This is a rush transcript from "On the Record ," October 13, 2008. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Joining us live is the president and CEO of Forbes, Steve Forbes. Steve, nice to see you. And the last thing that Senator Obama said was about spreading the wealth. Was that a gaffe? Am I maybe taking that out of context? He didn't really mean a redistribution of the wealth, or do you think that -- or does he stand by that proposition that we should redistribute the wealth, or spread it around, I think, was the word he used?

STEVE FORBES, PRESIDENT AND CEO, FORBES INC.: Well, I think he does have a mentality that there's sort of a fixed pie out there and that you can -- it's really a matter of how you slice the thing up. And what he doesn't have is what Ronald Reagan had, John Kennedy had, and that is the idea that you can expand the pie and that people can have more, that it doesn't have to be redistribution.

But if you look at his whole array of tax credits, many of which are simply Welfare payments called tax credits, if you look to his tax -- increasing taxes on people with capital, who provide the seed capital for jobs creation in this economy, it really is sort of a status (ph) mechanistic approach that really doesn't (ph) realize that we have a -- can have a dynamic economy. That's how you create jobs, get innovation. And - - but he -- I think he does have that mentality that there's only so much there and it's just a matter of how you divvy it up.

VAN SUSTEREN: Steve, should we demand from our candidates not just -- I mean, that -- that when they look at the economy, they have sort of a short-term vision, as well as a long-term vision, short-term to help people with their mortgages, their homes, they don't get thrown out now, but also to the extent that you can -- I realize there are a lot of variables in the economy -- but also present us with sort of an understandable long-term one?

Watch Greta's interview with Steve Forbes

FORBES: Well, I think that's a very good question. And I think that at least Senator McCain has proposed -- it's not very popular right now -- reducing taxes on business. As you know, in the developed world, we have second worst taxes on business, which just complicates the tax code as people try to wiggle around it or find ways around it. And he also I think has come out foursquare for a simplified tax code, give people an alternative to the monstrosity that we have today. So in that sense (INAUDIBLE) R&D tax credit which will encourage investment. In that sense, it is long-term and not just on the immediate housing crisis.

VAN SUSTEREN: What about -- I mean, there's -- I get a lot of e-mails from people. You bring up the issue of taxes. A lot of people want flat tax. A lot of people want a sales tax. I mean, is it coming to the time where we really sort of need to even look how we sort of tax things to run our government and to what extent that does stifle productivity or hurts families trying to put food on the table?

FORBES: Well, I think it's going to be an issue, and I hope the next president, whoever it is -- I hope it's Senator McCain, but it may well be Senator Obama -- will look at the tax code and recognize it's the biggest dead weight on the American economy today.

When you consider the brain power, the hours that we put in, six billion hours a year filling out tax forms, all the corruption that it breeds in Washington -- half the lobbying revolves around the tax code. This is a real dead weight, a real burden. And if we simplify the thing, slash the rate, give generous exemptions for adults and for children, this economy can roar ahead. Other countries have done it. Twenty-five have done it. We should be leading this instead of lagging it.

VAN SUSTEREN: Steve, one quick question. Everyone said that when the economy was really in rough shape last week, that really helped Senator Obama. We now maybe have a little turnaround today, but I don't want to be too optimistic. Does that help Senator McCain?

FORBES: Well, I think it gives a breather, that people realize this thing isn't necessarily going to be just one direction, down. And the debate on Wednesday night will be critical for him to reestablish his bona fides and get back on his feet and be able to set the agenda again. If he does that on Wednesday night, even if he doesn't have a knockout in the debate, it does -- people will look again. This is a very fluid race, as you know. Even though Senator Obama is ahead, a lot of it is not solidified yet. So this thing can change, amazingly.

VAN SUSTEREN: We'll be watching, of course. Steve, thank you.

FORBES: Greta, thank you. Appreciate it.


Content and Programming Copyright 2008 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2008 ASC LLC (www.ascllc.net), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon FOX News Network, LLC'S and ASC LLC's copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.