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tv   Cavuto Coast to Coast  FOX Business  April 26, 2017 12:00pm-2:01pm EDT

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is rich people are not getting as big of a tax break as they thought they were going to get. the top tax rate under the trump plan will come down but just to 35%. it is currently 39.6. a lot of people would come all the way down. not such a great break for the likes of neil cavuto, sir. neil: or you, sir. i don't want to rain on your little parade here, but that 35% rate, might not be a sure thing because they will limit your deduction. so that little tree farm of yours. >> little tree farm. neil: you might go into plastics or something, but it does not look good, bud. you can afford it. that is is the kind of country we live in. >> are you done? neil: no. i got two hours. we're calling it the varney surtax for the next two hours. great show. great reporting. you've been on this before, stuart. we'll carry that baton. as stuart told you here he is indeed right.
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they are narrowing down what will be still a very substantial, across the board tax cut, not just the same for everyone across the board. here is what we now know. on the corporate side, we're taking that rate from 35% to 15%. this is the goal. then a 15% tax on pass-throughs, s corpse, hedge funds, real estate entities, a lot of lot of donald trump interests would benefit from the lower rate. standard deduction doubles for individuals and families to roughly $12,600. if that is the case, that sticks, an additional 12 to 15 million americans, who presently go through, detail all their deductions would take the standard deduction. would make their filing a lot simpler. it would not rule out deductions across the board. three rates now. that top rate at 35%. as stuart pointed out here.
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bottom rate of about 10%. we're going to getting into all of this with kevin brady, man who runs the house ways and means committee. he was for bigger tax cuts the o looking for a border tax to pay for a lot of this. that seems to be out the window for now. but again these are fast-moving developments. we are also told behind the scenes that steve mnuchin, reported in "the washington post,," "wall street journal," tangentally with our interview a few weeks ago, was against making this anymore than a middle class tax cut. there are far more middle class folks, that would make sense. he would say earlier, elsewhere, net-net, upper income top filers, this might be a wash. slightly lower rate and limiting on deductions, didn't specify which deductions they might not come out all that ahead. they will have a cleaner, simpler tax form to fill out.
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since a lot have army of accountants maybe that that is t point. adam shapiro at the white house with more on all the fast-changing developments. adam, what are you hearing. reporter: historic day, what fox confirmed, start with the individual tax brackets. lowest is 10%. proposal from the president, middle 25%. top tier coming down from 39.6%, to 35%. we expect that secretary of treasury steve mnuchin, along with economic advisor gary cohn, at 1:30 this afternoon will be officially presenting this to the press and to the nation. and steve mnuchin actually referred to this as historic and revolutionary. listen to what he said this morning in a prep for what is about to be announced. >> we want to make business competitive and we want to simplify the personal tax system, lower taxes, create economic growth. so this is going to be the biggest tax cut and largest tax
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reform in the history of our country. reporter: part of that tax reform, neil, includes a 10% tax on the money that companies have parkedded in banks overseas, one time repatriation fee of 10%, if they bring in something like 2.6 trillion back into the united states. in regards to the border adjustment tax, mr. mnuchin was asked about this. he said, quote, we've been talking to chairman brady, and speaker ryan. there are aspects we like, things we're concerned about but he said we don't think it works in it is current form. the question that mr. mnuchin will attempt to answer this afternoon after laying out the president's plan, is how do you pay for it, especially if you're not going to pursue the border adjustment tax. neil? neil: adam, do you know, we're getting hints of this, that mnuchin was the guy who wanted to hold back on generous tax breaks for the rich. he had gone out there in number of interviews, including with us, net-net the rich might not
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see a bigger tax cut. we believe it will be cleaner, simpler, fairer, nicer for them but it is largely a middle class tax cut, that he was pushing something north of 35%, 37% rate, because he didn't want it to look like a boon to the rich? >> answer to your question is simply question. mr. mnuchin not only this morning but in the past his talk about the president's desire for a middle class tax cut. he was talking about when you were joking with stuart varney and his tree farm, he can use that as pass-through as income and under the plan it would be 15%. he wanted to make sure truly wealthy people don't take advantage of lower tax rate in pass-through. they will have to prevent hedge fund lawyers or wealthy lawyers claiming that pass-through 15%. mr. mnuchin has been in his own words, he wanted to protect the middle class from very wealthy
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people taking advantage of the lower tax brackets. neil: like stuart. reporter: like stuart. neil: like stuart. thank you, very, very much. adam shapiro dropped in that middle of that argument innocent so. so-called penalty on the rich or they might not enjoy a big tax cut at all, it should be substantial. they should earn more. any cut even in smaller percentage terms would be substantial. but it is what it is. republican congressman doug collins of georgia, he is a republican conference vice-chair. always good having you. do you like the broad parameters we're hearing? >> i think we do. i think what we're hearing so far, neil, goes back to something we talked about before, this president is engaged. this is president is part of something he wants to talk about a great deal. this is his proposal, putting this forward, combined with what is going on in the house and senate bringing all of us together.
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what we find 80, to 85% we're talking about the same things. we can negotiate over things we may disagree. at the bottom line, he understands when we take whole complete, sort of said revolutionary took attacks system we'll see economic growth come we're searching for for so long right now. neil: one of the things i notice, congressman, when someone puts out a proposal, they put out their best proposal. that even with tax cuts, whether talking about bill clinton or ronald reagan, or even george bush, jr., whatever they initially proposed is ratcheted up a little bit here. so is it safe to say, for example, that the president's desire to lower the corporate tax to 15% is going up? that it will likely be, as the house ways and means chief, kevin brady intimated closer to 20%? >> i think it's a starting point. this is the president, has been through many deals. he understands the negotiating that.
