Transcripts For CSPAN Washington This Week 20130707

The study they are doing of 30 practices. I think it will be interests to a lot of doctors to learn a little bit more about what other doctors are doing to make that work. She is embracing change. Some people fear change. Some people welcome change. She is encouraging her membership. She talked about silos to change what can you do to make that change in how this has to change to become more efficient and help improve the quality. A thing she has a very interesting ideas. To help the policy reporter for the washington post. Thank you for joining us. Thank you. One of the points we make in didnt make any difference to have popular elections . We decided it did make a difference. Senators began to act like house members. This is not something any senator wants to hear. It means that were scavenging for votes. Bad to go out to the people. They had to go out to the people. All you need is 14 votes. You can easily pay off and they did in some cases. They paid off 14 senators. Paying off their mortgages. To buy their election. More with Richard Baker tonight on cspan. Five years from now we are still going to be looking at a world that is dominated by the traditional paid tv packages. People have waited for years to see the tv package blow apart. It is starting to happen. You are seeing are erosion around the edges. In through seismic change the Business Model or technology but the leakage of people at a very slow rate. Over 10 years, that will be a very large are events that the programmers in the Entertainment Industry will have to address and have to serve. Up anare trying to set opportunity for broadcasters to turn in some of their rights if they choose to. To decide to channel share or move to a different part of the spectrum. In return, get a part of the proceeds as we rear range the spectrum. Turn around and sell it to the Wireless Companies for flexible use which will be mobile broadband. More of what is happening from the cable show. The communicators on cspan. Former speaker of the house Newt Gingrich and former greek Prime Minister George Papandreou where they argued about whether taxing the rich hinders our contributes to economic equality. This is one hour 25 minutes. You did not know which one of your arguments would be totally destroyed. And then you have to come back, you are shaken up. Tax change. You do not know what to say, but you will have to say something. I cannot believe i am about to say this but the dr. Kissinger eu have six minutes. Off . Uld africa be better is a hypocritical argument. [laughter] you are finding it annoying. [laughter] you are all in this. The United States cannot pull itself out by running a surplus unless you find another planet. We remain totally unlike japan, a place where every body in the world wants to, and the place where everybody wants to put their money. We crated colonialism and fascism and every bad thing was in europe. Nor are we in the house of commons. Big deal. He will get there. I promise. It is much more frightening [indiscernible] iran attacked a 1859. Or was in was imagine a World Without religious faith. No scripture, no place to faithp, because of that dedicate their lives to others. Objects in as crude experiment and to supervise this is a dictatorship. A kind of divine north korea. [laughter] [applause] ladies and gentlemen, welcome to the munk debates on taxing the rich more. I am the treasurer and i have the privilege of once again acting as your moderator. He wants to begin tonight of by welcoming you, over 3000 people i want to begin tonight by welcoming you him over 3000 k debates. Another mun we appreciate your enthusiasm for the simple idea to which moreseries is dedicated, and better debate on the big issues of the day facing the world can only be good for us to be hello to the National Television audience watching this debate. And across the continental United States on cspan. , our online you audience watching life right now. It is great to have you as a virtual participant in tonight proceeding. The presence here here on the stage in a matter of moments are for big thinkers. A burning question of our time, tax the rich more would not be possible without the generosity and foresight of our host tonight. I hope you will join me in a warm round of applause for peter and melanie munk. Bravo. [applause] now, we are mere moments from getting our debaters out here on center stage. First, i need your help with three simple tasks. Number one, you should never say this in a concert hall, i will. Power up your smartphones. With a twitter hashtag, munkdebates. You can engage in conversation over the next hour and a half. We also have another technological innovation we want to sprinkle you. Spring on you. Code. Those of you watching can also access our mobile online poll through the following url www. Munkdebates. Com vote. Sounds likeve said ancient greek. I salute you for your knowledge of ancient languages. Do not worry, relax, enjoy the debate. That moment has, were we start to get our debaters has come where well get our debaters onstage. Please welcome the first the former Prime Minister of greece one of oregon policy George Papandreou. [applause] his fellow debater, a Nobel Laureate in economics, a tenacious columnist with the New York Times and discourage a billionaires everywhere, paul krugman. [applause] one Formidable Team of debaters deserve another. We have them for you now. First, welcome the intellectual father of reaganomics, a columnist huber claimed he has has never seen a tax cut he did. Ot like, dr. Arthur b. Laffer [applause] our final speaker tonight joining dr. Laffer is none other than the former u. S. Speaker of are presented as and recent republican nominee and or the most influential politicians of his time, the honorable Newt Gingrich. [applause] 2 final piece of business. First, i am going to ask our projector operator to show the debate countdown clock. Those of you have been to debates before remember we have a clock and when he hits the final moments, it appears on the big screen. We want you to join me for a round of applause during her opening and closing statements. That is going to keep our debates on time and our debaters on their toes. Finally, time for a pivotal moment. We are going to see how this audience voted on tonights resolution as they came into this room. The resolution to tax the rich more, lets have the results. There you have it. 58 in favor. 28 opposed. 