this loophole is something we have talked about for quite sometime. we have had hearings in the small business commission, at the government audits and oversight committee. we had a meeting here, including a closed session. the difficulty with this legislation is that, as we are trying to close a loop hole, which i think even people who have issues with the legislation have yet to hear anyone say that is loophole does not exist. we are challenged by law that limits the jurisdiction to micro manage the way in which the accounts in question are handled. it is for that reason that, in trying to address this loophole, we have tried to strike the right balance between protecting the rights of these workers, taking into consideration the interests of businesss, the interests of consumers and taxpayers, but doing so in a way that follows federal lay and the guidelines described by the 9th circuit. the fact is the more we try to micromanage how these accounts are managed, the more likely we are to run afoul of srissa. we have in the last few weeks taken the t

a lot of the loopholes he said he closed a lot of them that didn't consider loopholes.that presentation in s&p, he bragged about raising fees quite a bit as well, a revenue measure which drew a lot of republicans in massachusetts at the time. >> closing loopholes the way he's talking about there is the way grover nowhere quist opposes. they won't let you close a loophole unless you reduce a tax by the same amount. he's got trouble ahead on that one. generally, how has romney's perception been. now it looks rough in iowa. >> you got heckled by democrats, got as good as he got. he opened it pretty well. he put together -- the corporation is a person, you know, certainly arguable. you see what he's getting at. not the best thing to say if you're trying to shed an image as a pollute-acrat. >> do you expect that we'll hear anybody using any of the things that romney said against him. or is it going to be another one of those we're all friend, we're just against barack obama debates? >> you want to take romney down. they want to kill each other. for tim paw lepty, michelle ba

it is for that reason that, in trying to address this loophole, we have tried to strike the right balance between protecting the rights of these workers, taking into consideration the interests of businesss, the interests of consumers and taxpayers, but doing so in a way that follows federal lay and the guidelines described by the 9th circuit. the fact is the more we try to micromanage how these accounts are managed, the more likely we are to run afoul of srissa. we have in the last few weeks taken the time to meet with a lot of people on this issues. we have met with the golden gate restaurants association, the chamber of commerce. we have met with business owners. we have met with workers. we have met with taxpayers. we have met with consumers and small business owners. what you have before you is an amendment that i would like to make, and i make a motion to amend the legislation along the signs of the draft before you. let me tell you a little about this amendment. what this amendment does is that it recognizes a concern that has been outline by it business community. there is a probl

either it's a loophole or not? >> you know what i'm going to telly, honestly, i think that that's not a very good question compared to what we're talking about. i don't really care. i know amazon cares a lot whether we'll tax -- >> but, listen, if you can monetize something on the internet. why do i get it, this mug right here for free on the internet when i were caulk into targcan and -- >> the thing about taxing. you've got to tax something. you could tax wealth, consumption, sales, salaries. you've got to do something. it all starts, nobody wants any of it. settle on taxing somewhere in the loop. anyway, that's not my problem. the people in d.c. can tear their hair over where exactly -- >> i'm bald. i'm not worrying about tearing my hair out. >> you're talking about -- >> i want to cut the $14 trillion deficit. >> monetize more of what we're doing with information. it's like -- >> you monetize and i'll tax it. >> people make money -- >> the question, jared -- >> a little news for you, here in new york there are

to the extend that the labor council and labor wants a closing of this loophole, it need to be done in a way that does compromise the entire law enacted a few years ago. we want to make it clear that if this board goes to the point of of trying to micromanage those accounts beyond what is proposed, well not support any effort to micromanage the accounts and amend the lou in a way that jeopardizing not only the closing of the loop hole, but also the entire ordinance as amended. that is not only a message that labor is sending, but from workers, and from the assembly member who was the arthur. the last point i will make is that labor is united on this problem. a number of us have gotten later on this issue. there was a letter that went out to the board of supervisors on behalf of the jobs. the organizations on the letter head of this letter have indicated they do not agree with the position outlined in this letter. those individual have disassociated themselves from thattler. and to the extent that there is any question about the unity of labor behind this legislation, we have a letter f

