good evening. i'm erin burnett, and outfront tonight, a burning question for mitt romney. today, he got an endorsement from donald trump, and he was all smiles, but another day has gone by without an answer to a crucial question. does he think he should pay more taxes. here are his returns from 2009 and estimated for 2009 and estimated for 2010 and 11. it turns out that 30% of mitt romney's income, $12.9 million, comes from one very specific thing, in these tax years, 2010 and 2011. it's called the carry. and here is how it works. partners in private equity and hedge funds invest money for their clients, and they get a significant cut of the profits they make. that cut, the carry, is taxed at 15%, not 35%, like regular income. now, many people think that it is right to reward people for investing money, for taking risks, with a lower tax rate. they argue this encouraged people to start businesses and create jobs. but almost no one says it's right to reward the guy who invests other people's money with a lower tax rate. after all, romney didn't take the risk. someone else did. we're not down. it's legal, and he didn't do anything that isn't standard, but it's a loophole and it adds up. he would have paid $4.5 million in taxes in the two tax years if the carry were taxed at ordinary income rates. that's more than double the $1.9 million that he paid. we called a lot of people in the industry to try to see if anyone could justify this loophole, which really affects private equity managers solely. outside of the lobbying group, no one even tries. leon cooperman had this to say to outfront today. quote, it seems to me thereat a preferential tax rate should pertain to one's own risk capital and the reallocation from the investor's capital should be earned income, taxed at the ordinary rate. not worth a tv appearance. >> i'm suri you couldn't come on and say that, but you make your point. the burning question, where does mitt romney stand on this issue. he's kind of confusing. here he is with larry cud low. >> i'm not looking to single out some group of people and say let's raise taxes. if it's actually a capital investment and it's fairly priced at the time people invest in it and it rises in value, it turns into capital gain. if it looks like a bonus, it's not a capital gain. >> yeah. keep the carried interest, but no, not if it's ordinary income, yes, no, yes, no. governor romney, can you tep me? we asked him to come outfront because we want to hear about his economic plans. the strike team thinks he's got the best in the republican field when it comes to an economic plan, but we hope he can take a stand on outpen front when it comes to carried interest because the issue is not going away. david is here, gloria borger, and david is a former speechwriter for pridz clinton. this is tough, a loophole, fair and standard in his industry, that almost nobody really defends. michael bloomberg has come out against it, leon cooperman, a lot of people, so he's going to have to take a position on it, isn't he? >> no. the loophole was there, he used it. the longer he is talking about this, the less time hae has some anything else. there is nothing he can say that will satisfy anybody. so often in the political campaign, everybody comes with strengths, vulnerabilities. you talk about your strengths, the things that are going to connect you to people and you do not offer excuses for things in your past that other people may find difficult. you soldier on and allow the voters to decide how important it is. >> what do you think, michael. can he soldier on through this or am i right in thinking that taxes are going to be more important in this election than that? >> in some other year, he could, but this isn't something like having a bad sense of humor or an odd hairstyle or something like this in an election. this is a core issue of public policy that existed before he was the republican front runner and will continue to exist. the idea there's something wrong with this loophole has been going on for years. andrew jackson, pridz andrew jackson had a slogan, equal opportunity for all, special privileges for none. very kind of basic idea, and people might see this as really hitting up against that. >> bain capital lobbied against closing the loophole. there have been seven attempts to close the loophole in recent years. democrats and republicans have chosen not to do so. >> right, i think the wealth gap is going to be a big issue in this campaign. i think president obama made it an issue in the state of the union saying there ought to be a minimum 30% tax rate, and he's raised the buffett rule, et cetera, et cetera, so it's going to be there. the wall street journal wrote something interesting after romney's taxes came out. look, there's a way he can turn this around, erin. that's to say use his own tax return as exhibit a. and say, you know what, this is why we need tax reform. this is why we need lower taxes. this is why we need flatter taxes, and by the way, if you lower the corporate tax, then maybe you take away this loophole. >> interesting point because david from, this is something that mitt romney has indicated, he