Transcripts For CSPAN3 Forum Examines Tax Code Overhaul 20170606

This is an hour and a half. Good afternoon, everybody. Welcome. My name is maureen conway. Vice president at the Aspen Institute and executive director. I am delighted to welcome you to todays conversation in our working in america series. At the Economic Opportunities program we do a lot a variety of work to advance ideas that will help low and moderate income americans connect to Economic Opportunity and thrive in a changing economy. In the working in america series in particular, we look at a variety of issues that affect the shape of opportunity that working americans face and consider ideas that could make things better for working people. Were extremely grateful to the ford foundation, to the prudential foundation, and the Walmart Foundation for their support of the working in america series. In todays conversation, as you have seen, well talk taxes and what tax reform could mean for low and moderate income workers in the United States. If you think about taxes, you probably try not to, but if you think about taxes, one of the things you think about is the complexity of the american tax system. And this is not surprising because we have come to rely on the tax code to do a lot of policymaking and to incentivize a variety of economic behaviors. When we think about low income workers in particular, probably one of the first things we think of is the earned income tax credit. In 2015, roughly 27 million workers earned the earned income tax credit. So that came to nearly one in five working people. So the tax system is a big deal for working people. But the tax code offers a variety of other incentives. Saving vehicles for college, retirement. Home mortgage deduction to encourage home ownership. There are incentives to businesses, investors to encourage job creation. Preferential treatment for capital gains. There are targeted tax credits. You have like the work opportunity tax credit to encourage employers to hire veterans or other groups that are seen as facing barriers to employment. So in short, we do quite a lot of Economic Policy making through the tax code. So as the talk of tax reform comes along its important to think about the tax system not just for the economy broadly but in particular how it affects working people in the United States. So, today we go super wonk and talk taxes. I have a couple things to say before we get started. First of all, please do silence your phones. Were very thrilled to be Live Streaming as well as recording. We are glad to have cspan here today. So please do silence your phone. But please do tweet. Our hash tag is talk good jobs. Lets see if i need to no, i dont need to do any of those things. Ill introduce the panelists. I am thrilled to introduce the panelists. I will start from my far left and work this way for your far right. We have frank clemente, executive director of americans for tax fairness. Next to frank we have mireya eavey at united way sun coast florida. Alex brill. Research fellow at the American Enterprise institute and i am delighted to have next to me. Jean sahadi Senior Writer for cnnmoney. Com who will be our moderator for todays conversation. Jeanne, thank you and i turn it over to you. Thank you for having me. A little bit of table setting on tax reform for low and middle income workers. Right now what we are hearing from politicians is a lot about Business Tax Reform. You have a lot of support from the republicans, you have a lot of support even among business friendly democrats who really think the business side of the tax code needs a lot of reform, more urgently even than the individual side. There is also a sense in fact, to me, as i cover this, it sounds more like lip service to how will this affect the middle class and financially strapped workers. It will be hard for them to just do Business Tax Reform without addressing the larger population. I am glad to be doing this panel because i think well talk about issues that should be discussed in the context of overhauling the code that is not currently being discussed. It seems to me that there are four ways that tax reform can affect low and middle income workers positively or negatively, you could talk about giving them new or expanded tax breaks that already exist, but the other side to that is, if other changes that are proposed undercut the value of those new or expanded breaks, that may or may not change their Tax Liability at all. Another way is through Economic Growth. Republicans are making the case that if you lower business tax rates and you reduce their tax sorry, lower the business tax rates and lower their breaks that that will encourage investment, investment will create jobs, jobs will more jobs and higher wages. So hopefully that would work. If it doesnt, weve just blown through the deficit. A third way is to frank, youll speak to this point, i think, is there is a lot of people who think, well, you should raise the rates on highincome individuals, make the tax code less beneficial to them and raise more revenue to support programs that help low and middle income families. There is sort of an underside to all those arguments. Right now we have a pretty progressive federal income tax code. 40 of filers end up owing nothing in federal income taxes. Its unclear if some of the proposed changes would help them at all because their tax bill is zero to begin with. As i said, if Economic Growth does not work out all weve done is reduce the amount of revenue available to us. So, i am going to turn it over to these guys who bring excellent perspectives, all of them, very different perspectives, to lay out what they think is working today about the tax code for low and middle income workers and whats not and then well go from there. Afterwards well toss to you guys for your questions. Alex, whats working today and whats not for low and middle income workers . Thank you. Thanks for having me. One of the things i note when i think about the federal income tax with respect to low and moderate income workers is the disparity to which the tax code affects different people within that population differently. Thats always true across the income spectrum but its particularly true among low and middle income families and households. For example, as was mentioned, the earned income tax credit, one of the largest welfare programs, one of the largest at the federal level is a very effective program, helps to raise people out of poverty, encourages work and labor Market Participation. But not everyone who is lower and middle income is eligible for the program. There are both people who are eligible and not getting the benefit. There are some amount of improper payments in the program. But its also a lot about family size and composition. Within the structure many people are ineligible for the program. So the amount of taxes that are paid either when you ask when you say taxes, meaning federal income taxes or all which include payroll and excise taxes varies widely. That creates complexity and uncertainty for taxpayers. A taxpayer may have one Tax Liability one year and a different liability the next year, making it difficult to plan and prepare for their taxes. All of those things are inefficiencies, in my view, in the system. When we think about what we could do to the tax code, and when we talk about tax reform in washington, that discussion is about federal income tax, both federal individual income tax and federal correspondent incpo tax. We are not having a conversation in washington about changes to the payroll tax system. Someone could introduce that topic. And we are not having a conversation about changes to federal excise taxes and washington is not having a conversation about how the states should change their tax systems. So for the individual, low and moderate income household, theyre facing all sorts of taxes but the tax reform debate is primarily related to income tax. Ill just say two specific things about how i think about how they how those two taxes affect workers. With respect to the individual income tax, i think about tax policy in two ways. One is the average and the other is the marginal. On average, what are people paying, what is their Tax Liability . For people who are low and moderate income, on average their federal income Tax Liability, not their total Tax Liability. The federal income tax is negative. Were using taxes to redistribute income to low and moderate income households generally speaking. The other way i think about taxes is on the margin. Individual taxes on the margin. What happens when they earn one more dollar. Here we see, again, wide disparity across the among individuals who are low and moderate income. On average we see taxpayers facing marginal rate of 20 on the federal level and higher when we start to bring in the effects of other programs. And that can create in some cases disincentives for labor Market Participation or additional hours of work. The other way i think about the tax code with respect to these individuals is the effect of indirect taxes, taxes that they dont pay that might affect their well being for livelihood. There is an emerging economic literature on the Corporate Income tax that finds that Corporate Taxes paid have an adverse impact on the wages that workers earn. One of the reasons, i think, that policy makers are so motivated to pursue Corporate Tax reform is out of an understanding that those taxes will affect the wages across the income spectrum. I meant to mention the other way that middle income workers could be helped by tax reform is simplification. Some of the things you told me before the meeting are stunning. At united way are helping with tax preparation. We believe the Program Provides families the mechanism to, because the tax code is so complicated that families struggle and sometimes dont understand their tax returns. The volunteers are trained individuals who have to go through an irs certification to be able to help the families with their tax returns. And a lot of times folks say, well, is it just that theyre not paying a fee to have their tax returns prepared . And at our united way we filled out around 19,000 returns for families that brought 25 million back in tax credit for our families. If the preparers tax preparers charged lets say 200 for those individuals to have their tax returns prepared, that we saved those families of the 19,000 returns around 3. 