you're right, not even the notion revenue, and these silly and loopholes of the corporations get for corporate jet or oil companies and even that was off of the table and not a penny of revenue and enormous win for republicans and enormo enormously bad for the president. bill clinton, when he balanced the budget and put together the economic plan it was 50% revenue and 50% spending cuts which was seen by independents who bill clinton was focused on like a laser beam as you will e careca john, independents like that sense of shared fairness and the president has a difficult hand dealt to him frankly, but i don't know that he played it very well. if you look at the last eight months, john, has been extraordinary and back of december 10th, if the memory serves the president agreed to a bipartisan deal to cut the taxes and enormous amount straight to the debt, $858 billion to pass a tax cut seen as republican priority and then in april, spending cuts were passed to continue the operations of the government and the continuing resolution and now up to $2.5 trillion perhaps all in spending

and therefore they will be reasonable and we'll close loopholes and raise revenue.ing is a taxncrease. if anybody in america has to pay more taxes, then we're in a hopeless situation. and that leads the rest of us who don't have those loopholes paying a higher tax than we otherwise would have to pay. >> charlie: the ball's your court marty. >> i ha to believe that people will come to understandÑi if we say it enough and if you explain enough and if dav leonhardt's newspaper explains it enough that people will come to understand that changing the spendingçó that is in the tax code, the special subsidies for different kinds of individual behavior that cost revenue, that those really are spending and that they ought to be put on the spending side of the ledger, even though they technically raise revenue. >> charlie: okay then, who nailed to failed make that clear. is that the president's fault, is it john boehner's fault, my fault, is it david leonhardt's fault of that evidentual point. >> it' a relatively new idea. when i talk about it -- it's been around for decades

and by the way, not only is closing corporate loopholes-- (laughter) you are a nerd crowd. (laughter) >> jon: there's no doubt in my mind. (cheers and applause) by the way, not only is closing corporate loopholes and raising the marginal tax rate class warfare, it totally wouldn't even work. >> you can tax rich people all you want. and you're not going to -- >> the idea that if we raise taxes as the president said on millionaires and billionaires, raise taxes on oil companies, raise taxes on owners of private jets, that that somehow is going to make a difference. >> the president wants to raise the top 2 income tax rates which would raise about $700 billion over ten years. you know what, that's only a tiny fraction of the federal government's deficit. >> jon: $700 billion over ten years. (laughter) that's less money than warren buffett's cleaning lady pulls out of his shower drain every week. (laughter) no,-- so-- so $700 billion of raised revenue over ten years ain't even worth the effort. i assume these folks have the same why bother attitude towards low level spending cu

(laughter) >> jon: so closing a few corporate tax loopholes and returning the top marginal tax rate to the 90s economic boom time levels is class warfare. and if there's one thing the rich have learned, it's that class warfare is hell. >> he invoked the corporate jet class. >> so that's a whole new category of people to demonize, right. >> soak the rich, it's their fault. >> barack obama's tax on these evil, disgusting corporate jet owners. >> demonizing the rich as evil, as lazy, as inheriters of their wealth. >> he's saying fat cats. >> it's disappointing. it's class warfare and the kind of language you would expect from a leader of a third-world country, not the president of the united states. >> jon: true, because united states of america is not a third-world country. by any measure. except perhaps income in equality where we rank-- worse than the ivory coast, worse than cameroon-- 64th. ah. in your face uruguay, jamaica and uganda. (applause) uganda? yeah, uganda, yeah. (applause) >> jon: keep trying, rwanda. (laughter) wow. and by the way, not only is closing corporate loopholes-

we are losing to the treasury $1.1 trillion a year to tax expenditures, tax loopholes, tax exclusions and guess who gets most of the benefits. 26% of the benefit goes to the top 1% of those tax expenditures, those tax loopholes, those tax preferences. here is one of the most conservative economists and america. martin feldstein, professor of economics at harvard, chairman of the council of economic advisers under president reagan. this is what he said about tax expenditures on july 20th of last year. cutting tax expenditures, quote, cutting tax expenditures is really the best way to reduce government spending. eliminating tax expenditures does not increase marginal tax rates or reduce the reward for savings investment or risk-taking. it will also increase overall economic efficiency by removing incentives that distort private spending decisions and eliminating or consolidating a large number of overlapping tax base subsidies would also greatly sympathize--simplified tax filing. in short cutting tax expenditures is not at all like other ways of raising revenue. that is precisely why th

