at earnedasay.org. jon: thank you for joining us today. jenna: nice to have you, everybody, "america live" starts right now. megyn: fox news alert, exactly four months to go until election day, and new concerns today for the president's re-election campaign. in a swing state he carried by a huge margin just three years ago. welcome to "america live," everyone, i'm megyn kelly. we are awaiting right now -- waiting to hear from president obama in iowa as he pushed for a new round of tax hikes. he's making the pitch in the same state that launched his road to the white house. iowa voters, however, do not seem to be so sold on the president this time around. according to the "real clear politics" average mr. obama is locked in a very tight race with governor romney for the state's six electoral votes. look at the numbers there, 46.5 for the president, 44 for governor romney. he won this state by 9.5 points

last time around, mr. obama did. you can see it there. president obama over john mccain 53.9 to 44.4, three years ago. different story today. chris stirewalt fox news digital politicsed tore. why is that. why a considerable tightening of the race. what is it about iowa voters, a state in which unemployment compared to the national average is relatively low? >> i don't want to be too sappy, but there is nothing quite like love that is disappointed to turn into dislike. the case in iowa is this. iowa citizens were so proud they took a loot of credit and responsibility for launching the national career of barack obama. remember when he went out there he was such a long shot, khreu hillary clinton was a shoo-in for the democratic nomination in 2008. democratic caucus goers got behind him, launched him to victory. and that propelled him forward and it was because of a new brand of pool particulars that was aspirational, hopeful,

healing, uniting, all of these things that the president was. well, it's not that way any more. and you look at campaign that he's running today, which is intensely negative, and focused on mitt romney, a lot of character attacks on mitt romney it looks very much like the kind of politics that obama encouraged iowa citizens to vote for him back in 2008 so that he could end, and here he is doing it. megyn: they are talking in iowa according to the reports today in the des moines register about a sense of betrayal, feeling detrade. it' betrayed. it's not that they could do better, they feel they were promised something and the promise was violated. they spell it out in terms of teugs. the president promised we won't be blue states or red states but the united states is now pouring millions and millions of dollars into iowa on negative ads going after romney's jugular. the numbers are they've purchased $4.8 million in tv advertising just since

april 1st the obama campaign has. this is the way they put it, they purchased 42,000 500 and change gross rating points statewide. it doesn't matter exactly what that means. let me just put in it perspective for the audience. they purchased 42,000 gross rating points. it takes one thousand gross rating points to be sure your message pen straits one market, target audience viewing about ten times. they have done that one thousand plus another 41,000 on top of that, and apparently of the 17 ads he's bought eight are going after romney, his resume, his private equity experience, outsourcing accusations that have been debunked by "the washington post" and so on. is that backfiring, chris? >> sure. every time you run a negative ad you pay a price yourself. every attack tomorrow's with some self-inflicted damage. in the case of obama and especially in iowa, my goodness especially in iowa where he was at the stkaoep zenith of

hopefulness and changeness. he has to come back to town and say things might not be that great, it could be worse and by the way this other guy is a vampire, don't vote for him. it's not what iowa citizens expect. that kind of saturation carpet bombing negativity he's doing in iowa he'll be doing it in all these other states and he needs to be concerned that there will be the same affect in iowa where they new him first in these other states later on. megyn: there is a theory by some he has to do in iowa because that like new hampshire was one of the first in the nation's states, it's the first in the nation caucus state and the president may feel that he got pummeled so much there because we had this protracted g.o.p. primary. however, having been to iowa twice in the run up to that caucus, i mean, the ads they were running were the g.o.p. candidates ripping on each other. they weren't yet taking serious fire at the president at least not in the way mitt romney is going to be doing now.

>> there are lots of rationals for running a very negative campaign and they don't matter, it doesn't matter why campaigns say they were being negative, i was attacked first or anything else, that doesn't count. what does count is that the president has embraced a campaign strategy heretofore probably unseen from an incumbent which is early, expensive and intensely negative. it's their decision, they opted to do what george w. bush did in 2004 in trying to define john kerry. they are doing it on certificate rides in a way we've not seen before with the amount of money and ground game behind it. they've made that choice. whether it works or not we have four months to see. it's totally different. megyn: why do they care about iowa's six electoral votes with all due respect. >> if he can put together the traditional republican states in this election the must win ohio and florida and thanks to karl rove plus one, one more, then mitt romney wins and iowa has got enough. megyn: you're seeing the numbers there is a piece out of the

washington times from yesterday or today talking about how president obama is down with young voters, he's down with black voters, he's down with low-income white voters, he's down with post graduate white women and so all of these sort of, you know, erosions in his support are leading to a sense of concern about states that he did win handily the last time around. chris stirewalt thank you, sir. megyn: more for you now on why iowa matters so much for the president. his caucus win in 2008 was the win that put him on the path to the nomination and the white house. now the hawk-eye state, which was republican, has voted for the democratic nominee in five of the last six presidential races. iowa also voting for the winner in six of the last eight presidential elections, and you heard chris explain why it is so important to the president, this is his fourth visit this year, his 6th since he announced his re-election effort in april of last year and his 10th since

becoming president. those six electoral votes clearly mean something in this campaign. moments ago republican presidential candidate governor mitt romney arrived for his latest town hall meeting in the battleground state of colorado. you may remember this was a state that president obama won back in 2008. now mr. romney is hoping to win over voters by focusing on communities hit hardest by the tough economic times. take a listen. >> i know that last week the middle class of america got a kick in the gut when the jobs numbers came out and we found out we'd created only 80,000 jobs. our nation needs to create about you can double that if we're going to keep up with the population growth of our nation and so we're falling further behind under this presidency and that's one reason why we're going to change him and get someone in there who will get this economy going. [cheering] megyn: tomorrow morning governor romney will be in texas for the meeting of the 103rd annual nwacp national convention. while the president focuses on

the tax fight today his campaign team hits governor romney on the issue of investing in companies that outsourced jobs, meaning sent them overseas. today, however, the republican national committee is hitting back calling out president obama on what they say is the president's own stained record when it comes to outsourcing. the rnc launching a new website accusing president obama of using money from the 2009 stimulus package to fund foreign projects, including building solar panels in mexico, windmills in denmark and batteries in south korea. the obama team vehemently denies those allegations saying the administration has always fought to end tax breaks for companies that shipped jobs overseas. in chicago new questions today about the political leadership of that city's mayor, the man who was the former white house chief of staff. rob emanuel. murders and gang activity are up

drastically in recent months. one of the the most recent victims a seven-year-old girl shot and killed by a stray bullet while selling candy outside of her home. but rob emanuel is defending the anti-gang tactics that he and the police and the superintendent have in place and the numbers in chicago are staggering, trace gallagher, they are staggering as you look at the number of people killed just in past weekend. >> reporter: it's important to remember that rob emanuel megyn made attacking the street gang problem in chicago the cornerstone of his administration. the numbers do not favor rob emanuel. i mean the number of homicides in chicago, the same time this year to last year up 39%. you mentioned that seven-year-old girl, other children also getting caught in the crossfire. but mayor emanuel says it's the policies of the previous administration that failed not the new policies. the old policy used hundreds of