8 million. And we have to think about that because one of the reasons that vita is so important is that we are not only helping the individuals who are filling out a tax return, we are also helping them understand their tax return, we are talking to them about how to build assets, how to save, you know, what should you do with your tax return, because if you think about it, families in florida, 44 of the families that live in florida just make enough for the base basic expenses for child care, rent, and just having 400 in their savings account could help that one individual make it to work because maybe their car breaks down. So we have to think its beyond saving them on the 400 filing fee that they may be charged but we are providing assistance and advice on how to spend the refund that you are receiving. But we also show them, teach them, this is what your tax return this is what you are paying for, a better understanding. Because i think the confusion and why we want tax reform to be simplified is so its easier for families to understand. You know. We are asked a lot of times, well, if its simplified, do we still need vita . Yes, we do. Because many families need to have a place to go to to understand what their taxes are going to be. Many families, their average wage the families that come to our site make 22,000 a year. A lot of the families, they may not have a computer at home, and we currently have my free tax. Com through the irs that they can prepare their tax return but families like to come talk to a tax preparer just like all of us have the opportunity to go to our tax accountant and get financial advice. Our lowwage workers, they want the same opportunities. So we believe that the vita program is a very Important Program that we currently have and we provide to lowincome workers. Thank you. Frank. Happy to be here. Im going to take probably a bit more of a macro approach to the issue. We are actually in that kind of environment where were discussing whats tax reform going to look like in congress, President Trump has a proposal, the House Republicans have had a proposal. And the way we look at it, americans for tax fairness, which is an organization of about 400 national and state organizations, we are working for a what we call a fair tax system. We believe that the wealthy and big wealthy corporations ought to be paying quite a bit more in taxes than they are paying now. We are not asking the middle class to pay any more. What we want to do is basically raise a lot more revenue so that we can make the kinds of investments that we think are critical for an economy to create an economy thats going to work for all americans. Right now we think the economy is not working for everybody. There is a great deal of inequality in our country. The vast majority of the wealth of the country is controlled, owned by the top 1 . Very little is owned by folks at the bottom. And we need to change that dynamic. And part of it is to grow the economy and to grow the pie. We think the best way to grow the economy and grow the pie is to make investments. We actually think that we are we have what we call a revenue gap in this country. I will use a little bit of math, its not the easiest thing to understand, but revenue is about 18 of federal revenue is about 18 of our economy right now. Its but our spending is at 21. 5 . So that difference is whats thats the deficit. And thats what i call the revenue gap. The revenue gap will go up to 23. 5 versus 18 . Revenue will stay flat but the gap will go up spending will go up to 23. 5 . Why . Its going up because folks are retiring. We have a big baby boom generation thats going. And we have a choice. We can cut things, cut Retirement Security, cut medicare, cut Social Security in order to close the revenue gap or we can raise more revenue. I believe that the you ask the question of the public do we want to make more revenue to ensure Retirement Security, to ensure that we can afford to put our kids in college, to rebuild our roads and bridges, we all recognize what a critical need there is to rebuild our infrastructure, to do new medical research, all of these things cannot happen now unless we raise significantly more revenue. And the only place to get that revenue is from those who are benefiting from the economy currently. In fact, just one concrete example, the Affordable Care act is an example of what i am talking about. The legislation that president obama got passed that provided Health Insurance to 20 Million People. That was paid for by taxing the richest 2 of americans, putting a modest investment tax on them and by adding a. 9 to their medicare tax. Folks who make 250,000 and above, the top 2 . Also, Insurance Companies and Drug Companies were asked to pay a little bit more because they were going to get a lot more business. Those taxes is what enabled us to provide Health Care Coverage to 20 million americans. The problem right now is under the trumpcare legislation they want to wipe out those taxes which is why 20 Million People will lose their Health Insurance. Thats how we advocate using the tax system to create more opportunity for everybody. If i can play devils advocate to alex and frank. Both of you seem to agree that Corporate Taxes have a big impact on low and middle income families but for very different reasons. Frank, you believe that higher taxes to corporations provides more money, the federal government can spend for low and middle income workers. Alex, you believe, lower corporate rates, create more investment. Pay higher wages. Both seem completely reasonable, except as a cynic because i have covered this for so long, i firmly dont think my company will give me higher wages if their tax rates are cut. I am dubious. I also dont think, if you raise Corporate Taxes that companies will stay in the country. Thats the whole point of Corporate Taxes. So you two can go right at it. You can tell us how you come together on this point and make my life a little bit easier because i do not understand how the two of you will come together on this. Lets start with what are corporations paying now. There is the topline rate, which is 35 . Thats called the top tax rate on corporations. Then there are lots of studies that have said that tax rate is substantially less than that. Were talking federal taxes, were not talking the entire state, local and all of that. Just federal taxes. The Government Accountability office, which is a nonpartisan entity, they looked for five he years, 2008 to 2012. Profitable u. S. Corporations. The profitability corporations they said are paying a 14 tax rate, thats more than half under what the effective tax rate is. There are lots of studies that have shown that essentially what alex, you are talking really about trickledown. If you give more profits to corporations they will then spend the money to invest and that will create more jobs and grow the economy. First of all, most people most academics dont believe the studies dont show that that trickledown actually works. We have gone through that before. Bang for the buck, you get a lot more jobs created if you invest in infrastructure. Three times as much jobs in infrastructure as you do with Corporate Tax breaks. Thats a cbo study and a mark sandy study. We dont have corporations are very flush with profits right now. Their profits are higher than they have ever been. And yet we dont see this massive amount of investment going on. Why . Because frankly the demand is not there. What drives investment is less much less about tax cuts. Its much more about consumer demand. And whether people have the money in their pockets to drive things. 