14 undecided. Lets drill down with our second question. How big that potential swing vote was in this audience. Depending on what you here tonight during the debate among are you open to changing your vote . Lets have that number. Wow. 79 said yes. Only 21 said no. It is a debate that is very much in play. Time for our opening statements. Wellide arguing in favor will argue first. Paul, you are up. Good evening. Thank you for being here. The invitation. I am delighted to be here in this lovely city. Which among other things has a much more interesting mayor. [laughter] that is not what we are here to talk about. Were here to talk about taxing the rich. Philosophical big and social issues involved here. Colleague ist my going to address those. I am going to keep my part quite mundane. Three to talk about mundane issues. Should we be thinking about raising anybodys taxes . The second is can we raise significant sums by taxing the rich more heavily must work and should we fear the economic consequences if we do raise taxes on the rich . On the first question, look, we are living in a time certainly in the United States where we are currently being told there are good, humane things would like to do but we cannot afford. We are short on money. The debate involves. Which is been a lifeline to a lot of people. One is food stamps which is been a lifeline to a lot of people. Rich make anyhe different . If you look at the top one percent in the United States, and 2011 they had a combined ome of 1 trillion not cap not counting Capital Gains. If you can raise 0. 07 , that negate the Food Stamp Cuts we have to make. The point is, theres a lot of money at the top. Make a significant difference in allowing us to have a Better Society than the one we are headed for. Can you actually collect more money from the top . Will raising taxes . We lot of evidence have a lot of evidence. Our top tax rate has ranged from 91 . W of 28 to with a lot of variation. It is true that higher marginal revenue toost decline. We have good estimates of how have to be torate put us on the wrong side of the curve . Probably 80 . We do not have to worry about taxing so heavily that we lose revenue. We can collect more and put it to good use and were willing to raise tax rates from the top. Finally, what about tax rates and the economy . Would have disastrous effects . Thats what you always hear. The classic example came some time ago. At least 20 years ago in 1993 when president clinton raised top tax rates. There were many predictions this would have terrible effects of the economy. You knew this was coming. A fellow by the name of Newt Gingrich said it would kill jobs and lead to a recession and will force people out of work and into unemployment and increase the deficit. I know what your answer is going to be. You are going to say, on the good stuff happened after republicans took over congress and started cutting taxes. That is not going to watch. First of all, during the first two years of the clinton administration, the u. S. Economy added millions of jobs. To understand a thousand a month before you guys moved in. 278,000 a month before you guys moved in. Every year, according to cbo that little was in office, the tax rate on the top 1 was higher than it was in any year of either the bush one or two administration. Do at the economy the u. S. Economy expressed in applicable. Boom. Epic some people figure that it does not happen. By the way, wouldve much higher tax rates for our generation after world war ii. It is considered inconceivable now. That did not stop the 25 year period to be the test to be the best we ever experience. Should we raise taxes on the rich . Yes, for various reasons. Can we actually raise more money that way . Yes, we can. Should we be afraid that it will hurt to becoming . No, we should not. Lets do it. [applause] very well done. 25 seconds to spare. Youing better than when find those quotes to turn against your opponents. We like that. Speaker gingrich, you are up next. Thank me say, i want to peter munk for creating Something Like this. As a former teacher am a when you are talking and you realize a large part of your class is behind you, it creates a certain tone of insanity. You hearting on those to watch back. I want to approaches from a different angle. The debate is not about raising the tax rate. 90 . D 70 tax rates and you had really good attorneys and cpas and you never paid them. When a president ial campaign in candidatekrugmans ran against my partys candidate. It was all legal. It is like the current president s total for the commerce which turned to mistake her taxes by 80 million. It was not a big mistake. It will be like me and you fouling 300 running. The fact is, really rich people do not earn incomes. They get money. That is why bill gates have lots of money. That is why he does not care what the tax rate is. He is not going to pay it. Im going to make three quick cases. First about morale a team. Morality. 21 whoo commend the said they do not care what the 4 of us say. Audiencesean canadian are more candid. Let me start with morality and practicality and then a question of focus. I love the way it is phrased. Raise taxes on the rich. Why . Would we mean by rich . Live in a neighborhood a drive a certain type of car. The person next you drive a better car. They happen to like cars. Something else. Since i drive a better car, should we tax them more . You have another friend that happens to work two jobs and they have a slightly higher income because they earned it. Should we raise their taxes . Why . This is not about charity and contributions and morale a t area the power to tax is to morality. If youto tax is to are successful enough, we should rip you off. You owe it to us. How dare you he so successful. If that is the strategy, the right answer is not to go out on a fancy tax rate that learners can get around. We know how much bill gates is worth. We know how much Warren Buffett is worth. Why should they have more than 1 billion net worth is mark will get 1 billion this year out of two people. Why should they be allowed to be successful . The american answer has been, when has this become a big deal . Microsoft is a big deal. And improve the lives of the lot of people. It may want particular person successful as a courage another generation to sound like to invent microsoft. We can send a different signal him why waste your time . Wartime and inin the crisis, you can say to people we need everything we can get. Say to peopleto in general, if you are successful, we are going to punish you. It is bad. I want to sayity, come to america as be an entrepreneur and create jobs and great wealth and new ideas and we will award and honor you. We believe that pulls people ahead. That chinese has followed the strategy of creating a lot of billionaires. 