>> what do you think of that, adam? it is fine. i would want to mimic the s&p 500 and all of the stock markets and not . >> i want to thank all of you. . >> what we still don't know is is it time to fix this mess for something steve forbes has been advocating for years? >> the flat tax is something simple like my flat tax. >> the flat tax. >> something single rate. >> flat tax. >> simple flat tax. >> sorry a simple flat tax a way to tame the irs beast?

welcome to forbes on fox. elizabeth mcdonald and rich and mike. so steve, complexity is part of the problem here. corrupt folks are so of hiding in the complexity of this scandal. >> they are and the tax code the way it is, no one understands it including the irs the hotline to give you the wrong answer and hold you responsible. it brings out the worst in all of us especially at tax time. this is not a deduction. it corrupts us civilly and corrupts the government and gives the irs discretion. if they want to go after you, they can. it makes life simpler and the irs will be about 10% the size it is today. >> look at what the president's own aide said about what's happening now. part of being president is there is so much beneath you that you can't know because the

government is so vast. complexity is a great excuse for avoiding responsibility for this. >> let me deal with the flat tax issue first. i love that retrospective on steve. that was cool. i would be all for a flat tax with modifications for the lower ends of the economic stream. steve recommended it by the way. i don't believe for one second that you wouldn't end up with a 70,000 page code again. why? most of the current code is filled with things that have been done for special interest. special interest aren't going away because we turn it into a flat tax. let's be realistic. i ran a large company, but nowhere near as large as what the president sits on top of in the u.s. government. >> does it have to be that large? this president pushed for making it larger. >> this is the argument that you guys should be making. >> rich, let me go to you.

not only has this president made this government larger, but he made the irs larger as part of obama care. we will have 17,000 more irs agents. it is the complexity of the internal revenue service that is part of the problem, right? >> it sure is. to rick's point, he may be right if we flattened it and it's complex again, but that's not a reason to flatten it. you have to blow it up and start with something simple. if it's complex overtime, blow it up again. we haven't had fundamental reform since 1986. we are way overdue and the whole irs story dove tails with the apple story. this is polarized people too. does apple pay enough? if you have a simple code, it's out there for everybody to see and follow. >> john again, the question of responsibility and accountability. we need accountability.

right now we don't have any with the irs. >> i love steve's flat tax because it would be a huge improvement, but it does penalize income and causes us to prove it like the irs. that's why i would prefer a national sales tax. that's the only way that we as individuals can restrain what we give to the obnoxious beast and hopefully lower revenues and not increase them. >> let's talk about making what we have a little less complex than what it is. you can hide corruption. we have just seen that. that's a lesson of the scandal. >> by the way, david axelrod gave a ringing endorsement and they are getting nailed for it via the irs. time and again, political corruption is now dangerously frighteningly systemic within the irs, an agency that is an

intimate part of our lives. the fact that we are reporting income to this brutal agency and i will tell you the political corruption is so bad, we found the ten congress men going after the irs saying you have to do more to invest gait and probe the nonprofits. then it's flat out wrong. >> it wasn't just an internal matter. the question of getting rid of the complexity and trying to make it simpler. this president is making it more complex. i mentioned obama care before. >> the first concern is obama care. the irs is the enforcement arm of that and if you think it's bad now, wait until they get their hands on the certainly records. they are charging hospital community activities and all that. what does that mean? you have to start with obama care before you get to the flas tax. >> this is an organization that can destroy lives and businesses even before they have proven the

people are guilty. you are guilty until proven pnnocent by the irs. >> we should all be able to agree. you have the big problem with the irs being thes to enforce the payment of the penalty if you don't get insurance, you will not like that either. how do you suggest we enforce a law? >> we are suggesting you switch to the flat ax that gets rid of a lot of bureaucracy that is causing the problem. >> the flat tax would do that. it's more of a major source of corruption in washington. half the lobbying reinvolves around the tax code. we amended it 14,000 times since and let's blow the thing up and start all over again. we are trying to junk it up in the future. simplicity is the best. everyone can see what happens. put something in the code today and you don't know about it six months later.

