to prosperity. who is this that i spent time actual time working on the national security issues. of all those people running there is not one that has fixed areas in all of those critical three areas. >> a midsummer person running for president? we do. >> part of a video giving the reasons john kasich says he should be president. the live announcement is live on c-span 3 at 11:00 a.m. eastern. >> it's almost as if they were a matter enacting it. >> freedom breeds inequality. i'll inequality. i'll say it a third time. >> almost always in the rate. >> very unlikely today. today i believe there is someone singing dwindling talk about hot topic hot salacious topic number two whereas then i don't think i was the norm in tv at the time and i don't think these guys needed that. >> as you mention the moderator a distinguished newsstand who is really embarrassed by this year he was moderating but he disappears for sometimes five or more minutes out of time. today you would have a moderator not jumping in every 30 seconds. really everybody at abc stood back and let the fire burn. >> the father of the woman who authorities say was killed by an undocumented immigrant in san francisco will testify on capitol hill this morning. >> next upcoming discussion on that in the tax code including the flat tax, corporate tax rates and proposals offered by presidential candidates. from the heritage foundation this is three hours. >> that will work it good morning. welcome to the heritage foundation. we of course welcomed us to join us on our heritage.org website and those joining us on c-span on the future occasion. we recommend everyone in house to check their cell phones have been muted and for those online but remind the questions or comments can be sent any time. hosting our opening discussion for a price of the today's paul winfrey for economic policy studies. and income policy at the u.s. senate committee. prior to joining the committee he served here is a senior policy analyst in simulations and our center for data is. he's additionally served on the foreign commission to study alternative economic performance and also specializes in health economics and applied econometrics. join me in welcoming my colleague, paul winfrey. paul. [applause] >> thanks, john. we are pleased to have with us dr. eleanor bush cuts. a david and jones -- senior fellow at the hoover institute at stanford university. he is a world-renowned expert in a number of areas but especially technician having served on tax for spirit he has a bachelor's degree from washington university in st. louis and a phd from washington university. please join me in welcoming dr. alan bush cut. [applause] alan and i will engage in a little bit of a discussion here and then open it up for questions. first of all i would like to welcome david to our tax reform talk show. we don't have a live band but if you want to play some games then i'm open. so let's get this thing kicked off. and your seminal book you wrote that economists and politicians of all persuasions agree on three main points. the federal income tax is not simple. to come the federal income tax is not costly in the federal income tax is not there. can you elaborate this points for us? >> share. for those of you who may be interested or haven't seen any other we've done for this largely self-explanatory which means a minimum of regulation and 60, 70, 80,000 pages. anybody who thinks that simple is missing the point. so many stories over the years some entrepreneurs take a tax return to seven different tax offices and get seven different results. that could be a problem for tax professionals. and all the difficulties in interpreting things every time there's another caption it gets worse and among my favorite phrases was archer who kept talking about the income tax and by the time he got even more water. part of the problem is it just gets worse and worse. what is the cost us? i was invited in 1984 to serve on the american bar association commission on taxpayer compliance and we had three pharma commissioners, some professors tax experts and we produced a lovely report over two years about 100 pages long single space. we had a staff of experts to help us out and went through everything we could figure out why there's three or $400 billion owed to not pay. it is hard to prove in any way with the main causes. the higher the rate the greater the noncompliance, the lower the rate the list of noncompliance. what do we have? they are avoiding taxes by exaggerating deductions. we have tax lawyers, tax accountants. luther wrote the first book in 1983, the number of people who practice law in new york city versus washington d.c. we found in the early 80s the number in washington had grown so rapidly that they caught up with the number of new york city except the number of lawyers in washington practice law. they does advising people on tax policies and so forth. we created a massive industry and in silicon valley before the bust i remember talking to 400 financial planners and all but two or three said that the tax rate below 19% that because we had high rates of 40% and 50% basically remember it is $2 of producing income come away better to concentrate on saving them producing income where you can put one for the other. simplicity, complexity, cost, rates, the whole package. it's