>> let's describe what is a loophole and was raising taxes.it that is of a tax lawyer and a way that was not intended by the legislation in my state, we had a special provision for real estate enterprises that owned a lot of real-estate. it provided lower tax rates in certain circumstances and some banks figured out that by calling them sells real estate companies, they could get a special tax break and we said no more of that. if there are taxpayers who find ways to distort the tax law and take advantage of what we call loopholes that are not intended by the people, absolutely, i would close those loopholes. there are many people use the word local to say let's just raise taxes on people. i will not raise taxes. >> pay your fair share of. >> i am a peacock farmer and schoolteacher. i supplement my income as a peacock farmer. since the last election, my peacock farm went away. i was going to add more people can keep everything in this state. if i support you, can you assure me that you'll make small businesses like mine better? >> i will not s

you're taking advantage of these corporate tax loopholes you're taking advantage of these tax breaks you have the responsibility to create jobs in the united states so for you to take advantage of the situation and bring up something that is so politically charged right now in this economic situation is really just disgusting r. and i thank you so much for joining us tonight thank you ana. and already today president obama announced that he's going to address congress in a joint session next wednesday night to present his brand new improved jobs plan and we decided to send our intrepid producer patrice and essentially out on the streets of washington to ask americans what they want to hear from the president. what do you think obama should do to create more jobs for this country. i'm a firm believer in supporting the infrastructure of the united states i think we need to look towards their cultural side of the united states in the things and you know maybe supporting our own maybe growing around i think the moon before you go. back and. think he alone as president can't create jobs y

down do you want the middle class to bear a disproportionate loophole? >> you made it clear this is going to have an impact on the 2012 election. explain. >> no question it is going to have an impact. the fact of the matter is over the past week, my office and all congressional offices were inundated with calls from americans saying quit this nonsense, do a fair and balanced approach that asks oil companies and corporate tax loopholes to share some of the sacrifice. the american people are holding republicans accountable for their actions. they did it this week. they will do it going into the 2012 elections. our choices are better than the republican choices. and i think that this is going to be very well for the democrats. >> you sent out a fund-raising letter after obama spoke about the debt ceiling crisis. how is this going to affect your fund-raising? >> you know, fund-raisizing an important element both for the republicans and for the democrats. but there is a time when you have to put that aside and do what is best for the long-term future of the m

this loophole is something we have talked about for quite sometime. we have had hearings in the small business commission, at the government audits and oversight committee. we had a meeting here, including a closed session. the difficulty with this legislation is that, as we are trying to close a loop hole, which i think even people who have issues with the legislation have yet to hear anyone say that is loophole does not exist. we are challenged by law that limits the jurisdiction to micro manage the way in which the accounts in question are handled. it is for that reason that, in trying to address this loophole, we have tried to strike the right balance tw

what they did was in 1986, they eliminated a lot of loopholes. they streamline some of the things then. host: and before that, eliminating tax deductions. guest: this is an ideal time to just go to a flat tax. you have made a wealthy people that do not pay -- their tax rate is 39%, but when you look at the effective tax rate, with all the loopholes, some of them do not pay much of anything. everyone ought have something in the game. we ought to go to a flat tax, and ronald reagan's economic adviser told him to cut taxes 30%. you will see the economy explode three it took three years to get the deal done. democratic congress phased in over three years. when the full 30% one in, the economy exploded. he did not raise taxes. he tried to simplify the tax code. i would say that perot that stupid ridiculous document out and start fresh. flat tax, two deductions, mortgage interest and charitable deductions. and you get rid of everything else. everyone played -- pay a flat tax. we could do with a 13% tax and everybody, make a rich, not rich, pay the same