wants to close loopholes. this loophole, it's a loophole. he could say, i would close it. what is he left with, though. he already got the benefit from it. >> he doesn't want to be talking about himself. that's true for any candidate with any kind of background. it would be, you know, every candidate comes with these problems. and bill clinton had problems. he didn't spend a lot of time reminding people what his problems were, apologizing for his problems. he moved on and said, let me tell you what i'll do for you. one of my favorite political stories. karen hughes tells this, walking down the beach, seeing one of the planes carrying an advertising slogan. it said, jill, come back, i'm miserable without you, jack. bad slogan, too much about you, not enough about her. >> jill, i love you, you're amazing, jack. but it's going to be raised. it's going to be raised anyway. i agree with david in theory, but in practice, barack obama is clearly going to raise this one way or another, particularly since romney seems so uncomfortable in talking about his own wealth. right? so we have to have -- he has to have a plan ready and say, okay, let's make the case for reform. i didn't break any laws. you want to change them, let's make the code flatter and fairer. >> and that would mean people like me are going to pay more money, and i'm for that, but i don't want to raise overall tax rates. he could thread that needle. >> he could get out of this in some respects by proposing tax reform, a system that is more fair. that's where he's in a pickle because anything he were to do that was like that runs right against the orthodoxy that is strong in the republican party that nobody's taxes should go up ever, which he himself repeated. until that hammer luck, the pledge mentality, can be shaken off, he's going to be stuck with this. it's right, this is not occu occurring in a science lab in a vacuum, but president obama is going to make this an issue. the public polls well, and he's going to pound at it. >> it seems to me that he's going to beforced somehow to talk about it. >> he can talk about it but not in the context of himself. i agree with gloria. if you're offering a plan, a concept, but don't apologize. don't look embarrassed. you didn't break the law. and by the way, it was a coalition of democrats and republicans. >> i made this year. >> this is about the new york senatorial delegation more than anything else. >> president obama has to be careful here, because when you look at the polling of americans, they don't begrudge anybody their wealth. they like the fact that people get wealthy in this country. it's part of what we're about. what they want is fairness. so the president can't seem to be on, you know, an argument for class warfare. he's got to talk about fairness. that's a pretty delicate balance he's got to strike as well. >> thanks to all three of you. it seems like we have come up with something. a tax plan that was creative and got rid of loopholes and maybe that might do it. barack obama, meanwhile, is turning up the heat on the governor at a prayer breakfast. jesus may be on obama's side. we'll get to the bottom of that. >> and police and protesters clashing in egypt. horrible violence going on at this hour in central cairo. and leon panetta said something shocking today. israel attacking iran this spring. with thermacare heatwraps. thermacare works differently. it's the only wrap with patented heat cells that penetrate deep to relax, soothe, and unlock tight muscles for up to 16 hours of relief. that's 8 hours while you wear it, plus an additional 8 hours of relief after you take it off. can your patch, wrap, cream or rub say that? 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>> what we have at the moment is several hundred people have made it through. they've knocked down a barrier in one of the roads. they've clashed with security forces and made it basically to the outside walls of the interior ministry. many of these protesters blaming the interior ministry and its security forces for not providing adequate security at the port said game, many accusing the minister for allowing it to happen. basically working with what they describe as thugs in the crowds in port said who allowed, basically allowed this bloodshed to happen, erin. >> let me ask you, you had another day. yesterday, you said a lot of this was a result of the political upheaval, lack of authority and control in cairo. any sense that's getting worse today? >> well, certainly, what we're seeing is that the government is on the defensive, but one bright point today as we saw that there was this emergency session of parliament to discuss the bloodshed in port said, and it was broadcast live on egyptian television, and we saw one deputy after another get up and blast the government, blast the interior ministry, blast the supreme counsel of the armed forces for its mishandling not only fof the situation in port said, but a general deterioration of security in the country. and egyptians were glued to the screen because they were accustomed to the parliament under mubarak where half were asleep and the other half were wasting