70 of our spending in the country is consumers buying things. So if wages are depressed, and too many people dont have work, that wont drive the economy so businesses are not going to invest in that case. So we have very high profits for corporations right now, taxes are at the lowest that theyve been for decades as a share of the economy, so there is not the companies are not overtaxed. I believe theyre undertaxed. After you. I agree that the amount of taxes paid is certainly for u. S. Corporations is certainly less than the tax rate, the 35 rate. Thats definitely the case. And thats also the case not even, as frank noted, not just because of firms in loss positions. It has to do with the base of the tax system as much as anything. Large share of the federal taxes that are paid are paid by u. S. Multinationals and a lot of their earnings accrue abroad. So the way our tax system works is that the taxes are due when that income is either earned in the United States or returned to the United States and firms are investing in lots of what we might call tax Planning Strategies to minimize or avoid the federal Tax Liability. For those reasons their actual tax liabilities are certainly far lower just as frank described. G. A. O. And numerous other people have made that point. The question is not one i would characterize as trickledown. The question in my mind is whats the incidence of the tax. So we know in Public Finance that you can ask the question who writes the check, who sends the money to the irs, and then you can also ask the question, who bears the burden. If you take the tax that we know well, one that is easy to relate to, say the cigarette tax. Smokers dont write a check to the irs when they buy a pack of cigarettes. Its the tobacco manufacturers who pay the tax. We know the consequence of the cigarette tax is that cigarette prices are higher. And thats by design and for good reason. When we think about things like income taxes its more difficult to try to trace through, we know who writes the check, the corporations write the check. But its more difficult to trace through and find out who bears the burden. For aening lo ti long time the was that the burden was borne by the owners of the corporations that the tax fell on capital. In theory, it could fall in any one of a number of places or in combination. On workers in terms of lower wages, it could fall on the owners of the firms in terms of lower stock prices, or it could pass through into higher prices for consumers. And for a long time the assumption by organizations like the Congressional Budget Office and others was that a large share of that, not entirely but a large share of that was borne by the owners of capital, the shareholders of the firms. The fact is we have new evidence over the last few years, half a dozen or so Empirical Research articles that have started to question that finding. And its not a theoretical argument. It is an empirical question. Theoretically can could fall anywhere. What weve been learning in the last few years is that a large share of the burden is actually being borne by wages. And the types of studies that are being conducted are the following. We look at companies around the countries around the world over many decades and we look at how tax policy changes in those countries and how wages change in those countries and what we find is the relationships between Corporate Tax payments and wages. Some of the studies find huge effects, effects that almost seem unbelievable like a dollar change in a Corporate Tax is more than a dollar change in wages. Some of the results are less than that, that a dollar increase in Corporate Taxes might be 50 cents or 75 cents in wages. The stats, though, do they measure wages overall, or do they measure in other words, are they paying the ceo more so thats where the dollar for dollar comes in . It is not being picked up by the 20 people at the top. Those people are already earning an enormous amount of money but not enough to capture all the benefit themselves. Okay. Could i clarify. At this point in time, alex, the Congressional Budget Office attributes 80 of the Corporate Tax to be borne by the owners of the corporations and only 20 by the workers. I just want to clarify that. So the vast majority of the taxes that are paid by corporations are being attributed to the owners of those corporations. And the owners of corporations are overwhelmingly welltodo folks. Shareholders and the like. If what he is saying is true, then we should think about Corporate Tax in one way, right, that thats a tax borne by rich people, by the rich people who own the corporations. Right. Then we can make decisions about how we want to tax them. If its the case that thats not true, that the newer evidence is actually right and that a lot of the burden of the tax falls on workers, then we might think about tax policy differently. You might not agree with the literature. Its not uniformly agreed to. I am not suggesting that there is unanimity in the research but thats what the evidence is suggesting. The people [ laughter ] i doubt many of your clients would understand or care i think its important what we are talking about, but who they give a hoot . Do they think of their if i said, hey, were going to cut Corporate Taxes and that will be great for you mr. And mrs. Smith, because eventually aggregate wages will go up. Will that help them pay for dinner, for their kids child care . Will it translate to them . It will translate if they get a wage increase but the reality is that, if they dont have the certifications and trainings needed that warrant that wage increase, just because a corporation gets tax breaks and the entrylevel workers in midlevel workers, if they dont have the skills to be able to earn the higher wage, its not going to translate to them. Because a lot of times what we see out there with a lot of our employers, we are investing a lot of dollars into job training and certifications because we are trying to rise in career pathway. The workers at the companies to move up. Now, will companies spend more money on job training to be able to certify employees because a lot of the entrylevel workers they go to work, maybe they only have a high school diploma. They need a degree, a certification. A lot of times its just a skill set needed for a company to expand but a lot of times job creation is based on do we have the skilled workers to be able to expand the business and grow our markets, to be able to grow the corporations. So a lot of it does end up being part of the workers are the ones who are going to dictate if that company is going to be able to expand. But we see more and more employers that the wage increases, theyre not giving them just because, okay, were going to raise everybodys salaries. But this is, you know, talking from being boots on the ground and working with employers. Boots on the ground matters. Boots on the ground. Yes. I wanted to pick up on that point. I am a tax guy, and i think that tax policy matters, it affects the decisions that people make. It would be completely wrong to think that only tax policy matters. And so many other things matter. And skills is one of those huge things. You could have the best tax code in the world, whatever that would look like and if people dont have the training they need, if they dont have the work ethic, if they dont know basic soft and hard skills about how to get to work on time, be responsible, it wont make a difference. There are so many other factors. Just, you know, related to the Corporate Tax issue and taxes on wealthy folks, the analyses that have been done of the trump tax plan and the House Republican tax plan can we just say the trump tax plan, still a question mark. Still a question mark. Less detail than we had during the campaign and now even less. Its the trump tax plan that he put out during the campaign and last september. The analysis of that plan is that 50 of the tax breaks in that plan go to the top 1 . After ten years. So the vast majority goes to the top 1 . And thats because the Corporate Tax rate is cut so deeply. Corporate and business tax rates are cut so deeply, so the largest benefit the huge benefit will go to the top 1 . The republican tax plan that was put out by paul ryan last year, its hard to believe, but 99. 5 of the tax breaks are attributed to the top 1 . After ten years. 