not fair either. if you think about it, we have a wonderful legal system gradually evolving. you're illegally not supposed to discriminate on the basis of age, sex gender, race religion ethnicity. tax policy discriminates against every single person by affording each individual different kind in different amounts of deductions and exemptions on rates. we have a tax code which seems the 14th amendment. that is a good way to begin discussing. the >> it seems like a tremendous opportunity cost of the human capital that goes into abating and avoiding taxation. it's not like a tax accountants and lawyers and everybody else. how many folks in here working the tax world and how many are tax lawyers are tax accountants? not as many as i thought. that's an opportunity cost in and of itself. >> i should mention the problem with high taxes is we can't quantify forgone opportunities. under a simple flat tax say i miss the core person and i will pay the going from tax rate. if they succeed they will grab such a large chunk of it. there's the unknowable and invincible appeared we can estimate what they might be if you had a much lower rate. as a whole range of invisible costs associated. >> so let's talk about the issue of fairness for a minute. many on the left and right thing for graduated marginal income tax rate we have today when in reality it doesn't. progressivity is savagery, not marginal rate. can you going to have the flat tax is more equitable than our current system? >> i did have one set of numbers i can't remember so i wanted to bring with me. i did an assessment or something like 202 political jurisdictions around the world to see every single one of the income taxes. here's what i found your 16 have no purse or income tax. 45 have a flat rate at which 36 or 37 and we can trace in my book. i've got a desk in my office by 5000. 23 have to raise. 118 have three raids. not only that but the rates aren't the same. they are different everywhere over time. if someone wants to tell me i want to know how you pick up to 218 is the fairest and i was a still long enough not to change anyway. this is just rates, not days, not production. the notion that a particular system is fair and the other side is a matter of personal choice or where you can politically get away with it in in force. the way i like to think about fairness since you can have a progressive tax on a single uniform rate. so i did than her up one point to illustrate this. let's take for example insane individual has $20000. less than $20,000 of income you have zero. if you got a 40,000 you are paying 10% and you go all the way up until you make a million dollars a year paid 19.9999. you ran your way up from zero to just about 20 depending on your level of income. you can vary the personal allowance, make it higher can have a greater degree of progressivity or you could not read and make a smaller degree. at the end of the day as long as there's a personal allowance or deduction or exemption and is progressive. what a great progressivity do you want? if you decide to have tax rates going up to 50% you can be sure the congress will because it always sounds as high income people get special treatment because people don't pay the tax rate. very few do. what happens is the rates goes up is you end up with a tax code that gives special deductions to various kinds of sectors in industry and when you talk about fairness or marginal rate, you have to do with the fact that different entities from personal people to corporations to business enterprise in the leg. my view of this as it is impossible to consider a flat rate with no deduction where everybody starts the first dollar of income. a flat rate allows you to have it simple, fully integrated progressive consumption tax. i will repeat that again. fully integrated progressive consumption tax. this attacks in there and i'm sure we'll talk about it. the goal of having a consumption tax-based custom element of progressivity plus integration of business and individual taxes without double taxation. that is the beauty of having the reason for sue. fairness under the situation will treat people pretty much the same because everybody is taxed the same on their last marginal dollar of income and everybody has a room circumstances and do the same personal allowance. you may think you had to give preference to one group over another. fine. both openly on the budget financial transfers. here in the record of for spending money. if you hide it in the tax code you're not on the record voting for spending money. disclaimer complicated to say you're spending money by providing tax seductions and the tax base. the flat tax or in a flat rate system is when you get in terms of treating people equally. that is their political view. >> in your book you have this great quote about how an expenditure tax applied across a broad base of equitable tax. imagine john rawls is not necessarily conservative. so i thought i was dairy -- >> if you don't know what the latest know what her life is good to be, why not everybody have the same tax system they will face rather than determine in advance. >> you spoke about how it is important to have a consumption-based and so for folks in the room who aren't as familiar with that the social taxes as a tax on consumption, but not income investing. can you go into detail about why have any function basis so important? >> basically, in a way like to think about it is it to use the simple formula, product equals consumption plus government services, which is small. if you net out investment it is whatever you do if you invest and make your business activity more productive and having your right off of investment spending is the maximum incentive to make the investment in the first place and also changes the tax base of gdp to purely consumption. economists across the board agreed to get better performance in the economy by taxing consumption and not investment. that is the basic core argument on that. there's always differences among people on how much better it will perform. 