>> you had a key phrase. everybody can see what happens. they came in and say we will be the most transparent in history. look what's happening. >> the least transparent possibly in history. the time that we waste satisfying the irs and congress, flat tax should be the time you spend doing your dishes and that's it. that's about as much time as you sh on your taxes and enact a nuisance tax every time they think they make progress with writing the complex legislations we have to live under. it's unhealthy for the american people to feel like they are doing something bad and they are so invasive. >> i want to give you the last word. we have run out of time. you have been pushing this for a long time. is it reasonable to expect that out of this crisis, out of this scandal we will have fundamental change to something like the flat tax? >> absolutely.

in 2016, a lot of candidates will be advocating this and simpson bowles came out bipartisan for simplifying the code, but not as far as a flat tax. when they removed tax shelters. when you touch one, you touch them all. it's drastic simplicity and the code that doesn't bring out the worst in all of us. is the reason we are not getting to the bottom of the mess at the irs because of the worker's union. they are looking into that. at the the bottom of the hour. here on forbes, senator tom coburn from oklahoma. they plan to rebuild after the big storm could be paid for by cutting the government's budget. is he right or heartless? the answer is next.

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. oak home ans are busy cleaning up and the costs are mounting. the most receipt estimates are topping $2 billion. now the debate over how to pay for it. senator tom coburn it is additional funds raised for his state should be offset with spending cuts. critics are calling it heartless, but you say he is right. why? >> this is the benefit of having people who are not running for reelection like senator coburn. they can speak the truth.

in any household or small business, if you haven't saved up for a rainy day and the rainy day happens, you have to take it out of cash flow that means you have to take it out of other things and i wish the u.s. government would run that way and we wouldn't be in the pickle we aare now. >> i am sympathetic, but americans want to cut spending and i am one of them. with holding funds for these victim who is are facing an unbelievable tragedy to their town is not the way to accomplish this nor is it good politics. i think that in the aftermath of super storm sandy which we saw all sores of things get folded into that bill, but i'm not sure coburn's approach is the right one. >> you did extraordinary reporting in hurricane sandy pointing out how the funding that went to fix up buildings in washington, d.c. which was not

hit. there was so much misuse in federal funds for sandy and katrina and on and on. it might happen here as well. >> it feels like every time there is a disaster that the disaster hit d.c. and not the other parts of the country that suffered because of the way d.c. behaves turning them into pork wagons. for the 90s, they cut first and they offset by going to the clinton administration and saw time and again, both agreed to that. we have to get the money quickly to the people in oklahoma and our hearts go out to the victims and 23578lys, i want to get them the money. this is an issue of congress and rich got it right. they have to do it right and correctly and be fair. >> senator coburn is consistent even after the awful bombing. he made sure that the funds were offset and he was also against

sandy funding because he knew there would be a lot of pork projects in there. he was right. he is consistent. he is consistent. >> this is not the way to get real budget reform. it will have to be a comprehensive reform because it's heartless. he pointed out that the costs are about 200 to $300 million because people have insurance to get out of the fema budget and don't have to do extra funding. in the future, we do need real reform. this is not the vehicle sadly to do it. >> morgan? >> 100% agree with steve and am curious why we are having this discussion. this week after this disaster took place, $12 billion is in the fema fund right now. the most important thing is to get the money out to the victims. when you add red tape to the process, the taxpayers may get hurt the most. historically we saw it with hurricane katrina. a lot of direct aid going to

homeowners was tied up for years. the lower ninth ward is still smarting for that. course was an issue, but small businesses were hurt in lower manhattan in super storm sandy. they won't be reopening. >> it's one thing to be against red tape. that's a good thing. can't you at the same time be against the pork spending that is often loaded into these disaster programs? >> obviously it's a tough question to answer right now and we see what's happening there. obviously disastrous. i think it's dangerous when we federalize every disaster when people in new mexico have to pay for something that happened in oklahoma. we have to stop doing this. if they stay out of this, people will be careful about the insurance and more careful about the politicians they elect because they have someone good in place when the unthinkable strikes. >> that's the libertarian view