75 the first year, but then it rises to over 99 . The reason is because its not that the top tax rates on individuals are cut so much, its because of the Corporate Tax rate cuts and the business tax rate cuts in these two plans. It goes with the assumption about who bears the burden. Exactly. That suggests that it really is a tax borne by rich people, the corporate rate. And if you cut it, its all right. This is why my job is so hard because they both make excellent points. You wanted to Say Something else . I am sorry. Help me out. Do you think when i was talking about doing this panel, i was having discussions with folks at the Aspen Institute and they said is the supposition of the panel that the tax code is the best way to help low and middle income people. One of the answers i got was good, god, no. But its the only thing people are willing to talk about. When you talk about job skills training and funding that, it seems that the support for low and middle income families is such a multivariate problem, but maybe it starts with the amount of revenue we bring in. Excuse me. So much of the programs that support those families under Government Spending is its discretionary, its what lawmakers want to do in any given year. It fluctuates. I think mir mireya can speak to that issue. I believe that tax reform gives us an opportunity to look at ways to help the lowwage workers when we talk about, whether its the vita program or job training. And e. I. C. , e. I. C. Is an Important Program for working families. Its a program that has encouraged working and families can work towards the job skills and growing. And its one of the programs thats a curve. I say, make more than the tax credit that they get will start going down, but they see the advantage because they are making a higher wage. So its very important. And we have in florida had an appropriation for vita that was 500,000 that we received last year. And florida was the only state this year that the vita returns were up 9 because we were able to really focus and put a lot of vita sites and reach out to the working families. But we partnered with employers in bringing the vita tax returns to the employers where the workers are working. A lot of times its a lot of the barriers that, when you think of a lowwage worker, a moderate, they have a lot of barriers. Some have two jobs, they have families. And bringing the vita returners and preparers to the place of employment eliminates one thing that they dont have to, plus we opened sites on saturdays. But having appropriations, and we talk about wanting to be for vita to be something permanent that we see in the tax code because its so important and so useful for families, as well as job training, you know. And one of the things e. I. C. Is another thing we want to preserve. We want to keep the e. I. C. If you think about it, in the 90s when it was expanded, we had more single moms going back to work because it encourages work over welfare reform. These programs are very important and looking at what we put, i really believe that reform is an opportunity for us to look at how to help our lowwage workers. We are talking about families with children. Theyre working hard. They are not there because they want a hand out, they want the easy way out. I believe some of these folks work harder than we do because theyre trying to support their families and the tax code sometimes does not help them. Yes, they may pay a lower tax rate but they are paying sales tax and theyre taxed in other ways that it affects their ability to be able to support their families. I was racking my brain how much does the federal government spend on job training and i dont know that. Let me give you a different comparison. We call it a tax tradeoff. So we spend the government spends, on the earned income tax credit, about 63 billion a year. This is the income support that mireya was talking about that helps lowwage workers, gives them the incentive to work and they get about 3,000 in their pocket through this program, 27 Million People get it every year. Thats probably about half of who is eligible for it. There is a huge number that arent even making it available to themselves. Why is that . Just remind us why theyre not taking advantage of it. Because they dont understand it . Ill leave it to mireya. They dont know about it and they dont understand it. So one company, apple. Probably half the people in this room have apple phones. They have 235 billion in profits that are offshore that are untaxed. Alex was talking about that. Now, theyre taxed an apple theyre taxed offshore. They are paying a 6 tax rate on the profits that are offshore. How do we know . Apple has told the securities and Exchange Commission theyre supposed to report this to the sec. If they were to bring the money back they would owe a 29 tax on the money. The rate is 35 . 35 minus 6 that theyre paying offshore is 29 . So, that 29 is 75 billion. So that one company owes us 75 billion in taxes. Thats more than what is being spent on the e. I. T. C. Thats the kind of comparisons that we need to think about. And i would say we need to change in order to afford the kinds of investments that are going to make a difference in the lives of working people. So let me ask you on the Corporate Tax front, what should the top Corporate Tax rate be, and do you want the worldwide right now we have a worldwide system, which means that wherever you earn your dollars, the United States government will tax you on them if you are a business. The question is when you bring it back, thats when they tax you. Most countries have a territorial system which is businesses only pay taxes on the profits where the profits are earned and there is a proposal with republicans to change the United States to a territorial system. Do you want worldwide or territorial . Whats your top rate and the same question to you. Our organization is in favor we actually have not taken a position on we want by and large the system we have got now, we want to end the loophole which is called deferral that lets Companies Avoid taxes on the offshore profits. We think that, just like we pay our taxes every single year, that corporations ought to pay their taxes every year and shouldnt be allowed to defer taxes until they quoteunquote bring the money back. Lets be clear, most of the money is not really offshore. Its booked offshore in subsidiaries but most is invested back here in treasury and corporate bonds. They just cant bring it back to the Corporate Company and use it. We havent taken a position on what we think the top tax rate is because we want to see what it all ends up being. You want to preserve the worldwide system . By and large, our problem with going to a territorial tax system, right now we are losing about 100 billion every single year by corporations that are shifting their profits offshore through patents, intellectual property. Its mostly hightech companies and Drug Companies and some finance companies. They are able, because of the loopholes we have, theyre able to shift profits offshore and avoid paying taxes on them. These are profits earned here in america, but theyre making it look like theyre earned in the subsidiaries offshore. We want to close that loophole. What the rate is in the end for us is determined by how much money do we need to raise in order to have the kind of economy that is going to be able to make the investments that we need, is going to be able to take care of seniors in retirement, et cetera. So that number is a little hazy, right . Right. It depends on what individuals are going to pay. It will also depend on the Gaming Companies will do to not pay it. If you get rid of the loopholes, right. Whats your favorite top rate and i assume you want to go to territorial. My view, not surprisingly is a little different than franks. I think a lot of the income earned in the Current System by corporations is ungettable by the irs under the structure that we have. We can sort of observe the income that is being earned and do that through s. E. C. Filings and others, but actually being able to capture that money, i think, would prove very difficult. And the reason is because, within the very competitive environment. 50 years ago when the United States economy was more closed and we were less engaged in trade and Financial Markets were less sophisticated it was easier to capture this money. Through the strategies that frank describes, firms are locating their intellectual property offshore and engaging in these strategies that i mentioned earlier, and they will continue to do that. They will continue to optimize their tax system. We can think of that as unfair and unjust and unright, but we also need to think about having a tax system thats operational. And so, the incentives for firms to engage in these practices, and i am not saying that they dont. I agree with frank that they do engage in these practices is large when the difference between our tax system and the tax system of our trading partners is large. And so, we have a top tax rate of around 35 in the United States. 35 plus state and local tax. They pay less than that once they take all the tax breaks. On the margin, when they earn an additional dollar they would generally pay that amount of tax if that dollar was subject to tax. If they engage in the same activity in france or germany, italy spain, ireland or uk for sure. Canada, mexico or anywhere else, they would pay far less. And so, again, we can say, well, theyre not thats not fair or right, but it is operational for them. So then the question is because their obligation is to their shareholders, not their country. They are compliant with the law and those are their obligations. They are truly earning money around the world and paying taxes and offshore and they are also engaging in strategies to maximize the extent to which is looks like they are earning money offshore. They are doing both. I dont think we can capture that money. Certainly not by raising the Corporate Tax system. The question is, is there another way to thats less distortionary, that wouldnt encourage them to play these games where we could collect an appropriate amount of money. Some people have suggested that that might actually that there would be less gamesmanship if the rate was lower and more competitive, if our rate was like other countries rates, in the 20s instead of the 30s. Then countries would pay tax where they truly earned it and when they truly earned it in the United States they would pay the