time. they're seeing a vivid display of democracy at work. so that does show people that there has been a change. there has been an improvement, but there are worries about security and the general state of political instability in the country. >> ben wedeman, thank you very much. now, the high stakes showdown against iran. there was a stunning prediction today from defense secretary leon panetta. hit my in box, i said, really. he said he believes there is a quote strong likelihood that israel will strike iran in april, may or june of this year. now, the military operation would target iran's nuclear program. a program that israel and obviously many others including the united states is developing nuclear weapons. mike rogers, chairman of the house intelligence committee. good to see you, sir. appreciate it. do you have any sense of what leon panetta was saying in how significant his comment was? how big of a strike this might be, how unusual, what the repercussions might be? >> well, little surprised he was as aggressive in his talk as he was. we had lots of conversations in classified settings, a little taken back by how clear his prediction might be about israel's intensions. i'll tell you this, one of the things about iran is they're really pushing the envelope. we know they're aggressively pursuing a nuclear weapon program, announced as much by saying taking enrichment facilities to gome, which is difficult to get at militarily. we know their external operations have been in high gear, including political assassination attempts here in the united states. what israel has to decide is what is our red line? what is the line that iran crosses where we say we can't have that happen. it's too dangerous. a middle east nuclear arms race is dangerous for israel ark really dangerous for the region and dangerous for us. that's what i think all of this talk is right now about where israel is. >> and would you support an israeli strike on iran? >> i think a unilateral strike by israel is not helpful. it takes middle east allies to the united states and makes them have to oppose israel. it comes with a pretty high cost. now, we have a defense treaty that will support israel if they're attacked and we will live up to that. i would hope that we could do this if necessary to try to slow the program, sanctions are taking hold. the u.s. congress passed tough sanctions. >> right. of course. >> that's really starting to take hold. the one thing that is missing here is we're not sure that iran really believes when the administration says everything is on the table. if we can make them believe everything is on the table with sanctions, meaning the possibility of military strikes, that could be the thing that tips us over and backs them down. >> it sounds reasonable, as you say it, although interesting, david sangar, a friend of mine at the "new york times," has talked about in an election year, we always hear the rhetoric turn up on iran. here's a quick sense of what i mean this year and other election years. >> we cannot tolerate a nuclear iran. it would with a game changer. >> that old beach boys song bomb iran. ♪ bomb bomb bomb >> whatever stage of development they might be in their nuclear weapons program in the next ten years during which may might foolishly consider launching an attack on israel, we would be able to obliterate them. >> obliterate, bomb, bomb, bomb. that was 2008. it sounds like we're hearing that again. has the threat just changed or is this just hey, election year, iran. >> one thing we've learned is that mccain can't sing. that's the one thing we have learned. >> join the crowd. >> exactly. the one thing that concerns me is iran has made steps to become a nuclear weapon state. that's why this anxiety is out there. this is different than election year rhetoric mainly because the president has been really behind this. the u.s. congress pushed him to do sanctions. we have been arguing that you can't let israel get to their red line so that they unilaterally launch an attack and right now, they look back and aren't sure where the united states is and that's what this big unknown causes uncertainty and i think that's why you see so many people are just so nervous about what happens in the next few months. >> thanks so much. appreciate you taking the time to be with us. a man returns home from his honeymoon alone, charged with murder. his wife's murder. and the super bowl just days away. mixed taped and madonna are next. 