strike units to go in and stat rate the crime-ridden areas. the new policy keeps police in specific areas. you see the mayor right there at a press conference. listen to him talk about his new policy. play this. >> we put them out in our neighborhood and made our commander's in each area responsible. i'm not happy, nor am i content and gary and a al know that with the level of gun violence related to gangs. >> reporter: the mayor and the police commissioner says flooding those areas, saturating was kind of like putting a band-aid on a gunshot wound. now the former police commissioner and the alder men whose areas are gang areas issued a blistering attack on rahm emanuel and the police commissioner is saying the gangs are running freely because they no longer fear those strike units. consider this chicago had the same number of homicides this

year as new york city. new york city has triple the population. romee manual is vowing to continue with his policies. megyn: thank you. we received new remarks into the newsroom from attorney general eric holder suggesting that texas and other states may be trying to turn back the clock on voters' rights. we'll show you what he said and his promises when it comes to his aggression, the doj's aggression against states that try to crackdown on voter fraud. and another mayor taking a hard line as his city drowns in debt, the legal battle that is now brewing over public worker pay cuts. have you heard what's happened in scranton, pennsylvania today? the white house down-playing what would be the president's first sit down with egypt's new islamist president. why the change? first s coming, then it was maybe they'll bump into each other.

our panel debates this right after the break. >> let me just be clear, i don't have any bilateral meetings with foreign leaders to announce, with any foreign leader. >> it was announced, it actually was -- it was announced by the egyptian egyptians. -- 8% every 10 years. wow. wow. but you can help fight muscle loss with exercise and ensure muscle health. i've got revigor. what's revigor? it's the amino acid metabolite, hmb to help rebuild muscle and strength naturally lost over time. [ female announcer ] ensure muscle health has revigor and protein to help protect, preserve, and promote muscle health. keeps you from getting soft. [ major nutrition ] ensure. nutrition in charge!

megyn: the white house apparently changing it's tune on what would be president obama's first meeting with egypt's new president. mohammed morsi is a member of the muslim brotherhood and he claims the question that who is responsible for 9/11 is still unresolved, at least that's what he claimed a couple of years ago. yesterday morning we received reports out of the united states and egypt that the president, our president had invited him to meet during the u.n. general assembly this september. but by the afternoon this is how the white house press secretary jay carney was describing the situation. >> do you have anything to

confirm or announce as far as when president obama is going to meet with him? >> well, the president will be going to the united nations general assembly in september and he will, i'm sure encounter a number of leaders. >> but he will have a one-on-one or that's not 100%. >> there is nothing scheduled like that. it's just that they will meet, encounter each other. megyn: it's just going to be an encounter. there is a question about whether that's all it should be and whether there has been a change in plans and if so why. joining me now lie lieutenant colonel, and brad blakeman. president morsi wants to reject on the face that we have the perpetrators of 9/11 and we know

exactly who is responsible. he's a guy who has said, brad your former boss, george w. bush was the world's terrorism leader. and he's gone onto say that the presidency in egypt should be restricted only to muslim men, can never be presided over by a nonmuslim, that the states top priority has to be spreading and protecting the religion of allah. you tell me whether we should be reaching out to him and having a sit down with him one and one. >> we should. the president has added a new policy to miss foreign policy, disrespect. this guy is the elected leader of egypt, whether we like it or not. he's somethin somebody we should be sitting down and talking to and not dismissing out of hand. he's said a lot of outrage us things in the pass. we should remember those things but try to have dialogue with

him as an important member of his country. president obama's first trip was to g to disrespect israel and go to egypt. to the juice he' jews he's saying i'm disrespecting the arabs just like i did israel. they don't want any leader who is this important not only to ourselves but to our allies. megyn: even though he has controversial ideas, he's the president of egypt now. and that is an important ally for us, and so the president has got a tough i guess he's in a tough position, our president, because you've got a guy who is questioning who is behind 9/11, but he's running one of our most important allies in the middle east. >> well, you know, megyn, we spend billions of dollars of

year supporting the pakistani government and they question who is behind 9/11 i. think brad's point is crucial. egypt is the most important arab state, the largest population, 82 million people. they democratically respected this guy. i know some of my fellow conservatives are having a hissy fit because we didn't get our pony. but we supported democracy in the middle east under george w. bush that was supposed to be the answer. suddenly obama is president and we don't like demock crazy in the middle east. i won't change my views. i think democracy in the middle east is the only possible way out of the absolute mess that has paralyzed the entire region but it won't be in a 24-7 news cycles. we won't know the results of this for maybe 30, 60 years. this guy is democratically

elected. let's see if we can work with egypt, if he screws us, if he turns out to be a monster we have plenty of time to turn the guns on the guy. megyn: there is a question of how far he's distancing egypt from israel and how closely aligned with iran he wants egypt to be. that seems to be the direction 's announcing although his statements have been a little conflicting. brad, what is going on with respect to mr. morisi and our white house? it was the egyptian government that came out and said, we everee been invited for a sit down with the united states. they didn't say with the white house. they said we've been invited to go to the united states when we are there for this u.n. general assembly. they say they've been invited. but then the white house you heard jay carney sort of saying, well it's an encounter, we are not really having a sit down with anybody. president obama, president morsi are going to pass by each other at the u.n., congrats, you too. >> that's what you do with

venezuela, you pass them in the hallway, you have an encounter, the guy reaches out his hand like he did to president bush, or you pass castro. when you have an important country like egypt and you have the promise of better relations with egypt than you have in disrespecting them isn't it worth a shot for a newly elected leader of an important middle east country to at least give him the benefit of the doubt and meet with him and see if you can influence the kind of direction egypt takes with wou with our help. isn't it important for israel to have a good relationship with this and have their treat he's respected. it's all about obama and his political future rather -rpb a good solid policy with our allies. megyn: 20 seconds to the hard break. >> i'll tell you the muslim brotherhood says a lot of crazy stuff. watch what they do, with any politician you know this. megyn. forget what they say, watch what

they do. the muslim brotherhood is going to be struggling to get egypt's economy back on track they are not going to be attacking israel any time soon. megyn: let's hope you're right. thank you so much. an update on the horrific violence in mexico. ♪

what can i get you ? cheeseburger. you know what, got any salads ? b-ball, anyone ? and then take your leg wide out to the side. you can do it, dad

thanks, girl i'm really proud of you, dad. make the most of your network with verizon. more 4g lte coverage than all other networks combined.

megyn: fox news alert new details about the shooting of a mexican citizen by a u.s. border patrol agent. angry officials in mexico today insisting the border patrol crossed the line. the f.b.i. is investigating the confrontation that happened along the rio grande on the border in brownsville, texas. trace gallagher has an update from our west coast bureau. >> reporter: you talk about an international dustup here megyn. the mexican government is saying this might be a violation of their sovereignty and it could be a human rights violation.