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i think what we will see is a discussion. you and i have talked about this before. neil: right. >> there has to be understanding of the dynamic scoring as opposed to static scoring saying what will the tax reform policies actually mean to the economy. i think we have to say, build in that fact. some ways you don't look completely deficit neutral or not, make sure long term we have the financial situation which we're controlling spending at the same time we're reforming tax reform, which will allows generated growth we're coming. this is a first step. a lot of thought going into it, pay for and not pay for situation will be something addressed over the coming weeks. neil: it seems to broadly mimic what some of your house colleagues have been putting together or working on behind the scenes but again with the exception of that lower corporate rate. i'm wondering, given the gap between that and even a lowered top rate of 35%, can't you see the possibility of savvy rich
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guys finding a way to shift income since a lot of them, s-corps, real estate entities, hedge funds, all the like will take advantage of that? >> well i think that's always a possibility and i think that's one of the reasons we need to do major reform. this simply shouldn't be one targeted area of tax reform. look at corporate structure, pass-through structure -- neil: that is something would stay in place. the way the trump folks envisioned, sir if they're right, 35% top rate and 15% corporate rate. >> right. neil: you don't have to be a financial einstein, i will find a way to pay that 15% rate, right? >> exactly. i think treasury secretary is aware of that. i think that was what you heard from some of his comments. neil: right. >> we'll looking at that, making sure there is not -- the thing is, simplify the tax code, instead of making most complex in the world, simplify the tax code we're taking away some possibilities to do very things
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to avoid structure and have a system works for everyone. that is the part we're wanting to make sure of. we're having system works for everyone, provides a pro-growth platform for taxes. taking care of everything we need to do, take care of business environment and individual environment. one of the things i don't want to have happen, simply talk about business. businesses are important, provide jobs. i want to talk about the person guys to the jobs. when we're looking at corporate tax reform and individual tax reform we're telling moms and dads and single folks and college students coming out in the job market there will jobs available to you. that is what tax reform will give us. that is what we're focusing on. neil: sir, regardless what is happening on the health care front, rework on that, is it just all right, we'll see which gets done first? >> well i think what we can do is we're showing that many times people might not think congress can chew gum and walk at the same time. we are proving we can. we're continuing discussion on health care.
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we don't have time frame. we'll get it done. work on budget, get it done and tie into tax reform. the american people elected a bold agenda with this president in november. they kept their confidence in the republicans in house and senate, now time to act upon it. this is not a time to push it or protest time this is time for governing. that is with we're working on now. neil: thank you very much, conference vice-chair, congressman doug collins, beautiful state of georgia. white house as we indicated taking lead on multiple press conferences and meetings where they spell out with a plan coming up with something very aggressive. is it historically the most aggressive tax reform we have ever seen. president trump indicated that. former cbo director douglas holtz-eakin on that. always good to have you. i caught your comments referring to everything republicans want to do, i hope i got this quoted correctly and correct me if i don't. neil: imagine cutting rate to 15%, referring to corporate rate, i can imagine growing
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percentage point faster from 2% you were applauding to 3%, i can imagine raising $2 trillion in revenue. i can't imagine them being one and the same policy. that is like a little zinger there? >> that's correct. that is concern i have for the proposal sketch i heard so far. we could find out more this afternoon and my concerns would be assuaged. neil: what do you need to hear to get your concerns assuaged? >> you have to have something more than promise of growth to make this revenue neutral. the reason that is important is, 15% is a very pro-growth rate. that would be tremendous. territorial system is exactly what the united states needs. we have to stop taxing our companies for their overseas earnings as if they were earned in the u.s. but we need to do those on permanent basis to get incentives right. if they don't have this fully paid for, with growth plus other provisions, then they're not going to be able to get it
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through the senate using 50 votes. they will have to have it sunset. will it be worth all that you're talking about to get a couple of years of a low rate? neil: they had to sunset after 10 years. >> right. they did after 10 years. those were, and those were largely on individual side. these are on the corporate side, if you cut corporate rate for three years you run risk creating deficits in year 11 budget window, thus disqualifying the bill. neil: for 10 years, effects, very good point. changes what you can do with reconciliation right? >> yes. neil: let me ask you this, the corporate side quickly. i noticed -- that is the advertised rate this 35% rate. not everyone pays, very few do. retail comes closest i guess, doug with 27%. nearing concerns about 26 to 28%.
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oil and gas concerns about 8%. construction 26%. utilities 10%. so few pay at that advertised rate. what is to stop me if i'm a utility from saying i pay 10% now. under this i might pay 15%. what is in it for me? >> i think two things. one of the key provisions what to do with overseas earnings. that is where the 35% rate matters. once the money has been earned and parked overseas there is no way to avoid coming back to the u.s. without paying a full rate of 35%. so it is staying parked overseas. that has to come down. that is true for large, successful global companies. for those in the u.s., the reason there is a gap between the 35 and effective rate is the kinds of deductions that they are permitted. that is with the details i think it is important to see. can they, like the house plan expense their investment or not? that would lower effective rate. can they deduct interest or not?
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that would also lower the effective rate. how you lower the effective rate is what they will care about. neil: i lied to you when i said that last question was my last question. with president bush there was tax forgiveness for companies to repatriate the money and presumably invest it, higher workers. a lot plowed into their own stock. it helped their stock price i guess, but it did not have the desired effect of epropelling job growth. in this case we want to use it for infrastructure. unless you make that demand or law, what's to it koppel them to do that? >> nothing. i think the key difference between this proposal and what we will see in the future and past, that was explicitly a one-time holiday. it was a temporary policy. temporary stuff never works. you want to set good incentives to invest, innovate and grow in the united states.
