to be owning. that is why i advocated the index. neil: thank you all. david: president obama will be out once again trying to save his healthcare reform in a few hours. he promises to safe your mine by cutting the number of years drug companies can charge high prices for brand names. >> if we can make those patents a little shorter generics get on the market sooner, you as consumers will save money. david: some say the plan will cost money and cost lives. a welcome to "forbes on fox." let's get the flip side with mr. steve forbes, elizabeth mcdonald and neil weinberg with other our group. will this hurt lives or save lives? >> this will cost lives. this is a poison pill from the president who has no understanding of innovation.

takes $800 million to $1 billion to bring a drug to market. you shorten the patent period you will get higher prices or entrepreneurs doing less risk taking because the raurds are rewards are cut short. david: quentin is this good or bad? >> i think we have to look at what drug companies document 30% of cost is marketing and 12% is r. and d. 25% of the drugs they make are novel. the rest are just sort of following on the way hollywood movies make schedules. they make sequel drugs. the fact of the matter is if they just stop producing so many ads all love to the ads they have on our show but if they stop marketing so heavily that would go straight to the bottom line and generics would be better. but they don't want to tell you the facts that that basically walking and going to church works as well as statins. david: in 2008 the drug

companies spent $1.3 billion developing drugs. so it is not cheap. >> it is not cheap and i her quentin's point he makes a good point about the advertising costs and we don't know yet the president says will jive to get $80 million of discounts out of the drug manufacturers. but when you look at what is going on with europe when the government stepped in, a lot of companies spit here to the united states because it is innovative and drug companies know that the rates of return that they get on investing in the drugs can be far less than what they plow into them in the way of costs, boots on the grounds studies and research. david: shortening patent time good? >> i think it would be good and you could look to the drug companies for guidance. they are not that worried. they have made some horse trading. what they were worried is remany port station from canada that is not going to happen because of steps and worried about the

government using massive purchasing power. that is not going to happen. incentives pharma industry got those i think they are happen. david: will it be good or bad for us? >> it would be terrible for us. this is as stupid as the arrest of obama care. schering-plough just came to market with an antisigh cot tk drug. it --ant psychotic drug. if they thought the patent life would be short they wouldn't have paid $16 billion for the company and the company wouldn't have developed it knowing no big drug marketer would pay $16 billion for it. david: they patent lot of moan out in terms of developing the drugs. they want that money to be paid off in terms of the price. >> boo hoo hoo. i'm crying for the drug companies. a patent is a licensed monopoly, a license to rape and pillage

your customers. that is what they often do. the patent period is 20 years. a certain amount of that is used for research and development. what i say is shorten the patent period to get cheap drugs on the market and in exchange we guarantee a certain period. 10 years or whatever in which the patent will be in effect. they get a guarantee and we get cheaper drugs. david: they are raping and pillaging. >> blame that on the founding farts who knew the importance of patents. as for pharmaceuticals making deals with government lennon had a description for them useful idiots because when they need the money the government will squeeze them they won't go along as the members of congress have made clear. whatever the white house promised the pharmacists they will do what they want. david: you have to admit there is a reason for patents and they pay off in the end, don't they?

>> the reason was about information sharing. protecting information for 20 years is counterproductive. this week in the journal cell there is an exciting discovery about a drug they developed that can target specific cancer cells. one mall problem for the drug companies and their arguments about their own innovation it was m.i.t. that spearheaded the study. 55% of the r & d companies calendarize on comes from public institutions as a gift. they should maybe give back a little bit. >> but there is difference between invention and innovation. there are a lot of inventions out there but it takes expertise to bring the inventions to market and prove them and make them widespread. china invented paper but it was the western world that developed the paper and made them into an industrial revolution. >> they sell generics. >> the point is steve is right, it is about incentives.

you have drug companies maybe they have a new life changing, life saving drug, alternative application for a drug and they won't want to do it because the patent is about to expire. why not extend the patent on, say, if it will save lives from cancer and let -- why not extend on those drugs and expiror cholesterol drugs? david: can consequent is not -- quentin is not against patents, is that valid? >> no. often a drug developed for one use and approved for one use is often found to help cure a different ailment. number two, if you want the patent there is something called buying it. so there is the free market out there. you can buy a patent if you want it. >> there's nothing sacred about there 20-year period for the legalized monopoly. the fact of the matter is if you look at it from a public policy point of view the problem is we have senior citizens cutting in half pills taking half the