in fact there are new accusations from the mexican side of the border that one of those border patrol agents actually crossed into mexico and fired that shot. the u.s. border patrol vehemently denies that saying it didn't happen. here is what we know. a border patrol agent has detained a number of suspected illegal immigrants, arrested some, others ran back across the border and the border patrol says they unleashed a bunch of rocks. the border patrol agent could not seek shelter, he opened fire. another agent noticed someone on the other side of the border pointing a rifle at agents, he too opened fire and that's the man that mexican authorities say was shot and killed. but they do not yet know if he was carrying a rifle they say. the u.s. border patrol acknowledges that the agents did fire shots across the border but are still investigating whether or not somebody was killed. the mexican consulate in brownsville says the mexican government is furious, they want an exhaustive investigation calling this a disproportionate

use of force, but the border patrol is saying, look, we have conveyed our feelings to mexico, we are saying that any time rocks are thrown at border patrol agents that is considered lethal force and they will fire. just last year alone there were 500 rock attacks against border patrol agents along that southern border, and many, many injuries. megyn. megyn: trace, thank you. coming up emperor obama? that is the latest line of attack by critics aeu cushion the president of by passion congress to expand the power of what his critics are calling an imperial presidency. we'll take a closer look at what the supreme court said about the president just last week, and the other evidence that his critics are citing in support of their claim. and the mayor of scranton, pennsylvania, finds himself in a heated legal battle after taking a hard line on the city's budget crisis. what he did that got hundreds of city employees fuming and how they are now fighting back.

plus, she was sentenced to more than 40 months behind bars for a deadly hit-and-run in a trial where her own stepdaughter testified against her. does the punishment fit the crime? that is today in a powerful "kelly's court." >> she continues to say that she never saw him. do you believe that? >> yeah, i mean i believe that, you know, and then when she knew she panicked, like any -- any human being would, you know, so -- >> can your family forgive her? yeah, we are on the road for that, we are on the road for forgiveness for sure.

current dividend tax rateoon, will expire this year, sending taxes through the roof and hindering economic recovery. the consequences? millions of americans will see their taxes on dividend income spike, slowing investment in u.s. companies and jeopardizing development in energy projects that create american jobs. ask congress to stop a dividend tax hike -- for all of us.

megyn: fox news alert on what could be a new showdown in the health care fight n just moments house republicans will gather for a major five-hour long debate on capitol hill. they are expected to introduce the repeal of the affordable health care act. again they want to repeal obamacare, an effort that has failed in the past because it has not the necessary support in the senate. so far the house has voted 30 times to defund, dismantle and even repeal this law since it was signed by the president in 2010. it was upheld by the supreme court, just last, this month after more than 25 states, last month. now it is july. after more than 25 states brought a lawsuit questioning the law's constitutionality. a knew survey out by the doctor/patient medical association which we're told is nonpartisan association

of doctors and patients, finds more than 83 of the doctors, 83% of the doctors, said they actually considered leaving their practice because of the president's health care law. not sure what the numbers are of those who were polled. in other words, what the sample size was. ♪ no one can be powerful than any other, each controls the other you see, that's what we call check and balances ♪. megyn: remember that? "schoolhouse rock". taught a whole generation of american kids that government is made up of coequal branches government that operate within a system of checks and balances but krilt ticks of the obama administration are suggesting that the president may have missed that lesson. in just the last year

mr. obama used executive orders to change everything from immigration policy for young illegal immigrants to offering waivers to more than two daz states for their no child left behind spending, deciding that the department of justice would not enforce the defense of marriage act. so on, so forth. even last week the supreme court calling his new immigration policy and his effort on illegal immigration, an astounding assertion of federal executive power. conservative columnist charles krauthamer righting yesterday, quote, during the bush 43 years we were dealt garment rending of imperial press den sip but this president has earned little comparable attention. because president barack obama has been so ineffective hard to call someone imperial who has failed so consistently. fair or not? joining me now, syndicated radio talk show host leslie marshall, a fox news contributor and lars larsen, a syndicated radio show host for compass media networks.

leslie, criticism is coming from folks on the right like charles, who are taking note of what the supreme court said. in particular justice alito in his dissent in the arizona case and justice scalia and his dissent in the arizona law case, look you have a state deciding to enforce the federal law on the book. feds say we know the law passed by congress but it is not consistent with white house policy. the white house challenges that state to enforce federal law on the books and succeeds and get as ruling says you're out of line because you're enforcing you arizona, the law on the books, as opposed to my, presidential policy on immigration. this has krauthamer and others saying the latest example of an imperial presidency. your thoughts. >> i don't want to say you say tomato i say tomato kind of thing. as charles pointed out last administration, executive orders used numerous times,

that was used by the right. on the left it is okay with you guys now. bottom line i don't think this is imperial i'll. even though it is an election year, lars, i hope you know it effect tiff. i don't think imperialism will stop people voting for the president. when it comes to the supreme court, with all due respect some of the justice i think were being like spoiled brats because they didn't get their way. i seen that on both side of the aisle with different rules on different issues. but at end of the day with regards to arizona, the majority of that court voted with the majority of what the president and the federal government had put forth. megyn: lars, back in april of 2012 "the new york times" did a long report how in the fall of 2011 president obama made a decision, it was a turning point for him. that is where he unrolled the we can't wait program. >> yeah. megyn: he decided he would bypass congress. he would bypass congress. here is a sound bite from the president not long thereafter making clear what

his plans were. listen here. >> if congress refuses to act, i have said i will continue to do everything in my power to act without them. megyn: and he has. >> megyn, he has. all hail king obama. listen, the fact is the president is effectively saying to americans, i don't need no stinkin' checks and balances. if i decide that the defense of marriage act is unconstitutional, i don't need a supreme court. if the congress won't pass the laws i want, he will go ahead and pass them as executive orders. he will grant a million illegal aliens the right to stay in the united states for at least a couple of years. he will grant all kinds of other things that should be written as law, passed by congress. you can't even count the number of things this man has done to act like a king. he tells his regulatory agencies to do things that are demonstrably damaging to american industry and workers. and he says, the congress won't pass those limitations so i will have my agencies do it instead. he is effectively replace the supreme court to a large

extent and the congress and he is acting like a king. he doesn't need this. if lewis carroll were to rewrite alice through the looking glass, this is the king of hearts, king obama, who can do anything he wants anytime he wants. can you imagine what he will be like during a second term if he get as second term? he won't have anybody to answer to. megyn: is there any concern that you have, leslie, in seeing the executive, exert so much power, in particular over domestic policy which is little bit more unusual than doing it in foreign policy where you're the commander-in-chief and you make these executive decisions not to excuse what president bush did but there is distinction between foreign policy and domestic policy? is there any concern you have if we go forward in november or january, 2013 with a president romney? >> no. with a president romney do i have concern? absolutely. >> thanks for the endorsment. >> sorry, i can't hear president romney. when you said it megyn, it

is not reality for me. i was still hung up on lars saying decider. i have it on a loop my radio show. i'm the decider. i'm the decider. i'm very fearful with a president romney because this is a man who says that he will control our country, like he did his businesses in the private sector. megyn: no, no, i'm talking i'm talking about once we set a precedent that an american president can bypass the congress. he tried to get the dream act through congress. he failed. he went around them. he tried to get cap-and-trade through the congress. he failed. he has gone around them through the epa. yeah, through the epa he has tried to get numerous initiatives, through the congress and failed. then he has decided to do it on his own. if that is the precedent, do you worry what a republican president would do with it? >> well, i have seen former president bush, a republican do that. i think sometimes presidents say if congress can't get something done, i'm going to

