versus san francisco. >> a great saturday. >> the fight is on to the finish. both candidates out pushing their plans to rev up our economy and we find out it's still not in full recovery mode and more u.s. companies are announcing major firing, not hiring. the president has his pamphlet and the governor has his overall plan. and more on the pamphlet later. and is governor romney's call right or wrong? i'm brenda buttner, it's bulls and bears. we've got gary b smith. tobin smith. jonas max ferris along with tim la camp and steve murphy, welcome, everybody. okay. the folks at forbes will tackle the pamphlet plan in one hour, fair and balanced. what about the plan to

overhaul the tax code. what is it going to mean for jobs. >> i think it's going to be great for jobs. overhauling the taxes is the thing that the governor and hopefully president romney can do. and incents, if that's a word, every individual and corporation out there. provides a path of what they're going to do, what they're going to pay and if it's simplified and overhauled, it will get rid of hopefully a lot of the special interests, which takes the government out of the intervention and provides a clear playing field for everyone. this could turn around our economy, if done soon and done right. >> brenda: jonas, we don't know exactly what kind of overhaul we would get and isn't that adding uncertainty? wouldn't that keep people from hiring? >> moreover, it doesn't really, neither plan really addresses the deficit and the need for revenues. let's leave that problem off the table and talk about the job situation. i like what romney wants to do, the code has a lot of deductions that shouldn't be there, we should just lower

rates and get at them. and in fixing that, if you pay 25%, and then you get deduct the mortgage or don't get to deduct the mortgage and pay 20%. if you're net-net not getting taxed any more, i don't see how that's actually going to lead to more spending and i tell you a little dangerous in the short run, the housing market is still-- and to pull out major deductions the home mortgage deduction being one of them. he didn't say he was going to do that, if it didn't do that, but makes the budget work. >> brenda: i know, the tax code is like war and peace. overhauling it, will that help get jocks. >> like you've read that. >> not immediately, but look, we've got the most sophisticated tax code in the entire world, makes us uncompetitive and the u.s. falls on a competitive basis and a lot of reason is the tax code. what it's done, it's made small businesses at a big disadvantage to big business. because what happens is big crony businesses getting their

loopholes and their deductions from washington in exchange for higher rates, and it becomes way too complicated for small businesses to have to hire lawyers, they have to hire accountants, just to figure it out and steven hawking doesn't figure this out. it's not going to fix our economy immediately, but remove the biggest obstacle to growth and that's a complicated tax code. i'll tell yu, focusing on little things, little pieces of this, like the mortgage deduction, focusing on bits and pieces, and the problem. the problem is it's just way too complicated and small businesses cannot figure it out. >> brenda: you know, it's interesting though, steve, the other steve not hawking, because a lot of the bigger businesses have been laying off this week, huge, huge numbers coming out and they depend on a lot of these deductions, actually. >> yeah, no i think what we have to-- jim is absolutely right. first of all, steven hawking, would have looked at all this have and call it an alternate universe. it doesn't, you know, it defies the reality that we

live in here today. look, our economy is transforming. the consumers, we're not going to prompt them into picking up the negative savings rate and spending that we had before the wall street collapse in 2008. they know better now. they're not going to be burned again. and this is an opportunity for exports are picking up, manufacturing's picking up and we need to stop consuming more than we've produced and start exporting more. so, yes, making our businesses more competitive is critical to that, and look, i would just get rid of every single corporate deduction, and bring the rate dramatically down, and cut it in half. 15%, something like that and they have to pay it on domestic profits, they have to pay it on foreign profits, minus whatever they're paying locally and just, and there are several other policies we're not allowed to get into this now, not enough time, it ought to be about making american business more competitive and exporting and increasing our advanced manufacturing or exporting.