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there will be a one-time event of money coming back. try to figure out what you want to do with that, about going forward incentives matter. that is what people sent donald trump to do, make the economy more rapidly. that is how he will be judged. it is those incentives they need to focus on. neil: thank you, douglas holtz-eakin, forker director cbo. advisor to john mccain and many more. what he hears out of republicans today, that is crucial. dow up 57 points, largely with these developments. devil in in those details we don't have, save this, taxes are coming down, not quite the same for everyone. how it gets sorted out and how various sides sort this out, after this.
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hey you've gotta see this. cno.n. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. family time is awesome! show me the radio disney music awards. just say it and see it with the x1 voice remote.
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and you can catch up on all the rdma buzz... with artist interviews... past performances... and more! available now on xfinity on demand. xfinity the future of awesome. and to find out how to catch exclusive videos featuring rdma host jordan fisher. and the ardy goes to... watch disney channel presents the 2017 rdmas. april 30th on disney channel. neil: all right. health care deal. in the middle of all of this fussing and pushing for a tax plan you would almost think republicans have shelved that off to the side. they have not. consueloconnell mcshane in in wn that front. that is also a little drama. reporter: that is quite a drama that. not that they have deal yet, seem to make progress. you know how this works. this is quite a dance. the more you cater to conservatives, freedom caucus,
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more you risk losing moderates. we might see it before and lose it again. i want to whack through the amendment getting a lot of attention through washington. speculation of possibility of a health care deal. new jersey congressman tom macarthur,. there are two key provisions that conservatives like. states can waive essential health benefits. obamacare requires plans to cover things like ma tern care, emergency room visits. they can mod tofy their own essential health benefits. if costs come down they can go with that. something else conservatives like, community care ratings. obamacare has community care rules. insurance companies have to charge people same price they live in certain area regardless how they are different, gender, preexisting conditions. mack arthur amendment would allow states to get around that. conservatives like this. we're not sure about the moderates.
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here is speaker paul ryan asked about it earlier. >> we want to give states ability to customize the reforms to maximize ability to lower premiums and protect people with preexisting conditions that is exactly at the heart of the what the mcarthur amendment does. it helps us get to consensus. reporter: consensus remainses to be seen. we talked about a congressman from pennsylvania. he came out did an interview with "washington examiner," based on what i read, it does not change my position. i was a no. remain a no. we're still reporting this is not a done deal on health care. the other thing really interesting, we're told that republicans when they got together on capitol hill together with a meeting they talked much more about health care than they did about the possibility of a government shutdown which is kind of strange or ironic or word you want to us. since speaker ryan went public this week it should be about funding the government. that should be the focus. although there is optimism, last time we checked there is no deal in place ahead of a friday
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deadline. they're talking about health care apparently. neil: quirky, connell, they took out the idea they had to put funding for a wall in there, along the border. reporter: right. neil: did that kind of grease the skids to get that done, not the wall part but getting -- reporter: i think so. that is what everybody seems to be thinking. my point it is not done yet, right? they have to do the some sort of is and cross a few ts. but yes, that is certainly the thinking when the president appears to blink on that. neil: thank you, connell mcshane in washington. the wall will not be a part of this we're told. to connell's point does that help? ted cruz had a novel idea for the wall. have "el chapo" pay for it. you will miss to the opportunity to hear my "el chapo" impression which is dead on. that is coming later in the show when i'm feeling a little more freewheeling. meantime, "new york post" washington bureau chief is here on that. what do you think, gabby, all of
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a sudden that thorny issue put aside and that helps republicans avoid the calamity of a shutdown, what do you think? >> avoids a partial government shutdown on friday but some conservatives are actually quite worried that the president caved too easily on securing funding for his border wall in this spending bill. if you go back to what he initially said what he wanted in this bill, he mentioned that he wanted a dollar for dollar match on financing these obamacare subsidies, which is something that would play ball with democrats and securing funding for his border wall. he later backed off of that. we've now seen thiswishy-washy response whether or not he wants to have funding for a physical barrier along the border, or just open to an appropriations that would deal with funding for, broader border enhancements. i think conservatives are really worried, if the president caved so easily on this, what does that mean for negotiations going forward on health care, what does that mean for
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infrastructure, tax reform? this is a president who constantly said on the campaign trail he is greatest deal maker. they don't feel he used his leverage this time around. neil: let me switch gears, talk about the tax cut, the way it is being presented right now, 15% opening rate that has republicans on the hill more in line with a 20% opening corporate rate. 35% top rate, up for the white house. it is right now 33% with the house plan. big differences, worrisome differences, what do you think? >> i spoke with a gop leadership official this morning who said that they are pretty much on board with this tax plan. that there were areas where they tried to negotiate with the white house. they have feel this overall will benefit the economy and really lead to a reboot of the economy. a lot of republicans worried to begin with about cutting the corporate tax rate down to 15%. that was a non-negotiable for the president i'm told by a
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white house official. so it seems like they're all headed in the right direction. but of course this will have to go through congress and on to the senate at some point where you're going to have to secure democrat support as well. they have already signaled opposition to 15% rate for corporations. neil: all right, gabby, thank you, very, very much. to gabby's point, worth repeating as well. even though republicans are trying to do this through budget reconciliation, requiring simple majority, not 2/3 vote or 60 plus votes, the fact of the matter if they subassistantively change the math behind this, cut that effective deficit beyond 10 years, they do need democratic support. they do need more widespread sort of rallying around this plan than they would get simply among themselves. so no guarranty a simple majority will do. the battle has been joined. if it is not difficult enough among republicans, possibility having to bring democrats on board could make it interesting.