1% 2%. everybody says it's positive. we don't know whether it will be small, middle or at large. but we pretty much agree it will be positive and what that means in the long run as we accumulate capital to get her productivity and so forth. you do get a benefit over the longer run. imagine if you could compound growth of 4% instead of 3% how much are rapidly you a double real income. it becomes useful and you'll get higher growth rates over time on a consumption days. >> can you talk about by marginal tax rates are important? >> people work for themselves not just government. i know very few people who sit down these days and say what can i do to reduce the national debt. i will write a check because there's a special office in the treasury you can send that too. every now and then they highlight that most people work for themselves which is quite fascinating. you have billionaires who go out of their way to make sure they are not paid ordinary income that's buried in on circumstance action that i think should be taxed as ordinary income. that continues to survive for the time being. basically if the tax rates rise ronald reagan figured out very early that by this time he was paid 91% sacred work in the last six months of the year. a lot of situations when your tax rate goes up you begin to think a little bit about is it really worth it now. the other thing is the higher the rate the more likely you are to avoid the higher the after-tax insert and and those people work for themselves and not the government. >> there's a lot of stuff in the room and one of the issues debated right now in congress is the highway trust fund. two additional tax compliance which would increase the definition of the tax code. what would you tell a member of congress looking at compliance measures relative to overhauling the total? >> generally speaking i would tell them low rates on a broad pace and fitted to avoid or evade taxes and add complexity to that and you have less need of compliance. the united states is a good country for people paying taxes and we get a pretty good response with lower rates. any measure to increase complexity will make google more and happy with every aspect about taxes. there's a story appeared a residential neighborhood and some cargo speeding through and you call the police to get the person apprehended. if everybody in the neighborhood is more or less pena tax code nobody calls the irs. they call and ask allie does it. this gives you some indication of how people respond to the irs and generally speaking when you sit around a bunch of people at a tax conference you have a word that does a special thing for your heart you avoid avoid the high inheritance tax. the lot more compliance. >> a white house website president obama has laid out a series of protection forms. this includes one lower marginal rate, eliminate unfair tax rates. three depart the deficit reduction effort. for increased job creation and five income revenue. >> the panel at are fully in grated broad-based low rate consumption tax that over time to the extended aids economic growth and reduces noncompliance will generate additional revenue and if we can somehow stop the congress and president from spending every dollar it would over time reduce the deficit is a faster performing economy to give you additional revenue. i say they are all terrific. governments don't create jobs. i was sort to drop the category list the business community and individual businesses to create jobs. i wouldn't focus on the deficit reduction part of it. i would try to freeze spending because if you focus on cutting things you end up with all kinds of people telling you why you shouldn't. otherwise it is spread in the margin. it's too bad they don't do what they say. >> disc with the president's comments don't poison the well. >> no they don't. i have noticed that mrs. senator secretary today in proposing things to do. i believe that two later questions in the others. she couldn't be more wrong if she tried in raising capital gain rate and in particular long-term investment. in silicon valley nine out of 10 startups fail. we are interested in more peace of the whole notion someone will sit around to get a lower rate. >> one of the significant things inside the beltway accomplishments that congress has had in the last six months is the adoption of the rule by the congressional budget. you have written in the past at high rates discourage economic activities in the last demand which stipulates the prices and quantities inversely related. how do you think or do you think a new dynamic