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[ male announcer ] if you can't afford your medication, astrazeneca may be able to help. we start the second half with stories we care about and focus on our reporting and find the "outfront 5." first, mitt romney scored an endorsement from donald trump. but the presidential candidate let another day go by without answering our burning question. does mitt think he should pay more taxes? $12.9 million came from carried interest. paid a 15% tax rate on that legal and standard, but many call that tax rate on carry a big loophole. today, leon cooperman told "outfront" income from carry interest should be taxed at an ordinary rate. romney has not said whether he thinks the loophole needs to go. the issue, though, not going away. number two, members of the house and senate met to discuss the payroll tax cut. we watched. there wasn't a lot of talk about the actual tax cut. the panel of 20 discussed smaller policy issues. the clock's ticking. >> but the little secret that all 20 of us know that most americans don't know is that we really don't have 27 days. in the house, we have no more than 13 legislative days left before the end of this month. >> the secret is out. 13 working days left to reach a deal on a tax cut that would save most americans about $1,000 a year. >> number three, mortgage rates have dropped to a 30-year low. this is unbelievable. 3.87%. 30-year fixed mortgage, the 15-year fix is down to 3.14. holy cow. we look at the numbers and compared them to a year ago. homeowners now save about $50 for every $100 borrowed. one with about a $300,000 loan would save about $2,000 a year. the problem, of course, is qualifying for those mortgages. a lot of homes in the country still underwater. that's a problem. four, initial jobless claims dropped by 12,000. 367,000 now is number. experts say it is an improvement in the job market. economists mixed on what the unemployment rate will be tomorrow. someone told us they think it's going to go up. 8.6%. others think it's going to go down to 8.4%. all a betting game for them. right now, it's 8.5%. it has been 181 days since america lost its top credit rating. what are we doing to get it back? today, ben bernanke told congress the pace of economic recovery has been frustratingly slow. he also warned that we need a credible plan for cutting the deficit in this country. sadly, the super committee that was supposed to cut the deficit in november didn't. as a result, america is facing $1.2 trillion in automatic spending cuts next year. 500 billion from the pentagon's budget on top of $487 billion from their budget. that adds up to serious money and today, top senate republicans tried to spare the military by proposing a plan to freeze federal worker's salaries and reduce the federal workforce instead. >> we could take the whole defense department budget and take it off the table, and still not get us out of debt, but if you did that, not only would you not achieve financial sovereignty, but you would render us ineffective to threats we face. >> democrats say no way, so wait, ground hog day again. oh, yeah, there he is. punxsutawney, he's a cute little thing. and it is ground hog day for real. it's like he's posing. nose is sticking out. comes "outfront." i'm not talking about you, sir. i was looking at punxsutawney, he was preening there for the cameras today. we make light of this issue in terms of the parties, but i know you voted in front of the budget control act of 2011 and you did it so the super committee would do their jobs and we wouldn't be in this commissioposition, but . is a deal a deal? we should go ahead with these automatic cuts? >> i don't think there's anybody who wants to have our military guided and the select committee did fail to do their job. it's up to us to go in and revisit. i understand senator mccain and others filed a bill to step back and strategically address these concerns. as many of you know, senator mccain's a menltder of mine. i look forward to reading the bill. now we have to move on to the postal bill and also working on this as well. your party proposed sparing the defense cuts and instead freezing federal pay and cutting the workforce by about 5%. regardless of that, the numbers are about $127 billion in savings over ten years, which is eight tenths of a percent of the current debt. doesn't the idea need to be bolder? >> listen, there's going to be a lot of ideas. we need to do a lot to step back from our debt and deficit, but we're not doing really a whole heck of a lot right now. that's why the select committee missed that opportunity and we have to go in and work together because we are americans first. we need to work together to step back from our debt and deficit and the increasing numbers we're seeing. when i got down here, it was $11.9 trillion. up to $15.3 trillion and rising, and we're going to need to move quickly or we're going to end up like some of these european countries. >> a bill passed that you've championed. this is the stock act. stock trading on congressional knowledge. something that seems like common sense to a lot of americans. first question is, basically, means you're not allowed to use information from congress to profit. makes it a crime. >> same as every other american lives by that. you can't use insider information for personal profit. pretty simple, you're right. >> it is pretty simple. but let me ask you about this amendment that didn't go through. this is something i've never understood. so, if you are on the banking committee and you are overseeing the rules on say bank of america, you're still allowed to own shares in bank of america. i don't understand that. >> i voted for that amendment, i they put it back in. i know the committee members are going to look into those things, so i don't know what to