getting rid of the federal here entirely. >> that's a nice principal, but when you see a disaster happen, you want to say get the aid there. thankfully most people were insured which is why the bill would be 200 to 300 million. trying to do it in the wake of a disaster is not going to get the job done. it speeds ammunition to the opposition. make it part of a real reform. you want to get aid there and get another part of the budget. >> you are hole up most of the argument by yourself. go ahead. >> i agree it's bad politics. thank god there plain spoken people like coburn or alan simpson that will speak the the inconvenient truth. to get this idea into circulation that money is not free is a good idea. get the aid to the people as

soon as possible. >> we like plain speaking in politics. far too little of that. forget buyer beware, retailer beware. why the stores advertising holiday sales could be opening themselves up to lawsuits from customers.

>> retailers rolling out memorial day sales, but they better be careful. a judge just ruling shoppers can sue kohl's after a customer said

the mark downs are bogus. sabrina said stores should be able to advertise any price they want. explain your flip side. >> this is absurd. we know that marking is about perception and if kohl's wants to be a low cost alternative, the reality is this is about are we going to limit how many e-mails i'm allowed to receive? what if i acted on all of them? my bank account would be empty. i have to remember that there is a layer of responsibility in all of this. >> the kohl's disputes the allegations, rejecting false advertising. doesn't it always come down to buyer beware? you have to beware if you are shopping. >> that's exactly the point. that is what you wanted to come down to.

sabrina, would you expect the e-mails you got would be fraudulent lies if you are going to send out an e-mail saying we have things on sale. shouldn't it be on sale? what happened at california was the people. the initiative. the people passed the law that required that there be truth in that advertising. how can you criticize? >> before sabrina answers that, there is always an exaggeration in these sales, is there not? >> the ninth circuit court is one of the most liberal and the rulings get overturned by the supreme court. the lower court ruled there was no financial harm to shoppers. this is basically the liberal court trying to pay back the tort lawyer who is tried to finance the campaigns. >> all we need is more lawyers in our lives. >> they define what constitutes a sale and what doesn't. there is legislation and court

cases that set precedence and i take false advertising whether it's real or whether a court strikes it down. at the end of the day i can undermine confidence and an entire industry. we sell this to a huge extent with the mortgage industry. i take false advertising very seriously and people should be allowed to bring whatever lawsuit they want. whether they win say totally different story. >> you can sue anybody for anything. let's be honest. the way you can interpret every detail and things can bring the lawyers into the situation. we have enough lawyers. we don't need more. >> we don't. in this day of hand helds and pcs, you can check, is this a good price or not? >> it's true. it comes back to the idea of buyer beware. we have enough tools at our disposal to beware. >> somebody who spent a lot of time in court as a lawyer and not as a defendant, i can tell you these cases are not jamming

up the california courts. you will see in a million. >> just wait. that's all we need. next, no false advertising here. our informers have stocks on sale right now and that's the truth.

and we're back. forget about memorial day sales. they have sales that will make you money. you take the lead from the current issue of forbes magazine. >> pepsico is doing great. it's inventing or may have a new sweetener that will take on coke big time. >> the woman on the cover is meg whitman of hewlett packard. >> i like pepsi and i recommended it before, but i like coke better. >> she prefers coke. >> you prefer marathon petroleum. >> this is a refining arm of marathon oil. that has potential upside of 50%. >> what do you think of that? >> worried about it because they will hit the industry really hard having forcing it to put more sulfur out of gasoline and the first fear of the new rules.

>> thank you, ladies. have a wonderful memorial day weekend. keep it here. the number one business spot continues. . >> this will fire up talk at the holiday barbecues. our union is standing in the way. who else is the government snooping on and are you on the enemy list. right after the deadly twister hit, one senator said this. >> the damage that the polluters and deniers are doing doesn't just hit alabama and oklahoma and texas. >> he is apologizing now, but why are democrats cashing in while people are digging out. firing up your weekend barbecue conversation right now