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Bulls & Bears

Will push for new taxes backfire?

DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.

NEW DEBATE ON TAXES AS BERNIE SANDERS CALLS FOR PAYROLL TAX HIKE ON EVERYONE

Suzy Welch:  This is something that everyone is going to feel.  Let’s talk about what Bernie wants to raise taxes for.  He says family leave, but it's to increase all social programs.  My husband Jack and I were recently in Reno, Nevada at a conference of auto glass installers and one man stood up, there were 2,000 people in the room, he said to all of the auto glass installers, “how many of you would hire somebody if you could when you went home but you can't find who will take a job for a little bit above minimum wage?”  Every single person in the room raised their hand.  The problem is, nobody wants to cut out all safety net programs but what Bernie Sanders wants to do is build a safety mattress.  So we're going to have a no work nation where people rather stay home than work.  That’s what happens when you raise the taxes. You're paying for people to have the kind of social programs where we just have no participation and nobody is working and that is a big backfiring.

Chuck Rocha:  I think it’s good that if a woman has a baby she can stay home from work and get compensated.  Take just a little bit more out of  your paycheck but there's a reason about 1.3 million different people  have given Bernie their money  and his average contribution is just 30 bucks, because they believe in it, it kind of makes sense.  So I think you would get increased productivity and I think that it would be a good thing. I'm not saying just give all the money to the government and just trust them.  I'm just saying, I think it's not a bad idea.

John Layfield:  This is like running for student council president where you say everybody gets free pizza and you say how are we going to pay for that?  Let's just get the rich kids to pay for it.  This doesn't work really anywhere in the world.  They tried it in France with a 75 percent tax on the super-rich and they end up getting so little revenue out of it, and hurting their tax space, that they had to resend that tax.  When Bernie was pressed down on this he said he’s actually going to have to raise taxes on every single person to pay for this.  This populous message plays real well when you’re talking about the super-rich because people have a discontent in America right now.   If the economy was really thriving right now, this would not resonate so much but because it’s not thriving, this populous message does.  But what you have to do is break social problems at the core.  You have to break these generational cycles in the inner-cities.  We're not doing that.  So putting more money in the social programs is not the answer.  Fixing the social programs, that’s the answer. 

Jonas Max Ferris: Well, at least Bernie is being more honest.  You really can't have the European model, just soaking the rich.  That doesn't really work.  In Europe they don't do that.  They actually tax the rich, sure, a lot, especially in France, but they also have value added taxes that apply to everybody spending money.  We have really cut back on taxes to the middle class and lower.  Even the Clinton regime is on the sub-$200,000 income level.  We actually private balance budget at this point.  We can't have more benefits without raising taxes across the board.  What kind of economy does that lead to?  Well it's like Europe.  You're going to have a fair society to some, not to others but you’re going to have generally higher unemployment and slower growth just like a European country.

Gary B. Smith:  Jonas is right, Bernie Sanders was definitely honest.  I give him props for that. But this fails like all other nutty big government ideas on three points. One, any government spending is inefficient.  Whether it’s the new Department of Homeland Security they’re building in D.C, it’s billions over budget, it’s behind schedule.  Second point, what I call hubris, why does Bernie Sanders think he can get our money and spend it better than we can?  They can’t.  Government shows that over and over.  Third, maybe the most important point is that they have done study after study of the optimal size of government.  It's 25 percent of GDP.  Do you know what ours is? 35 percent.  So any argument you could make for government spending fails on one of those three points.

GOP CONGRESSMAN ASKS HILLARY CLINTON WHY NO ONE WAS FIRED OVER BENGHAZI

John Layfield:  You try get subpoenaed by a court, by a government, by anything and tell them that your e-mails have simply disappeared, or you cleaned your server and they're no longer there.  That is not acceptable for any citizen.  This thing with Benghazi is a terrible tragedy.  Listen to Mayor Giuliani talk about the fact that there were rockets there and they come out right away and say it was spontaneous.  Obviously it wasn’t.  But the problem is it gets spun into partisan politics.  So it’s just Republicans going after Ms. Clinton or Lois Lerner.  It was just a gross mismanagement by Lois Lerner, she was just incompetent, not a big deal.  It is a big deal.   We need to find some answers to this because you have people that died and you had people that were targeted, specifically targeted.  This was admitted in the justice department probe. A disproportionate amount of Tea Party were targeted for real money and no one is culpable in this.  This does not work in the private world. 

Jonas Max Ferris:  The IRS is the most profitable part of the government right?  As we learned from the recent Sony hack, the manager directors at an accounting firm make a half a million dollars a year out in L.A. just working with the Hollywood business.  You’re running the whole IRS, that job would have to pay a million dollars.  Lois Learner made under 200 thousand dollars a year so you already have this huge pay cut they’re taking.  If you went to a job and they said this is a job you can’t get fired from, I would expect that job to have a lower pay than a job that pays well but can you.  Let’s not forget the job has an embarrassing factor where you can get taken in front of Congress because they want to make grand stand.  I can rationalize not firing people in those kinds of jobs given their pay. 