and, you know we talk about all of these tax loopholes. the technical term is tax expenditures. what they are are special interest tax preferences for individual special interests, and it blows your mind to realize that they will cost $14 trillion over the next ten years. well, why should this special interest have a tax preference and this one have a tax preference, and yet we find it difficult as we go through the harangues here in our debate on what is the level of the tax bracket taxation on ordinary people. you know what you can do? and the supercommittee can do this. they can take a lot of those tax preferences, $14 trillion, they can take only 15% or 20% of those away, and by utilizing that revenue, you could simplify the tax code into three tax brackets for individuals and you could lower everybody's tax in that income bracket. and you could lower the corporate income tax. now, that's a real possibility that this supercommittee could do. and, of course, they could give instructions back to the ways and means committee in the house and the finance committee in the senate,

just to give you a sense of that, if you add up all of the costs of all of those loophole, it's a little over a trillion dollars a year, so it's a lot of money, and if we can eliminate or scale those barks then you make the tax base broader and more flat, fairer, less complex, and you raise a lot of revenue, so much revenue, you could probably even lower marginal rates on businesses to try to help our global competitiveness or even ensure that we don't have to raise tax rates on individuals. so i agree with the thrust of that question. i think we should move towards a flatter tax base. jenna: do you think we have the resources, and resources in the people that are in power right now, to really get that done? do they have -- and speaking frankly, the smarts? and the guidance to do that? >> yeah, you know, i think they -- here's the most important point. i think almost everyone understands that this is a good idea. from an economic perspective, on both sides of the aisle. of course, there's a lot of constituencies, each tax credit, each tax deduction, has someone who really likes it and wa

among the top corporations the didn't pay a dime and why of course because of all those complex loopholes in our complicated tax laws that's what all these major companies have actually structured how their business is run based on how they can get away without paying a penny more than they have to now add about of course the highly skilled lawyers who know all the complexities of the minute details and then of the day these companies who boast billions in profits are paying money to our federal government now we should note that there are other ways to avoid paying corporate federal taxes things like hosting overseas tax havens and in fact eighty three percent of the largest companies in america post were called those overseas overseas tax events yet another way to bend the laws and keep more. dollars in their big old money vault so with more clear evidence that our complicated tax law is helping our debt grow and grow then the frustration obviously turns to washington the politicians who left any changes to our absurd tax code out of this new debt deal and if they couldn't or chose not

personal income taxes but corporate taxes as well those same of corporate taxes that are full of loopholes right subsidies being good at the end of the day and not to them being away will be able to get away with paying almost nothing and that's something that right wingers of course being that leader not because on the books they're always crying about how the us has one of the highest corporate tax rates in the world. u.s. corporations overall place an average combined tax of about thirty nine percent that is the second highest rate among all industrialized countries it is just behind the tax rate in japan a grouping of thirty major market economies known as the oh you see you do which includes all the europeans did a study of what the most counterproductive tax had been in all those nations you know i did approach the corporate income tax as the most harmful for long term growth. all right so if companies actually paid their taxes then maybe those guys would have point but unfortunately they don't and we've covered it before on the ship but let us give you some more details that come st

the state closed a loophole. that's called tax enforcement.might not meet the grover norquist test but we'll wait and see how that evolves as the candidates debate. see you tomorrow morning on the politico breakfast with tim pawlenty and on our show right there. thanks so much,mike allen. >> safe travels. fried butter on a stick is the new thing. >> that's great for your heart, too. the doctor will be right around the corner. >>> new poll numbers now about the blame game going on in washington. they're not pretty. the "washington post" eugene robinson with us next. [ male announcer ] where'd you get that idea? how'd you learn to do that? what'd you use? every project we finish comes with a story built-in. it's how our rough ideas become "you did that yourself?" so when we can save more on the projects that let us fix, make, and do more... that just makes the stories even better. more saving. more doing. that's the power of the home depot. right now get this vanity and matching mirror for just $99. what if we designed an electric motorcycle? wh