say. i voted for the amendment, it's my bill, a stronger bill than it went in being. i want to commend obviously the leader and the president for obviously pushing it forward and senator lieberman and collins and i marshalled it and senator gillibrand, so it's a good, strong bill and i challenge the house to get a bill out soon so i can get a bill to the president's desk by the end of this month. >> why do you think people voted down that amendment? you voted for it. you don't think someone on that committee should own shares of bank of america. why would that pass. i don't get it. >> i don't know. as i said, i voted for it and there are other amendments that failed and others that succeeded, so we need to obviously get over to the house, see what they're going to do and get it through the committee. this is a victory for the people of america. i sit in what i consider the people's seat and right now, we need to help reestablish the trust between the american people and the members of congress and the fact that i saw the 60 minutes piece, filed it. we got this done within 90 days and you were just talking about the gridlock. this was record time. it was a full and fair and open amendment process. we must have done between 15 and 18 amendments. it was a good day in the united states senate and i'm very thankful that we've taken a little step to move forward to reestablishing that trust. >> thanks very much. good to see you. >> one more thing. go, patriots. >> i picked them. i picked them, which is -- i hear screaming and getting angry. >> you should. that's right. yes, okay. go, pats. >> get ready for my security detail when you come to new york. what would jesus text? this is a real question today because the president at a prayer breakfast in washington this morning raised the very issue. >> i think to myself, if i'm willing to give something up to someone who's been extraordinarily blessed, give up some of the tax breaks that i enjoy, i think that's going to make economic sense, but for me as a christian, it also coincides with jesus' teaching that for unto whom much is given, much shall be required. >> all right. just how much is required from those who are given much? "outfront" now, former director of the congressional budget office, good to have all of you with us. jamal, let me start with you. >> of course you want to start with me. >> i do. i want to ask you what you think of the politician bringing up jesus as on their side in a tax debate? >> yeah, you know, i'm not that in favor of it. i think as progressives, many of us who are more center left, many of us have said republicans spent too much time infusing religion in their policy arguments. the president is on really safe ground talking about the fairness argument. i'm totally supportive with him. as a christian, i agree with him on theological grounds. i just don't think the president of the united states should be making those arguments, that those of us outside the government, i want government and religion to be separate. >> church and state, separate. shouldn't have gone there? >> i think it's a legitimate point, but i think the president wasn't giving jesus enough credit. one way of thinking about people is that you care about inputs. you're showing you care by spending more money. another way is by delivering results. funny thing about america since 1970 is that we have tripled the amount of money on public school students. that sounds great. tripled the amount of money. hurray, we care more, but the graduation rate has gone down by 5%. we're spending more money and doing a worse job. so the issue is not hey, let's get people to pay more taxes. the issue is, hey, isn't something broken here? maybe the schools aren't actually helping the poor kids we want to uplift. that's the real problem. and i think jesus would think gosh, we're not doing a really good job of helping those who are downtrodden with this government that's not working super well, so why exactly will we focus on how to extract more money from folks creating jobs and doing other stuff. middle class folks who are going to be taxed for a government growing out of control. >> i must say, i do feel somewhat uncomfortable talking about jesus in a prime time show. all right. there, you said it. not me. okay. doug, let me just ask you this. >> it's now down to me? >> i would say hot potato. >> every graduate program in economics has a course called what would jesus do. we know the answer. he maximized the dynamic of good works. it doesn't include the buffett rule. obviously, majority of americans support taxing the wealthy, so there is that. people agree with the concept here, whether the use of jesus makes them uncomfortable or not. doug, you looked at the numbers. if he does that, how much money gets raised? >> it's on the order of $35 billion a year. it to give you a sense of the magnitude involved, we have a deficit of over $1 trillion. it's nothing. >> jamal, i want to ask you just to follow up on that. a guy named adam davidson was on the show last week. he raised an interesting point. you taxed millionaires at 100%. you'd raise $700 billion in one year. they'd have