do what is within my power. now of course it is argueable what is within a president's power. based on interpretation of the constitution. but the bottom line is, any president that doesn't have, for the most part, their majority, in both the house and the senate, is sometimes going to have to, as i would look at it, color outside the lines to sometimes get things done. i think both -- >> you can't color outside the lines, leslie. megyn: go ahead, lars. >> this is outrageous because what she was asking you, leslie, if you're going to support obama doing it are you going to equally support a republican president. we know you will not. >> depends on issue. depinds on the issue lars. >> i will say that you should not color outside the lines. i think john roberts colored outside the lines and i certainly think president obama has been coloring outside the lines by taking things that are not within his authority. for instance, making recess appointments when the senate is still in session and his lawyers just say, we don't have to obey the law or the

constitution. this guy is acting like a king. megyn: it will be interesting to see. american people like divided government historically. they like it. so there is not too much power concentrated any one party. and yet if you can get around that by just sort of saying, congress refuses to act, i'm going to do it on my own, do we really have different vieded government? where does that leave us. >> we have illegal government. unconstitutional government. >> what we need is a queen, not king, all right? we need a queen. megyn: leave it on that, girl power. leslie, lars, thank you. short time ago attorney general eric holder made some new remarks suggesting texas and other states may be trying to turn back the clock on voter rights because they're passing laws requiring voter i.d. we'll show you what this could mean for the doj's legal battle with a number of states. one of the tax hikes president obama did not talk about yesterday the coming tax hike on estates. the death tax as they call it. are we about to get hit with a whole new death tax.

>> if i work all my life around pay my taxes on my income and then i die i want to pass on what would be great if it were a $5 million estate to my kids, why should i pay the government again? why should there be a 35 or 45 or 55% tax on that again? >> you aren't paying in that case because you will be dead. megyn: the estate is and that is less for my children? >> but, the only question is, look,. megyn: no, answer my question. how is that fair? >> megyn, megyn, you will have to let me answer the question. we're going to have a conversation that gets us anywhere. megyn: go ahead. >> only question is not whether or not there should be a tax on that. the question is where the lilts should be. megyn: no, i will ask the we and you're not answering tell me how is fair? >> ready? megyn: i am. this man is about to be the millionth customer.

would you mind if i go ahead of you? instead we had someone go ahead of him and wifty thousand dollars. congratulations you are our one millionth customer. people don't li to miss out on money that should have been theirs. that's why at ally we have the raise your rate 2-year cd. you can get a one-time rate increase if our two-year rate goes up. if your bank mes you miss out, you need an ally. ally bank. no nonsense. just people sense.

megyn: well the mayor of scranton, pennsylvania, is getting some national attention today after taking a hard-line on his city's budget crisis.

democrat chris doherty, slashing the salaries of hundreds of city employees to minimum wage including his own salary. after the city council rejected his 2012 budget proposal which included a 29% tax hike. >> our financial crisis is very serious right now. therefore we need to take these very drastic decisions. all employees including the mayor will be paid minimum wage until we get through this financial crisis. megyn: city union officials are now suing over the pay cut, insisting that mayor doherty has to comply with a judge's order to restore normal wages not minimum wage. tomgy owe dawn know radio show host and we have a reporter to the pittsburgh review tribune. thanks so much. the mayor says look we have $5,000 left in the coffers, five grand. how will i pay hundreds of city work he is their normal rates? i can't do it. i don't care what the judge says. my only option is to pay

minimum wage. celine nashgs does he have a point? >> he does have a point but there is a political grandstand. doherty is in a fight with the city council. they have always had a toxic relationship. he always had a toxic relationship with unions in that city. he wants the tax hike. the city council doesn't want it. the president of the city council, january nest evans wants to be mayor, which is the position that doherty has. so --. megyn: internal politics there? >> yeah, absolutely. megyn: but the reason this is interesting, there are many cities across the country that are now facing similar fiscal cliffs. different ones are dealing with it in different ways. some say we'll cut the pensions. sorry we'll do it. that is only way out. not only wanted to hike income taxes 29% or what is it, local city taxes i mean? >> yeah, absolutely, megyn. i think he is out of control. like the mayor of harrisburg who has done similar wild things. i don't think this guy has

to do this. if there is some long-term thing like pensions, that is one thing. this guy wants to flail away and get 29% tax increase. megyn: he wanted to increase city taxes by 29% and he wanted to raise property taxes by 78%. and now he is like, they wouldn't let me. this is, i mean seems a little disingenuous dom? >> he is trying to hold a gun to the head of these guys. they can't work for minimum wage. the public employee unions are being held hostage here is turn about fair play. i say it is the mayor and he has statewide aspirations apparently. megyn: how does he get out of this? he can't get the tax hike he wants. so he is trying to cut the salaries down to minimum wage. these are people that have bills, they have mortgages, kids in school. they can't live on minimum wage. they are going from $1500 every two weeks to $600 every two weeks. >> absolutely. he think he expects something to happen pretty immediately. he has six children of his own. not like he can live on

minimum wage. doherty does have political aspirations. he already run in a primary for governor in 2010. he ran for state senate in 2011. so he is always been mayor of scranton for the past 10 years but always wanted to be anything but mayor of scranton. megyn: how does this help any politician politically? i'm trying to get -- republican or democrat, how do you run on i fought to raise property taxes 78% and when denied i cut the pay of city union workers, firefighters and policemen down to minimum wage without their consent and even after federal judge told me i couldn't do it! on what party ticket does that help, selena? >> he doesn't. he has not always been a great politician. has always been a decent manager. for the past 10 years scranton has had a renaissance in the city. unfortunately because the taxes are sew high in the city of scranton, all this sort of development he has done in the old buildings and new buildings, there is no tax base to support it.

megyn: yeah. >> so people are moving in there. megyn: what is he supposed to do, dom? we've seen other cities say we have to cut the pensions. we're sorry you were promised a rose garden but we can't deliver. is that his only option? what is his option? >> that is his option to me, megyn. long-term type of things. the type of things we talk about on national level, entitlement. pennsylvania is going through this right now at the state level but not a grandstand to telescopes and firefighters, work for minimum wage. megyn: yeah. can you imagine? 29% increase in your city taxes and then 78% increase in your property taxes. bye-bye. there are other cities besides scranton which to live. dom, selena, thank you. >> thank you very much, megyn. megyn: we're getting new details what happened when a florida teen had a violent encounter with an alligator. his terrifying story is right after this break. >> the gator was about two feet away from him. came straight at him.

abraham said, fred. he punched the gator. it took his arm and he went under. clear, huh? my nutritional standards are high. i'm not juice or fancy water, i'm different. i've got nine grams of protein. twist my lid. that's three times more than me! twenty-one vitamins and minerals and zero fat! hmmm. you'll bring a lot to the party. [ all ] yay! [ female announcer ] new ensure clear. nine grams protein. zero fat. twenty-one vitamins and minerals. in blueberry/pomegranate and peach. refreshing nutrition in charge! his morning starts with arthritis pain. and two pills. afternoon's overhaul starts with more pain. more pills. triple checking hydraulics. the evening brgs more pain. so, back to more pills. almost done, when... hang on. stan's doctor recommended aleve. it can keep pain away all day with fewer pills than tylenol. this is rudy. who switched to aleve. and two pills for a day free of pain. ♪