tax in the United States and not have the incentives to offshore the profits. The House Republicans put forward a rather unpopular proposal that i think is quite elegant called the border adjustment tax that would go at the heart of the issue and ensure that there would be that tax collection. The other thing i would note is that, when we think, just to put orders of magnitude on things, about 10 of the federal tax receipts come from the Corporate Tax. So where does the federal government get the money that it gets, the 18 of the revenues that it gets . Generally from individual income taxes. So as you noted, a lot of lower and moderate income households pay no or negative federal income tax liermenabilities. Most of the money collected today, in our system, to pay for the programs that we operate are from the income tax system. When we think about reforming the tax code, if we wanted to raise more money, it would seem wed want to do that, if that was the goal, we would go for the money is. We would broaden the tax base and collect more money from individuals. Trying to collect more money from corporations is going to be difficult. So we should make the point that a lot of the lets call it business taxes a lot of it comes through the individual code now. You have a choice when you set up a company to incorporate or become a passthrough business, a ridiculous term, but whatever. It just means the businesss profits get passed through to you and you pay the tax on your individual tax return. So over the last 30, 40 years or whatever, a lot of business income tax has transferred to the individual income tax system. In part because of the inefficiencies of the corporate system. Okay. So frank. Two quick points so folks understand. Most of the money thats offshore, 75 of it is owned or held by 50 corporations. 40 of it is held by ten corporations. So there is a small number of corporations that we are talking about that have a vast amount of these profits. Starts with apple. Microsoft, ge and pfizer. Apple alone has 10 of the profits offshore. We are talking about a very small number of companies. There are a lot of Companies Paying 30 , 31 , 32 . Those are domestic companies. So the tail wagging the dog here is these multinationals that are not paying close to their fair share. The second closing point i would make on this is that most of the money is not in france or germany or britain companies. The countries that are true competitors of ours. Most of the offshore profits is being booked in tax havens where there is a zero percent tax rate or 1 or 2 tax rate. Well never compete with that. If you create a territorial tax system, it means the tax rate that theyre going to pay is where they book their profit. So its just going to make i say it will make the world a tax haven. So we kill deferral. We didnt earn your profits pay taxes right now to the United States government. What are you going to do if i tell you that . I am not a corporation. You look like a corporation. What would you do with a corporation . What would you do if that were to change . Its a function of the right. I am not ducking the question. Its a 25 rate. They do what the house wants to do. Lower it from 35 to 25 . But no more deferral. 20 . 20 . 20 . I dont know. I mean, at some point when the rate is low enough, the importance of deferral diminishes. Its the same with a whole spectrum of other provisions. So we say, net Interest Deductibility should go away. There should be expensing, depreciation, or this or that credit. When the rate gets low the distortions in the code get small. Its one of the reasons to have a low rate. When we have a low rate the other things matter a lot less. It also matters a lot less as a policy and matters a lot less as a budgetary issue. Whether we have deferral or not, if the rate is 15, it doesnt matter as much as when we have deferral or not and the rate is 35. Okay. Lets talk specific tax breaks for individuals because i think we have avenue were not going to resolve Corporate Taxation. Earned income tax credit. What do each of you think needs to be done to improve on that credit so that it has better reach and is better targeted to the people who need it the most . I think there is a low suboptimal takeup rate. We need better publicity and awareness so that everyone who should be getting it is getting it. We also have a problem with improper payments. Many people who are not eligible for the program are successfully claiming benefits and we need to figure a way to tackle that problem while making the other problem go away. So antiabuse and advertising. Utilization. Yes. To boost utilization. Mireya. Lets preserve it. Lets not lose what we have. But we also have where a worker without children, they get a smaller credit, but if someone is under 25 or over 65, theyre not eligible. We see a lot of seniors that have to work. Its not that theyre just working a little bit because they want a little extra money. So if theyre over 65 they are not eligible to get a credit. So maybe looking at how can we expand that, that because, if you think about a worker thats under 25 but, you know, they may be 23 years old, and theyre not getting a credit, they still could be in poverty because maybe theyre only making 16,000, 17,000 a year. That applies to Single Parents under 25. They dont get the earned income tax credit even though its meant to support families. Under 25 or over 65. So looking at both of those and being able to expanding eligibility. Expanding eligibility. Not increasing the value of it, not people under 25 if their parent and people under 65 if theyre on low income. You know, the eic or the eitc is one of the best mechanisms we have to encourage work. And if we think about corporations that need to have the demand, the families that are receiving the tax refunds that theyre using to pay down their debt, theyre using it to put a downpayment down on a car. They are using it during times that maybe theyre not getting a paycheck that theyre saving the money. We have to look at it. Its economic impact. Theyre spending the money back in the economy that stimulates jobs and increases demand. Its just a very powerful mechanism that we could have to encourage workers. And we want more workers because when we talk about income tax and the way that were raising money to be able to pay for programs or pay for things we have to have workers working. If theyve not working because they cannot afford to go to work, we will not do what youre talking about. Just building on that point, i believe for individuals for individuals, that they arent eligible above 15,000 a year. They do not get any eitc support. For kids you mean . Singles. Single not married. Single with kids. Single no kids. Basically you are saying you might get help up to minimum wage. But beyond that youre not going to get any help. Now, in a lot of cities you cant live on minimum wage. Expand eligibility to people with no children. Single people without kids generally and people over 65. And i would say in the grand scheme of things if im rejiggering the federal budget if theres money when you look at where you want to make your investments this is an important place to make some investments. Hopefully we got more money to invest and this might be one of those places. Overall in terms of for everybody. Child care costs are big in the news. Weve gotten a lot of suggestions that the Trump Administration is interested in helping people pay their child care costs. But how its done really makes a difference. I think broadly and tell me if im wrong about this even though you may have the best tax break in the world, if it doesnt come to someone who has to pay daycare costs this month its not going to come for 12 months or more, is there a way to make them more available to them . Same with the subsidy that the Affordable Care act offers. Is there way to do that with child care . The credit can be advanceable. It can be . It can come out on a quarterly basis or monthly basis. Slightly higher administrative costs i think. Theres an issue of how to recolle rectify that at the end. You dont really know what the annual income is going to be. You think youre eligible for a program for the First Six Months and youre drawing on that benefit, if it turns out you earned a lot within the last six months, and youre not eligible, how youre going to recoup the costs. So there are operational mechanical issues that need to be wrestled with. But if thats important that could be designed into the program. Are you happy with the child care tax credit as they are today . Is there any improvements you need to happen . I think there always could be improvements to everything. But you know, thats one of the Biggest Challenges for workers is a lot of families are paying as much as a mortgage or rent for child care. So you know, when theyre making 12 or 13 dollars an hour and its costing them close to 1,000 a month for child care, its one of the biggest reasons that employers say they have high turnover because families cannot afford child care and some workers are putting child care at the place of work because its such a challenge. So you know, thats something that we have to think about. President obama had made a major