Chuck Rocha:  I'm never afraid to fire somebody who’s not doing their job.  I think our government is a mess but I think it’s a mess of people trying to have some accountability.  I think there’s a reason why there’s a special committee.  There’s a reason why we have an FBI and there’s investigations.  You get to call people up, they have to testify, you get called out.  Does it make it right or wrong?  It’s a horrible thing, like John said, what happened, but that's showing what the people's power is, by being able to call a special investigation and do this work.  If you go back to the private industry though, back in the 70s companies told you the cigarettes were good for you and that Exxon and oil companies could pump oil into the Gulf of Mexico.  Was there accountability there?  There's probably certain accountabilities but I don't think you can compare apples to oranges.

Gary B. Smith:  I'm scratching my head at what I’m hearing.  First of all, that there is some link between what a person gets paid in government and whether they’re accountable, that’s just dumb.  Second of all, there was no culpability with BP?  I think they paid billions of dollars for crying out loud.  Here’s a scenario, say that UPS decided I’m not going to deliver packages on that street because I don't like the looks of it there.  What do you think would happen to UPS?  They’d be fined, they’d be taken to civil court, they’d have to pay billions in damages.  The IRS is pejorative in looking at these interest groups and what happens?  Oh we made a mistake, it was just an oversight.  See you later Lois Lerner with your paid leave, by the way.  Nothing ever happens.  She gets probably a nice pension.  It’s ludicrous.    

Suzy Welch:  Business is business and politics is politics and never between shall meet.  Should they?  Probably, but it isn’t going to happen.  I just think that Lois Lerner and Hillary Clinton did not get fired, or nobody got fired because in that political system, in the administration they don't think they did anything wrong.  So why would they fire them?  They showed they're accountable to their party and they did what their party believes in and supports. I love the way business works, when there’s a crisis or a scandal, there is blood on the floor.  Somebody pays, people are held accountable, that’s just not politics. 

GOVERNMENT TO REQUIRE DRONE REGISTRATION AFTER CLOSE CALLS WITH PASSENGER JETS

Gary B. Smith:  I'm going to depart from my libertarian roots here and say government should have drones.  Industries, companies can have drones.  Everyone else doesn't need drones. It’s just going to create mischief.  They are going to be crashing the planes, they’re going to be spying on neighbors.  People don’t need drones.  I don’t see the worth of it and I would ban them. 

John Layfield:  When Glenn Curtiss and the Wright Brothers were fighting over the airplane back in the 1900s, there were tons of accidents.  If we had just shut down the airplanes, they are not safe right now in certain instances.  We need flight plans, we need flight distance, we need flight regulations.  Registering is not far enough, but this is the future and this is where we’re going.  We need a little more regulation on this to keep them safe.

Suzy Welch:  I hate regulation but I hate drones more because I take Happy for a walk in Central Park at 7 a.m. in every morning and I see the hobbiests playing with their drones.  You would not trust your life with these people.  There are 16 year old boys, who haven’t bathed for a long time, there are guys in hoodies, and they’re flying their drones around.  Saying nothing of the terrorists and the lone wolves who want to play with their drones, we must regulate these.  I’m with Gary on this, get rid of those drones.  They’re a tragedy waiting to happen. 

Jonas Max Ferris:  It's like someone saw a kite and said how do we make this dangerous and more noisy for everybody?  I’m glad everyone has come around my way because I have been singing this song since drones were a little problem.  This situation, the localities have to deal with this on a nuisance level and the federal have to ban it, that have to add insurance to make it impossible.  Look, I have a scooter, I have to take a class, I got to get insurance, I have to pay a tax, just to drive a little scooter on a highway. They're flying these aircrafts around with nothing.  It's the most ridiculous thing in the world.  You have to get insurance so when they hurt somebody, that alone will kill it.  I bet you can’t find an insurance company that will insure you the liability. 

Chuck Rocha:  So here's what happened, the holiday season is upon us and red necks have figured out they can spot deer with these drones.  So they're going out to the airport and next to the airport are the woods and that’s where the deer live.  Once all my buddies back home got a drone, they’re probably going to figure out how to put a gun on it eventually.  That’s why they don’t want anybody having drones, nobody going near the airport, these things are not going to be safe because they’re going to crash them.  When my buddies, who can’t drive a truck, are driving a drone, we’re going to have a problem. 

PREDICTIONS

Gary B. Smith:  Amazon (AMZN) 50% gain in two years

John Layfield:  Chevron (CVX) 20% return in one year

Jonas Max Ferris:  Lululemon Athletica (LULU) 25% profit in one year