scoring rule adopted by congress can help the flat tax? >> there's probably different fact her stomach go into it. but it certainly would help it. is going to obviously be a huge debate on what the degree of response will be, small, medium large. i think in this notion that people get rich quick or the second i stop working. i don't think there's any doubt that there'll be people working and doing things to get richer. i want to be careful to not over exaggerate the benefits of it as a political measure but take some small -- it's just going to have a long-term cumulative impact. even if it only you could get a 1% growth rate over time they will make -- [inaudible] >> wait a few minutes for questions if anybody has a name. please state your name and affiliation with your comment in the form of a question. >> hi, nick farmer. can you comment on the idea of having a peer consumption tax, sales tax and whenever you want to call it replacing all your taxes. business, corporate, personal, payroll tax and keeping the progressivity of our current system with the rebates to individuals to replace the various income transfers embedded in the federal budget. the concept would work well and be much more efficient. >> what you've done of course is just described the fair tax only if governor hoover -- in favor of the flat tax and we didn't get anywhere. i read a piece once called a friendly case against the fair tax, why it's great for me. a couple features of that. in the 1960s there were 12 european countries and the national retail sales tax. by 1980 there were zero. i'll had transformed themselves and the reason is the value added tax is off the chain and you can collect it where's the retail sales tax is from to cheating. by early personal story in 1981 i was having dinner in a restaurant in rome and on the way out the cashier said listen. we are not charging a value-added tax. if we see someone coming up to you, go ahead because one of us will run out the door right there as fast as we could you worry we gave you the wrong was he. after a while it turns out proprietors get very good at doing this kind of thing. so you lose a lot of revenue in that process. retail sales taxes are very hard to enforce across the whole country. a second matter is we have a retail sales tax as well. tax and on and you will have the fans rate. there's a number of other aspects of visitors mall but start to add up. i'll start with a joke. i hope you see the various "star trek" series. i have this little book called 216 rules of acquisition and roll 183 i remember is only a retail. that is one of the second is i don't know how many of you come from immigrant families but those are also the famous he said no if you for you wholesale. there is no taxpayer. of course you have the rest to set up small businesses so you become a c. corp. and you don't pay retail sales tax on your which in the worst economic situation and the proliferation people repeating that the restaurant. the next thing for me is terrific at my house is paid off, cars paid off. i live on my situation. we consume such a tiny proportion of our budget that it would be way better than the income tax in effect denies. another aspect when you have a sales tax increase to any state or entity it goes into the cpi from the consumer price index. the flat tax is what you end up getting is to get a value-added tax, the equivalent conceptually that doesn't have any effect on the consumer price index and so on. just a bunch of these things get away and complicated. the you've got to know who's eligible for it. anyway what i think my biggest fear if you were to do that the probability that congress would swap one for the other in the answer would be that started 3% and see how works. when we hit 30 we will get rid of the personal income tax, corporate income tax. not japan not korea, not taiwan. they haven't produced a income tax. it is no accident in-your-face than 50% of gdp. it is because they've gone that route and you end up not with the replacement that in addition. it's very hard. so many programs congress would never agree to an overnight swap. by the way and in 1983 he became a big problem so we had a transition and the rule that can be very despite years. if you've got a lot of unused depreciation do it right away. we figured 80% plus the enterprise would go right away and at the end of the five years there's not much depreciation anymore. certainly startups are fantastic and then you can draw them down when you are profitable. in many respects i am not persuaded. they had about 80 page review and there's a lot of problems as they add to it. on the a constitutional amendment that guarantees simultaneous replacement otherwise i'd be very nervous. >> did you want to follow up? >> i could start a business printing fake restaurant receipts and apparently makes the money. >> 25% of the economy is estimated underground. >> hi. i was wondering if you wouldn't mind going into detail contrast in the flat tax of hillary clinton's proposed tax plan and why the flat tax would be better. >> i don't know what the tax plan is that. she's hinted at what it will be. the higher taxes on the wealthy and 50% marginal rate over a million. let me digress there and throw some cold water on that. 50 years capital thomas pkd. he organized a letter in 2012 