. >> a lot of people talk about the loopholes and the importance of closing these loopholes. help us here? >> basically the thing with the loopholes is -- and every year we all send a check to washington to pay our taxes. we all know that -- >> we're supposed to. >> right. large corporations, we also hear the stories like ge and others don't pay a time. one of the best thing you can do is to hire a lobbyist to get you a tax loophole. it's not that hard to pull off. i'm not here to demonize big business. the company is taking advantage of a system we've all agreed to. we're the ones that have to be aware that we're operating in that system and seek to close the loopholes and ultimate shatter the practice of the large corporations of any kind of anywhere using that money to gain -- energy subsidy is 5% for all fuel sources. >> we know that lawmakers have vested interests and sometimes are linked cozily with some of these oil companies and they get the breaks. >> yes. and that comes down to the leadership breakdown -- we don't have a political leader engaging with the american p

when you could have protected my medicare, why did you protect corporate tax loopholes? i don't know what the national weather service is predicting for temperatures in august, but for house republicans i'm predicting it's going to be very, very hot. because they are going to spend their august defending the indefensible. thank you. >> thank you very much, chairman israel. chairman israel's one of the few democrats we can call mr. chairman. madam chair, you too. we're honored that you're both here and thank you for your great work on behalf of the american people. i'm very proud of the work that our house democratic caucus has been doing over time and relentlessly on behalf of job creation, as you heard a what was said here, there is a tremendous need for rebuilding infrastructure of america, the society of civil engineers says it's in the trillions of dollars, just addressing rebuilding the infrastructure of america will create good-paying jobs here at home. thank you, mr. president for emphasizing that -- mr. president, for emphasizing that and the infrastructure bank

in other words, if you're going to eliminate loophole, you have to make sure when all is said and done, there is no increase in the amount of money that the government is getting from taxes. otherwise they would view that as a violation of that pledge no new taxes. in other words, there can't be an increase in the amount of tax money coming in from a change in the tax revenue. there can be an increase in the amount of tax revenue coming in from an improved economy. in other words, if there's greater prosperity and more people are working, more people as a result are paying taxes. there will be enhanced revenue from taxes, but they don't want to do that as a result of any changes what's called tax reform. >> and i was listening to your interview with chris van hollen, a democrat, with great interest because what he essentially said it seems to me is that that will frame the 2012 debate because i think the democrats would be very happy it-to-go back to where they were when they were complaining with paul ryan's budget saying that republicans want to cutback to where they were when they w

>> let's describe what is a loophole and was raising taxes. a loophole is when someone takes it that is of a tax lawyer and a way that was not intended by the legislation in my state, we had a special provision for real estate enterprises that owned a lot of real-estate. it provided lower tax rates in certain circumstances and some banks figured out that by calling them sells real estate companies, they could get a special tax break and we said no more of that. if there are taxpayers who find ways to distort the tax law and take advantage of what we call loopholes that are not intended by the people, absolutely, i would close those loopholes. there are many people use the word local to say let's just raise taxes on people. i will not raise taxes. >> pay your fair share of. >> i am a peacock farmer and schoolteacher. i supplement my income as a peacock farmer. since the last election, my peacock farm went away. i was going to add more people can keep everything in this state. if i support you, can you assure me that you'll make small businesses

you have no loopholes. you have no subsidies. when you are talking about a fair tax, a consumption-based tax, that is what we had before 1916, when we created the kind -- the amendment that allows us to tax. to do the fair tax, all levels -- levels of federal taxation have to be gone, or you get what is called a value added tax. you have your basic federal tax and then a fair tax based on your consumption, and sales taxes on top of that. you have to get rid of capital gains tax, dividends taxes, the death tax, estate tax, the irs if you want to have -- [applause] i know. if you're going to have a fair tax. that means you have to repeal the 16th amendment. i believe the air attacks can be in a state, but a flat tax can -- that their tax can be an end state that we get to, but a flat tax can be a bridging mechanism. you have 40% of households that are not paying any federal income tax right now. what a shock it would be if they suddenly got a 23% national sales tax on goods and services. that is why we have a flat tax, as a means b

and have the necessity of closing the loopholes or some of those doing away with those targeted tax benefits i'm wondering if you have any observations about things you would be willing to give up. >> senator soon, we are willing to look at every benefit and believe they all should be on the table for discussion and we do receive some benefit we are not into heavy r&d investment as a retail company but there are benefits we received today that we think should be looked at as an overall comprehensive plan. i would add i believe it is possible to have revenue neutral corporate tax reform and other fiscal crisis shouldn't add to it. but i think everything should be on the table and again i would air in favor of lowering the rate and if we can get the combined federal and state in the u.s. by a 25% which would imply a federal writ of 22 or 23% then i think a lot of these incentives become much less important. >> one of the hallmarks of the global nature of the u.s. economy is the fact larger and larger percentage of the u.s. businesses outside of the united states there are those who vi