[ female announcer ] and try aleve for relief from tough headaches.

megyn: fox news alert. a scare at one major us air port is creating delays in the air and on the ground. we are hearing smoke was spotted in a control tower at newark liberty international airport in new jersey. we're told it may have been coming from an elevator shaft. we're getting reports on delays in arrivals and departures. there is a full stop on all aircraft at the moment. the faa saying a statement will be issued shortly but will not comment any further at this time. a frightening attack in central florida. 17-year-old boy is recovering today after an 11-foot alligator like this one attacked him, biting off part of his arm while he was swimming with friends in a river near fort myers.

trace galler with more from the breaking news desk. >> reporter: experts say it is alligator mating season. any slash in the water is considered prey for them. these kids grew up in the air area. they know all about alligators. this one kind of came out of nowhere and went directly after 17-year-old, kaleb fred langdale. listen. >> he said, fred, gator was coming at him on top of the water. as fast as he would paddle back and forth he was coming. >> reporter: the 17-year-old punched gator. it be grabbed his arm and took him under for the death spiral. he thrashed around and came up knew his arm was gone. listen again. >> been around alligators. he knows if he offers him arm won't take the torso. he was smart and took the risk. >> reporter: yeah, paramedics arrived and took fred langdale to the hospital. the trappers came out to try to find the gator to find

the boy's arm. three hours and several gators later they found the one, cut him open. pulled out the arm and sent it to the hospital but it could not be reattached. here's dr. siegel. >> it's very difficult to know what condition the arm is after the alligator got ahold of it. if it is mangled and the blood supply can't be fixed and aligned with the blood supply of the rest of the body you can't really save it. >> reporter: so they couldn't reattach it. fred langdale says he is glad they got his right arm because he uses his left arl to steer his airboat. he also says he wants the head of that gator so he can rest his prosthetic on the head of the gator, megyn. megyn: unbelievable. trace, thank you. we've got breaking news out of egypt. moments ago where the showdown between the new president and the old guard just went to an ugly new level. that is after the break. and one of the tax hikes president obama did not talk about yesterday was the big

increase coming in the so-called death tax. the fight over this plan just ahead. plus, remember this? >> what is wrong with the 32,000. they earned the money. want to pass it on. >> no, they did not. they will be dead. no, they will be dead. ll also f, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying... [ all ] i'm with scottrade. that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan,

insured by unitedhealthcare insurance company. like all standardized medicare supplement plans, they pick up some of what medicare doesn't pay. and save you up to thousands of dollars in out-of-pocket costs. call today to request a free decision guide to help you better understand what medicare is all about. and which aarp medicare supplement plan works best for you. with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients... plus, there are no networks, and you'll never need a referral to see a specialist. there's a range of plans to choose from, too. and they all travel with you. anywhere in the country. join the millions who have already enrolled in the only medicare supplement insurance plans endorsed by aarp, an organization serving the needs of people 50 and over for generations... and provided by unitedhealthcare insurance company, which has over 30 years of experience behind it.

call today. remember, medicare supplement insurance helps cover some of what medicare doesn't pay -- expenses that could really add up. these kinds of plans could save you up to thousands in out-of-pocket costs... you'll be able choose any doctor who accepts medicare patients. and you never need referrals. so don't wait. with all the good years ahead, look for the experience and commitment to go the distance with you. call now to request your free decision guide. this easy-to-understand guide will answer some of your questions, and help you find the aarp medicare supplement plan that's right for you.

fiber one. uh, forgot jack's cereal. [ jack ] what's for breakfast? um... try the number one! [ jack ] yeah, this is pretty good. [ male announcer ] half a day's worth of fiber. fiber one. megyn: a fox news alert on new developments between the department of justice and dozens of states. i'm megyn kelly. the attorney general eric holder going right after what he calls voter rights in remarks at the naacp and their national convention in houston two hours sea go. specifically calling out a new law in texas. that new law requires voters to show a photo i.d. in order to cast a balance the. mr. holder and the d.o.j. blocked the legislation prompting a lawsuit. that case started yesterday in federal court. today the attorney general saying he is not going to allow any state to bully people away

from the ballot box. >> after close review, the department found this law would be harmful to minority voters, and reject its implementation. we'll be vigilant and loud to protect voting rights and voter fraud. but we'll not allow political protect to disenfranchise american citizens of their most precious right. megyn: casey stegall joins us live with more. >> reporter: it got a little heated a couple of times. the justice department cited multiple reasons why they believe this texas law is unfairly impacting minority votessers. they say a lot of them live in rural areas and cannot make it to dps or department of public safety offices where they need to obtain the proper

identification. or they may not have the funds to acquire the documents needed to secure that i.d., therefore it is diseven franchising part of the electorate. the feds say 1.2 million of texas voters lack any form of acceptable identification under this proposed law. >> i can't predict the future and i don't know what will happen as this case moves forward. but i can assure you that this justice department's efforts to uphold and enforce voting rights will remain aggressive. [applause] and i have every expectation that we'll continue to be effective. the art of american history has always moved towards expanding the electorate. it's what made this nation exceptional. we'll simply not allow this era to be the beginning of the reversal of that historic

progress. >> reporter: the state argues texas voters want to show identification when they head to the polls to avoid any impropriety or voter fraud. attorneys for the state are pointing to records that show 500,000 deceased individuals are currently on the voter roles and that's one of the reasons they believe showing an i.d. is necessary. rinse to our attorney general. >> the allegations made by the department of justice that hispanics will be diseven franchised are faction alley fictional. >> reporter: closing arguments happen friday in d.c., then a three panel judge will make a ruling in about a month. attorney general eric holder also talked about immigration, specifically referring to the recent supreme court ruling on arizona's sb1070. he said to the crowd today, no

american should ever live under a cloud of suspicion based on what they look like and of course he's talking about the portion of that bill that stands, allowing law enforcement in arizona to request a person's paperwork if it is suspected they are in this country illegally. megyn: casey stealing, thank you. governor romney will be speaking at that convention tomorrow. president obama will not. he turned down that invitation and will send vice president biden instead. that raises questions about whether the president could be taking the black vote for glantd this election. we'll take a look at the question in just a few minutes. president obama yesterday predicted that a tax hike on middle class americans of $2,200 a year would have very negative consequences on millions of americans. >> that why i'm calling on

congress to extend the tax cuts for the 98% of americans who make less than $250,000 for another year. if congress doesn't do there is, millions of american families including these good looking people behind me, could see their taxes go up by $2,200. starting january 1 of next year. that would be a big blow to working families. and it would be drag on the entire economy. megyn: but that's about the same amount many middle class families will be taxed if they don't buy insurance under obama-care. joining me now, an economic researcher, the current president of american commitment, and a former executive at americans for prosperity as well as a columnist for foxnews.com. the president saying if you

pinch middle class families for $2,200 by raising taxes, it will be a drag on the economy and hurt those families. about it question is whether the individual mandate if a middle class family declines to buy insurance as required by obama-care, is that about the tax they will wind up having to pay? >> pretty similar. there is a couple-year phase-in. but the penalty is over $2,000. $2,085. it's 2.5% of adjusted gross income. he said a one-year extension which means he wants to hit all those middle class families with the expiration of the tax cut a year later. that's what he proposed. megyn: i want to talk about the obama-care tax as the supreme court called it. you are talking $2,000 for a family of three they will have

to pay to the feds if they don't buy health insurance? >> that's right. we are talking about a new government defined qualified health plan with a government defined minimum essential health benefit people will be required to buy. even the lowest cost of these policies will be pretty expensive. megyn: the reason many of these families don't buy it is they can't afford it. the president and the new law are going to be arounding state-run exchanges which will make it affordable. if a plan costs $15,000, it will be subsidized and it won't cost $15,000 for the family. how much is it going to cost? >> even if they qualify for the subjects does under this new law the lowest cost policies that will be offered to the evenings changes are expected to cost

