STEVE: ALL RIGHT, WE'VE HAD A
TRUTH AND RECONCILIATION MOMENT
FROM THE TABLE HERE.
[LAUGHTER]
>> NOT SO MUCH RECONCILIATION
BUT --
BUT.--
STEVE: CHANGE OF TOPIC.
SINCE THE 1980s THE BIGGEST
ARGUMENT IN ECONOMICS WITH
SOMETHING CALLED THE -- CURVE
NEIGHBOR RONALD REAGAN'S
ECONOMIC ADVISOR WHO PROVED THAT
IF YOU CUT TAXES YOU GOT MORE
GOVERNMENT REVENUE BY BOOSTING
ECONOMIC ACTIVITY.
FOR YEARS DEMOCRATS BITTERLY
CONTESTED THIS IS A BUT GUESS
WHAT HAPPENED IN THE CALIFORNIA
ASSEMBLY THE OTHER WEEK?
CANNIBALS LEGALIZATION HAS NOT
BOOSTED THE CANNABIS ECONOMY AS
THEY PROMISED AND NOW WANT TAX
CUTS ON THE CANNABIS INDUSTRY.
GUESS WHAT THEY USED TO JUSTIFY
IT?
YES, UNBELIEVABLY THE -- CURVE.
THEY LITERALLY DO THAT.
WHO BETTER TO BREAK ALL THIS
DOWN THE MAN HIMSELF, DOCTOR WHO
I SPOKE TO EARLIER.
STEVE: THANK YOU FOR JOINING US.
BEFORE I START I WANT TO STATE
WHAT IT ABSOLUTE HONOR AND
THRILLED TO HAVE YOU HERE.
I'M STUDYING ECONOMICS IN OXFORD
IN THE LATE 1980s YOU ARE
ALREADY A LEGEND THEN AND I CAN
BARELY BELIEVE IT'S REALLY YOU.
>> WHAT A GREAT TOPIC.
HERE WE ARE TALKING ABOUT
MARIJUANA AND ACADEMIC PROFESSOR
AND YOU'RE IN CALIFORNIA AND I
CAN JUST SEE -- ON THE FRONT
LAWN OF RIDGEMONT HIGH DOING A
A --
A.--
STEVE: WHAT YOU MAKE OF IT?
AFTER ALL THESE YEARS WITH
SOMETHING THEY REALLY CARE ABOUT
THE DEMOCRATS EMBRACE THE CURVE
CURVE -- WHAT YOU MAKE OF IT?
>> HYPOCRISY KNOWS NO BOUNDS
WHATSOEVER BUT IT'S OBVIOUSLY
TRUE THE CURVE WORKS WELL AND I
WROTE A BOOK ABOUT FIVE, SIX
YEARS AGO ON TOBACCO TAXATION
THEORY AND PRACTICE AND THE
CURVE ABOUNDS ALL OVER AND NOW
THEY FOUND IT CALIFORNIA IT'S
AMAZING AND IF YOU LOWERED THE
TAX ON CANNABIS YOU WILL GET
SNACK REVENUES COMING UP HIGH
BECAUSE EVERYONE WILL GET THE
MUNCHIES AND IT IS PERFECT.
[LAUGHTER]
STEVE: IN SO, WELL, WHILE WE ARE
HERE TO GET MORE SERIOUS I
WANTED TO GET YOUR TAKE ON THE
BROADER QUESTIONS OF WHAT IS
GOING ON AROUND THE TAX DEBATE
BECAUSE IF YOU LIKE WE ARE GOING
RIGHT BACK TO THE WAY YOU CAME
INTO IT AND WERE SEEN THIS VERY
STRONG DEMAND FOR HIGH IN
PUNITIVE TAXATION COMING FROM
THE LEFT NOW BUT IT'S RESPONSE
TO SOMETHING WHICH A LOT OF
PEOPLE REALLY FEEL WHICH IS THE
SENSE THAT YOU GOT GROWING
INEQUALITY AND QUITE HIGH
NUMBERS OF PEOPLE AGREEING WITH
THESE HIGH TAX RATES AND WHAT
YOU THINK OF THAT?