600 millionle people into the middle class. The price of that was germanic, radical economic growth. Dramatic am a radical economic growth. That is good, not bad. I want to raise the bottom. I want to find a way to help everybody. Is theber one focus jobs. If trading opportunity for everybody. As solving the problem of the poor. And solving the problem of the poor. This the wrong folks of politics. Big government today is a failing your credit institution. Look at all of the things you have in the private sector that has improved. Look at the handheld device that was all of you have that enables you to vote tonight. Look at all the breakthroughs. Look at the government. I will close to one example. The founder of the google driverless car, it is to lower the cost of College Education by 90 . By improving access to learning. Theres a world out there that we can improve dramatically. Ofis not a function taxation. As a function of breaking through the boxes we have been in. That would be a better focus the trying how to punish people for being successful. [applause] i can see those republican primary debates have kept you sharp and on your toes. He says great opening statements. Up next, George Papandreou speaking for the pro team. [applause] thank you. Let me thank you, when i was a teenager in canada, it was very hospitable to my family who were in exile because of a dictatorship in greece. It is an honor to be here with the speakers. We are talking about a very important issue. That is inequality. Theres a story in inequality created in the 1920s. It is undermined basic principles of fairness and justice in our societies. I am in favor of this weposition because i believe need to ensure fairness and a just society. I admit, theres a value which i cherish. Beyond the moral reparative i feel that is important, i would like to relate a personal experience to you. Minister, ie prime had huge deficit made by the previous conservative government. I had to raise taxes. My main task was to revamp the tax system because there were loopholes, lack of transparency, and a lot of tax evasion. The greek people who were paying for the debt of greece were at the same time seeing as we were paying back our lenders am a is Global Financial system was aiding tax evasion through tax havens. Economy,y trickle down we had a trickle out economy. Instead of a trickle down economy, we had a trickle out economy. Offshore in 2010. Revenues are lost. They is so much being lost could five times a deal with the lending goals. Say inevitable tax, i also believe in a strong, Global Governance which must include transparency, closing loopholes, financial regulations around the world. Arecond point, tax revenues a democratic decision for each country. I believe in progressive taxation because it is the bloodline of a social contract among a basic bargain in our societies. Conservative argument is we need a race to the bottom because of global competition. They say we should emulate the emerging economies with a lower taxes, lower benefits, lower environmental standards. Less education and less of a safety net for pensioners. They are proposing to undermine this basic bargain that holds our society together. Is there another way . Gordon brown said we need to overhaul our economies ever structure an event hightech equipment and promote education. That is bringing our iphones and blackberries and this innovation. Is going to he says be the firepower to deal with the emerging economies of china and india. Otherwise, he if you look at the more equal societies around the world, all the indices show, if it is anything, whether it is life expectancy, health, jobs, homicides, they are taught, if you look at more equal societies around the world very well done. By the way, paul, that was a great one on the mayor. I have had a great experience just before come linging here. It is a beautiful city. Some of you can tell im not an exercise freak. I didnt break into a sweat or anything. Walked gorgeous lead into the office. I happened to be in the messinine, and i said, do you have any chance have a machine that would attract someone like me . The man said, yes i do, in fact. He he walked me over to the a. T. M. [laughter] let me say all the aspirations all three of you have mentioned tonight are correct. The question is, what happens in the real world, im going to tell you, if you raise tax rates on the rich, you will not get the money you expect, and you will probably lose money completely. If you look at the u. S. Tax code. We put in the progressive income tax in 1913. At that time the highest marginal income tax was a high 7 . By 1990, we raised that rate to 7 . In 1919. We had a depression going into world war i. After world war i, we had a campaign in 1920, between the democratic candidate roosevelt who wanted to keep wood row wilsons tax rates high. And the republicans wanted to drop the tax rate. They said they wanted a return to normalsy. They cut the highest tax rate in america from 77 to 75 . The figure was called the lower 20s. Output and production soared at this time. Output as a share of g. D. P. , not just in dollars, went way, way up. We then went into 1929 with the largest tax increase on traded products. We raised the highest marginal income tax during the depression from 25 to 83 . There was a depression during this period, and the tax revenue from the highest income earners declined as a share of g. D. P. You go to the post world war ii period. We had cotton tax rates. Again, a boon. Cotton tax rates went up. If you look at the period of jack kennedy, jack kennedy cut the highest tax rate from 91 to 77 . We had the gogo 1960s, a beautiful period of expansion. Tax revenues went way, way up as a share of g. D. P. Then we have the period, which i call the four stooges, johnson, nixon, ford, and carter, the bipartisanemblage of in the United States. The then raised taxes, and g. D. P. Declined. Then we have reagan, two administrationed that cut taxes dramatically. If you look at 1980 to 2007, in that period, the revenue from the top 1 of income earners went from 1. 6 of g. D. P. To 3. 1 of g. D. P. A huge increase in revenues from the highest income earners. We cut taxes from everything that crawled, jumped, swam, it didnt matter what it was, we cut their taxes. Revenues from the bottom 95 actually went down. When you look at the evidence, the evidence is very clear. Raising tax rates, you dont get the money. The Prime Minister says, they can avoid taxes. They have the ways and the mean. They can hire lawyers. They have the composition of their income, the volume of income. They arent going to do it. If you raise rates, they are going to get around it. They can do that. What we really have to do is lower rates and broaden the tax base to collect the money. After brown was Prime Minister, cameron came in, the first thing he did, he raised snk oh, sfk he raised income rates from 40 to 50 . What happened . Doubledip resession, and incomes went way down. If you look what happened in the canada in the recent period, you have tax rates from corporations at 15 . You restrained yourself at stimulus spending, and your economy did far better than the u. S. did during the recent recession. The period of resession was way high in the u. S. , and then it didnt go up if you look at your debt level today, we have done a better job. What we need to do is not fool around with this ad hoc raising the rate here and there. We need a total tax reform. We need to tax all income across the board. Unrealized capital income. All these things that are tax exempt, all these gifts that are supposedly charitable. Tax them with all one flat rate across the board. By raising tax rates and wishing it would do good, would only delay us from fundamental tax reform which we need right now. Thank you. [applause] there is a notion by some that economics is a dismal science, so well done. It is now done for us to dig into the table, gentlemen, that