$12,000 per year. the fact that you can use subsidies to pay for that, that subsidy comes from other taxpayers. i think as a society we are going to be paying vastly more for healthcare as a consequence of this. megyn: i see your point that others are subsidizing it. if a family of three looks at a plan that cost $12,000 and the feds say we'll cover $8,000 of it. that's still $4,000 the family has to pay out. they don't get it for free >> that correct. a lot of families are going to be facing a situation where they will have to pay $4,000, $5,000, $,000 out of pocket or choose to pay the $2,000 penalty and go without insurance. megyn: if you pay the penalty, you don't buy the insurance, do you get anything for the penalty? >> you get a higher tax bill from the i.r.s. megyn: it's not like you get health insurance. that's a purely punitive tax.

>> that's precisely what president obama campaigned against. he said i'm not going to punish people for not being able to afford healthcare. i want to make it less expensive. and now we know the rules and regulations will make it more expensive and it will punish people. megyn: he went on the "ellen" show and was critical of hillary clinton for that reason. he had an issue with the mandate being proposed by his rival hillary clinton. here is part of an obama ad from 2008 on that point. >> hillary clinton is attack but what is she not telling about her healthcare plan? it forces everyone to buy insurance, even if you can't afford it and you pay a penalty if you don't. megyn: there is a question about when this kicks in.

they have don't math, they can't afford it. they have got a kid in college, kids in private school. whatever it is. put food on the table. now they will have to pay this penalty and the i.r.s. will take it out of their income tax returns. the question is whether that does have a drag on the economy as the president is predicting in arguing for his middle class tax cuts. he's saying $2,200 a year creates a drag on the economy. >> i think it will create some. the $2,000 tax doesn't phase in until 2016. but the tax out of the healthcare law that will have a huge impact is the surtax on investment income on capital gains and dividends. that will hit the same time the president wants the bush tax cuts to expire. we'll have a dividend tax go from 15% to 43%.

that could knock 25% to 40% off the stock market. we could be looking at a negative story at the end of the year if nothing is done about that. megyn: we have breaking news in egypt where the country's new president and its highest court upped the stakes in an ugly showdown over who is running the country. this is an important country. we'll have a report on what's happening in egypt after the break. tearful testimony from an angry daughter sending the wife a former nfl star to prison. and we are now hearing about the so-called death tax that is almost going to double at the end of this year. and will soon possibly affect millions of american families who were not at risk before you pay taxes on your money, then you die, more tax on your

estate. just ahead how this fight which we talked about a while ago is suddenly back. >> megyn, you are going to to have to let me answer the question. the on question here is not whether or not there should be a tax on that. the question is where the limit should be and how much. megyn: no, i'll ask the question. tell me how is it fair? >> ready? megyn: i am.

♪ [ female announcer ] life is full of little tests, but bounty basic can handle them. in this lab demo, bounty basic is stronger than the leading bargain brand. everyday life. bring it with affordably priced bounty basic.

megyn: we get breaking news on a tense showdown in egypt over the hard line islamist president and the nation's highest court. it's all over who is in charge and who is in the parliament. leland vittert has the latest. >> reporter: we have a showdown went army and the newly elected muslim brotherhood president who wants to control

egypt. the united states is count on the egyptian army to maintain serious u.s. interests inside this region. the muslim brotherhood controlled the parliament, democratically elected. a few months ago the army dissolved the parliament saying they didn't like the election. the muslim brotherhood president comes in and recalls the parliament. the army says that recalling of the parliament was illegal. so what are the possibilities going forward you? could have a negotiated settlement which is something the secretary of state has talked about to calm things down. but things in egypt have a tendency to get out of hand when the brotherhood doesn't like something they send people to tahrir square for a showdown with the army which as we know those things tend to get violent. megyn, back to you. megyn: thank you, leland

vittert. we showed you at the top of the hour that attorney general eric holder made remarks about voting rights before the naacp national convention in houston this morning. but there is another story and that's president obama's decision to take a pass on an invitation to speak. governor romney will speak tomorrow and vice president biden will speak. it's raising questions among some on whether president obama is taking black voters for granted. now some are saying that he is taking the black vote for granted. this is reverend william owens saying he meets with everybody

except for the people po who put him where he is. >> this is political reality. blacks were vested in the president's color during the 2008 election. but there aren't enough blacks to elect the president. they are 12% of the population. hispanics are a larger group. he ran by throwing coalitions by together. sub sets of the american mosaic if you will. those people went out and vote for them. unless they have a defined interest they can use, they are not that valuable. also he didn't run on a black agenda. to give him credit because you are suppose to be the american president. he didn't run on that even though he self-identifies as black, and that's causing friction in the black communities. they are fighting with hispanics and illegals on the lower end of the socioeconomic scale. they are look at the policies and government failures, worst

schools, social services. failing urban environments megyn: there may be unhappiness in the black community. president obama beat mccain 95% to 4%. look at the erosion now. rasmussen reports 93% to 93% to 3%. is there erosion in the black community? >> i want to take issue with something david said. he says african-americans elected president obama because we were vested in his color. that's insulting to say we can't think for ourselves and discern policies. that's an insulting policy to make. you are causing harm when you say that first of all blacks vote for democrats historically in large numbers since basically jfk, so that's not new with president

obama. megyn: the risk the reverend is saying he feels like he is taking their vote for granted some are saying he needs to work for it a little bit more. >> president obama has had policies that are targeted towards the african-american community as well as other communities that are suffering. one fact that people are unaware of, there has been a 155% increase in african-american businesses getting access to capital via the small business administration. megyn: the unemployment rate is much higher than the national average. >> since 1972 since the government has been tracking that number the unemployment among blacks has been double. >> let's look at black unemployment from 16-25, 19-25 even more closely, which is 36 36.5%. when you look at what we have here. real empowerment in the black

community. be insulted all you want it, more insulting to take a group of people and say you historically vote for democrats. we are not black americans, white americans, hispanic americans. but it is -- here -- megyn, let me finish. it is more insulting and you can't paint everybody in one community. when you have a predominance of voting by party and race and gender, then you have a problem. then the black community. this is their history for 40 years. megyn: is it a mistake for him mott to speak at the naacp convention? >> he has tons of his supporters. but the bigger issue is if david is concerned about these issues you would be supporting workforce training. president obama has been pushing

workforce training which will helpful some of the 3.6 million jobs open right now. workforce training will help. megyn: be right back. so i test... a lot. do you test with this? freestyle lite test strips? i don't see... beep! wow! that didn't ta much blood. yeah, and the unique zipwik tab targets the blood and pulls it in. so easy. yep. freestyle lite needs just a third the blood of onetouch ultra. really? so testing is one less thing i have to worry about today. great. call or click today and get strips and a meter free. test easy.

