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IN FOCUS: From California to New York, more states looking to raise taxes on the wealthy: bad news for the economy?
STEVE FORBES: When you put taxes on the people who create jobs, and create capital that creates jobs, you are going to hurt. Thankfully in America you are still allowed to move from state to state, not your business but at least with your feet, and so you are going to see more migration to states like Texas who are hospitable to people who want to get real things done. You tax more people who do good things; you are going to get less good things. Very simple.
RICK UNGAR: I think it is wrong. Look, it makes for great rhetoric, but if you look at the numbers, this has never been the case. You can look at the fact that since 1980 the tax rate in the United States has been going down and do you know what else has been going down? The average annual increase in the economy. It simply does not work out on paper. There are charts, there are graphs and there is nothing but information to prove this.
ELIZABETH MACDONALD: You look at what a bipartisan crowd did, and they looked at what happened in Maryland and what happened in Illinois, New York and California and Maryland. Maryland tried to hike taxes on the upper bracket. One in seven left the state and the same story is going for California and New York. In fact, voters in California rejected the same increases that Jerry Brown now wants and you look at New York. New York lost upper bracket people who would actually create jobs in the state. Same story for New Jersey as well.
MARK TATGE: Well nobody likes tax increases and tax hikes. Taxes definitely have an economic impact on economic activity, but 26 states or more by last count have big deficits. You can't just cut to the bottom; you are going to have to raise taxes. Even the patron saint of tax cutting, Ronald Reagan, realized that and put through some of the largest taxes increases for a president in the last 25 years because he knew they had to raise taxes. So we are going to have to raise taxes to balance it.
VICTORIA BARRET: We are mainly talking about two states here but you are asking about the larger implication, which is this: There is a sense that we are not fixing the fundamental problems. Instead of fixing government spending, looking at pension plans that are just insane, everyone can agree on this practically, except the people who are receiving those pensions. Instead of fixing those problems we are just raising taxes, we are just putting a band aid on it. What Jerry Brown apparently doesn't understand is that the one percent he wants to tax already pays 50 percent of California State income taxes. Show it be 90 percent? You are living in a world of taxation without representation.
MIKE OZANIAN: David, if you look at what they are calling the millionaires tax in New York State, it is really for incomes of $250 thousand or more so it is not just millionaires. And $250 thousand for a small business owner who has his company as a Subchapter S Corporation is actually a very small business and these are actually the big job creators. So you are really hurting the small businesses and individuals that create the highest percentage of jobs.
FLIPSIDE: Help create jobs in the U.S. by letting more foreign workers in the U.S.
VICTORIA BARRET: It sounds counterintuitive, but when you actually talk to the people in these technology companies, I also talk to lots of start-ups that have been formed by foreigners who went through elaborate dances with our immigration officials to actually stay here, where they are on tourist visa for a year they have to go back and forth between their home country and the United States, but the bottom line is they are creating more jobs than you can argue they take away by filling jobs that someone here may or may not be qualified to do. So we should open this up. We should be a country that welcomes talent.
MORGAN BRENNAN: I actually do not agree. Victoria, if that is true in tech than that is great and maybe we should look at that but I can talk about Wall Street here and lets remind everyone that there are millions of Americans out of jobs, about 200,000 of those lost jobs this year are from Wall Street, different places like HSBC, Bank of America, let's not forget MF Global and these are jobs that probably won't ever get refilled. These are white collar American workers that could sue some of these while collar jobs and now we are just going to flood the jobs market and take some of those highest paying jobs and put more competition towards them? I do not agree.
STEVE FORBES: Look American companies would find it much easier to get an American worker than go through the hoops of the immigration service. If those people from Wall Street were qualified, they would be hired. They do not have the necessary skills. And technology, David, is a very highly competitive industry. If they can't get the skills here they are going to take it overseas, which is a loss for us and not good for our economy.
MARK TATGE: So let me get this straight. This is the Fox News Channel and we are saying we should never give preferences but we should give preferences in this case if someone writes I am of foreign descent on an application? This is kind of ridiculous. What we should be saying is look, about 15-20 percent of our population is out of work or underemployed or has given up looking for work. And we are going to turn and say 'Hey, I am Greek,' or 'I am Russian, I should get the job over the American,' right? I have nothing against immigration or hiring people based on skills but come on guys. Let's take care of our own first and let's give tax credits to the companies that do it.
DENNIS KNEALE: You know if you are a Russian chip engineer and I need a chip engineer, I am not going to hire an American insurance salesman to do the chip engineering. I am going to hire what I need from the skills set. Guys, remember that old saying 'We are a nation of immigrants,' the whole reason we built the strongest, most innovative economy in the world is because we diversified the gene pool of ideas by letting newcomers come into this country. China cannot come close to innovating on our level, because they are a monochromatic country where everyone pretty much thinks the same. This has been our strength. A study showed that last decade we lost 7 million jobs to off-shoreing, we created 6 million jobs with foreign companies building things here.
BILL BALDWIN: I think of the xenophobes like Mark and Morgan would just calm down a little bit, they would realize that immigrants don't just create jobs they create whole new industries. Andy Grove immigrated from Hungry, Andy the former head of Intel, how many hundreds of jobs did he create at Intel? That is a whole new industry that didn't even exist before immigrants came and help build it. There I say we give a green card to anyone who comes in with a PHD.
Retails sales drop the week after record Thanksgiving weekend shopping spree. Bad sign for economy?
STEVE FORBES: It is a bad sign David, however there is relief. That is the president is going to be going on vacation in mid December. After Thanksgiving, he hit the campaign trail with his anti-capitalist, anti-free enterprise rhetoric, so of course sales will go down. Now that he is going to be in Hawaii, I am hopeful we are going to have that final surge before Christmas.
DENNIS KNEALE: I have a message for all of you Grinchs out there. When sales fall off the weekend after the biggest shopping day of the year, it is a statistical inedibility. It is not a forecast of consumer sentiment. Guys, Christmas is going to be better than investors really think. Two key touch points for consumers; gasoline prices, they have been going down and jobless, the threat you will get laid off, that risk has been going down. That is good for consumers. When you get in those stores, you decide the heck with cutting back I want to get my little girl a good present.
BILL BALDWIN: Do not get too optimistic David. Shoppers are depressed by the deadweight cost of bloated government and so called stimulus. If you're looking at a trillion dollars of benefit cuts and tax increase in the future, that is why they are taking their Christmas money and putting it in a sock drawer.
MIKE OZANIAN: Well it could be good for me if my wife is included in that category that stopped Christmas shopping. You know David, the last two quarters where consumer spending was robust; it largely came out of savings. For the typical family in this country, household net worth declined by $21,000 through September for that quarter. So I actually think this could be a good sign in the sense that we are not going to see people go into a lot of debt to buy things.
MORGAN BRENNAN: It is still a little too early to tell, but I am very skeptical that this is a good sign. Yes, we had record sales for black Friday, the last time we had sales that were comparable to that was in actually in 2008 and then right behind that sales dropped off like they are doing right now and they stayed flat. It ended up being one of the worst holiday spending seasons on record. I am afraid that is going to happen this year because we still have a week housing market, a weak jobs market and consumer confidence is still relatively weak. I am nervous.
Martha Stewart shares up on JCP investment news. What's the next takeover target to take off?
Dennis Kneale: NETFLIX (NFLX)
Morgan Brennan: ACORDA (ACOR)
Elizabeth MacDonald: RANGE RESOURCES (RRC)
Bill Baldwin: DST SYSTEMS INC. (DST)