DO THINK INEQUALITY IS A REAL
PROBLEM THAT WE NEED TO SOLVE
SOMEHOW?
WHAT WOULD YOUR APPROACH BE?
>> INEQUALITY IS A REAL PROBLEM.
WE NEED TO SOLVE IT BUT WE DON'T
SOLVE IT WITH HIGHER TAXES.
THE MOST UNEQUAL AREA WITH THE
SOVIET UNION SOCIAL STATES
THAT'S WHERE THE GOVERNMENT
OFFICIALS GET ALL THE WEALTH AND
EVERYONE ELSE IS TOTALLY POOR.
WHENEVER YOU RAISE TAXES ON THE
RICH YOU GET LOWER TAX REVENUES.
IT HAPPENED WITH HARDING AND
COOLIDGE AND KENNEDY AND REAGAN
AND HAPPENED -- IT'S AMAZING
THAT THIS IS A COMMON SENSE
THERE BUT WHENEVER YOU TRY TO
REDISTRIBUTE INCOME, STEVE, YOU
LOWER TOTAL INCOME.
IF YOU GO TO ONE OF THE PRESENT
REDISTRIBUTION WHERE EVERYONE
COMES OUT EXACTLY THE SAME AND
IF WE TAX ALL THAT WE TAX
EVERYONE WHO MAKES ABOVE THE
AVERAGE WAGE, ONE 100% OF THE
EXCESS WAS OF THE NIGHT EVERYONE
BLOW UP TO THE AVERAGE INCOME SO
EVERYONE COMES THE EQUAL I WILL
GUARANTEE THAT EVERYONE COMES
OUT EQUAL AT ZERO.
THAT IS THE PROBLEM WITH THIS
INEQUALITY.
YOU LOWER THE TOP, DON'T RAISE
THE BOTTOM.
OUR PROBLEM IS POOR PEOPLE, NOT
RICH PEOPLE AND WE NEED TO HELP
THE POOR GET RICHER, NOT MAKE
THE RICH FOR.
STEVE: THERE YOU GO BUT I LOVE
IT.
LET'S FOCUS ON THAT IMPORTANT
PRIORITY.
SET OUT THE FORMAL MEASURES YOU
WOULD LIKE TO SEE IMPLEMENTED TO
LIFT PEOPLE UP EXACTLY AS YOU
SAID.
>> I DID A CANDIDATES TECH
SYSTEM OF WHO WAS GOVERNOR OF
CALIFORNIA, GARY JERRY BROWN, I
WAS HIS ECONOMIST WE DID A
BROAD-BASED BLACK TEXT AND GOT
RID OF ALL FEDERAL TAXES, ALL OF
THEM, GOT RID OF INCOME,
CORPORATE, CAPITAL GAINS TAX, WE
GOT RID OF MEDICARE AND MEDICAID
TAX AND PAYROLL TAX AND
EVERYTHING AND HAD TO FLAT RATE
TAXES.
ONE OF BUSINESS NET SALES AND
ONE ON PERSONAL ADJUSTED GROSS
INCOME AT 13% THAT WAS IT AND
WAS MUCH BETTER THAN NO FOR
CURVE AFFECT AND JERRY BROWN
WENT FROM EIGHTH AND RACED TO
THE DEMOCRATIC PRIMARY TO
SECOND.
WOULD IT BE TO CLINTON HAD NOT
BEEN FOR A FAUX PAS OF HIS BUT
THAT IS THE RIGHT TEXT TO DO.
STEVE: LEFT.
WHAT ABOUT BUSINESS TAXES?
WHEN I WAS WORKING AS A PRIORITY
IF YOU WANT TO ENCOURAGE JOB AND
WEALTH CORPORATION --
>> SURE ENOUGH, BUSINESSES DON'T
PAY TAXES.
PEOPLE DO.
BUSINESSES DO COLLECT TAXES AND
DO A VERY GOOD JOB OF IT SO I
WOULD HAVE A FLAT TAX, BUSINESS
NET SALES AND PERSONAL INCOME
WITH NO DEDUCTIONS FOR
EXEMPTIONS AND EVERYONE PAYS THE