proposal to expand the child care assistance grants. It cost 80 billion over 10 years. Double counting. Give you a microsoft example too. That would have helped 2 million families. I cant remember how much each family would have gotten. It would have made it much more viable for them to work. Because of the assistance on child care. What of the tax reform discussion weve heard, what makes you most hopeful if lawmakers manage to get it over the finish line . Which is a big, big question at the moment. Have you heard anything from out of washington that makes you say, oh good . Anything . [ laughter ] at all . Something that we something we will all remember . Anything . Wow, thats not a fair question right now. Im hopeful that theyre talking about tax reform. Theres an opportunity with tax reform that maybe we can look at when were looking at whether its the vita or the eic or preserving the charitable deductions for families, im hoping they are going to look at all that. I cant say right now im i really cant think of something. Im hopeful. They are talking tax reform. If that happens, thats hope. One of the thing we talked about before this meeting which hadnt occurred to me before we got here. She was saying i hope they keep the charitable deductions. I remember they wanted to repeal the estate tax. The reason lot of people give to charities is because they want to lower their estate to avoid the estate tax. Yes, how is that going to work for you . I mean i just i talked to some Financial Planners and they brought that up as a concern that charities might suffer. Do you agree with that . Why its so important when were sitting back and our major the work that we do in communities to help families with Financial Stability and raise families out of poverty. A lot of the burdens fall on the not for profits to provide a lot of the services. And as we keep hearing of programs that are going to be cut and we start thinking okay, that means were going to have to step up as not for profits to do more work to help families because we want communities to thrive and we care about everybody that lives in our communities. If the charitable deductions are reduced, its almost like we are getting a double whammy how were getting hit. The program cut and federal funding wont come down to us. Nor the charitable deduction. At this time, we start thinking what are we going to do. So its very important to us, however it falls or how it happens, we its something that were watching very closely because its very important to everyone that lives in our communities. I would add, when we think about the charitable dollars come from, some of them come from the state. State tax planning. Overwhelmingly they come from individuals making contributions. And many people make charitable contributions and dont get a tax deduction. Because they dont itemized. They take a standard deduction. And many people claim a lot of benefits. A lot of highincome earners that donate a lot of money get a large federal tax cut. And they do respond. Individuals do give more because of the charitable deduction. If it were to be curtailed that would have an adverse effect. Going back to what trump said during the campaign, he did have a proposal to limit itemized deductions and that policy would have an adverse effect. My suspicion it would have less effect on the vita program. Just because of the way of the distribution of dollars come but it would certainly have an effect. Quite frankly, the proposal to double the standard deduction would make fewer people itemize and limit the incentive for some of the charitable. Even if they didnt repeal the estate tax, preserve the charitable deduction just by doubling the standard and pushing more people on the standard deduction. So far charities are not coming up very well in this . With respect to what speaker ryan has said in their blueprint, they were clear on of charitable giving. There are certain elements of that blueprint that have not been fully laid out and it was clear from reading that document they tend to ensure that people have just have it separate. Frank, did you want to weigh in . The first question about do we want tax reform . Is there something to look forward to in tax reform . What are you hearing out of washington that makes you optimistic . As an organization in washington that thinks the system needs to be we need to raise a lot more revenue for the system. The proposals that are out there are going in the complete opposite directions in our point of view. We are much better off trying to stop tax reform at this stage of the game. With President Trump in the white house and the congress controlled by the Republican Party on both sides, we will not get what i would call a progressive tax reform that will benefit most americans. I have one last question and im going to turn it over to the audience. We have often talked about the socalled benefits cliff on some tax benefits, meaning, if i earn above a certain amount, i lose benefits from social welfare programs that i need to sustain my family. Is there something they can do in the tax code to appease that effect . Because it can really a parent can think maybe i wont work. You sort of weigh these horrible options. I wont work if i earn this much. The macro answer is though issues can be mitigated and its expensive to mitigate those issues. You can mitigate the cliffs by phasing out the benefits for people as their incomes rise. Mitigate those effects by making those programs available to people at higher levels of income. And doing so expands the cost of those programs. So there is a tension between targeting the benefits to people who are most in need of the assistance and not providing, you know, these programs to highincome individuals. At some point, you have to flip from being able to get it to being able to not get it. And then as you sort of relax the rules and make it more generous or slow the phase out you can take away some of that sting and there is a budgetary consequence. Thats the tradeoff. Do you want to weigh . . Yeah, and we talked about training employees. So career edge is one of our programs that we raised private funding to for career edge and that is to invest in the low to mid level workers to provide training dollars to companies to be able to upscale their workers and lift them up so they can make higher wages. We have also run into the employers saying to us, help us because our turnover rates are 90 with a lowwage worker. They ask where do we need to get them to so they dont quit because they do. What happens is they now report they are making say 12 an hour and three months later they have to report for child care assistance that theyre receiving or food stamps and they get cut. They just get cut off and at that point that parent has to make the decision, i cannot h d afford to go to work. This is why i think we really believe in the eic because thats more of a curve. As employees earn more, the tax credit is lower but they see their wages going up and we can have that conversation but now youre making this much money and you dont need those services. Thats the true economic power of lifting people up. So the benefit cliff is very real and i believe that employers suffer a lot from the benefits cliff because of employees quitting because they cannot afford to go to work. Its something i think we talked about where on the state level we have to look at how you have a gradual staging off process as workers are training so they can make the higher wages so theyre out of that benefits cliff situation. A thing to add, i think that raising the minimum wage is critical to put people up there to where theyre getting a livable wage. Thats more important than anything we can do with taxes, to be honest with you. Then its folks are at 15 an hour is there still going to be that cliff . It depends on the region of the country and whether its urban or rural but is that cliff will be there . If it is then obviously we have to change the Eligibility Criteria for food stamps and eitc, for example. But the important thing is lets get people a solid minimum wage first. That gives people so much more dignity. They are making a living so they can afford to survive with their family. So its up to you guys to grill them. So i think youre going to be passing a mike around . Yes, sir. Thank you very much. This may sound like an offtopic question but i am wondering has anybody done any studies on the impact of promoting Birth Control on the budget . For example, what we are looking at now is a total december make of planned parenthood, for example. And this has an impact on all the budget tear stuff we talked about. Child care, people having kids they dont want and having to lose their jobs or leave their jobs, job training, it goes on and on and on. There is a ripple effect. Is anybody doing any investigation of that . I dont know. Is it worth doing . Thats outside my scope. Yes, sir . Hi. I have started a project called the center on capital and social equity to include everybody in our economy. I noticed in the background material there was a lot of emphasis on tax exclusions and deductibilty where there is inequity for Retirement Savings accounts, mostly going to highincome people. On