you set for this debate. I think we have plenty of time to talk about the economics. But in the mind of many of these people about the politics of this debate. Speaker gingrich let me begin with you. Recently it was reported that the richest 400 people in america command more wealth than 150 million of their fellow citizens, your fellow citizens. So outside of any comblick consideration, why wouldnt you why would you be opposed to taxing the rich as i dont know, a corrective, a america ive to backsliding into the guilded age and plutocracy . Well, let me put the question back to you in a sense. Which is, under america what ri the state step in and say to somebody, we now have decided that you are doing too well, and we are going to punish you because you are doing too well . And i get a little whats the appropriate debatefriendly expression . I was looking for something well, im pissed off. [laughter] if you think why do i want to punish the rich i consider that intellectual bankruptcy. It is never at all about punishing the rich. I dont dislike the rich. Actually, some of my best friends you are one. Im high enough to be hurt by the policies i advocate. I dont have anything against the rich, i just want some of their money to pay for esengs sention programs. I think it is worth saying, there are some systems that gingrich mentioned some people who have a way that maybe can drastically cut the cost of a College Education. Maybe. I hope that works. But the funny thing, we used to have a way that lower class and working class kids in the United States could get a good education, and that was by going to state universities that were heavily subsidized. That option is largely gone now because the subsidies are gone. State University Tuition has gone way up because there isnt enough money. So we need more money. One way to get more money is by taxing the rich. It is not going to solve all of our problems, but maybe some of it. This notion that were now going to base our tax policy on the belief that we a modern 21st century nation with all the democratic governans are completely incapable of policing tax evasion [applause] listen, i know it is context. These there are two totally different arguments paul just made. The first argument is we need all this money because government is so infish and the price so inefficient and the prices keep rising so much. Look at education. Whats happened to salaries of administrators . Why has administration gotten to be so expensive . Nobody who is for government wants to talk about the necessary rethinking of how we spend the money. So i start with the question, before you tell me i need to raise taxes, are you really prepared to defend the current government . But the second thing you said i find chilling. Were in the early stages of an i. R. S. Scandal in which i. R. S. Agents who have enormous power are saying things like, what prayer were they saying at the meeting . This 83yearold woman who held friday Morning Coffee sessions, what exactly were they doing . At 83 years of age, what exactly is she doing . You may be comfortable, both of you, with a government so powerful that it can guarantee that nobody will escape taxa tion, that is a government so powerful, that it frightens me what it will do with that power. [cheers and applause] first of all, im not saying im in favor of government or in favor of margets markets, and i grew up where we had a dictatorship. I didnt like the state then. What i am saying is we need a government which is kemently accountable to our citizens. What im saying is that the concentration of wealth today is a government is not serving the public good. It is serving special interests. Thats the problem. And i would add to that, i dont think you are against government. I think you are in favor of government. But you are in favor of government for a specific interest, for big business. Im in favor of government that will serve the people and the public good. Im not against the markets. I just want to make sure that the markets serve the public good. I dont think anyone degrees with you. Everyone wants government to serve the people. The answer to raising tax rates does not serve the people. Raising tax rates is not the way to go to have government serve people better. Getting revenue. Having tax reform, which is exactly what you talked about. We need a broadbased tax reform without reductions and exclusions. This is the whole principal behind simpsonbowles. You talked about politics. What happened . We lowered the highest income tax in the United States from 58 to 28 . We lowered it from 12. 5 a to 15 . We dropped the corporate rate from 46 to 34 . And the vote in the senate . 973 in favor of it. Including alan kranston. Including my friend and neighbor, al gore. Including chris dodd. Including all of these guys. Howard metzenbaum. They all are for it because they know it is the right thing to do to increase growth and increase the ref knee knew for spending. There have been careful economic studies of the 1986 tax reform. I do believe equalizing tax rate on Capital Gains is the right way to go. Yes, sir. However, there have been many studies attempting to effect that tax reform on the greater u. S. Productivity, and they havent found a thing it is just not visible. The effects of the 1986 tax hike are very clear. Ou can look at all of these. We need to put out spread sheets for each other. Good point. Lets pull up from the minutia. Which is important, but lets pull up from it a bit. Speaker gingrich, again, why do you believe that fundamentally you are going to get the growth that will lift all votes through a policy of not taxing the rich . And why do you think paul George Papandreou are wrong . 400 people have power. Ok. You want to raise the tax rate . Now you are back to where we ere. You want to take enough money away from bill gates so he doesnt have power . Thats like 53 to 1 billion . Even with a billion, i think billionaires have a lot of power. What are we trying to accomplish about the signals we send about the society we live in . Now the primary reason the poorest people in america are trapped in poverty is because government fails them. The government schools fail them, the neighborhoods fail them, the opportunity to have jobs fails them. If you look at chicago with over 500 people killed. The Public Safety system fails them. I would like to see a politics that fome focuses on how radically we have to reform the experience of poor americans in order to break out and give them a chance to genuinely climb. Im more interested in the next 1,000 people rising from poverty than i am from trying to go out and find someone who i can reach into their pocket and take money from. I would argue that at 4 trillion a year, the problem with the u. S. Government is not absence of money, it is absence of competence. If we go to europe, you can see there can be a transparent government that is not simply to weaken the concentration of power, which i do believe affects politics. It does affect politics. I have been a Prime Minister, and i know how