• With: Steve Forbes, Bill Baldwin, Rich Karlgaard, Rick Ungar, Elizabeth MacDonald, Victoria Barret


    IN FOCUS: Gov. Christie tells Warren Buffett, if he wants to pay more in taxes, then write a check

    STEVE FORBES: He is my home state governor and he is absolutely right on this. This is the "Buffoon Rule." If it was ever put in, it would hurt capital creation, job creation and it would hurt upward mobility. In Britain they raised the income tax rate David, to 50 percent, they not only got less revenues, but the economy is doing poorer than expected. This is nonsense, the governor is absolutely correct.

    BILL BALDWIN: Listen, what is so terrible about a 50 percent tax rate? What do they say in "Rent"? "Today for you, tomorrow for me." A 50-50 split with a tax collector works, it worked in the Reagan first term. In 1984 the top rate was 50 percent, it hit at $80,000 of taxable income and the economy roared.

    RICH KARLGAARD: Oh my gosh Bill, you know your IQ is three times your advocated tax rate, but you lack common wisdom. In the Book of Leviticus in the bible, there are suggestions of a double tie, that is 20 percent. Thousands of years of human history show that when you raise taxes more than about 20 percent, people take evasive action. So you can tax people at 50 percent and you would still get Warren Buffett paying 17 percent.

    RICK UNGAR: Look, Chris Christie would do himself a big favor if he would be more careful both with what goes into his mouth and what comes out of his mouth. This line is a silly playground thing and it does not work in politics. We all know what Warren Buffett is saying here, we all know what this rule is intended to do. It is not fair, it is simply not fair in our county that employees end up paying more in taxes than employers. And, if you believe that lowering the tax rate will create employment, than you know what lower the corporate tax rate because that is who employees people. If I am not mistaken, that is precisely what President Obama has proposed this week.

    ELIZABETH MACDONALD: If Buffett wants to cut the deficit, you want to create more prosperity for the people who actually pay and create more for the people in those brackets so they can help cut the deficit. I am tired of Buffet's unbearable rightness of being, where basically he is just going on a guilt trip for investing the float in insurance companies and wants everyone else to have their taxes raised. Look, here is the issue. There is already a Buffett tax in health reform on investment income and basically we do not want DC wasting Buffett's money on Solyndras and GMs and Cash for Clunkers, and all sorts of nonsense. That is the issue.

    VICTORIA BARRET: I am disappointed Bill, I mean really. We want wealth creation in this country. We want immigrants to come here and build companies that employee other people. You are not going to have that if we have exuberant tax rates. Look Buffett, this whole thing is a fallacy. He is comparing himself to his secretary when capital gains, that money has already been taxed at the corporate level. It is a double taxation. So Bill, I cannot believe you want to increase it! What should we do a triple taxation somehow? Is that ideal?

    The White House is 'buying' votes for more controversial legislation

    RICH KARLGAARD: We have to figure our someway to flatten these spikes and make everything more transparent, as you said, before these three major piece of legislation moderate democrats suddenly started getting three, four and five million dollar grants to their district. I know there is a tradition of this but it is a bad tradition and when we are running trillion dollar deficits it has got to stop.

    MIKE OZANIAN: This is all just a coincidence David. Look, I understand what Rich is saying and I am certainly for more disclosure, but there is no official way to even measure these grants. This Heritage Foundation report was done by just sort of looking at when these grants happened and what legislation was being passed. There is no official way to measure it. The only way you are going to solve this David, is you have to lower overall government spending relative to GDP. Otherwise, you are not going to be able to stop this.

    VICTORIA BARRET: Mike I do not think of you as a naive person. These are hardly coincidental, come on! I hate to be naïve here but shouldn't politicians be voting on these big bills because they believe they are the right thing for the country instead of voting on spending more of our money, by taking more of our money to be convinced to spend more of our money. This has got to stop. It is out of control.

    DENNIS KNEALE: You know this entire premise is based on the idea that when you ban something it works. You just pointed out that Obama banned earmarks in favor of grants, so if we ban grants something else will come up. When I was 10 years old in fifth grade, I remember opening the history book and there was a saying, "to the victor go the spoils." Andrew Jackson was one of the first guys to do it. This is what power is about.

    ELIZABETH MACDONALD: I opened the history books and our Founding Fathers including Thomas Jefferson said, no way, no how this should be going on. It is not in the enumerated powers of the constitution for the White House to do this. By the way, wasn't stimulus one big grant, that $800 billion 'pork' fest? A lot of that money by the way didn't go where unemployment is the biggest. Some remote town in Alaska got $15 million for an airport when Newark, Las Vegas and Atlanta got no money to create a better airport and create jobs.

    STEVE FORBES: They should do away with the grants and if there is another loophole close that loophole. Mike is right, you have to reduce the size of government. The good thing in this David, is the voters are acting before congress does. Ben Nelson suddenly decided to look for new opportunities and a lot of those congresspersons got defeated in November of 2010.

    Should the government cut off Fannie and Freddie completely?

    MIKE OZANIAN: David, it is appalling that taxpayers are paying these legal fees. The people responsible for running these companies in the ground, they should be going after their money not taxpayers money. Unfortunately, President Obama likes to shift the blame onto taxpayers. He did it with Fannie and Freddie by taking them over. He did it with General Motors as well. IT is the absolute wrong thing to do.

    STEVE FORBES: Well, if they have a legal obligation to do it, they have to do it. They will get back more thatn$100 million David, by banning and liquidating Freddie and Fannie, keeping the government out of the housing business in the first place. That will save hundreds of billions, not just the $100 million these guys illegally got. By the way, if they are convicted of a crime, they should have to repay.

    ELIZABETH MACDONALD: Here is the deal, this was an egregious accounting fraud that Franklin Raines and coterie orchestrated, which even the government said they did to manipulate the stock higher and manipulate their bonuses higher. So yes, $115 million total is what the three walked away with. Franklin got $90 million, but what is going on is, since the government has taken them over, yes nearly $100 million has been spent by Fannie and Freddie but more than a third of that came after we took them over. What Fannie and Freddie are saying is, we do not want to fight these guys and spend legal costs in fighting these guys in court. It is worth our while to basically cover their fees when even the bill that established Fannie and Freddie said we could repudiate those contracts.

    RICK UNGAR: I do not like these Freddie and Fannie fools any more than anybody else, but you have to honor contracts. Unless we can show that these guys breached their contract then you have to honor it. But let me say this, what does bug me a little bit, there are people on this panel who defended paying the AIG bonuses because of contract.

    BILL BALDWIN: Number one, pay contractually obligated legal fees. Number two, get the government out of the Fannie and Freddie business. They should be liquidated or sold off. Number three, the government should be totally out of home mortgages.


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