saying they supported for a slog along because he wanted to put 75% are small income tax over those earning over a million and no one behold he did. and then comes the end of 2014 emulates it expired. pick any turns down the medal of honor and to make matters worse he resigned from which he himself found at them they are more open to this stuff. and of course the british labour party was even until the last day and they got slaughtered of course in a week or two ago the new leader whom you've never heard of said no more talk about a 50% marginal rate. let the corporate rate codec the teen. out there in the real world people who cedra tried it or advocated don't want to talk about it anymore. there's not much stomach for doing staff and it's really important to remember what went down for the year. please talk about 91% under eisenhower, nobody paid it. so we are talking about a tiny fraction. we are not talking about asserted the middle class pay the high rate that will hit them today. she's talking about high rates of income gains. if it's in the form of dividends it is a tax distributed in capital gains is an after-tax gain process on the higher stock prices but in any case we use gdp's and for those of you who know you don't find capital gains and gdp. and then you end up in the hybrid system that hybrid system with incoming double taxes. we went out and if you had a 9% rate and 99% on capital gains the double tax rate would be 15% prohibitive. if you start talking about a 39.6 or 60% tax amend a 50% tax on capital gains and you earn a million dollars a% marginal tax rates of nuts and companies -- [inaudible] what you'll end up is the inefficiency complexity is obvious and it's just the wrong way to do it. >> it may be a technical question. do you mention you figured 80% of businesses would choose expensive given the option. where did you get that figure? >> this went back to the early 1980s just looking at the nature of investment for example. we have tried not depreciation schedules but imagine you can put up a shopping mall and read the whole thing off in the first year. what you have is on investment spending and what you have to do is focus depreciation and some companies might be some calculation where you have to think about if you make new investments, the benefit of writing that off versus losing the depreciation of your old investment. the people who benefit those who are stagnant and not planning investment and will slowly depreciate the road investment and that goes to us based on our assessment is a small minority in the tech world there's no place you prefer depreciation write off and the case of small businesses no-space. most jobs created with small business, 80% something like that you certainly get a better stimulus by having full investment spending. section 179 is basically what we propose for the entire tax code an across-the-board section 179 for all new investment. interestingly enough if you look at investments we are producing more of a share of the economy is manufacturing the output values still higher. we get into a situation where it's almost obvious to anyone if you want to take the stress. after five years it is pretty hard to find very many businesses if any that don't disseminate nine turns of writing off the rest of their appreciation. not all that bad and i should tell you how the senator became the first. turns out they have 48 separate properties which were 48 separate companies all under 40 separate depreciation schedules. he looked at me and said you mean i can tie all this together and i said yes and he says the idea. that is how we got democrats in 1982. more democrats than republicans and as a joke -- "the new york times" came out and read a strong positive endorsement of flat tax. so at the actual quotations from the "washington post," "wall street journal," "new york times" and then the story takes place. one other point the questions have been brought. economists think more about equity indices since they did talk about a child enough favoring one industry over another. as i look back over 34 years of doing this and marketing all over the world what i would say is in the united states we may have understated or underplayed the importance of complexity whereas the post-soviet countries starting with lithuania, latvia, they regard simplicity in compliance in understanding and all my work porting in the same way they regard low rates as conducive to the revenue growth. i think here we can't stop talking about efficient yet we don't talk about simplicity with the ease of understanding committees of compliance committees of correction and promotion of the idea that a low rate the very first book is called simple tax of a flat tax. we changed the title ii flat tax and discovered people couldn't keep three concepts in their mind particularly congress another field can't walk and chew gum except their street if they had to do. simplicity is really important to many of you who want to get on the bandwagon is important that we keep it simple because otherwise all we have is increasing complexity. >> if folks want to know more how can they do that? >> the good news is you can get a flat tax book online. let me tell you how to do it. the easiest way is to google my name. my google home page comes up first. you see a brief