• With: John Sununu, Former New Hampshire Governor

    This is a rush transcript from "On the Record," April 15, 2014. This copy may not be in its final form and may be updated.

    GRETA VAN SUSTEREN, FOX NEWS HOST: Sit down. You need to hear this. Chances are you are spending more money on taxes than housing, clothing and food combined. Take a look at this new chart released by the Tax Foundation. They have crunched the numbers and it's pretty stunning.

    Joining us is former New Hampshire Governor John Sununu.

    Nice to see you, Governor.

    JOHN SUNUNU, FORMER NEW HAMPSHIRE GOVERNOR: It's good to be here.

    VAN SUSTEREN: This sounds pretty stunning, spending more on taxes than food, clothing and shelter.

    SUNUNU: It's been bad five years for America on taxes. We've had about 440 new taxes proposed by the president.

    VAN SUSTEREN: Shot down by the House Republicans.

    SUNUNU: Not all of them. But enough of them got through, including Obamacare itself, which is a huge tax the Supreme Court told us. And your chart shows that we have reached a point where taxes are the biggest burden on the average family in America. And that's terrible.

    VAN SUSTEREN: I would have liked to have seen, going back to Simpson/Bowles, when they had their report, they said there were 3300 earmarks. Those are special deals for special people in the tax code. That never went anywhere. The tax code is a problem.

    SUNUNU: Well, the code is a problem. But what's the biggest problem is an attitude, I think, on the part of the president and the Democrats in Congress to use taxes to punish people who are earning well. And the upper middle class in America is getting beat on with taxes now. And there doesn't seem to be any incentive or desire on the part of the Democrats to give middle class, the upper middle class a break. They seem to want to punish them for earning so much.

    VAN SUSTEREN: Even according to a Gallup poll, I think 49 percent of people said they thought they were paying too much taxes. I thought that was a low number. I thought 100 percent. I thought everyone thought they were paying too many taxes.

    SUNUNU: You have got people who aren't paying any taxes. So how can they say they're paying too many taxes?

    VAN SUSTEREN: I know. I figured the people in the poll were people who actually paid taxes.

    (CROSSTALK)

    SUNUNU: No. It was everybody.

    VAN SUSTEREN: But you take a look at the tax code. You know, everyone comes to Washington saying I'm going to fix the tax code. I don't know one member of Congress -- maybe you do -- but I don't know anybody who does his own taxes because it's so complicated.

    SUNUNU: It is complicated.

    VAN SUSTEREN: Do you.

    SUNUNU: No, I don't. I can't.

    VAN SUSTEREN: None of us do.

    SUNUNU: And I have a Ph.D. in engineering and I can't do my own taxes.

    VAN SUSTEREN: Isn't that a sign that it's time to really do something?

    SUNUNU: Yes.

    VAN SUSTEREN: What's the problem?

    SUNUNU: What it needs is what -- we new presidential leadership. We had it in 1990. George Bush led. He went down and made the -- cashed in his political capital, if you will. We got a restructuring of the tax code. We got a cut in taxes. We got a cut in spending, $3 for every dollar. It started that way. It ended up two for one. But two dollars of cut in spending for everything that was raised in taxes. It doesn't happen in Washington without the White House leading and the White House investing political capital.

    VAN SUSTEREN: In terms of tax reform though, you can do a few little changes here and there.

    (CROSSTALK)

    SUNUNU: But they won't help.

    VAN SUSTEREN: But they don't mean anything. What I mean is a real tax reform. I think it's obscene that no one in America who makes over $50,000 can do his own tax return because of the complexity of it.

    SUNUNU: It is bad. It is wrong. We have got to straighten it out. When people come in this town and talk about a simple tax or a fair tax or a flat tax, something that you do on one page or two pages, a lot of people are submitting -- in the middle class are submitting tax packages that are an inch or two thick. It shouldn't be that way. It is terrible that it's that way. And it's time for a change.

    VAN SUSTEREN: All right. That reflects today. Everyone is sort of struggling with tax returns. Long-term, when you look at the numbers, it looks like we are in deep trouble in terms of how much money we spend. We have this in terms of how we spend. What percentage of the tax goes to entitlements, what goes to other things like national defense? We even pay a big chunk of it every day to finance our debt.

    SUNUNU: Look, the problem in this town is when somebody courageously puts a package together to make some significant reduction in the growth that we're looking at -- like Paul Ryan did -- the Democrats jump on it and attack it as being a mean budget. You can't cut spending without cutting spending. And it's time for people to understand that everybody has got to give a little bit or this system blows up.

    VAN SUSTEREN: All right. So predict, where are we going on all of this?

    SUNUNU: You are going to have a strong protest election in '14. You will have an election without an incumbent in '16. I predict the '16 election will be run to a great extent on the issue we're talking about tonight.

    VAN SUSTEREN: Well, it's sort of curious, you talk to Americans they are absolutely outraged at Washington. They are outraged at so many things. Time and time again, they just don't like your member of Congress. They like their own. And so everybody comes back.

    SUNUNU: It's not in Congress. It is president -- I keep saying it. You need presidential leadership to move those folks in Congress who don't want to lead themselves.

    VAN SUSTEREN: And President Obama?

    SUNUNU: Where has he been? We haven't gotten a real budget from this president since he has been here.