media and politics can be controlled when you have such a huge, amazing concentration of power. What i want is to many power our citizens. Because today i see our citizens are not free. They are very dependent. They are dependent because there is huge unemployment around the orld in the developed world, and they are not getting the basic needs, basic services they want. We have es where higher taxes and services are good, you have good education, good health care, and at the same time a sense of cohesion, and the most highly competitive economies in the world. Why . Because we have invested in the Human Capacity. These people arent dependent. They feel very independent and free to be innovators and move forward. I know you will get the last word on this and then we will move on, but that is not saying you raise tax rates. We all agree with you. Everything you have said, how we can get the money, and by raising tax rates, you wont get what you want. Your example of sweden, have you seen their performance recently . It is amazing what happened in sweden. The best way to achieve your dreams and your goals of a truly democratic government, is by lowering the tax rates, broaden the tax base so everyone pays their fair share. You get the requisite revenue, and you compete they are not in favor of a flat tax, and they have a very progressive tax rate. Regardless. And they are prosperous . The inequality from sweden the reason for the problems in sweden is the inequality has created riots in some suburbs. We have to see a more cohesive ociety is one much more equal. Among these countries, america has become the land of the least opportunity. It has become the country where people who start at the bottom have the least chance of making their way up. People are more trapped in poverty than any other advanced country. A lot of that is not because government is failing you know, is doing its job badly, it is because government is not doing its job. Children do not have adequate nutrition. It is hard to work your way up to get a good education and work your way up to the middle class if you are hungry all the time. A lot of kids in america are hungry all the time. It is hard if you are sick all the time and not treated. A lot of children in america dont have Adequate Health care. The reason they are not given those things is not general fill soskal principles, it is, we dont have the money. We just cant do that. We cant raise anymore money by taxing the rich, because if we do that, it will destroy the economy. Dont tell me that is not the real issue. That is certainly an important part of our story. Good point to transition on. Lets go to the first of our video interventions. Rmer treasury secretary, to president barack obama. Lets listen to larry summers. Yes, we should tax the rich United States. In the United States we have growing pressures on the public sector. Population over 65. Many nearing or passed retirement. L education, health care, the relative price of health care. A Television Set has changed by the factor of 100 over the last decade, and Public Health care. Of course population over 65. Many nearing or passed retirement. L education, health care, the relative price of health care. A Television Set has changed by the factor of 100 over the last decade, and Public Health care. Of course we have raising some of it needs to be met by cutting wasteful spending. But there isnt that much wasteful spending to cut, so revenues will have to from . Inc where should that come on grounds of fairness, it should come from the wealthy. On grounds of major changes that have taken place over the last it has gone from less than 10 a decade ago to more than 20 . It should come from the wealthy, because they are the ones that have been able to escape and avoid the most taxation through a range of inappropriate tax loopholes and tax expenditures tours. Tax expenditures. Speaker gingrich, let me come to you on this. There is a key part of the debate, aging society, shrinking work force, a sense that were all going to have to pay more to cope with democratic challenges that much of the west faces. Especially here in canada. In a sense, why hasnt history given the nod to this side of the debate and said, youre right. Everyone is going to pay more, including the rich. Let me take two examples. First of all, dr. Krugmans appeal to children that dont get adequate footh food. In a country that has a womens nfant program, it has food stamps, a food program to help children eat. Despite spending billions of dollars, you may be commenting on the effectiveness of government to reach children, but it is not because the money is not there. Larry summers said one thing that i think is amazing that i dont think larry understood what he said. He says, the difference in television vs. Price care has changed by a factor of 100. Meaning televisions today are 100 times less expensive relative to health care than they were say in 1950 or 1960. He doesnt stop and say, gee, why is it that were able in the private sector to produce, for example, Handheld Computers called cell phones at declining cost with rising capability and we cant, in governmentcontrolled areas, get the same kind of break through . I would argue, we are on the edge, if we have the courage to do it, on a breakout of how we think of government. I will give you a specific example. Im a conservative, so im supposed to be pro devers. And i am. I tell people, im a hawk, but im a chief hawk. I think you could take 20 out of the Defense Department and have a better and more agile Defense Department if you modernized it. So before i raise taxes to pay for a bloated, inefficient system that is really running behind the world and running behind reality because it cant keep up with change, i want to fundamentally overhaul the pentagon. Then talk to me about taxes. Dont tell me i have to tolerate every bureaucrat incompetence. The failures that paul talked about. Why shouldnt we overhaul the system of helping poor children if what he is saying is strew . We spend billions of multiple bureaucracies and according to him we are failing to get the job done. [applause] we spend a fair bit, something well under half the g. D. P. That canada does. Dont talk about how we are that generous. We are not. We are the least generous in helping the poor. And as it happens, this particular program, which is on the firing line, by the way ne correction. As a New York Times columnist, do not allowed to endorsements. So you have no idea who i favored in the last election. I may have no proof, but i have every idea. [laughter] as it happens, food stamps are very much on the firing line. We talk about cuts in the agricultural bill. Paul ryan calls for savage cuts in the food stamp program. As it happens, thats a program that the government does very, very well. Bureaucracy is minimal. The spending goes to the right people. There just isnt enough of it. It is not enough to ensure that everybody who needs nutritional assistance receives it. The funds are too small. Health care, we do a good job. Medicaid is a surprisingly