description in the first paragraph. at the hoover press page where you'll see the book. each page downloaded and printed free of charge as many as you'd like. or not doesn't give in to your friends. on my home page there is a link and what you will find inside track to chronicle the history of the flat tax movement all over the world. fortified jurisdictions and i've written about everyone about the rates are the latest updated list which i just put up and it goes back to 2008. if you really want to go back and you would know the entire history of the flat tax movement all over the world and every time there's a change anywhere he put it up. on the same flat tax you will also see a picture of the flat tax book. it won't look like that because it's the newer hardcover version explaining how it spread to the countries. just a short now. why is it that the countries and others went to simple flat tax? under command and control, the state pays off the money collected revenue. when the wall came down, the easiest thing is a sure simple form you could do online and they needed to collect revenue in year one. some of the other countries wanted to follow, originally russia czech republic and after seven or eight years they threw in the towel. 13% they tripled the turns and that is when the bandwagon start of a love for the world. i'm still trying to market a big movement going on in italy which we don't have time to get into. a great help as we'll see something happening in western europe. the best way to reach me if you are media or want to talk as to e-mail me with questions and i'll take the time to answer them. the back of my book 66 most common questions we heard over 15, 20 years of interviews. they are designed for a quick understanding thing. read the questions and answers and updated in a few and answers in a gated and if you come up with a new question you get bonus points. >> the q&a section of the book is fantastic and i encourage everybody to download a copy and give them away on the corner. everyone, please join me in thanking dr. tran's fix. [applause] >> thank you here that was great. >> will have the next panel not on top. [inaudible conversations] [inaudible conversations] >> would like to introduce my colleague david vert. david is a senior philippine economic policy at der tisch foundation where he focuses on entitlements in on entitlements and the regulatory administrative law issue. his career in an inch on tax matters includes vice president for finance and general counsel of new england machinery manager of the chamber of commerce tax policy center at general counsel at the national small business association. burton received a jd from the university of maryland law school. he holds a bachelor of arts degree from the university of chicago. please welcome me -- join in welcoming data david to the podium. [applause] >> good morning. the purpose of the panelists to discuss the examples of good tax policy. we have a strong panel today with five of the leading experts and proponents of fundamental tax reform. each panelist will make a presentation of 10 minutes and then we'll have questions and answers from the audience. entire session will last an hour 15 minute period the broad principles of tax reform are some thing most contributors and libertarians generally agree about. economic principles are driven by the findings of the public finance literature, optimal tax literature and microeconomics. those could be summarized as the taxes to raise the amount of money necessary to fund the government in the economically destructive way. in more formal economic terms related and amasses the dead weight loss or excess burden associated with raising a given amount of money. what this effectively means that the flat rate consumption tax. as you here in some detail by the panel four types proposed over the years. there's also sometimes called the new flat tax and expenditure tax, cash flow tax and that's also introduced in congress. although not the current congress i believe. two others. one of the business tax on the other is the national retail sales tax. the magnitude of the economic game pad for moving towards any of these approaches is very large. cnn will address this object. in a mental tax reform has transfer and economic landscape. it's probably the economic policy program that represents the greatest opportunity to improve the american people and to create prosperity in the united states. the second principle is the tax system should at the least negative impact on the core institution for civil society evident that the family but also voluntary associations such as religious, charitable institutions. alexis de tocqueville has written eloquently and persuasively about the important of the types of institutions to the success of a free society. third is to help preserve life liberty and property and further the cause of fairness and justice for tax system should impose no unreasonable burden and apply consistently to all americans a special privileges for none. also respect taxpayer rights to due process. three papers have been made available to you today and those of you watching either a beast man or the webcast, the papers are for everyday equivalency result in equivalent to the proposals. the second is a tax reform primer for the 2016 presidential