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neil: all right. later on today, a little bit more than an hour now, we'll get the big details out of the tax cut out of the white house, the bigger the president says since ronald reagan, bigger than ronald reagan. we're getting different vibes who is calling the shots here. who knows better than our own charlie gasparino. he knows all the players. what can you tell us about the broad blueprint that you've seen? >> first of all, cohn, gary cohn, looks like the dude from annie. someone told me that. neil: tomorrow. >> here is what i think happened because remember it's, says we segue. neil: veering away.
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>> i think what happened was, donald trump was really, i think this is coming from the top. remember everything before, say last week was, we got to do health care first. neil: right. what happened to that? >> if we can't get health care, he said on our air, told maria, if we can't get health care, taxes are rolled back dramatically. we're back to the original tax plan, three brackets from seven and top rate going down, i think -- neil: 35 now. mnuchin was kicking around not too long ago, 37. nothing is cast in stone. >> we don't know how it will get through congress. neil: i think you do, but most of us don't. >> i have been covering the budget and economic side of congress for a long time. they don't know what is going on there. neil: are they that far apart between the house and senate? >> there are factions. there is a deficit hawk faction. getting back original question, donald trump was swayed by media.
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this is a guy watches tv, watches you every day. he watches the media. he reads, he still reads "the times" and all that. neil: what was he persuaded to do? >> phil graham said what he said in the "wall street journal." he saw that, larry kudlow, author of his original plan with steve moore, art laffer, those are guys basically created the original plan, they came out i think in "the times," here is what you should do. neil: right. >> people like us who believe that the american people and businesses should keep more of what they make because guess what? if you do that, you usually spend it and better than the government spending it. neil: can that pay for itself? >> that is i think over time it does. neil: okay. >> ben stein -- neil: steve moore wrote a editorial. i know that. >> right. neil: let me switch gears here a little bit because there is a reason why you are such a great reporter. you break news. you were the first to report barack obama getting 400,000-dollar speaking fee. >> he signed the contract.
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he did sign the contract. neil: all right. cantor fitzgerald, brokerage house here. and it was largely ignored initially until just lately. what did you think of that? that aspect. >> you shamed them into it yesterday. reality is this, largely ignored by what is big newspapers. i worked for "the wall street journal" for a long time, premr. murdoch buying it. i was offered by "the times," "washington post," i worked at "newsweek." i've been that sort of milieu so to speak. neil: i will say this, i had a solid guarranty from -- >> they hate covering up start like us. hate following in our footsteps. last thing -- neil: they hate covering something would look like glaring hypocrisy? >> i think that is half of it. half is us and -- neil: you. >> a third is us, they have to cover it. neil: you.
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>> we -- neil: they don't like you, charlie. >> we 180'd narrative that fox is right-wing -- we break news. it is me they despise because i'm a real jerk sometimes. a third, they love president obama and probably sitting around saying he deserves money. neil: what makes that so noteworthy, this $400,000? because you and i don't have a problem with anyone getting paid for a speech but in in his case -- >> he spent eight years beating the hell out of these guys. these are the root of all evil. he called them fat cats and i'm not going to do anything to help them. they were responsible for the financial crisis on and on. he not like he beat emup a little bit, he beat them up a lot. he is taking a big money day. neil: someone told me his argument is going to be look, it is, health care is the subject. >> right. neil: this is a very big subject near and dear to the president.
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so my reaction was make the speech $40,000. >> i agree. why does wall street have a health care conference. they're no having a conference this firm to find your obama exchange at lowest rate. neil: right. >> they're looking to do health care investment banking deals. whatever marginal, whatever insight mr. obama could give to them about the current health care system, where it is going, he obviously knows it, they will use that to make money and trade. neil: when you're fresh out of office, people will have you lining up. >> yeah. but the fat cats are going to get fatter. neil: calorically challenged. that is the term we use. >> friend of mine very high-ranking wall street executive and watching me do the story on your show last night, he cringeses every time, he told me cringed every time barack obama called wall street guys fat cats because he is fat. neil: really? >> he felt it was insensitive and a one of those hostile -- neil: he is right. >> president obama created
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hostile work environment for wall street guys. neil: most certainly did. >> that is what he did. neil: real quick thoughts on the market? up 54 points. >> love it. they like -- neil: better than none. >> stock traders are headline driven robots. neil: you are making friends. >> i covered the financial crisis. dow 13,000, right before the financial crisis hit. that was very high. historic high, 14,000. just saying be careful average investors. neil: when did you join us? >> day will live in infamy. when was that? january or february 2010. neil: okay. >> but i remember covering the financial crisis at the, that other place. >> the crappy place in englewood cliffs. dow 14,000 in december 2007, the fast money crowd, jim cramer, were like, lapping it up. everything is great. guess what happened next.