efficient program. Health care happens to be one of those areas where government is consistently more efficient than the private sector. But again, not enough. If you are going to use electronics as a standard comparison, why cant we make better haircuts and pizzas . That depuzznt make sense either. Thats a really, really bad argument. If cynicism about government exists anywhere, it is probably in your home country of greece right now. Why in the context of this debate are these gentlemen wrong . They are saying, look, these systems arent working. They need overhaul reform. Maybe they need financial pressure, the fear of the eduction of funds. My mandate in my campaign was to change government and make it more france parent. If you talk about government and bureaucracy, i had to deal with the big lobbies of the pharmaceutical companies that were milking the Pension System with very costly treatments in ur medical care. And if im not mistaken in the u. S. , the congress did not pass a bill to allow central procurement, that is, Bargaining Power of the central government, the federal government, visavis the pharmaceutical companies. . Because they get better prices if they pick off hospital by hospital. That is bureaucrat inefficiency. But that is not because of socialism, but because of the concentration of power and big business. Thats what i was fighting in greece. We were vooge having growing capitalism. We had to change. I had to bring in electronic prescriptions to cut out about 30 of the waste, which i did. I would add one more thing. Business needs a functioning estate. And a functioning state that provides for basic needs, such as good education. Many in many of these countries in europe you have businesses which are able to fire people very easily, but the welfare state comes and says, i am going to retrain you. I am going to get you back on the job market, and you will be even better then. You snow what that does . For business. For business. So i dont want to punish business, i want to make sure the moans are used in the right way. If we want to create the capacity of our citizens to be free and capable people. This is all off the point. The best form of welfare, as john kennedy said, is a good, highpaying job. People dont become prosperous from programs. They become prosperous with jobs. But i agree with you on making everything more efficient and everything better. No one wants to let those people who are down and out not get what we can afford as a society. We all want to free the prosperity. Benjamin put it so well. He was head of the naacp. He said blacks are hired last and fired first. The only way blacks are going to t jobs and keep them is if jobs are around and prosperity is up. The reason we can provide more jobs ineth openia ethiopia, is because we are prosperous there. If you tax people who work and you pay people who dont work do i need to safe the next sense for you . Come on. Do i need to say the next sentence for you . Come on. [applause] i would say i am disappointed of the cosmic nature of these arguments. As if the kinds of changes we might be contemplating are things that would have stopped, you know, steve jobs and wosniac from inventing a computer in their garage. We are not talking about that. Were just talking about what somewhat more. To provide somewhat more benefits. I think that by saying it as if it is all or nothing, as if we have to have no attempt at progressive taxation. Or if we have to have taxation at levels that will destroy everything is wrong. What we do know, and i think this is where the scandinavian stories come in. Here you have countries that collect 40 of g. D. P. And they function. They function very, very well. That tells you right away that the notion that taxes are in themselves extremely disruptive cant be right. The question is, how much can you focus those taxes on the rich . I think we can do a significant amount of it by having a progressive tax stifment not all of it, but some of it. That is the question we should be answering. Not are you for a free society go to taxes. First of all, the question is rather global. It said tax the rich more. The Prime Minister suggested we should tax the rich enough to redistribute power away from the 400 families. Let me give you a specific example. Would you regard 70 of taxing on the money . It is clearly leaving a wealth number of frenchmen to decide they love luxborg luckburg. Luxemborg. I dont think france can do it. I think if the European Union did it as a whole, it would be workable. I think if the United States did t. It would be workable. My colleague has crunched the numbers and he estimates the optimal tax rate turns out to be 73 . As high as revenue . That is not optimal. In any case, and we used to have that, by the way. We had tax rates in that range all through the great generation of post war growth. So am i suggesting that the United States should try to match the tax rate in france . No. Do i think what olan is doing is crazy . No. I think this is a useful dialogue. If you are going to go to a 73 perforate, if you could do it by a magic wand, would it be a 1952 style of 72 with large loopholes or would it be a cleaned out system where you would actually get 73 . I think you need some differential for capital income, but not nearly as much. By the way, if you look at what the effective tax rates were, they were high. They were over 50 . Gentlemen, in our remaining minutes here, i want to internationalize this debate a little bit. It is not just about congress and the United States, this is a debate happening around the world. Our that, i want to go to final video contribution tonight. It is from a big thinker in asia. He is the dean of the school of Public Policy in singapore. We caught up with him via satellite recently. Lets listen to his intervention. Thank you. About 20 years ago, a group of chinese economists came to new delhi and met a group of indian experiencedand they what reforms they would undertake. Said, y finished, he with some trepidation, do you realize if you carry out these reforms . China, there will be rising inequality . The chinese economist smiled broadly and said, we certainly hope so. And thats exactly what happened. As china progressed, it produced the largest number of new billionaires. At the same time, china also carried out the largest Poverty Reduction program in Human History lifting over 600 Million People out of absolute poverty and produced the largest middle class. So you can see, as long as the rising inequality also benefits the majority of the people, the people of china and asia, accepted it. [applause] good point. Lets have George Papandreou answer first. Hy is the china model wrong. 