medication for their high cholesterol and blood pressure because they can't afford it. >> i hear what you are saying about the monopoly that the government is giving the drug companies but the taxpayers invest in them and they have a lot of rverages & d tax credits. why not protect the investment by giving them the time to development drug and save lives. >> patients may cut the pills in half but they have the pills to cut in half. most compounds that drug companies come up with, most of them fail so you have to cover that. you have to have incentives to keep trying. david: if you don't have the incentives that are provided you might not have drug companies spending $1.3 billion to develop the drugs. >> it could hurt r & d but it won't because they have to create products. >> europeans gave up on it. >> it makes me more worried about people who are dying because at the can't afford a product on the market. neil: there could be drugs that are not on the market but could

be in the future and save lives we may not have if we cut the patent time. >> in poor areas the companies won't develop drugs. so -- >> don't forget the president is trying to wring $80 billion of discounts already. at the same time letting patents expire, i don't know why you need to do everything at once. >> instead of bashing the drug companies how about finding more ways of distribution and having foreign countries pay for the development costs. david: why are the drug companies for this though? >> because they have gone along with bill i toesen and some of the lobbyists -- david: the head of the farm that industry. used to be a democratic congressman. >> and a republican. so that tells you something. he is very flexible. but it is part of this useful idiot. they think government will take over healthcare and they are trying to cut a deal. they don't realize terror manufacturing the rope to hang

themselves. >> the bigger companies are willing to take a hit because they can survive. it is the smaller more innovative companies are not coming to obama. david: here is a new d.c. health plan that will have you dead bolting the door. send a government nurse into your home to tell you how to raise your kids. why somebody says that would be good for the economy. but first the great debate. how to revive the market, cut taxes or spend more. we have new evidence we just uncovered proving once and for all it is tax cuts.

>> from america's news headquarters i'm jamie colby. mu reports about a russian ship that had vanished. it is known as the arctic sea and disappeared last month. now finland investigators say a ransom demand has been made. it was sent to the shipping company based in finland but russia areas maritime website says it is detecting signals off the french coast. france saying the signals must be coming from other russian ships. the intense wildfires burning out of control in california are being fueled by strong winds. state officials are very concerned that the winds could spark more fires. the wildfires are forcing more evacuations in airs already under a state of emergency and the california governor is expected to visit the fire zone

today. now "forbes on fox" only on fox. i'm jamie colby. keep it right here. david: what is the best way to get americans back to work? cutting taxes or more government spending? we actually crunched some numbers and found several states lowering taxes this career, arizona, arkansas, idaho, maine, north dakota, texas and they all have a lower jobless rate than the national average of 9.4%. rich, is it time to follow their lead? >> absolutely. the beg problem in this recession is high unemployment and the unemployment unfortunately might get worse. traditionally it is small businesses that come in and create the majority of new jobs after a recession. small businesses on the sidelines this time. people forget most people who run small businesses do not have corporations. they are taxed at the rate of

personal income. so the more you lower income tax rates the more small businesses feel empowered and confident to go out and expand and create new jobs. david: neevepl, it is small businesses of the nation are the spine of the economy. they do most of the hiring. don't they deserve a tax cut? >> unfortunately the free marketers may not like it but at this point we can't afford that. there are two sectors creating jobs, government and healthcare. both rely on taxes. in addition, what we are talking about here with arizona is increasing the sales tax when consumers are not spending. so why not take a gun and shoot ourselves in the head. >> why don't you shoot yourself and raise the corporate tax rate. david: guess what steve forbes thinks. >> what do i say? the fact of the matter is when you reduce the tax burden on people who take risks, you get more of those good things. you are right about the surveys.

you also have the surveys showing that high tax states like michigan, new york, new jersey, california have the worst economic problems out there. low tax states make a swifter recovery from bad times even if they get hit like new hampshire in the early 1990's because of low taxes, alan: so i'm sure you have convinced quentin hardy that tax cuts are the answer, right quentin? >> well, responsibility is the answer and on the one hand i do believe that the arizona type of move of taxes consumption may make more sense than taxing income. that is a transfer of the tax burden and that is ok. what i object to is victimhood on the part of powerful institutions. yes, our nominal corporate rate is 35%. but according to treasury when you add in the loopholes it is 25%. then big corporations move a lot of stuff offshore so it is not counted. bottom line, our tax payment by

corporations is about 2.2% of g.d. period of time. the oe crfrpblts d average is 3.5%. our corporations pay less than most countries. david: as rich said, it is more the small businesses that would benefit from the tax cuts. >> he is right. the reason why companies are offshoring profits is because of the higher rates. >> no, -- >> hang on. if it were lower they may keep the profits onshore. i love how sweden, canada and south korea have lower corporate taxes than we do. >> loopholes. >> no. china, greece, mexico and netherlands have no capital gains tax. belgium and mexico and turkey have none. the others have no calendar gains taxes on stocks. h&r block the tax preparer screwed up their own corporate tax rushes. congress set up their personal i.r.s. office on capitol hill to