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just be careful with this. we don't know how -- listen, if he gets all this through, i love this market. i love this economy. this is good stuff. neil: i love you. here we go. you see stuart varney and his tree farm might be in danger here. >> he has a tree farm? neil: he has a tree farm. >> does he have a treehouse? neil: probably. whatever he does on his own -- >> swiss family robinson. were they english, swiss family robinson? neil: swiss. i'm thinking swiss. we have lot more coming up. he was working on this long before donald trump was even running for presidency. talking house ways and means chair. kevin brady what does he think of details out there. because they don't all jibe with his. what if technology
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neil: we are just learning that conservative firebrand ann coulter canceled her planned speech at uc berkeley. that was supposed to be for
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tomorrow. number of university officials concerned for her safety and those around her. the speech led to violent uprising. conservative groups are suing the school claiming that happens routinely where conservative speakers aren't allowed to speak their mind. even some liberal activists like elizabeth warren said there is another idea here. you don't have to go watch her. moot point now because she is not going to be speaking. elsewhere we have the whole tax thing. there is another drama later on in the white house, where all 100 u.s. senators will be gathering for classified briefing on north korea. this is slated for 3:00 p.m. eastern time. two hours 15 minutes from now. so what to make from that with ambassador john bolton, our former representative to the united nations. first of all, 100, that is a lot of guys you hope will you know, show some discretion but it lessens with each additional senator, doesn't it? >> well i think there is absolutely no hope of anything
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that is said in this briefing being kept confidential. and i don't think that is necessarily a bad thing. trump takes office after eight years of obama engaging in, what he euphemistically called, strategic patience, which is a long period of silence essentially. now suddenly people say, why do we have a crisis with north korea. the answer is, because during the obama administration's eight years of strategic patience, the north koreans were developing a nuclear weapons capability, developing their ballistic missile capabilities to the point where across the political spectrum, analysts believe that the north will be able to hit target in the united states in very short order. some say next year. neil: all right. obviously, when the president wants to meet with all of them, and not just committee heads or leaders of both parties, he wants to share something, right? >> i think it is to overcome
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eight years of silence and inertia saying this is very serious. this is not a wag the dog scenario. you need to know how serious this is. i would add, if north korea is that close to the capability, let's not forget that iran could have that capability the next day through a wire transfer. so this threat of nuclear proliferation is very real. and the progress that north korea has made, i use that word advisedly, people need to be aware of. if the 100 senators immediately go out out tell all their constituents, good. neil: what do you think is going to happen there, and what is a provocative act? i'm kind of confused, ambassador, because i'm told if we were to try to shoot down a missile over north korea, if they launch yet another one, that is on their territory and could be deemed a hostile act that would get a response. others say if it is over the open seas, it is another, it is another guess. what is the rule of thumb on
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this stuff? i don't even know. >> i don't think it makes any difference because i think any american president confronted with the potential of a ballistic missile with god knows what under its nose cone that could hit the united states, would take action to destroy that missile as early as possible, up to and including on its launchpad. look, if obama had not gutted the bush national missile defense program we would have more confidence. ironically by obama ditching national missile defense, he made the possibility of a preemptive military strike more likely, because you don't want to decide whether or not, or guess whether kim jong-un got out of bed on the right side or the wrong side on any given morning. obviously nobody wants military force used if we can avoid it. that means china has to step up which they have not done for 25 years. and see that north korea is a pretty ugly piece of baggage for them as well as for the rest of
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the world, and do what is necessary to make sure we don't have to face that decision on preemptive military force. neil: do you think china is doing everything it can to mitigate this? >> no, i don't at this point. i think they're, i think it is too early to tell whether the president's really changed their mind. i've watched them for 25 years, yeah, we don't want north korea to have a nuclear weapon. they have not applied force or persuasion they alone have the capability of doing. i think really we've got to aim higher than just stopping the north korean nuclear program. i think we've got to reunite the two koreas. when you say to kim jong-un, give up your nuclear program, what kim jong-un hears give up your government and maybe give up your life. the nuclear capability and north korean regime are one and the same thing to him and his generals. therefore the only way to be safe, avoid potential catastrophe on the korean peninsula to move to controlled
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reunification. kim jong-un won't like that either but that's too bad. neil: that is the way he stayed in power. that is the way his father stayed in power and his father's father stayed in power. there is something to that you said. >> thank you, neil. neil: we're getting word that the president is seriously considering withdrawing from nafta, the north american free-trade agreement officially cobbled together under president bill clinton, that won bipartisan praise at the time. unions balked at it, much more advantaged the likes of canada and mexico than the united states. republicans by and large are okay with these type of agreements as they were largely okay with the tpp,, transcivic partnership that would largely offer a response to china and asian trading but this is the president's first call saying not only does he hate it. pp, but hates nafta, one of the oldest such multinational trade agreements. we'll keep you posted. more after this.
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neil: all right. we were mentioning health care earlier. we're getting news out of the freedom caucus, this 40-strong conservative member, largely republicans who have been really causing some problems for those in the white house when they opposed the first repeal and rework attempt on the affordable care act. now in line with supporting
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something called the macarthur amendment, this would grant states more power and flexibility. that would win more backers. whether it is enough to win over 28 to 30 votes, roughly what they need if you allow for moderate be republicans, tuesday group republicans compensate for couple those peeling off, anyone's guess. there are indication this is group is more inclined to support a rework of that health care, redo with this, with these new provisos. we'll go into those provisos in a second or little later on in the show. sank wear city showdown yet again. the president promising to go back at an attorney in san francisco that effectively shelved the president's measure saying it was unfair. fox news anchor, legal expert gregg jarrett, on what's going on. gregg, as far as i understand it, in san francisco, a sanctuary city, what they're arguing is, you mr. president,
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can not threaten fund simply because we shield illegals in our city. who is right on this? >> well, the law was passed 21 years ago by congress signed by the president then, that essentially banned sanctuary cities, neil. it said, you know, if r a city, and you refuse to cooperate with i.c.e. in matters of illegal immigration including he detentions and holds, you're in violation of the law. you must cooperate and must not obstruct. a week ago, attorney general jeff sessions sent a letter to some of these jurisdictions. they said look, we'll start with holding some of your federal funds, not all, but federal funds related to law enforcement and immigration if you don't comply with federal law. the law is the law, seems like william or rick, the federal judge tried to massage and rewrite the law. he doesn't have the power to do that.