>> brenda: toby, is this going to increase jobs in the short-term? we're all looking long-term, even getting this whole tax code simplified would take forever. >> well, it would if we did two things. remember, we have this bizarre tax system that we started in the 19th century that taxes me as a company on money that i've made overseas twice. that makes no sense. we're the only country in the modern world and the stone age that continues to do that. and we also happen to be the only country in the world where you can deduct mortgage interest from your home. the only country in the world. canada, a few paces away from here has never done it, they have a much healthier home system. and we also can't deduct-- excuse me, a business and a person who gets benefits, i don't get taxed on my benefits, that came from the 40's. we have to get into the 21st century and that would get companies to unleash this 2 1/2 trillion dollars in cash, that's sitting on the sidelines. >> brenda: well, gary b, you know, toby was back in the 19th century and understands all of this from personal-- >> and it was a fine time.

(laughter) >> and the points, that romney is going to have a lot of problems, kind of jonas alludes to, getting rid of a lot of these deductions. there's a lot of special interest, but it's the special interest that are kind of mucking up the economy. the government should not be in the housing business or pushing people into the housing business. that's exactly what the mortgage interest deduction does. and every industry and every service rely on a level playing field and that will unleash the power of the market, not the government mucking up things with all of these deductions here and there where, as you point out. like war and peace, you can't figure it out. the only industry that will suffer from this is the c.p.a. industry. >> okay, now, jonas, you get rid of the mortgage interest deduction, what happens-- we're talking about jobs. what happens to the housing market and the real, the wealth effect of people? they're going to stop spending, what's going to happen to jobs then. >> ideally we would have

gotten rid of that deduction before the bubble. now that we've had the crash, a lot of people buy homes because they look at the after tax benefit and for home sales, at best phased out. do you it overnight you'll see home prices drop, 10, 20% and people might start to by in anticipation of it going away. the other one is health care, get that free, take that deduction away and all of a sudden your health care costs go up. you can't get out of these in a short period of time, too disruptive to the health care industry and home building industry. >> and here is the problem with that deduction when they're looking to buy a house. >> they're looking, but the health care, you're wrong. ear not going to come out and say, geez, i have a heart attack and oops, wait a minute it's going to be taxable income. that's not how it works. >> it would act on a tax increase on a lot of people. >> and you can't tax-- >> and you if, phase it-- >> hold on.

>> a $300,000 home-- >> this benefit primarily, it starts to phase out. over like a million dollars all of a sudden you're paying the marginal rate and the deduction, even the mortgage deduction, 1 million dollars. the point is, the effect is to make the tax code lets progressive, ultimately somebody making $100,000 a year with a house with health care plan paid by the company is going to pay a higher rate and making 2 million dollars, those deductions got phased out after 2, 300,000, to the higher and lower rates-- >> hold on, that's got to be the last word. i love you guys, you get so passionate about taxes, i am so lucky. all right, no within's been following what this election means to your money, your job, and your taxes, like who else, but neil cavuto and he's back at it next weekend. first on saturday for a special cost of freedom, your ballot, your bucks, starting at 10 a.m. eastern and then back on sunday for a special your world at 4 p.m. for neil, it's always about your wallet. so don't miss it. but first, neil and his gang

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>> a fox news weather alert. i'm anna kooiman, forecasters warning of a monstrous warm that threatens to be one of the worst in decades. sandy regaining hurricane strength this morning as it barrels toward the east coast. threats of high wind, heavy rain and maybe snow could hit from washington to maine and leave millions without power. several states have declared emergencies, residents being urged to stock up on food, water and batteries. and meteorologist rick reichmuth is in the extreme weather center. >> good morning, the snow

you're talking about will be across the central appalachians, west virginia, pennsylvania and ohio, everybody else we're talking about a rain event. the rain already in across the carolinas, and it will get worse through the afternoon. winds gusting up to 50 miles per hour at times, but the track is it interesting, generally this time of year, these storms move out to sea. not the case this time. we expect it to take a hard left turn sometime sunday and make a direct beline for parts of the coast line of new jersey up to long island. somewhere in that area appears to be the target. this is what we can break this down and show you how we're going to expect it. today, heaviest rain is along the coastal carolina area getting worse through the afternoon and winds gusting up to about 50 miles per hour at times and tomorrow, the wind will intensify, but it will also spread north by tomorrow afternoon, we'll see tropical storm force winds, potentially up around new york city and coastal areas of connecticut. the main event is on monday. we start to see that spread inland and the wind will increase, some 60 mile per