retirement accounts, more than 100 billion is for gone on taxes because its exclude as income. What if we rearrange those a little bit so half the people have no retirement account now . You reduce the tax advantage of the top and you provide a tax credit at the bottom for everybody. Everybody would be a capitalist, everybody would have some capital under their control and you could save 40 or 50 billion per year or get it from somewhere else by raising the Corporate Tax. Theres stuff like that that needs discussion. There is home mortgage. Do you mean by that if i save 100 i get a 100 tax break from the government . No, it would be a once and for all gift. Every year, the government would put two or 300 in everyones account. You dont have to keep it. You could opt out. Small amounts to establish an account so they have somewhere to go if they go to a job, they have an account. Anyone want to weigh in on it . I think the challenge is you focused on Retirement Security because there sort of is a crisis around Retirement Security for a lot of the population. What you are referring to is tax expenditures. Tax expenditures are spending by another name. What this is, there is tax breaks for money put aside in pensions and there is tax breaks for money put aside in your 401 k if you are lucky enough to have enough income. I think the two combined costs are about 150 billion per year so its a lot of money. No question about it. Now, our organization doesnt have a we thunk that helping people save for retirement is quite important. The problem with the way the tax expenditures are designed now is what youre raising which is most of the benefits are able to be taken by folks at the top of the income scale because they are the ones who actually have the disposable income they can put in a 401 k or theyve got a great job and the employers doing that for them. Whats happening is folks at the bottom are not able to save for retirement. First of all, because they dont make enough money. I mean, 200 or 300 a year, it would be a help but it probably isnt enough money to do what you need to have that nest egg to supplement Social Security in the back end. I agree we need to revise how these programs are structured so a lot more will go to the folks lower down on the scale. The problem with the Retirement Security area is, peoples disposable income, 50,000 per year is probably not that much money to save away every year. Youre just living. I would note there is a policy called the savors credit which is working in that general direction. It encourages lower income households to save modestly. Then of course there is Social Security where people are paying in at low income levels but they are getting a relatively high return. That program is not unstable ground going forward. But the components of that program provide income replacement. Its reasonable relative to peoples preretirement income. But to the point i dont make enough money to save so even if there is a savors credit i cant take advantage of it because i pay for daycare and im paying for dinner, do you have any response to the idea of the government infusing a few hundred of cash even though as frank noted its not very much. Yeah, liberals are quick to attack proposals a decade or two ago about privatizing Social Security. Right. Put money in peoples accounts. Right. So those ideas do exist. But theyre not too popular at the moment. Right. Right. Yes, sir . Patrick brown, i was wondering if anyone could talk about some of the discussions around universal child credit and some of the proposals from senator rubio and others to raise the amount and refundibilty of the Child Tax Credit and the benefits and drawbacks from that . Increasing the Child Tax Credit . I think there are few proposals if any at the moment that are popular in congress. To increase the Child Tax Credit. Folks remember this is a policy that was created in 1997, a 500 credit. President clinton and republicans in congress created this policy the first time. The policy was doubled to 1000 per child in the 2001 tax cut that president bush and republicans pushed through. The eligibility of that credit has been expanded somewhat over time and is refundable partially. It cost about 45 billion per year, i think. It phases out for moderate income households. The only thing i would say is if you were to increase that credit you would also be increasing the disparity in tax liabilities among low and moderate income households. And so thats a tax relief that only goes to a parent. Im a parent so i get it. I dont mean it critically. But there are a lot of low and moderate income households that are ineligible because they are not parents. We want to think about what the distant vision of those benefits are among the low and moderate income classes as well as other factors. Yes, sir . I am will rice and i work with frank at atf but i have been a vita volunteer for several years and i was always impressed by people even with very low incomes were very concerned about making sure they paid their taxes. I was very impressed by that. I want to go back to the first discussion and ask alex not only are corporate profits at record highs but corporate cash, just the amount of cash not only offshore but onshore are at record levels and borrowing is very cheap. So if companies have access to all this money, why arent they investing that . And why are they instead as some studies show spending over half their profits on stock buy backs and dividends which just helps their shareholders and executives, rather than opening factories and hiring people and making more profit . If the supplyside theory works, why isnt working when corporations have all this money . Thats a great question. I dont know why at any moment firmle firms would hold cash. There are firms that are holding cash and could be anticipating a tax reform. Maybe they want to relieve their tax burden. So the fact that a decade ago or so, we provided a temporary tax break that encouraged firms to bring the tax it was 1 trillion offshore. We said if you bring it back in the next six months, you get a tax break. The window closed after that. Everyone thought they would do it again. Thats encouraging firms to holder cash offshore. Firms that may be retaining earnings onshore for a variety of reasons. They may be planning an expansion or acquisition or hoping for a lower tax chains that means they could pay a dividend at a lower break. I think its important to distinguish between the moment in time analysis and the longrun analysis. And we need to think about both. So in the long run, you know, firms must return their cash to their shareholders. But thats the really long run. The question is why at any moment in time are they not . I dont have a good answer for that. This lady in the back my name is elaine. I lost my voice this weekend. Im from the tax policy center. Alex in your opening remarks and later when you said the big problem with the eitc is a low takeup and tossed out the number of 50 . My son says thats wrong and of that takeup is that low its only among people that are eligible for very low credits, primarily workers without qualifying children. Im wondering if maybe the answer to your problem is when your copanelists suggest increasing the childless eitc so that its very similar to what families already get in the 3,000 to 5,000 range. If i said that i was only puppeting someone else. I did not come with the stats. I may have repeated franks comments. I dont know the statics on takeups. I think the fix is an interesting idea, though. Yes, sir . Hi there, my name is jessie. Im a student at the university of michigan. I was wondering, you mentioned earlier the possible solution of gamesmanship we see, corporations engaging in to have profits offshore. My question for you was about the border adjustment tax and the way you speak of it, it sounds like an import tariff . Can you explain the difference . Yeah, thats a great question. It may be an academic question. It does feel in many regards like an import tariff. The way the proposal works is two pieces to the border adjustment task in a one is to disallow the ability to deduct and expense of a firms imports. In that sense, its a tax to be paid on the import. Whats critically important to understand is the economics of this policy is that it is not that alone. It is also and this also seems to bother some people but you have to understand the way these two factors work together. The other part of the border adjustment tax is an exclusion for the revenues associated with exports. It is an import tax and export subsidy. In equal and uniform measure. And is it that factor that the symmetry of this policy, with respect to imports and exports, that finance economists will tell you will have the effect is a wash. The theoretical effect is a wash. And the reason is is because this change on both sides of the ledger, imports and exports will result in an adjustment in the value of the dollar. There is a disbutpute or debate whether that Exchange Rate effect will occur immediately and perfectly. The theory is simple and elegant that it will adjust. There is some reason to think it might not adjust perfectly but thats the idea. As a result, if you