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i suspect he will be overturned if it ever reaches the supreme court. neil: gregg, you mentioned that the monies could be affected were those for enforcement or, that applied to cases like this. couldn't it apply generally to any federal funds a city is receiving or is the administration deliberately trying to avoid a fight by keeping it to that. >> that's a great question. the supreme court answered that in 1984, south dakota versus dole which the supreme court said you can withhold federal funds from local and state jurisdictions only if the withholding of the funds relates to the policy that is at issue. that is what the trump administration was doing in the letter they sent a week ago. they weren't saying we would withhold all federal fund. we'll comply with the supreme court restriction says it has to be related to immigration or law
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enforcement. so, you know, yes, you can't withhold all federal fund but, the conditions on these funds must be met. neil: you're the best, gregg. thank you very much. >> sure, neil. neil: i even understood that. >> oh, good. neil: for now. gregg, thank you very, very much, my friend, gregg jarrett. meantime we're getting more details on this plan on the part of the white house to lower taxes dramatically, the president says bigley, the biggest we've seen them cut. they they entirely jibe, with kevin brady the point man runs house ways and means committee. we'll be talking to him on fox, only on fox, after this. life. so when my asthma symptoms kept coming back
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in jury ..
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tree into -- neil: already. the white house to officially unveil the tax plan in this hour. we are also getting word that the freedom caucus which will be very crucial in the tax plan has gone ahead and indicated support for rework. the significant republicans attempted this on the health care plan and this would support something called the macarthur amendment that was supposed to satisfy those who are concerned about the federal government just switching out one big omnibus health care lie with another big on the best health care in the pier this would put more power this day. the wrinkle is you get conservative caucus members who support it, you might get the
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so-called tuesday group moderate republican members to say that sick, i'm walking out of here. a little too early but assigned republicans are making progress. the dow up in all these developments. now comfortably over 21002.5% advance getting into our market shortly. also hearing from kevin brady, demand around the house ways and means committee. say what you will of republicans immersed in taxes now. this guy was immersed long before donald trump even contemplated running for the presidency. no matter what you think of politicians, this guy has been walking the walk while everyone else has been doing a lot of the talk. they'll be joining assuredly. in the meantime, a lot of this out of treasury secretary mnuchin. >> and will confirm the business tax of the 3% sustained economic
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growth. it is very achievable and we will work closely with the house and senate. we are meeting multiple times every week. this is going to be the biggest tax cut in the largest tax reform in the history of our country. neil: will be left out there is the guy asking obvious questions breaking his left invited by the way threat in my job security here so is the last time i have them on the show could the health editor-in-chief bob cusack. that was excellent. i caught every word about. but i got it back on the kitty notwithstanding is that it's big but is it problematic? in other words it doesn't jibe entirely with what the house is working on. it isn't necessarily paid for. the president indicated that isn't indicated that as a crucial peer buddy thing? >> interesting developments. they will there will not be any transportation provisions will be put together. they are certainly not embracing the tax adjustment that is in
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the house republican plan. mnuchin said he had concerns about that. this is something they are relying on major growth to pay for this and this is something some conservatives balk at if it does blow a hole in the deficit. mnuchin is very confident they'll get tax reform. you know how hard this is by the end of the year. neil: we are talking about prerace pit the top rate would go to 35%. we are also told they will tinker with deductions so that will be offset a little bit. but it won't be paid for to your earlier point. steve moore, the supply-side of "the wall street journal" says you really can't get tax cuts to go a long way to producing growth. he stipulates just a one percentage point increase in gdp, let's say 2% roughly 3% which be a 3% rise in economic and dignity would mean roughly
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nine to $10 trillion more in revenue over the course of 10 years. is that realistic? >> it depends on who you ask. stephen morris and the administration is biting off more they can share. i was asking treasury secretary mnuchin about plan he and what if you can't be right with the entire tax code. we are going after this whole thing. supply-siders save maybe you should just narrow the focus a little bit because you're going to get major growth and matter what. without a doubt, they are moving ahead with this grandiose plan. it will be republican vote clears but i wouldn't count on it. >> you know it better than i appeared i have heard they want to do the reconciliation so that really needed simple majority.
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i'm similarly told that if you do anything to substantially change your alternate government revenue beyond 10 years, you have to give the democrats embroiled in right now democrats don't seem to be too keen to get involved. >> remember the bush tax cuts of 2001 had a 10 year expiration type. that is where we are headed right now. i don't see eight democrats working with 52 republicans in the senate to get 60 votes. tax cuts for tax reform or tax cuts for 10 years is a long time when you're lowering corporate tax. 10 years from now they sign this into law. corporations lobbying heavily. they want permanent. i don't think they'll get it. it would claim the jury if they get a bill passed for 10 years. >> i think what happened it went beyond 10 years because president obama did ratchet up the well-to-do back to the old
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39.6%. is that the most likely scenario that republicans now fear that if they go this route, the rate cuts for the upper income was similarly if a democrat is in office likely be phased out, be risky to do that for corporations and risky to do it for middle class and below. >> i think i would be the pressure. i would also watch these corporations in the business interest around the company on what kind of press release are they going to release in the wake of transplant. neil: you did a great job of the secretary. i don't want you to be surprised when we were a earlier interview that i'm the one asking the questions. we just thought it would be kind of neat for people to see. seriously, very good job my friend. >> thank you so much. foster's death like it. fox business jerry lewis. they worry about details later.
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>> i got to tell you they're a tell you there are details very troubling. you talk about pay for us. there's only spending. >> didn't just do it with growth? >> i don't know. i just really believe when you give all of this away and listen there simply here for low income middle income. shut one of the things i heard for every percentage point a corporate tax rate cut at $100 billion through the corporate tax visas to trillion dollars over 10 years. it's just a lot of money. i'm not sure how we make that up. neil: you in your greeting money grabbers. do you think the fact that there are cause i come and not you, but that they don't care about these details.