hour winds throughout the day, on monday and very heavy rain and the storm surge moving in across the coastal areas of jersey and long island and connecticut, it's tuesday, that it spreads far inland and we'll see the rain and wind move in across the great lakes and we will start to see the snow accumulate along the central appalachians. >> you can keep track of the hurricane on our website, foxnews.com, i'm anna kooiman. >> brenda: so, just as gas prices are starting to slide. fears growing, hurricane sandy could drive them right back up. the major refiners on the east coast could take a direct hit. jim, how bad could this get at the pump? >> well, if you ask me how bad. it could get really bad. easy answer to say look, it isn't going to be a big deal because usually these kinds of things aren't, but let's take a worse case scenario, if you had a category 1 storm hit the east coast we're completely unprepared for it, first of

all. gasoline prices are too high, even though they've come down recently they're too high and we don't have any slack in this economy so this thing would be kicking our compli eco hat a time we're not circling the drain, but on the edge of the toilet. i don't think that consumers can afford the increase in the gasoline prices, nor can they afford the economic hit that they would take in that region, rebuilding at a time, again, where things are difficult in the first place. >> gary b, are you worried. >> i am not. jim had it right and then talking until he had it wrong. the east coast area that might be hit by the hurricane has about 6% of the refining capacity, that will put a little dent, sure, a spike in prices, but i think what jim was talking about, we've been through this before. multiple times, hurricane katrina, hugo, et cetera, et cetera. the snow-ma geddon to hit the east coast, each time people

thought this is it. they spike for a little bit. 24, 48 hours and then come back to where they were before. >> brenda: jonas? do you have any concerns about this? hurricane isaac when it hit, caused the biggest jump in gas prices in 18 months. >> and in this case, no, in connecticut i couldn't drive because there were trees down and your mobility goes down to the point where fuel consumption will drop as much as refining capacity unless it freakingly hits the refinery because you can't get to work, major power outages, no power for a week and you're not consuming energy when you can't turn on the power and can't get to work in your car. so it's a good thing, but keep the gas price froms going bananas in the first place. >> brenda: the east coast provides 6 1/2% of the gas that the u.s. uses. that's kinds of a-- could be a hit. >> i don't think it's going to be a very big hit. look, the prices may well go up, even if just one light

bulb at one refinery gets knocked out because they rise and fall based on expectation of demand and supply, not the reality, so, they could go up a little bit. we could have a big one-day jump. they'll corrects in a couple of weeks and people won't be driving in this mess, and they shouldn't be, just stay home, be safe and don't worry about it. >> brenda: i don't know, tobin, i'm worried, what about you? >> well, i'm looking to the nasty ugly speculators, there's a futures market in gasoline. if the people who know the business best thought that gasoline was going be to be knocked out, a huge super spike, you would have seen the futures on gasoline go up accordingly, we haven't seen it. not to say we can't have a disaster, i don't have a ouiji board. but it would have a disaster to have a lasting effect as my colleagues said. >> brenda: thanks, guys, that's the last word. and homes sales heading higher, is a new regulation

going to send them back into the basement and send the job market back there, too.

>> coming up. when you thought it was safe to run back into the housing market. the government is doing something that might have moment owners and buyers running for cover. forget the tech