megyn: back to our top story from last hour. president obama make remarks about the economy in cedar rapids, iowa. he's calling for a tax hike on americans earning more than $250,000 a year. iowa is a swing state he carried by 9.5 points three years ago. but the latest polls show him in a tight race against governor

mitt romney. if you would like to his to the president you can. we are streaming his remarks live at foxnews.com. tragic story out of hawaii where a new york teen has been lost at scene. 15-year-old tyler madoff was on a kayaking trip when a powerful wave swept him and another 15-year-old boy into the pacific. the other teen was rescues but madoff has not been seen. now his parents are questioning whether this tour group did all it could and should have to find their son. trace gallagher has more. >> reporter: this is a combination of a hiking and kayak tour. they were kayaking on the big island of hawaii. they were sitting on rocks well above sea level when that unexpected wave hit. rescuers said the surf conditions were extraordinarily rough. one of the boys got out, 15-year-old tyler madoff did not

get out. now his parent say the guides simply did not do enough to save their son. listen. >> the people from the expeditions have shown poor judgment and extremely poor character. none of the boulder people stayed on the site to continue to search for our southern tyler. >> reporter: the tour company disputes that saying it's just a freak accident that occurred in a split second and everyone did exactly what they could. the madoff family did say they were grateful for all that the coast guard did and all the locals did to try to help find their son. but as you can guess, they are devastated by their loss. here they are. >> tyler is gone ... we love you. from the bottom our hearts. you are the best of your mother and the best of me.

you brought smiles and joy to everybody. >> reporter: the family is back in white plains and the coast guard notified us they concluded the search for 15-year-old tyler madoff. no body, nothing, megyn. megyn: trace, thank you. the saga of the white house party crashers goes on. who could forget them waltzing into a state dinner in 2009. breaking news about the multi million dollar lawsuit salahi filed against a rock star you likely know very well who knows his wife very well. and a fight over the death tax is suddenly alive and well with reports that the rates will almost double at the end of this year and president obama not calling for that specific tax to be addressed. your family could wind up paying the price. we'll talk about it after the

break. >> they earned that money. >> no, they did not. megyn: is it not double taxation? ♪ [ acoustic guitar: upbeat ] [ dog ] we found it together. on a walk, walk, walk. love to walk. yeah, we found that wonderful thing. and you smiled. and threw it. and i decided i would never, ever leave it anywhere. because that wonderful, bouncy, roll-around thing...

had made you play. and that... had made you smile. [ announcer ] beneful. play. it's good for you.

i haven't thought about aspirin for years. aspirin wouldn't really help my headache, i don't think. aspirin is just old school. people have doubts about taking aspirin for pain. but they haven't experienced extra strength bayer advanced aspirin. in fact, in a recent survey, 95% of people who tried it agreed that it relieved their headache fast. what's different? it has micro-particles. enters the bloodstream fast and rushes relief to the site of pain. visit fastreliefchallenge.com today for a special trial offer. megyn: if i work all my life and pay tax on my income, why should i pay the government again? why should there be a 35%, 45% tax on that again?

>> you aren't paying anything in that case because you will be dead. megyn: the estate is and that's less for my children. >> the on question is megyn: you are not answering my question. >> megyn, you will have to let me answer the question or we won't have a conversation that gets us anywhere. the only question is not whether there should be a tax on that, the question is where the limit should be. megyn: i'll ask the question, just tell me how is it fair? >> ready? megyn: i am. >> the question how much it ads to our debt. no one can be in favor of that and come on your show and say i'm so concerned about the debt because it's adding -- 72 billion for 75 billion to aid 32,000 people. megyn: they earned that money they want to pass it on to their children. >> no, they did not. they will be dead. those people will be dead.

megyn: do you miss him a little bit? the debate lives on. that was yours truly and former new york congressman anthony weiner in 2010 having a discussion about the so-called death tax the government levies after you die. the tax rate is expected to double to 55% to 60% and millions more will have to pay it. joining me to discuss it, a republican political analyst and national political course end. and mark hannah. now we -- the former congressman and i set the stage for you two. you can take it from there. >> i don't know if we can live up to that. megyn: i miss talking to him. >> i'll try to be a little bit more cooperative.

nice glasses there. megyn: it's actually no laughing matter. for a lot of americans who will be subject to paying this. you don't have to pay it unless your estate is worth $5 million. but as of the end of this year it will go way down to $1 million. it will get taxed at 55%. fair? >> there has been bipartisan consensus since 2001 to obviously remedy this problem because it's and totally punitive tax. all you have to do to have your family pay for it is die. there is something fundamentally wrong with that. the other part of that is it has no meaning to the federal government. the congressman was wrong in his numbers. it raises $24 billion a year in revenue. at the same time hurts the individual taxpayer far more

than it helps the government and it slows count ability to grow jobs and have the small business private sector job creation we need to get economic recovery. megyn: the president focused on the middle class right now. and that's what congressman weiner is trying to say. these are super rich people. if you have an estate worth $1 million you are rich. and too bad on your kids. >> this is absolutely a tax that's targeted for the wealthy. a lot of people when they die give an intear hans to their kids. this is only affecting 1% of the insharon answers. if you are wondering whether the death tax is going to affect you, it's not it's such a misnomer. a republican strategist came up with this term "death tax."

megyn: frank luntz, the evil genius. >> there is a quote, who is going to be affected by this? the fortunate sons. those who didn't work for the money they got. they inherited it. one in five americans inherited their money. that means 4 in 5 earned it the old-fashioned way living the american dream which should be predicated on giving your children -- megyn: mark thinks their kids are spoiled brats. >> who do you work for? the state or your family. megyn: it's tony's turn. >> this is like megyn's court today. family businesses which means small businesses, farmers. this isn't about corporate

scions. who just put money in the bang and give their kids trust funds. this is people who have slaved to get and earn what they have, who simply want to transfer the business they grew and sacrificed for to the next generation with a minimum tax penalty. i think we can agree. mark you are representing the fringe element of the democratic party since so many democrats have agree to reform this death tax in. megyn: the point i'm trying to make with anthony weiner. i pay tax on my income. i already paid my income taxes. then when i die. if i get paid a million and if you are in new york city it would be half that. then i die. and i have an estate that's ultimately worth let's say $2 million in the bank. why having paid on that money should i have to pay another 55%

to my estate. why can't i give to it my kids. i already paid money on that >> the same reason you pay after you take your income tax as a small business person. if you sell your business, you pay taxes on the sale of the business. most transactions in this country get taxes. >> we are not talking about a death tax. if you want to talk about death tax you can talk about mitt romney raising fees on funeral directors when he was governor of massachusetts. >> this isn't a death tax, it's a tax against massive insharon answers for mill d massive inheritances for millionaires. megyn: paris hilton -- people always go to that. i don't care if she gets any money from her parents, she is

