were simpler and lower, america would boom. that is our show. see you next week. ♪a: well, enjoy that miles.ll, enjoy that >> neil: and more tim. >> play that in the after the show show. >> brenda: the clock ticking, two days away and good riddance, 6 million hours and filing taxes each year and the president' budget calling to close loopholes and say here say we need to overhaul the massive tax code to kick our economy into overdrive. i'm tracy byrnes in for brenda buttner. jerry g smith, toe lynn smith, jonas max ferris and witness, john, time to scrap the tax code altogether. will it help jump start this economy?

>> yes, it will help jump start this economy, we have over 72,000 plus pages right now of tax code because we've had decade after decade of politicians giving favors to different people and we cannot simply put more bandaids on it. and what are we going to do, put more on top of those pages? it costs americans 34 billion dollars a year in compliance right now, we're at historic lows as far as revenue to gdp, 15 to 16% and the only way to get there fairly is to completely overhaul this antiquated horribly system. >> i'm with him 110%. how are you going to get through the lobbyists and special interest groups, and marching out to get the political favors done for the constituents? >> look, the points are true except that you can't get from point a to point b. the special interest groups are groups like home owners and people with kids and people money in an ira.

what makes it complicated are the variety of deductions, and that's a complexity and to remove them, especially in the short run, would probably destroy the economy, eventually. >> oh, come on, jonas. >> and couldn't allow it, but take the home mortgage deduction and imagine they took it away, in the long haul, it's a good idea and lead to 20, 30%-- >> and okay, let's think about what he's saying, too, and i'm playing devil's advocate. 40% of americans don't pay taxes and we overload the system, they're paying. >> tracy, you're right and that's actually the biggest problem of our system, i mean, you can't have a society where 20% of the people essentially pay all of the taxes and 50% pay literally zero, but we're sharing this stuff, the welfare state and everything else, this idea, the only people that are going to get hurt are the lobbyists and the tax attorneys, we're not living to keep them in

multi-million dollar mansions. >> it's not fair that 40% don't pay, i understand these are low income people, it's not there. everyone should pay something. >> well, everybody does pay something, tracy, whether it be state and local taxes, you can't just look at the federal tax system as the only way that people buy into the system. there are a variety of ways and our current tax systems at the federal level favors wealthy and high earners, unfairly. and it's ridiculous that you have someone's homes subsidized more if they happen to be high income, that their retirement is subsidized more, if they happen to be high income. >> gary b, it's a book of political favors, any way you look the at it. and right now the best you could do with it, throw it out the window. i don't know how you fix 72,000 pages. >> tracy, i'm with you, not only a book of political favors, it's the way of government kind of passively telling us what to do and what

not to do, you know, we talked about-- >> the government is saying better to own a home than not own a home. better to be married with kids than not be married with kids and all this might berue and they might be good things, but it's not for the government to decide. i think steve forbes had it right a few years ago. if the whole, your irs form was on the back of a post card, god bless, if obama could ever get that done i would turn around and say he's the greatest president since abraham lincoln, this would be his moon landing, if he did that, i had he' say joy to the world, greatest thing possible, do it tomorrow, come right now, get rid of the special interests and the 34 billion dollars we're spending, preparing taxes, get rid of all of those lobbies, let's cut to the chase. >> so, is the flat tax the way to do it? >> a lot of states, essentially have a flat tax and they're more, until recently, than the federal government. so just having the flat tax doesn't magically, in fact,

the tax code is complicated not because of the brackets going up, it's the deductions and the credits and adds to the confusion, you can do it on the post card with 50 marginal brackets because you plug into a table and because the students and deductible, only is certain level of income and we've definitely bandaided this over the years and complicated, but it's hard to get out of it in particularly in a short period of time. and now it's more complicated. >> joan nnajonas, that's the id and what it does do. what it does, we've seen it in astona, in russia, in countries that have been-- >> countries that have a hard time raising tax revenue. >> we do, too. >> what it really does is give certainty to small business people like me and who say, look it, now that i actually know that a dollar, tax dolly would-- >> and john layfield, i've got to call you back in here, it's

the certainty that will help the economy again. >> look who pays the highest corporate tax rate, me as a small business owner, you know why? because i can't afford to fight politician toss my friend's point. i can't afford to hire lobbyists and the big tent companies are in the high teens and small and medium sized companies can't buy off these in washington d.c., they're stuck with the task. that's why we need an overhaul, the flat tax worked in russia because putin enforced the taxes after he implemented it. we could do the same thing here the. >> we're talking tax code we've got to talk corporate tax, gary b. and so much money parked overseas because of our onerous system. >> exactly, tracy. the other thing we have, it kind of gets back to my point is the government is picking winners and losers. it's okay for some industries to get a deductio but let's