>> here is something we've all been waiting for. housing numbers with green arrows, oh, new home prices jumping double digits last night and sales leaping the most in two and a half years, but jim says the government is about to knock housing back on its back. how so, jim? >> well, look, they're talking about tightening mortgage standards again because of the standards put forth by dodd-frank. lending standards are already too tight even though the housing market is improving,

you talk to mortgage companies and title companies and tell you the same thing over and over again. these deals are very difficult to close right now. even though they're closing them. and this is the reason the housing market is not, has not moved a needle on the economy, like the statistics would suggest. keep in mind 31% of home owners out there are still underwater anyway so the housing market is held back anyway, if you tighten standards now, it's going to have a deleterious effect and not only that, but the federal reserve board is out there and 75% of all mortgages, the mortgage market is becoming the same monster it was under fannie and freddie mac. we don't need this, it needs to be settled by individual banks not by the federal government. >> brenda: okay. steve isn't this kind of the price we have to pay to not have another bubble and another burst bubble? >> absolutely. mortgage lending standards should be tough. you should have to be fully capitalized to offer mortgages and standards for the borrowers should be high and standards on the derivatives

should be tough so we don't have it happen again. and other one thing i disagree with jim on, where is the money going to pay for mortgages? it's being saved right now. we have a positive savings rate, 4 or 5%, 3 trillion in savings leads to an export economy. >> we've got to move on here, toby, what's it going to do to the economy? >> if they come in, they're draconian and my point the government should not be in the private mortgage business, if there's money to be made lending to gary and me and our house that is we can't refinance because, you know, we have different incomes, then there should be a market developing, but the new legislation keeps the private market out. >> brenda: right. gary b, is the pendulum swinging too far the other way? >> absolutely, the ultimate irony, i love steve's remarks, he has such faith and confidence in the government. this is the same government in ka hoots with the federal reserve that put so much free, easy money out there, and caused the housing bubble. now, what they're--

when things are finally starting to look green and prosperous, they want to clamp down on it. get the government out of the housing business. >> brenda: okay. jonas. >> and first of all, the government is still the loose ninja lender of last resort. called the fha program, and you can put little down, 2, 3%, 0 and ma market existses. the government is throwing away money, 3% program and home path program. the lenders almost all went out of business because of their own lousy credit system they were using and over exemptions thought that homes couldn't fall and now-- >> didn't have anything to do with fannie mae or freddie mac or the community reinvestment act or ultra low interest rates, doesn't have anything-- >> do you remember thornburg, the first were to go the non-fannie companies failed first and-- >> it was a long series of steps. >> those are the ones looking

at ten cents on the dollar and don't tell me it was all fannie stuff. >> brenda: guys, there you go. >> jonas, you're right. >> brenda: gary b, last word. >> i get the last word? hey!. >> brenda: yes. (laughter) >> that's all we needed. all right. and thank you very much, steve for joining us. well, one of the 80 ceo's warning about the looming fiscal cliff just announcing something that could make you a 40% bump by the spring. i'm a conservative investor. i invest in what i know. i turned 65 last week. i'm getting married. planning a life. there are risks, sure. but, there's no reward without it. i want to be prepared for the long haul. i see a world bursting with opportunities. india, china, brazil, ishares, small-caps, large-caps, ishares. industrials. low cost. every dollar counts. ishares. income. dividends. bonds. i like bonds. ishares. commodities. diversification. choices. my own ideas. ishares.

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>> predictions? and jim, you're up first. >> sirius xm and global car fleets are selling and we've got an aging u.s. fleet that needs replacing and their margins are expanding and looks really good to me. >> brenda: jonas, do you like sirius, that radio. >> no my cool internet phone is taking the place of it. >> brenda: you've got the coolest gadgets. jonas your prediction. the touchy feely world of my cool internet phone is

spreading to computers with the windows 8 rollout. it's not just benefits microsoft, but people of the gorilla glass company of corning going up. >> brenda: you really love that thing. toby, a bull or bear. >> it was a great call about six months ago. >> brenda: gary b? your prediction? >> don't give up on amazon, i still think the stock is a winner. up 50% the next two years. >> brenda: jim, are you bull or bear, what do you think of gary b? >> a great company, but look, the valuation is still too-- it can go down a lot more and still have too high of a valuation. >> brenda: toby, your prediction? >> all right. so, at the end of the day, facebook now has figured out mobile and there's so many people beating against facebook probably moves up 30% by go, ooh, ooh. >> brenda: gary b. >> since the stock was there a serial disappointer. >> brenda: and neil, i give him a big like and cavuto on business, take it away.