63 growth increase in good good . Wed kill for that, right . I dont think that is because of inequality. I think the Chinese Government invested in industry. It brought people out of poverty, yes. But the rising inequality in china is facing a dead end. Because first of all, the chinese realize, and i talked to the chinese, they realize they dont have a pension and a welfare system. They have a rising population. E one child per family has worked they also have a problem of needing to cater to the needs of a new working class thats asking depor higher wages. We know it here in the west because we know about the Different Companies that do the apple iphones and other industries. They are asking for better life conditions. Thirdly, they have a major environmental problem. Soon these businesses will not be vieable. They realize they need more money to create a Better Society. So i dont think it is inequality thats helped them. It is inequality that has undermined a more cohesive society, and i expect the chinese will more to a more equal society by investing in the needs of a social system which will help the chinese people. Paul wants in on this. I will go to speaker gingrich. You mentioned china in your opening statements. George papandreau thinks the model is not broken. It is in trouble. It is in trouble because it is a consequence of its own excess. You have a china with so many cars, they have a problem with air pollution. You have a china with so many people working, they have a problem of transportation. You have a china that has to go book to the basic environmental policy of, you dont want several,000 dead pigs floating down the river. Whats going on in china is like some of the great moments in Human History. The chinese have created enough wealth that they can deal with the next generation of problems which in 1930 would have been starvation, slavery, people who had no hope. A level of poverty which is almost unimaginable. I think the chinese will tell you, yeah, they have big problems, they are a big country, they are going to need ome big solutions. The more billionaires the better. China doesnt allow inequality . It doesnt go after the rich hard in a way that you would want. I have spent a lot of time on these issues. Latin america, 20 years ago there was widespread acceptance of the dont worry about inequality and you will get those wonderful asian takeoffs. A bunch of latin american countries liberalized, and no growth took off. It has been disappointing. After a long time, they tried to figure out what the asions had that the latin americanses did not have, and it turned out they had well educated positions and great infrastructure. It turns out that just jobs without those other things does not produce growth. And since the last 10 years or so, countries like mexico have tried to tackle inequality seriously. It is working. Inequality is coming down, poverty is growing fast. True it looks as if that is is actually starting to improve their Growth Prospects as well because of better education. The actual lesson is not that china has inequality and china ix succeeds, you know what . Just letting the rich run wild is not enough. The rich running wild. I love it. Paul, you are right, the rich shouldnt run wild. But we are talking about raising tax rates on a tragically flawed system where all sorts of incomes are taxed. These people are couching the system, but not because tax rates are too low. It is because you havent defined income properly. You havent put it in the right context. It is a tragedy what is happening, but in china they did three things. Tax cuts, sound money, and free trade. You see this massive growth from 1979 on. The prosperity . Yes. Newt is totally right. These diseases and problems you are talking about are those of prosperity, not of poverty. Commas people were educated, but they were in really bad shape. They now have a different set of options. Gentlemen, it is time now for closing statements. You can settle some scores with each other in your remaining three minutes eamp. We will do our closing minutes in the opposite order of the you ng statements, so art, are up first. I will start with one example of a man who has been trying to raise Interest Rates on the rimp for a long time. He is one. His name is warren buffet. He is a frenchorigin person from omaha, nebraska. Warren buffet. Hes been talking about, me and my friends need to have higher taxes. Let me take mr. Warren buffet. He wrote a letter to the New York Times. That letter said he paid a little less than 7 million in taxes, but that was 17. 4 of his income, and he had the lowest tax rate of any of the people in his office. It was half the tax rate of his secretary. Now, im a math wiz. So what i did, he took his 7 million to 17. 4 tax, and i got that his income was a little less than 40 million. Thats a large, large level of income. Let me also tell you what happened to warren buffet during that year of 2010 when he reported 40 million in income. His wealth in unrealized Capital Gains, which is not taxed, unrealized Capital Gains, rose by 10 billion. His gifts to the bill and malinda gates foundation, which are tax free, are only 1. 6 million. I didnt find out how much he gave to his sons and daughters funds either. But to mee me an economist is what you spend, what you give away, and the increase in your wealth. His income in 2010 was 12 billion. He paid 7 million in taxes. Of his income. That is not fair. But all the taxes he wanted to raise are the ones he doesnt have to pay. [applause] heres your dilemma. We shouldnt raise Interest Rates as they have been. We should change the tax code and lower tax rates. I did jerry browns tax flat tax when he ran for president in 1992. We had two flats taxes. And one in in adjusted gross income. If you did just a 12 tax on warren buffet, it would be 1. 44 billion. That is what i consider fair. Thank you. [applause] fighting words. Youre up next, george papandreau. I dont think paul is asking to punish the rich. What we are saying is that we have so much wealth, we have created whether it is the United States, china, or europe, it is a huge amount of wealth, but it is highly unequally distributed. All were saying is that part of that amazing wealth in the hands of a few hundreds of people around the world can go a long way if we tax it. And there are major issues we have to deal with. There is climing ate change, unemployment. In my country there is youth unemployment of close to 60 . Now is that sustainable . Is that a Sustainable Society . We need to give them the training, the hope, the prospects. So were talking about a small portion of their wealth to to our societies to make our societies more just, more better, more efficient. So for the major challenges the young generation will face, such as climate change, similarly in we dies, we have seeb societieshigher taxed perform better in all areas. Stress, obesity, even happiness. Even the rich live longer in equal societies. So were not punishing them. Hey will get benefits. So finally, i want to go from experience. I have the cuffers being exiled, but the blessing of coming to canada. In canada, i came from a country that was not only a dictatorship, but there was really no social contract. There was no bargain between society, citizens, and the classes. If we dont have a just society, we will have class warfair. Im not talking about class warfare, im talking about a cohesive society. I found it