already super rich. let's take me. i came from a very middle class family. my dad is a teacher, my mom is a nurse. we didn't have any money. i never had any money. let's just say i had some credit issues in college and law school days. but now i'm make something good money and i work hard and got this big job at fox news. i'm hoping when i die i will have a million dollars saved and i would like to give to it my kids and not the feds. >> paris hilton's father and family set up trusts and legal entities to avoid paying a lot of these taxes. the super rich this applies to don't worry about the death tax. the people who worry about it are those who are leaving under $5 million estates and businesses and farms they worked hard for. and they can't necessarily figure out a way to protect that money. they are buying pins premiums so when they die the kids can use

the pins money to pay the taxes. that's un-american. i'm glad so many democrats agree with this reform. >> the reason some congressmen agree with this reform is because they are also millionaires. there is a myth this is going to hurt small family businesses. it's not. with some tax -- megyn: what about me. why shouldn't i be able to leave my estate to my kids after i paid 50% in taxes on it. why can't i leave what's left over to my kids? i'm not a rich millionaire. i'm a blue collar gal at part. >> if you get a little bit more in the tax bracket. the 55% is for billionaires. when my disaster passed 10 years ago my two younger brothers and i inherited a small acre of land. we didn't get taxed on that at all. so for tony to call it a death tax i think is offensive.

when i experienced death in my family nobody got taxed. >> i was there was a value associated with the property. the last study done in 2009 on this issue found if you repeal the death tax against something there is bipartisan support to do you create 1.5 million jobs. you infuse 1.6 trillion capital back into the small business economy. megyn: right now you are not subject to this unless you have an estate over $5 million and you get taxed up to 35%. at the end of this year. if you have estate worth $1 million you get taxed at 55%. barack obama accepted he would like it to be exempt up to $3.5

million. but if nothing the president and congress went end of this year. we are going to the 55% plus a surtax on top of that. we'll leave the viewers with tony's question. is death a transaction? >> 22 million jobs we grew under president clinton. megyn: mark, lighten up. see you soon. coming up next. we are taking your thoughts on that. follow me on twitter@megyn kelly. coming up next, family secrets and tearful testimony from an angry daughter sending the wife an nfl star to prison. >> i'm on the ram for riverside off the 94 going westbound. >> is he on the ramp? >> he's on the ramp. the medicare debate continues in washington...

...more talk on social security... ...but washington isn't talking to the american people. [ female announcer ] when it comes to the future of medicare and social security, you've earned the right to know. ♪ ...so what does it mean for you and your family? [ female announcer ] you've earned the facts. ♪ washington may not like straight talk, but i do. [ female announcer ] and you've earned a say. get the facts and make your voice heard on medicare and social security at earnedasay.org.

megyn: shocking developments in a hit-and-run accident that pit an aspiring pop star against her own stepmother. amy sensor is facing a sentence of 3 1/2 years in prison for a hit-and-run accident that killed this man. the victim was a chef who was struck by a car and killed while putting fuel in his car on an exit ramp. >> reporter: she not on struck and killed that man but she also brushed the car, leaving some of the damage at the scene. here is a 911 call from the night it happened. i want to play this. >> there is a body laying on the ramp. i'm pretty sure they are dead. >> like next to it? >> i didn't get out of the car because i don't know if it's safe or not.

>> reporter: amy sensor kept going claiming she thought she hit a pothole. she was eventually caught, convicted and before she was sentenced to 3 1/2 years she claimed she was so remorseful she tattooed the name of the victim on her wrist. the judge says her remorse range true butted ad this avoidance of responsibility was not out of panic or confusion, it was orchestrated. when they first connected them to the hit-and-run. the 28-year-old stepdaughter of amy thought the police would have thought it might be anybody in the family. so she pushed her step mom to come forward. this morning she told "good morning america" she is not sure she buys the step mom's story. listen. >> i believe she is remorse phil, yes, absolutely.

but i kind of agree with the judge that it's hard to believe that you didn't know you hit something. >> reporter: she is an aspiring pop singer. the family is very well known. joe sensor runs a chain of restaurants in minneapolis. megyn: the question is whether this punishment did fit the crime. we'll do the court in two blocks. joey, she got 41 months in prison. she could have got 57 months. she left the scene. she had to be tracked down. there was a question about whether she deleted text on her cell phone to cover up her behavior. there is a question whether alcohol was involved. did the punishment fit the crime? >> i think so. even from a prosecution perspective i will say this.

you have to balance multiple things as a judge to met terks out a sentence you think is -- in order to mete out a sentence that you think is appropriately. there are 113 letters submitted by friends and relatives speaking to who she was. having said that. there is a need for jail here because you want it to have some deterrent value. under no circumstance should they be hitting and running. megyn: david, a maps is dead. 3 1/2 years in prison. she left the scene. she didn't take responsibility initially. she seemed to have mislead the court when she said she didn't know she hit anybody. >> this tattoo tribute will remind her of the consequences of her crime. i give the defense attorneys plenty of credit for that.

but apparently she had no prior offenses. she did come forward, she showed tremendous remorse at her sentencing. megyn: they are sorry when they are on trial for their freedom. we'll talk more about it in three minutes. don't go away.

megyn: how much of a factor should it have been that the judge did to the feel she took responsibility or was honest with the court about what happened. to the end she maintained she thought she hit a pothole. she ran over a man and killed him. >> i think there is a lot to say about her veracity or lack thereof. she said i really shouldn't have been convicted of anything. and if i would have it should have been a misdemeanor.

the other thing is that it strains credibility for you to think you hit something and you don't stop. you don't question. you don't call 911. you take no affirmative steps to address what you have done. in that instance the judge was right in rejecting the defense request for a downward departure that would have provided her with probation. megyn: 57 months in prison. for a man dying. if you want to send a message as a judge why not throw the book at her. to this moment you have failed to take responsibility to honestly own up to what you did on the night in question. the prosecution is saying she had several texts she was deleting from the night of the accident and the next day from her cell phone. why was she doing that. >> she definitely panicked. no question about it. there is also the issue of contributory negligence. the man was on and an offramp

putting gas in his car. whenever there is the issue of getting off the freeway and some wins on the side of the freeway you are going to have a contributory issue. there will be a presumption of alcohol and there will be a higher penalty. she didn't have any history that would warrant deviating. megyn: a man is dead. we are not talking about the different between 20 years and 5 years. >> you are right to be outraged by this. but to the point of the contributory negligence this person was not doing anything illegal. they ran out of gas and were standing on the side of the road. megyn: the judge wanted to send a message of deterring other would-be hit-and-run drivers. are you receiving a payout from a legal settlement

or annuity over 10 or even 20 years? call imperial structured settlements. the experts at imperial can convert your long-term payout into a lump sum of cash today. : a party? [ music plays, record skips ] hi, i'm new ensure clear. clear, huh?

my nutritional standards are high. i'm not juice or fancy water, i'm different. i've got nine grams of protein. twist my lid. that's three times more than me! twenty-one vitamins and minerals and zero fat! hmmm. you'll bring a lot to the party. [ all ] yay! [ female announcer ] new ensure clear. nine grams protein. zero fat. twenty-one vitamins and minerals. in blueberry/pomegranate and peach. refreshing nutrition in charge! >>megyn: