Bulls & Bears

'Moral Monday' protesters demand tax hikes on big business

But could hiking taxes hurt the US economy?



Tax Hikes in this Economy?

Ashley Pratt: It's the last thing we need and do you want to know why? Because the average American family is strapped. And that is because of this horrible economy that we've had under President Obama. And tax hikes are going to make things worse. The middle class is shrinking rapidly and that is very dangerous because now we're putting people into the very poor category and the very rich category and if we want to be France and tax our wealthy fine, but guess what they are going to leave just like they did in France and there was major hoopla then because businesses can't be created and right now we are burdening small businesses causing businesses to close.

Gary B. Smith: No you don't. But here is why. Most of the people on the left say look, you know, we hike taxes and taxes and GDP actually grew. Because if I'm the government and I take a dollar from you and I spend it as the government the GDP stays the same. So the government says look we'll go out and spend the money. Here is the problem. We all know that government spending is wasteful. It is full of fraud. Full of abuse. Just look at almost any agency. Medicare, $60 billion in fraud. Department of Defense, $23 billion in wasteful spending. Bridges to nowhere, etc., etc. The fact is, and getting back to Ashley's point. Not only do the middle class not need a tax hike but the government spends it less effectively. That is the problem with government spending. It is just not right. It is not fair and it is in effective.

Jonas Max Ferris: We had the tax hikes on the rich a few years ago. California and New York are paying over 50 percent if you are very wealthy. In fact the hard up middle class the first guest is referring to is really the bottom half of taxpayers are paying like 4 percent or less in income tax. So someone's going to have to pay more tax. Look, no one wants to raise taxes. And yes it is a drag on the economy any time but where is the economy where you can raise taxes. At some point we have to realize the debt is not going away unless somebody pays for taxes. We can't close the gap without going to a higher rate. And European citizens pay a higher tax for all the benefits they get. It is not just a soak the rich plan.

John Layfield: We went from about 14.6 percent of GDP of tax revenue in 2009 to about 19 percent which is at the high end of the historical average. We are bringing in record revenue right now. We've also got record debt. So if you have more revenue come in you are just going to have more spending come in. These guys can't balance anything. The problem you have with this. This is for corporations. We are in a mild, not a bad but a mild corporation recession. Profits have been down. The stock market, has had zero percent interest rates and the market has been flat just meandering sideways the last couple of years. The fed can't even raise interest rates right now, with 5 percent unemployment because we have a .5 percent GDP. The more you start bringing in tax revenue and taking away from corporations the more you are going to hurt job growth. And remember we've already got 19 percent of GDP right now coming in tax revenue. That is high part of the historical average. We don't have a tax problem.

Julie Roginsky: I would argue we may not need another income tax hike in general. We need a close in corporate loopholes. No reason people who are paying a higher rate than -- so the question is, how do you arrive at this revenue. But Jonas made a good point. Which is you will have to arrive at more revenue. The reality is we to do need the money to fund the government. If you want a level of spending whether on entitlements or on general revenue you need to create that revenue.

Time to Privatize the TSA?

Gary B. Smith: Exactly, we've all been that guy in that clip, you know, like what the -- TSA. Privatizing in my opinion is a slam dunk. There are a few reasons. You say well do they have to have the same level of screening and procedures as the current TSA? Yes they do. Two, they have done it before, private companies. Three, would there be better customer service? Of course. Because you just write it into the guidelines and if they don't hit the levels they don't get the contract renewed. And would it cost less than the current TSA bloat? Yes of course it is a private company they want to keep costs low. Same level of service. Better customer service. Less cost. This is a no brainer.

John Layfield: I fly two to five flights every week. I know TSA pretty well. The inconsistencies blow my mind. You are spending about $5.7 billion of government money. I say you not only privatize but take the 900 million passengers flying per annum and you have a user fee that pays for TSA. Privatizing that cures it.

Julie Roginsky: They are a disaster. Normally I'm not a huge fan of privatization but something's got to give and as the private sector could do a better job. I don't see how they could do a worse job. I fly often. And listen. They cannot be worse. They failed their tests. They are understaffed. It sounds like over budgeted if they are giving out bonuses for something they don't deserve. Give it a shot. If it doesn't work, get a new contractor.

Ashley Pratt: And Democrats in Congress are looking to blame Republicans for this saying well you are the ones who put TSA in there but they are the one this is the oversight in government reform committee looking at TSA and their activity and $90,000 bonuses for a pretty in effective organization out there run by the government with zero accountability doesn't seem to be effective anymore so privatization is something that should be happening because again people can be found accountable in a private system. Which is in we should move towards that. People do not like the lines. People are honestly getting away with being able to bring liquids on. I've been able to do it at least going through TSA that is not in a quart sized bag, so why are the long lines?

Jonas Max Ferris: Does anybody stand up for the bush administration anymore, this is getting ridiculous. The private sector cooked up the whole idea of charging you to check in your bag the right way where you put it under the plane so everyone stuffed in their oversized. That's causing the huge delay. That's causing a problem. Now the other situation is without full liability for a terrorist attack the airlines have really no incentive to do a good job. It is because no one airline runs that. No one is going to use a different airport or airline because the security area gets cued up.

Senate to Vote on $1.1 billion in Emergency Funding to Combat Zika Virus

John Layfield: I'm like most Americans with a brain. I don't like politicians but in this case I believe they are right. We eradicated polio. It is better to stop it now than try to react to it after it comes here.

Ashley Pratt: I completely agree. I think that just the other day I was flying through security and when I was there in line they actually had zika warnings. I think we're a little late to the game and this seeing as how people are already being affected especially people my age young women who could have children and that's very scary. I'm not one for big government spending but Marco Rubio is right. We need to look at here and fund this to full measure and take steps to prevent this from becoming an epidemic in our country.

Gary B. Smith: Well per Ashley and John to be like arguing against motherhood and apple pie is like saying you don't want the money. No one has come up with the plan over the next five, six months exactly how they are going spend it. They are going this is the money we need. And here is the problem. The current administration wants it with no strings attached not. Expiration date and they can transfer it to other departments. They can take this and put it in Department of Agriculture for EPA.

Julie Roginsky: You have the CDC. I'm sure they have a plan. People in Brazil are being told not to get pregnant the next two years. Do you really want that in this country? Give the CDC what they need to get it done.

Jonas Max Ferris: They can also take this money from other areas -- there is already profit seeking drug companies in this area, and there shouldn't be government research money there because these companies want to lower your cholesterol. So it is a huge multi billion market. So they need to shift that money from one to the other.

Stock Picks

Gary B. Smith: (AMZN) Amazon hits $1,000 in 2 years

John Layfield: (AAPL) see a 20 percent in 1 year

Jonas Max Ferris: (TAP) taps a 15 percent gain in 1 year