demonize the oil and gas industry. get deductions if you're in the green area, but not the other area like auto manufacturing. what i don't understand is why is that the government's role? and they implement it through the tax code. they need to step back and say, look, if we need certain amount of revenues agreed to by congress, simplest way we're going to do that charge everyone a flat rate. individuals or corporations and yeah, maybe a deduction here or there, but i'm in favor of making everything simplified and toby said, i think pointed out. then it's clear what you need to do to get richer or grow your corporation to-- >> but gary b, the government is not just picking winners and losers, they're buying reelection is what they're doing. >> i agree with that, also. >> and i've got to pull you back into this. i know where you stand on this, you can that the wealthy get a lot of freebies, but lower income people do, too, and isn't it best to take them out of the picture and put

everyone on a level playing field? >> i agree that the tax code needs to be simplified. the answer is not a flat tax. the answer is, to really have people recognize that government is in the business of spending a lot of money, not through the budget where it should be, but through tax expenditures where it's hidden and people need to get upset about that, and the issue is not that-- >> and the flat tax. >> we're going to call it, and the tax system and your concept of equality, how does that come together? >> a flat tax, gary, the way it would work, is someone who is high income, would pay the same tax rate as someone who is low income and a disproportionate-- this would have a disproportionate income on the-- >> i think that the flat tax that has been proposed have a few different rates, at least two or three. jonas, i want to give you the last word here, go. >> that point is true, anybody in the bottom 90% of the income distribution is going to see a tax increase, flat

tax and also, it goes-- >> they're getting the benefits. >> and removing deductions just largely proportion, 90% of the country and see a tax increase and the moves to simplify the tax code are going to lead to the average middle person whether it's moving their deductions or going to a flat tax, just be aware of the situation. >> the inequities in the tax code are the reasons our president paid 18.4 effective tax rate last year. >> and what about the last election. >> it's around the board, it's everybody. that was great. did you hear this? >> the politics has been relentless and continuous. it's very difficult when people live in a state where there's a daily declaration, we will not participate in the law. >> the republican governors are to blame for the health care law problem? why is the group pushing obamacare say we need another health care bil water.

i'm jamie colby. keep it right here on the fox news channel. back to bulls and bears. >> tracy: so another week another health care law bombshell. first, a white house official blaming republican governors for delaying implementing the law and it turns out the health insurance exchanges are going to cost twice as much as initially thought and now the group who created obamacare will help tackle rising medical costs, huh? gary b, was the original law

supposed to lower costs and take care of everything? >> exactly, tracy. it falls under that umbrella that the great ronald reagan said, the nine words to hear, i'm with the government and i'm here to help. you said the figures are doubled. they're going to be at least ten times. why? when medicare was started, it was projected to be about 12 billion dollars cost in 1990. instead, in 1990, it was 107 billion dollars. like every other government program, whether it's built in a parking lot at the kennedy center or the big dig, the cost overruns are massive. they always underestimate it. there's so much red tape and inefficiency and government. people think that we're going be to be saving money with health care, it might bankrupt of country and all of those people uncovered, they'll still be uncovered. >> the thing though, tobin, it tackled the problems and they're all still there. right? >> and we've railed on obamacare for a long time, but honestly, honestly.

we're curing the problem that doesn't exist. the problem is, 10,000 baby boomers every day turn 65. they have paid be collectively for every dollar they put into medicare they're going to take out $3. we know that, it's a fact and even president obama talked about this week. if you're going to try to stop the health care problem and you were to do it by these, sort of various cuts in medicare, they have nothing to do with the fact that you're-- it's demographics, there are ways to address this, but we came up with the idea, 2700 pages and now we're going to demonize the republicans and don't want to bankrupt the state, come on. >> tracy: medicare and medicaid are never ever touched and talked about and this affordable health care act is not so affordable anymore. >> well, it hasn't been fully implemented yet, but we really don't know what it's going to cost. >> that's part of the problem. but i will tell you this. >> for sure. >> and if you care about all of these nickel and dime revisions to projections that nobody believed in in the

first place, you should join me in supporting pa public option and that should have been the health care reform that was put on the table in 2009. and that should be the answer. all of these other attempts to get at the system from the privilegery are not going to get us to where we need to go. on that point, i agree. >> tracy: john layfield, isn't that the problem from the get-go. we had nancy pelosi saying we've got to read the thing and figure it out before we could determine what it's going to cost us to do. >> whoo hoo! yeah, tracy, that's the problem. the way this thing was passed, it's such a partisan matter, so much ill feeling that president obama has turned into a modern say john quincy adams when the jacksonions were against him. he can't get any further health care passed. we did not have health care reform. we should have. we had insurance reform. all we do is add 30 to 50 million more people to a broken health care system and exacerbate the fractures. >> tracy: jonas, is a new law the answer to this?