here in canada. It is a society which welcomes refugees, migrants, and was able to integrate because it invested in Human Capacity. Thats all im saying. We need today to use some of the wealth that exists to invest in the Human Capacity of our society and of our citizens. And in doing so, we will not only have a more efficient and competitive economy, we will have a much better economy, a much Better Society, a much better life. Thank you. [applause] speaker gingrich, your final words. Let me tell you first of all, lets start with the almost 60 of youth unemployment in greece, which is tragic. We ask, what is the underliing lesson we can learn about a system which has failed so decisively that 60 of young people dont have a job . Ill give you two examples that was inspired from the last message from singapore. I had a chance to spend time yu who helped develop singapore. I said what was the key to your success . He said i was a graduate student during the labor government after world war ii. I watched everything they did to create a socialist society. When i finally got to be Prime Minister of singapore, every time i would encounter a problem, i would say to myself, what would the labor government have done . And i would then do the compact opposite. He said, i what wanted the work elingtic to be important. I wanted people to save. I wanted the rule of law. Lets face this question. There are two key things. Practicality, what works, and whether you favor freedom or the state, which is a permanent tension in every free society. What works . There is a britain g in nan jang china. Two giant statues. A black cat and a white cat. It comes from a famous speech. Mao had tried by coersion to create an equal society. He drove intellectuals out to the farm. He caused chaos late in his career. Great jao pang at cost to himself, three times imprisoned by the state, was arguing that what they were doing is against the way people function. In his most famous speech, he said, look, i dont care if it is a black cat or a white cat, i care that it catches mice. What he was saying was revolutionary. He was saying to communist china. Dont lecture to me about ideology. Capitalism works. If we dont give the people of china hope, they will throw us out, and there will be a bloody revolution. He risked his life to get that across. He spent 20 years trying to get that across. While i have many, many problems with the chinese dictatorship, and it is a indicatorship, there are few achievements since world war ii that have helped more human beings than the application of free trade, hard money, and the right of people to go out and work really hard and rise. And i would rather see those 600 million chinese rising within a society of inequality than see them smothered in a society of absolute equality. [applause] paul krugman, you get the final word. I sometimes, at the moment, feel there have been so many flames thrown out that we have created a fire. No one is advocating a society of complete equality. I want to say a word, since i spent a lot of time on the eurocrisis. If you think the excess in government, whatever, that eece is somehow proving your point, what about ireland . Ireland is famous in low tax rates. And thats why conservatives, role ound, hailed it as a model. And ireland is rather a mess lso, you know . Thats not what it is about. [laughter] god knows, with a former speaker of the house here, i shouldnt have to be saying, politics is the art of the possible. Policy is the art of the possible. Were not going to turn the United States into cuba. Were not going to level. What we might do, hopefully what we could do is Something Like, what actually worked what president obama had suggested in his last several budgets, which was closing the loophole holes that the rich take advantage of. Raising more revenue, and possibly pushing top marginal rates higher. I would certainly like to end the two great sins of recent history are the 2003 bush tax cuts which gave treatment to dividends and cutting the Capital Gains tax rate in the 1990s that was under somebodys leadership in the house. I cant quite remember who. [laughter] i want to raise a few extra points of income from the top 1 and use that money for important things. Thats what i want to do. I dont think thats going it to solve all of our problems. I think it is a start to reducing the excessive power. It is a fact that when we had more progressive taxation in the 1980s, we also came out with a society that wasnt quite as pseudocratic as it was before. I would like to say, im not worried about us sliding back into the guilded age. We have slid back already. Now what we want to do ask claw our way back toward the kind of middle Class Society that we used to be. [applause] yes, a superb debate. A hardfought debate. A lot for us to think about. Also to reflect it, lets face it, the last few weeks here in the city of toronto have not been great ones. For the quality of public debate, the quality of executive leadership, so you have given us a nice respite from that. And countless others in this city remind us despite what happens in city hall, despite an International Reputation we might have to unwind, we are a city of sophistication, we are a city of substance, we are a city of civility, and we thank you for reminding us. Thank you. [applause] ok. Now for a crucial part of tonights program, we will the audience votes from the start of the evening. We began tonight with strong support for the motion. The result tax the rich more over 50 were in favor. 58 . 28 opposed. 14 undecided. A number of you that changed your mind over the course of the Newt Gingrichs response that 28 of you why out of it. Lets see if you buged at all. Please use that vote wisely. Vote once. Well announce the winning results in the lobby a little before 9 00 p. M. Where you can purchase books of past munk debates. For those of you watching online, the show is not over. Our webcam town shawl starts now munkdebates. Com. Ladies and gentlemen, thank you for a great debate. [applause] they were leading virtually separate lives as you will see in my portrayal of this saddest of all president ial couples. I i dont give my husband advice. Pat was quoted as saying because he doesnt need it. As we continue our conversation, author kati marton talked about president ial marriages. Monday night at 9 00 eastern on cspan. Coming up next on cspan, q a with austin senator historian emeritus Richard Baker. Then prime minster questions with british prime Minster David cameron taking questions from members of the british house of commerce. After that another chance to see monk debate with former House Speaker Newt Gingrich. This week on q a, former United States Senate Historian Richard Baker discusses his newly released historial narratived titled the Girls Club Women and wall street. Richard baker, Senate Historian emeritus, coauthor of the American Senate a brand new book, insider history of neil macneil. How did you get together with neil macneil to do the book . Neil macneil is one of these gigantic figures who not only did