no money left. if you increased taxes on everybody by 8%, it has a bigger impact than taxing millionaires at 100%. how do you get your arms around that issue that the middle class is part of the solution here? >> it does seem that in order to solve this problem, you're going to have to figure out a broad tax overhaul that makes sense. doug and some others look at the 30% millionaire tax, oh, it's only raise about $40 million to $50 million a year. over ten years, but you know what? last year, the republicans who came into congress the tea party, they were looking for 50, $60 billion cuts out of the current budget, so it's the same. if you want to cut the budget by $50 billion, that's the same argument. raising taxes by $50 billion. both things are equal to me. but i think ultimately, you've got to do a lot of things and you've got to grow the economy. i don't see a way out of this problem unless you do something on entitlements, spending cuts and taxes and grow the economy. just doesn't seem like the math works. >> final word quickly, doug. >> i think i agree. one of the reasons millionaires paying less than 30%, by the way, on average, they pay 30%, so it's misleading, but some pay less because they contribute in other ways. in charity, by providing growth. tax policy has lots of objectives. i think growth should be number one right now. >> thanks to all three of you. we appreciate it. the latest development in a honeymoon murder. a man accused of killing his bride is going on trial. >> and a woman who was rejected again and again and again finally made millions by going it alone. our idea segment outfront. to supply affordable, cleaner energy, while protecting our environment. across america, these technologies protect air - by monitoring air quality and reducing emissions... ...protect water - through conservation and self-contained recycling systems... ... and protect land - by reducing our footprint and respecting wildlife. america's natural gas... domestic, abundant, clean energy to power our lives... that's smarter power today. domestic, abundant, clean energy to power our lives... vacations are always wasn'ta good ideaa ♪ priceline negoti - - no time. out quickly. you're miles from your destination. you'll need a hotel tonight we don't have time to bid you don't have to bid. at priceline you can choose from thousands of hotels on sale every day. save yourself... some money the other office devices? 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[ kyle ] it's like we're connected. no we're not. yeah, we are. no...we're not. ♪ the allstate value plan. dollar for dollar, nobody protects you like allstate. it was supposed to be a adventure of a lifetime newlyweds from alabama on a trip to the great barrier reef. less than two weeks after they were married, her life came to a gruesome end off the coast of australia. this chilling photograph you may have seen before. it's sort of lodged in my mind. what it shows is what prosecutors say is tina's body in the background. it's in that circle as we pan out. lifeless on the ocean floor. gabe, her husband and diving buddy, said it was a tragic accident. investigators did not buy his story. in 2008, he was arrested and pleaded guilty to manslaughter. he served 18 months in prison. he was extradited in alabama in 2010 and now faces capital murder charges. his trial begins next week. he is the criminal defense attorney for gabe watson. he's outfront tonight. good to see you. thanks for coming on. i want to show everyone that haunting photograph again. for many people, it is something they remember and makes them remember this case. gabe was a certified rescue diver, which is part of the reason that some people have, there was suspicion here in the first place. went to the surface instead of staying with her when in desperate need of help. why did he do that? >> gabe's classification as certified rescue diver has been much overblown. gabe took a crash course four years before this fatal dive which taught him basic retrieval and safety things and he got a slip of paper that said he was a rescue diver. he had never worked on those skills before. had never had to use those skills to rescue anyone. he wasn't the guy someone would call if there was an emergency, call dave watson. call gabe watson, he can save you. he wasn't a rescue diver. he made a split decision when his wife panicked and started to sink, to find an expert. find somebody who could help and he went to the surface. >> obviously, i understand the manslaughter conviction in australia showed no intent to harm tina, his wife, but still, to some watching, it may be hard to understand why gabe would plead guilty to taking his wife's life then. >> well, he didn't plead guilty to taking her life. he pled guilty to being a bad dive buddy. and the highest courts in australia determine that he did nothing intentional to cause her death. he just simply made a split second decision to leave her and to get help at the surface. he pled guilty to what he did. that was that he left her. >> all right, so i guess abandonment is what you're saying. tina's family has made it very clear they think gabe