do we need more paper work? >> well, it needs-- the affordable part hasn't been added and in some parts, that hasn't been added on. and getting rid of it, you know, we're talking like the system before was so great. but that system was also going-- had the same problems the demographics and the taxpayers are paying for the americans and all of the uninsured people were going to hospital rooms and use it go like the family practice. paying a $10,000 insurance premium it for no reason. it needed some fixing and some were addressed, most were not. and the thing is we need key for incentives for health care and be healthy. they were not addressed and that's the only way to really stop the growth of health care. >> to the point of-- the person, everybody thinks that medicare and these things were paid to go. what you put in, you get out. and if the average person is within 100,000 and know they're going to take to 350,000 where is the other coming? right here.

>> you should maybe get for insurance who didn't have aen making them pay their way more. >> kristin's point, we're going to talk about it until then, all right, guys, coming up, a major u.s. company investing a billion dollars to create 2000 jobs and the cavuto gang says where it's investing, shows we can get americans working again, at the bottom of the hour, but up here first, remember those bailed out companies? well, they're paying back uncle sam. uncle sam. but with your tax dollars.

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>> here we go again. bailed out banks using government aid to pay back their loans. that's like you using your visa to pay off your master card. fact i've done. and they're using our visa and our master card. and toby-- >> firstoff the bail out by ex-wall street people and didn't give an idea how they'd pay it back. free money and pay it back with more free money, would you do that? that's the thing, gary b. it's like shoot now, ask questions later. >> why are we surprised when the government does something, whether it's obamacare or this, there's unintended consequences. my gosh, you mean, they don't have the powers to look in the future and figure out what happened? toby got a right, the banks are acting rationally. what is irrandall, ttional and

lousy ones gail and the others survive with growth. and instead this is a screw nup this will probably get worse. >> it's not rational to use our money to pay back to your money? >> first, that was a little-- they're doing the same stuff. look, it's hard to it bail out banks and not make them rich along the way and prevent them from going out of business. and like it's going in a bad direction if we didn't do this. should we have made more money? definitely. look the at the stock prices and the banks and the bailouts. taxpayers should have made hundreds of billions in this deal and we gave them loans, and that was a bad deal, but better than doing nothing because anybody couldn't get a loan right now. >> here is the thing, this low interest loan, well, you know what? look at interest rates these days. why would any bank want to loan me money at 3% when they can invest it and make more? >> that's the biggest point. the best use of money, look,

the loan demand is not there. you talk to bankers and community banks, if you try to put the loan on somebody who doesn't need it and get a small spread or pay off your debt, which is better for your bank, paying off your bank is the better for your bank. >> but, look at this. >> and look a small business, yet, they didn't enforce it and-- >> and that's part of the problem, and there was no room-- no, let's give christian-- >> that's a separate point-- >> let's get new here. there was no strings attached, but you can't blame the banks from using the money the way he they wanted. >> oh, you can absolutely blame the banks, why is it simply the government's problem? we used to be believe naively that banks would not do anything that wasn't in the interest of the economy. hopefully, that that's now been proven to be completely ridiculous. you know, banks are looking at

their own balance sheets and their own shareholder value and what's secondary is the health of the overall economy and the government's responsibility to impose regulation to make sure they didn't do that. >> but gary b, you're jumping in here, and they did make more loans than the guys with the money. >> that didn't bother me, christian thinks they have a moral obligation, does gm have a moral obligation to detroit before they pulled out? did merck, does merck have some moral obligation there? you seem to think there's a rule that they need to provide their shareholders and then do some public good. that's never worked for crying out loud. if there is he' a law that they need to abide by, they do it, otherwise they maximize profits to the shareholder and that's how the free market system is supposed to work. >> and guys. >> the government regulation-- >> got to leave it there, you guys. maybe next time they'll think better before they hand out money.

christian, good to see you, sir. >> good to see you all. >> tracy: and it's what everybody says you need to own. you see it everywhere, one of these guys says he's running from it. and how you can profit from it.

# # >> predictions, gary b. >> and xlf for a 30% gain in 2014. >>