let's have a conversation about scala thing
political or should work in the united states acknowledged by this
this whole thing just uh... to be a fascinating
question
you know how do you put together how do you make things work high cotton
economically how to make things work
and unum iran the being attacked for being
tom pocket is on the lines that you're the texas workforce commission
in the former head of the republican party of texas
and his website unfpa compete u_k_ ki and dot com
and uh... tom
better first all welcome the program
good to be backed up thank you for joining us
but here is suggesting you know recent post overtime parking dot com
that we should have
basically a value-added tax a vat tax that
it do i have a right personal uh... e affectively bennett lebow border
adjusted consumption tax to replace our
corporate income tax uh... with it
served thirty five percent worried because the current system rewards debt
so it's great for both
wall street private equity moguls because they blowed companies up wit dat
deadly deductible and
oppose as witty capital investment employment savings are punitive leak
actual reverse the dynamics
and you'll take the power away from the wall street financial engineers who
dominate the american economy today
and argue apprentice reason for that is because of the way we tax business in
america
yep i and i don't disagree with you on that and uh... at least in the in the
macro and you're right that that
this is why this is this is why mit romney it was worth over four million
dollars this is uh... hours worth
somewhere between two and four million dollars is an animal and while he know
always john paul cynicism a four billion dollars last year is that
is that we have a tax system that rewards debt because debt is tax
deductible now if i could just it try it for our listeners let me just convert
some of us in english ok because i think i'm concerned that you and i may be
talkin uh... using language that that that the some of our listeners may not
be familiar with on e first of all the way a value-added jetliner staying power
value added tax works in correct me if i'm wrong on this is that
at each stage of
production
in uh... you know whether it's into intra company or intercompany any stage
of production when value is added to a product that increased value is taxed so
for example if u bring the higher dorian and make it into steel you've increased
its value the value the iron ore and so there is a tax put on the increase in
the value when that steel was made into steel rolled steel there's an increase
in value that's tax
their role steel is made into a card or that value at that
that increase values taxed and their car door is added to a car that increase
value is taxed and then when the car is sold
there although that value added tax now has been battered into all the various
additions of value
and the way that compa that that other countries particularly the exporting
countries like
it's like a france germany try it the china and taiwan and south korea japan
the way that they're sneaking around the fact that we have no life at that
actually that's needed to do it retin open there a way that they're getting
around fact that we have as a as a world basically with a world trade
organization gotten away from terrence worries to say
you know if you make something in in germany worries were in charge of twenty
percent import tax on it
date by reversing out that that tax myself his eighteen percent vat tax
built into this b_m_w_ but if you buy it across borders we're gonna reverse that
tax out what they're doing is they're
they're putting up the a
eight twenty arid eighteen percent
uh... tera fairfax right having made in the united states you're absolutely
wretched border adjusted consumption tax creditor
it's uh... stealth character mini as an example as a nineteen percent tax
advantage over a so one week
at the border with the u_s_ product
they can access it nineteen percent
well we need to do in my estimation is
as exports come into the u_s_ in the eight percent
border just a consumption tax or a bad all goods and services coming into the
u_s_ would be taxed an eight percent
and it's important to note you get a rebekah a tax abatement ur tax credit
on your business consumption tax here at home as you export overseas
i do think it's important to know if we play their game
yeah i i do think it's important no people get a little confused i think oh
my gosh you're gonna taxes thing way on up
but it's it
it eight percent of the maximum they can be taxed imagery baited
as the taxes page so it is the total of a person it's not eight person a person
a percent and that's the risk of of going to a national sales tax because
you carry
it double uninsurable muslim countries that have that taxes mostly european
countries as and most of southeast asian kung entries
that has that texas both as a way of generating
you know basically
corporate income tax revenue from their domestic sales in domestic corporations
and as a way of creating the uh... a reverse tear off
to encourage exports
most of those countries cap their that taxes
between sixteen and twenty percent right why if we're going to compete with on a
level playing field why do eight percent why not do eighteen percent and well i
think that what uh... you know i don't think you can get the entire right i
think it has to be revenue-neutral
and an eight percent figure uh... fritz hollings uses the figures six percent
but
uh... let's just say it's six to eight percent
sent you would be revenue-neutral you could totally eliminate the corporate
income tax
i think you've got to do it rather than lor one and put another one and i don't
think you can get the bipartisan support so i would
i would say i don't see any reason to do this in a way that that they would get
republicans on board at you right first of course the latest justice tablets
that is that what you know who you are what we're talking about
we're talking with some parking he's the chair chairman of the texas workforce
commission
former head of the republican party its axis
i'm i'm concerned is that
him at a certain level i want to say tower the republicans you know france
for example has an eighteen percent vat tax
plus a nineteen point six percent corporate income tax
germany
has a twenty percent vat tax and nineteen percent corporate income tax
the u_n_ average of corporate income tax
among the the all the european union nations
is twenty point seven seven percent
corporate income tax
when dwight eisenhower was president united states we not only had an average
thirty one percent import tariff on goods coming in united states
we had
we had thirty five percent of the total revenue of the federal government was
corporate income tax right now it's eleven percent
so n_y_u_ blow that away yell but no you're not you're you're getting all the
goods and services coming into the u_s_-china business consumption tax
planners would be
of pain
uh... but i'm paying for cheer a zillion be revenue-neutral you grace just as
much money as your
as you're currently raising under the just interest to know i understand that
and what i'm saying is that the existing system worse growth
well now you get corporation spain one-third
as much of a tax load in the united states
as they did throughout most of the history of the united states but tom you
you re you have a general electric which is paying zero right now the puzzle
bobble loopholes and uh...
and the special interest provisions and they're going to have to pay eight
percent everybody's gonna have to pay a percent
and any race just as much revenue as you're currently giving an it's gonna
grow because
as jobs come home to america
energy star grown the private sector again you'll have more revolution to
address sharply western let's let's set aside the argument between you and i
over whether or not we should do it the corporate income tax because that you
know we're not going to
resolve that and i and i agree with you that if you want the republicans on
board that's what you have to do
well i just don't think that that's what we should do but but tanah merah we have
left how do we get america talking about a vat tax year most americans i know
that saccade abridged bartlett's got a new book out uh... on this issue and now
i'm reviewing its serving american conservative uh...
uh... the approach hollings has an organization out
pushing this idea chaal a blurb on matt today you've got pat chote who
ran for vice president uh... pushing the idea more and more i think the word is
getting out and now those of the mit romney sand and now i know the religious
aunt diane night we don't have anybody on our side other than rich and carmen
he doesn't understand the concept so
he's talking about manufacturing
but we gotta bring manufacturing jobs home to america rebuild our
manufacturing base because this is a way to do it you and i may have a different
songs how to approach it but we both understand that you've got a quick
rewarding these private equity moguls and and and allowing this massive uh...
of leverage landfill and totally with you tom and i i encourage people to go
to tom for complete yuki and i consider that
bank itself the little set back it up