it was of being taken over by a couple of terrorists, how many people on that plane who are not terrorists would you want to have a knife? interesting question, dean. and finally tonight, there are legitimate debates in washington other government spending like the national science foundation has awarded a grant for nearly defended. $900,000 to the university of iowa to study snail sex. yes. you heard me. iowa to study snail sex. yeah, you heard me, they're there are reasons that they do it. it is a 4-year study. lasting into 2015. scientists want to know if it would be more beneficial to reproduce a sexually, which sails can do. maybe they have sex for the same reasons people do, they like it. there. mr. resolve then another charging unit 1 penny for that. that