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>> steve mnuchin has said that. that's the thing. he talked about with bob cusack. what if this does work in steve moore who you highlighted is correct when they get to three to four. neil: we are told that it wouldn't pay for the whole thing. >> look at the history of last year the treasury brought in record amounts. there's already proffers detailed. neil: ceo spot on the revenue raised. it was very optimistic about barack obama and how much revenue would get his growth target. >> it does. that's something you have to keep in mind. the real-life application with the tax cuts whether it's the individual simplification, corporate tax rate, those will affect so many areas. the market we've been waiting for her. >> small-business operators have been sitting on their hands.
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this is a big kick your pants if they don't hire a ton of people it will be amazing. you look at the standard deduction. there's a big secret that they be unveiled in the next 30 minutes. and every tax bracket we now only have three tax brackets. how do they do that? maybe they'll likely all those deductions. they can do it without even a winter. people opt for a short form. 95% of americans will go to short form with no crying, no sobbing. they will just move on over. neil: they expect fewer americans will itemize. if they could have such a generous deduction. we don't know. the one thing i'm curious about is what led unnerved wall street here? those deductions that it limited to jerry's point, limit how much of a tax cut that ultimately
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getting. >> jury brought up a great point. if you start seeing those on death week a grandiose plan that will cut everybody's taxes ever fill it out in a postcard but then you dig in the details. the seductions gone. that one's gone. neil: the treasury secretary himself was not a big fan of you because you don't need it and you've got a simpler tax code. it's all the better longer-term. >> what is interesting is look at what happened -- i'll tell you it's funny. if you look at smallbusiness formation, small-business optimism in precipitous decline. that will turn this whole thing around. >> has only been a pylon of taxes. medicare surtax was right on the backs of the wealthy. 40.5% the effective tax rate for people in the top tax bracket.
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this is a big change for them. they will be applauding. neil: thank you, guys. scott, i was only kidding. you're the son i never had. we've got a lot more coming up. we are going here obviously from the white house that will align a lot of these details. first to the guy who knows more about taxes and revenue than anyone else in washington. he's been a very quiet for some miss talking about this in dealing with this in the background. whether he likes it or not, he's front and center. kevin brady with the house ways and means. he's the one to put this all together. talk about pressure. kevin brady next.
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show me top new artist. [ applause ]
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[ laughing ] show me top male artist. my whole belieber fan group... it's not a competition, but if it was i won. xfinity x1 lets you access the greatest library of billboard music awards moments simply by using your voice. and thank you so much. the billboard music awards. sunday, may 21st. 8, 7 central. only on abc. neil: gary cohen and steve mnuchin from a secretary-treasurer the united states are going to spell out again in much greater detail than we've heard thus far what the administration wants to do regarding taxes that this will be big and unprecedented by almost any measure this generation. they don't exactly mirrored the administration is coming up
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with. very good to have you. >> thanks for having me. neil: the world seems to be coming to you. there are some big differences. not the least of which is where you pay for it, how you pay for it, do you pay for it as far as i can see import task switches your original plan. what do you make of that? >> this is an important day. one, america has waited a long time for the president to be in the house are willing on tax reform. you're looking at the numbers. that's important. maybe the most important take away from today's utah have the first serious step toward a house, white house, senate getting together in the same plan. it won't happen overnight but this today signals rolling up her sleeves doing the hard work
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all to deliver on tax reform. trained to use a one happen overnight. you did say as well as the end of the year. what is your best guess as to when this is resolved? >> we've got some work to do. the house laid out a blueprint five years in the making. last year the white house laid out their initial tax plan two key principles principles further refined. the senate wants to engage in a major way. over the next coming weeks and armand, working with those in the white house on this important -- we've got to work to do. both getting their rates as low as we can, making sure we eliminate any taxes overseas and yes, i'm order just might come of the taxing equally in the united states a big change from where we are at. more work needs to be done. we are going to bring some positive solutions to the table.
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true to you haven't given up on that. >> now. i don't think the white house as either. neil: i got the impression the white house has. >> no, i don't. their point is area accurate, which is the way the original proposal was laid out a lot more work. they are willing to work with us on how to get this to the right place. clearly we've been listening to stakeholders as though i'm how we design and transition it. we will bring the solutions to the table. neil: do you get the health care thing done first? we've got word out of the freedom caucus and their leader mark reynolds will be joining me today later on fox news that they are kind of unanimous on the sword every work here that would put more power in the hands of the states. there's hope that a health care
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measure or rework attempt would work this time. are you similarly confident? >> well, i am encouraged the policies coming out because our competitive members and conservative members are talking about how best to you. this is very encouraging. remember we need 216 votes. that means the entire conference will feel good with the process giving people time to evaluate his and i think that's critical. it is encouraging. this is good policy. neil: is that integral you get that done first before you start out the tax plan? >> yeah, it would be hugely helpful for a couple reasons. neil: that it's got to get done before the attacks. >> it would be enormously helpful for that to occur from a stack standpoint. but importantly to show we are willing to leave and covered with this president.
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that's equally critical. neil: one of the measures calls for 10% tax of money that's abroad to come and be repatriated here with an understanding if i've got it right would be used for infrastructure in the lake. how would she be able to guarantee that? president bush had tried something similar to bring money back and a lot of the companies just bought more of their own stock or they didn't hire workers as was the goal at the time. power should that be stipulated? >> so, these are details we have to work out what the white house and senate. the common ground as we want those trillions of dollars to flow back to the united states sooner rather than later. we want to make sure we don't strain them out there in the future. very important for competitiveness. the rate and how it is used will be part of the roll up your sleeves discussions we are going to have over the coming weeks.