candidate and they walk through the design choices anyone developing tax reform must confront. third is how congress should reform business taxes and looks in detail at the issue of how we should tax business and proposes both intermediate and long-term recommendation. all three papers are available on our website. let me quickly introduce their speakers. first we have got your dan mitchell senior fellow at the cato institute. he was a senior fellow before he lost his leg went to work for that other think tank. he previously worked for senator bob packwood before he was chairman of the senate finance committee and once one of the tireless advocate for economic freedom. stephen is a senior fellow at the tax foundation. cns colleagues at the tax foundation have created the best and most transparent tax model in the country. prior to joining the tax foundation he was for many years at the institute for research on the economics of taxation. it is also deputy assistant secretary for economic policy during the reagan administration and worked for the jac and cap commission. dr. jason stegner is a senior research fellow and also an adjunct professor at georgetown, johns hopkins school of international studies and the virginia tech center for public administration and policy. jason was explaining to me before we came here and i'm hoping we will have our similar area day presentations. jason served as deputy commissioner of social security for retirement policy at the new social security administration. he also serves the jac. steve case's chairman and president of americans for fair taxation and attorney in private practice. he sometimes calls himself a recovering tax attorney. he brings a practical awareness that the real-world problems with the current taxes. it is fair to say no one has done more to improve the public's understanding of the fair tax and need for fundamental tax reform generally been teased. courtesy this research fellow in tax economic policy at the heritage foundation. previously a senior associate at price waterhouse cooper for his structured transactions as part of the transfer approaching grew. also served at the tax foundation where he authored three why the record as insider report, tax freedom day comes that local tax burdens and the state business tax climate index. both curtis and jason are among the very best of their generation of free-market tax policy experts. we will go in the order people are please join me in welcoming dan mitchell. [applause] >> was just a day sitting down. that would make more sense than people getting up-and-down. thank you for introducing the panel. used to represent the server to think that i'm glad now you are upholding the important role. one basic, but underscores everything we are talking about a new goddess horus from alvin and you will hear it later on today as well. tax rates matter in what really frustrates me as politicians understand this when they want to. a lot of times they mean they're facing we need higher taxes because we want to put a spoke class. i'm in the libertarian think tank. i don't think its governments job to to control private choices. but i give politicians an a+ for economics. the higher the tax he put on the list to get it there. the fundamental economic points are right. high tax rates discourage what is tax. my frustration is many of the same politicians forget the lesson when it comes to taxes on work saving investment, rick taking the things that help our economy grow and create jobs make us competitive. but as for tax reform in my mind i try to make it as simple as possible. but a lot growth and prosperity. you heard out in just saying over and over again, consumption-based tax. my job is to try to exploit why that is important. it is important because our current tax system treats income you save and invest much worse than the income you consume. think about the simple fashion. you make the money, pay tax on the money. what is left? disposable income. you have two choices of what to do. consumer right away or in the future. saving and investing. let's think about how the federal tax system treats the two choices. if you consume after-tax income right away, the federal government i enlarged the super loud. we have federal excise tax on gasoline and bows and arrows but other than a few obscure things like that there's no federal tax on consuming income. what happened to be save to be saved and invested time and said. between the capital gains tax corporate income tax it is possible for the single dollar of income to be taxed over and over again. you don't have to be a luddite supply sider to think if you have either no tax rates but the low tax rates imposed multiple times that you'll be doing something that will dramatically or significantly affect people's decisions whether to consume income today or in the future. why does it matter economically? so what. people want to consume income faster rather than over because saving and investing is treated harshly by the tax code. what difference does that make? it makes a big difference because every economic theory doesn't matter we can other socialist, marxist appear. every theory is based on the notion you have to defer some of today's consumption to finance tomorrow's growth. ..

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