murdered her. listen to this. >> until that day comes, until he actually faces the evidence for the first time in a criminal trial before a jury, there can be no rest or no peace for anyone in our family. >> what's your reaction to that? >> it is certainly a tragedy. tina's death was a tragedy for her husband, for her parents, and for all that were involved and knew and loved her. however, their blame of gabe is absolutely misplaced. the investigation in australia was fraught with problems. it started off on the wrong foot by bumbling investigators in the australian police. and they basically convinced her family that there was some foul play here. otherwise, we wouldn't be here today. >> you have known gabe now for a long time. what's he like, and is it possible, although you're convinced of his insnls, that he could be hiding something from you? >> not at all. i have no doubt in my mind he's innocent. he's a guy's guy, a sweet guy, a big teddy bear. he's been described by his friends as just that, the guy you call when you need something. he's doing the very best he can with these allegations that have been hanging over his head for nine years now. almost nine years. he's remarried to a lovely woman who is a school principal. they have a wonderful relationship, a healthy relationship. and there's nothing to indicate that he's a devil that did this. >> all right, brett, thank you very much for coming out. >> thank you. >> a writer rejected over and over and over and over again until she finally comes up with the one idea that vindicated her and helped her make millions. she comes quat outfront" next. of any small business credit card. the spark card earns double miles... so we really had to up our game. with spark, the boss earns double miles on every purchase, every day. that's setting the bar pretty high. owning my own business has never been more rewarding. coming through! [ male announcer ] introducing spark the small business credit cards from capital one. get more by choosing unlimited double miles or 2% cash back on every purchase, every day. what's in your wallet? will be giving away on passafree copiesevery day. of the alcoholism & addiction cure. to get yours, go to ssagesmalibubook.com. there's a pretty good chance you have never heard of tonight's idea guest. she was a college dropout makes less than $18,000 a year, using her free time to write love stories about magical trolls. but no traditional publisher wanted her stories. so she posted them online at an ebook. within six months, she sold 120,000. total profit, $2 million. tonight, she's got a multimillion deal with st. martin's press, a big hollywood movie deal, and her first book, which can be found in her hometown library. she came outfront to tell me not only how she beat but some people say completely changed the industry that rejected her. great to have you with us. tell me how you got through incredible setback. you were set on writing. you knew you wanted to in your heart, right? >> yep. >> then you submitted your book a lot of times. and you kngot rejected. >> the first rejection was really hard. i took it personally, like a really bad breakout. you have this idea that it's all going to work out and it doesn't. it was kind of devastating. i stepped back from writeing for a couple years. then you govern yourself time and start thinking about other things and i got over it and realized i wanted to write and i need to do this. >> what made you decide to publish ebooks? >> i had tried everything i could think of the traditional route and i wasn't getting anywhere. in 2009, i set out and wrote several books and i really sent out letters and was doing everything i could and i wasn't making any headway. in 2010, i heard about authors having success with ebooks. i thought i would try it out. i didn't have anything to lose. i wasn't making headway the other way. >> all these stories about how ebooks are the future. you're proof. you're an entrepreneur and self-starter. nothing to $2 million in books alone. you're proof there's a new model. you signed with st. martins, why? >> self-publishing was time consuming. the publishing asspect was taking up so much time that i would rather be writing and working on books, and where wanted to reach the large portion of the market that doesn't have ereaders. >> people like me, by the way. >> there's a lot of people who just aren't that into ebooks. and some people never will be. i wanted to reach everybody, and i wanted to put out the best quality product i could that would reach the most people. and st. martins is the way to do that. >> when did you realize you were a hit 1234. >> i think it was toward the end of 2010. i started selling like a ridiculous amount of books. in december, i sold over 100,000. in january, i sold over 400,000 books. and it was just kind of like this insane, crazy moment when i saw that it didn't make any sense. it was mind boggling. i thought, this is really, really taking off. >> the big leagues. what is the next character going to be? are you going to stick with trolls? >> i have a new series coming out in august, and that one is about sirens, i have had an interest