and get rid of subsidies and loopholes. those are the types of things i hope to be seeing come out of the committee. >> congressman west, appreciate your insight. let's get some democratic perspective, from a man who not only has to vote on this plan as early as tomorrow, but is on the ballot in 2012. are you a yes or no? >> i'm voting yes. >> why? >> we successfully paid back some of the attempts coming from some fairly radical proposals in the house of representatives to dismantle medicare and turn it over to the insurance industry. we also knew that there were efforts -- going to be efforts in the house, to private ties social security and turn much of it over to wall street, and we're successful in beating back those. second we can't let the united states government, the united states of america default on its obligations, it would frankly hurt far too many families in my state, small businesses. social security beneficiaries, veterans, soldiers in iraq and afghanistan, interest rates going up, what that does to homeown

on other tax loopholes. are we going to have a country where hard work pays and responsibility is rewarded or is schemers are the ones who get rewarded? >> schieffer: let me ask you this. >> that is what this election is going to be about. >> schieffer: let's stop talking about... if i say with respect stop talking about what the election will be about. >> you asked me. >> schieffer: i understand that. >> i'm just responding. >> schieffer: you made an extended response which i asked you the question. but let's talk about what happens before the election. what's going to happen between now and the election? do you see any indication that things are going to get any better? i mean, every forecast is that unemployment is going to be pretty close to 9% when we get to the election. i don't see any indication that anything very much is going to change here. you tell me i'm wrong. >> bob, well, we have an opportunity to impact on that. i think you are wrong. if we act i just laid out five things that we can do righ

there was an extensive application i had to go through to avoid the loopholes. i do not understand why you cannot cut back on medicaid. i see people that just have to write down their income on a piece of paper and that is it. they can still get medicaid. there needs to be an application like the financial aid application that we can weave through all these false applicants. host: democratic oliver north carolina. what do you think? caller: what do i think? concerning the debt ceiling, we did not get in this problem in one day. i do understand that washington needs a change in spending, but we did not get here and in one day and with a fragile economy, we just cannot cut our way out of this fragile economy because people are still losing jobs every day. host: turn your television down so we can hear your comments without feedback. more on 2012 with the deal already fodder for the campaign. gop candidates already responding. president obama recorded a video to his supporters

let's close the loopholes for rich people and get rid of write offs. t i think the evidence of the 1980's when we cut the tax rate from 70% tax payments went through the roof. we collected a higher percentage of taxes from the bridge after week cut tax rates than before. this is something john f. kennedy said. he said if you want more revenues come a cut the tax rates, do not raise them. host: you mentioned moody's. we are still waiting on moody's recommendation. when is that expected? is expected to go the s&p route 4 stay with aaa? -- or stay with triple a? guest: i do not know the answer to that. nobody knows the answer to that. if you ask me that question a couple of weeks ago, i said i think it will downgrade. i think s&p took a black eye when it downgraded. there was such a negative reaction. when the interest rates on those are at record low, everyone is saying how could you downgrade them? if people were worried the u.s. to limit was going to default on the treasury obligations, people would be demanding a higher interest rates. in fact, what h

they have since close the loophole. but it's a disgrace.i probably should frost that guys face because he's a nice, young men. he was put in a position where he could not -- teachers generally have an attitude of being a coach. for whatever reasons. and he would have lost his job, but it's a statement about how we treat teachers and how we teach the needs of our kids. i wrote this book, "the influence of teachers" as this war was heating up, this ongoing war, fighting over a 10 year seniority, merit pay and some of the in the book i talk about two camps. there's one camp that says, it's a matter of defining the problem. and this one camp says the problem is people. we just need better people. if we get better people everything would be solved. that side has firepower. it has a lottery, opera, education, candidate quality journalistic exercise on nbc. it has teach for america, it is charter schools but it has a lot of venture capitalist, hedge fund guy supporting it on the other side is this megaphone. a teacher unions and a few other people