figure out the tax code. 26,000 government workers filed no tax returns because they didn't understand the code. get it out of the way of the entrepreneur and small business. >> what we are talking about is a simple thing lowering income tax on individuals, spur employment right now. that is out of step with the psyche of the country. david: it doesn't want lower tax sts >> i want lower taxes but i will squirrel the money away because i'm in a conservative place. i will hold on to it in case something terrible happens. that is what businesses do now. nobody is out there really taking a risk expanding, hiring anybody. host: rich, might that happen if we gave tax cuts to the small businesses, they would just store it in their basin accounts to save it for maybe when they can expand more? >> that doesn't sound like the small business people i know. but let me give you an example from the west coast where i'm talking from. california and oregon have

horrendous unemployment rates, high taxes. the state of washington has no state income tax and is doing pretty well compared to oregon and california. so, everywhere you go. the key thing is and you know this, that capital is mobile, talented people are mobile. they will escape high tax jurisdictions. >> on the corporate tax rate that has quentin upset, all those loopholes, cut the corporate tax rate to 15 and get rid of the loopholes and you will collect more. david: let it be known am capitalism is against loopholes and corporate welfare and that is the file word. now the boss asking you to work when you are off the clock. anyone with a blackberry knows how that works. now employees are suing because of this. somebody says they are just a bunch of cry babies. but somebody else has safe a

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david: the boss' block berry hit being you at home asking you to do extra work without va pay. some are suing to get paid for all off the clock duties. some say stop the whining. >> that's right. it is a blackberry carrying worker i think this is ridiculous. wages always follow rises in productivity and during the second quarter of this year we

had an unprecedented rise. so it is a matter of time. it will trickle down as employees do more work they will soon see wages increase. alan: you have to be careful because you have a lawyer next to you. >> we are talking about hourly workers and if they are being paid by the hour and they work after hours this is real work, not the g.m. auto workers being paid for doing nothing. they should be compensated for the time they work. david: what do you think, steve? >> both are true. they are cry babies and the lawyers are right. however, i hope these lawyers will hire the workers after they also the jobs because the employers can't afford tell because of high wages. we are in a tight economy. so we all should cut back a little bit to make sure we get through. david: when we all have to chip in weekends or week days? >> i don't think there's anybody that doesn't. that way right now and i really object to the idea they are cry babies. the fact is they are working

flat out and the fact is they really try hard and get up and go 20 to 30 years working as hard as they k. but it is an information age economy. you can be got to. you are competing around the world. we have an industrial structure. david: rich shall are had he cry babies or do they have a point? >> i'll talk strictly chicks. unemployment is high. point number two because of that employers have leverage. point number three, end of story. when the economy recovers there will be the reverse story. david: so we just have to wait. instead of starting this whole series of lawsuits, why not wait for the economy? >> a lot of neems that are suing have been laid off. >> i think that people are happy to have a job. with five people doing the work of seven employees for companies to turn a profit i think they are happy to have that and willing to work a little harder.

david: steve doors you expect any lawsuits from people saying i'm not going to do this unless i'm paid more. >> editors don't work by the hour, they work on a clock of their own, sometimes with closing coming you do 28 hours a day. david: might they change the hourly wage structure because of this? >> small businesses just two years ago in western north dakota because of the oil boom a mcdonald's franchise had to pay people $14 an hour. look, the economy is the economy. and right now employers have leverage. tomorrow employees will have leverage. it is always thus. david: economic common sense from the publisher of forbes. forget suing your boss. we have the stocks that will pay you even if your boss won't. the money-making names are next.

david: we are back with the stocks that are sure to pay even if your boss won't. you are going to france? >> i figure obama is trying to turn our economy that the french economy so why not go with a france stock. >> it is french. second, it sounds lying telecom stock with a high dividend. you have to hope the french government bails you out. it has taken a hit. david: you have a tough stock that makes stuff.

makes metal products. >> worthington makes metal productsment 3% dividend, not great but good. recovery play. i would say insiders have been boog helps. >> expensive on a cash flow. 1.5% return on investment. i think it has too much exposure to commercial construction which is still slow. david: auto parts retailer. >> auto zone. it has a 24% return on investment capital and been beaten up on the cash for clunkers but it is ready. >> it will keep getting beat up on cash flow because that is the only thank is helping our phony economy right now and obama will keep channeling money into cash for clunk, and that will get killed. david: i'm amazed you are supporting cash for clunkers stock. >> that is beside the point of the it will emerge stronger. david: that is it for "forbes on fox." have a fabulous weekend of the keep it right here. "cashin' in" starts right now.