buy that theory and that response, then imports become cheaper. So theyre taxed, yes, but they are also cheaper and youre back to where you started in the net cost. Some people dont buy that theory. They dont think the market works that way. They dont think there is a liquid market or perfect market for currencies and theyre concerned its going to result in higher prices for consumer goods. Yes, sir . Mark green from safety net in madison, wisconsin. I know theres an issue with people in america suffering or living with income volatility. And its a big issue. From what i have heard, people solve for that in a lot of cases by going into their retirement account and taking on a hefty penalty for taking that money out. Im wondering if there has been any talk about relieving some of that pain for people with maybe getting rid of that or having an incomebased penalty or maybe what the effect of that penalty is for people based on their income . Or if there is a way to help people with that issue because to me it seems like its an issue of not making enough money and trying to do the right thing and do the things that the tax code is encouraging but life gets in the way and makes it hard do. That im wondering if that you are talk about the 10 penalty owed on the 401 k . The hardship withdrawal. If it is a hardship withdrawal do you still get the tax . Are you aware of it . I know the penalty is 10 but i dont know if there are any waivers. There may be if its true hardship. Youre nodding yes and you look very smart. So im going to go with yes. [ laughter ] but is your broader point people should have access to their Retirement Savings at all times without penalty . Yes, or something linked to their income taken they are below the poverty line and they have some savings, thats when it helps them the most when they need it the most and i dont think the tax code is meant to punish people. If your income drops more than x percent you should be able to get to your savings . Its not an area im knowledgeable about. I wish i could help. Give you an opinion. But i understand peoples circumstances change year to year. It would be definitely helpful to smooth that out. Do your clients have Retirement Savings and theyve used in that way . Im not aware of any but im sure they have. That is why we are trying to work with Financial Institutions to help build assets and open up accounts that then they have to fall back on. One of the things that we are finding most successful is helping our kindlies build credit. Im not really sure about that. They need money and we have some employers that are setting up accounts with Credit Unions that if they have an emergency, they can go in get a shortterm loan and it will be deducted out of their paystub to pay that back while at the same time, they are building credit because we record it. They are trying to find different alternatives to help families because it does happen and they are trying to keep them away from places where they may have to pay some high interest to be able to use their own money. Yes, sir, in the back. I am an entrepreneur. Curious if we take the budget of the earned income tax credit because you get the credit at the end of the year, theres the incentive to work you dont see it immediately versus if the minimum wage went up or Something Like that. Im curious if the panelists could answer that if you have that pot of money and you want to create an incentive to work and the other benefits of the wealth transfer, might you invest in the a different program, say, topping up a low wage or Something Like that so you could create a stronger in sentive to work . Or have an effect that would be larger than what it is now. Do you mean transferring some of the money that would go to the etic like raising the minimum wage . Yes, Something Like that. And each panelist can respond if they had the whatever, 60 billion. If i have a minimum wage job and i get the money at the end of the year, i dont see that money immediately versus im looking for a job and i see a seven dollar wage versus a 10 wage, the incentive is much stronger and immediate i would think. But maybe im maybe the lowwage consumer is sophisticated enough that they see the money down the road and that incentive enough. I dont know the answer but just thinking through that, when were thinking about 8 an hour to 10 an hour, you have to think about that. That is barely making it, being able to afford things so you are still within that wage where the earned income credit, we look at it also as a savings account. You can look at it as putting money into a savings you will get at a certain point and you are going to save for it. Instant gratification i think is one of the things that gets a lot of people in trouble. You are absolutely right, the Main Objective is want to get people trained and skilled with a certification so they can make higher wages. So preparing our work force and our skilled worker as were talking about companies that hire folks, a lot of it is that we have a lot of job openings that we dont have the skilled workers to place in those jobs that we have that issue. So its a matter of i think that we have to train our individuals so they can make the higher wages because if we dont get that, the wages are higher, and you also have to look at are the employers willing to pay higher wages . We know the eic is a credit. The worker earned that money. But you have a great point because you need it every month and you want to have that money. Its a great point but i dont know how we do that. I guess my i think that the most important thing is to raise the wage. Thats that will give the immediate gratification. That will actually give people the incentive the additional incentive to be working and you know, put a lot more money in their pocket than theyre getting now. I would not want to erode the eitc at this point. Its such a successful program. Its helping 6. 5 Million People. Its lifting many out of poverty right now. I dont think there is a percentage or advantage to reducing the funding there. Its leveraging. So i think the key question is how can we raise peoples wages across the board . Any other questions . Thank you so much to each of the panelists. You did a great job. [ applause ] i just want to thank you all. I think this has been a great discussion. I learned a lot and i hope you all did, too. Thank you all for being here. Thank you for your expert managing of the conversation and please come join us again in our next conversation in or working america series. Thank you, again. Thank you very much. Former fbi director, james comey appears before the Senate Intelligence committee this week as part of the investigation into the russian activities in the 2016 elections. President trump does not plan to use executive privilege to block mr. Comey from testifying. We will have live coverage starting at 10 00 a. M. Eastern on cspan3 and www. Cspan. Org. In case you missed it on cspan, David Shulkin on the state of the v. A. 20 veterans a day are dying by suicide. This is a National Public Health Crisis and requires solutions that not only v. A. Will work on but all of government and other partnerships in the private sector and nonprofit yoo organizations. Corruption in the u. S. Government. This is splitting the community. And mark twain who you can go to for almost anything writes about this in his novel the gilded age is the two different languages of corruption that happen in the late 19th century where elites start to say this isnt really corrupt its just the way we do things and everybody else says, you know, walks like a duck, talks like a duck, its a duck, right . Talking about free speech and censorship on college campuses. Call it a tax on free speech. I do agree with them. They are being placed in a tricky position when they cant invite the peekers they want to speak because there will be violence. To gregs point i think that when you give into threats, you know, when you give into threats of violence, you basically allow the violent agitators to be successful even before they land a punch. Thats a dangerous precedent to set when you prevent a speaker from speaking because of threats. And Hillary Clinton talks about the 2016 election and her upcoming book. You may think you know what happened and you may be right to a certain extent based on what you perceived and how you process it but im going to tell you how i processed it and how i felt and what i thought because, you cannot make up what happened. Cspan programs are available at www. Cspan. Org on our home page and by searching the video library. Cspans washington journal live every day with news and policy issues that impact you. Coming up tuesday morning, myron ebel will discuss the u. S. Withdrawal from the paris climate accord. Then crystal ball talks about the peoples house projects mission and how to fix the democratic party. And tonya snyder discusses President Trumps plan to privatize the u. S. Air Traffic Control system. Be sure to watch cspans washington journal live at 7 00 a. M. Tuesday morning, join the discussion. Next a look at Navy Maintenance challenges with vice admiral thomas moore. He talks about modernization efforts and new construction that would increase