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neil: you know, these through rates, 10, 25, 35%. are you okay with those? your top rate is 33%. is it likely the higher rate and when it comes to the corporate tax rate of 15%, you were a 20%. when you make of differences? >> the rates are awfully close on the individual side. we went to get the rates down as low as we can. satisfy big businesses, the small operators as well. we'll have discussions going forward. i continue to push in the house to get below 20% as possible and get small business rate down as close to because we can. we've got some work to do in both those areas. neil: i want to pass along some steps and sources were telling me. if i'm misquoting, please let me know. you're not keen on original law coming out of the treasury department of the top rate of
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37% and their deductions and that you thought it should be lower and lo and behold they did lower to 35%. any truth to that? >> well, not necessarily. we are having good discussions with secretary mnuchin. a lot of them as we work through topline numbers. here is my sense. the white house wants to go bold. i'm going to makean argument that the greatest growth for the greatest number of years comes with tax reform is pulled, bounces in the budget counting on economic growth than is permitted. neil: how long does it take? steve loris editorialized today that both allow mobile to pay for this. you agree with that? >> yes, growth will go a long way towards that. neil: you don't seem to subscribe to that. >> i got a chance to look at stevens.
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i'm a big admirer by the way. growth was an awful long way. how we designed this to make this work. at the end of the day, tax reform can be bold. they can leapfrog to the top three lead packs most competitive on the planet and help us move towards a balanced budget. himelfarb do you really think so? i've covered many big tax cut and a big advocate of the stimulus game in town. they relate themselves pay for the tax. good night and hope springs eternal in here, but do you really think the boom you get for the bike he was going to produce 3% plus growth which should be 50% more than we've experienced a melody betrayed? >> here's my answer. the house blueprint leapfrogs to three, top three in the world is bold on tax reform for businesses and is per minute.
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i know what hard work we can achieve those. but i think those are part of the discussions we have to have going forward. neil: finally, if you do get the tax thing done, let's say august is unrealistic. let's say it's closer to the poll. but those cuts be richer rack into the first of the year? >> to be determined. clearly timing matters. we model the growth coming forward right away in every way possible. those of the part of the discussions. i hope we can make retroactive as much as we can to grow the economy. i want to make sure we are going for growthsustained for the long run as well. with hard work we can achieve both. neil: i lied. there is one other question. the 15% lowest corporation way. what is to stop someone and a revised 35% bracket from shifting income to an llc or hedge fund operator, whatever and a lot of the pastor goes to
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the individual rate. can they then shipped the income so it allows them to pay at the lower rate. >> is going to be a challenge whether 20% or 15%. as long as the small business rates are down as low as we are, you've got the opportunity to address it. neil: kevin brady, thank you very much. he is the hardest working guy in d.c. kevin brady, the man who runs the house ways and means committee, a plan very close to the one he's been crafting now forever. now of course all of this seems to be taking place. the president, the first since ronald reagan can something so big, so broad, so sweeping. and now from his officials, the details.
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neil: when you say on boarder adjustment, you haven't given up on that?
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>> no. i don't think the white house has either. neil: really? i got the impression the white house has and did. >> no, i don't. in fact i think their point is, is very accurate. which is, you know the way the original proposal was laid out, it needs a lot more work. neil: all right. they now know their battle plans here. the house ways and means chief kevin brady saying they are closer than they are apart right now. i get the read from "after the bell" co-host david asman, charlie gasparino as well. david, what do you think of that, and how close these guys are on the big, big picture? >> that is a good question. part of it is how trump is dealing managerial with a legislative process. he wasn't too happy the way things turned out with health care. therefore you wonder whether his team is saying we'll take the lead on taxes. you guys took the lead on health care. you led us to believe it would pass with no problem. it didn't. therefore we'll take over on
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taxes. >> it meet pass. house freedom caucus, more inclined to doit. neil: doesn't guaranty moderate republican was. >> you and i spoke a lot about this. this is their strangest hand. they should have played this first. >> they were misled by congress. why you have to do health care first. neil: ryan said health care thing has to get done. >> ryan says you should do it because you get savings. i think donald read newspapers, listened to us, the best shot getting something going, economy boeing, getting taxes down, do it, go big. neil: they seem to think, brady is right, they're going to get both done. is that your thinking? >> let's hope what is done first is taxes. seems both the freedom caucus and tuesday moderates, whatever they call themselves these days, you get them working together. you get big gaps. they made progress in health care. you have big gaps.
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it is so complex. the way it is laid out, it is pretty easy. go from eight bracket to three rates. low rates not as dramatically i like, 39.5 to 35 but -- neil: i have this on pretty reliable sources, late last night the top rate would be 37, 38%. journal and "washington post" both reported that. then we got indications no less from the president, no, no, they have to be dramatic. >> let's hope he holds the line on 35. if we go up to 37, it is ugly number. i never like the number 3. neil: lower than where it is now. do you think that is telegraphing where it might go? >> here is the thing, if you think that the moderate republicans have any stroke, if you think that rand you paul and a lot of those tea party deficit hawks in senate -- neil: not so much a deficit hawk now. you heard a lot of his comment?
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>> i saw it, you can read through some of those. judge napolitano has a good call on those guys. a lot are afraid of the deficit. it is a work in progress. i think the president should be given credit for the fact he went back to his roots. he is putting forth the kudlow, laffer, steve more plan, not the mnuchin -- >> supply-siders used to writ for "wall street journal," they are not part of the administration. pressure from the outside is working. you talked a lot about we need tax cuts to get the the con going. neil: we have idyllic view of how tax cuts came to be. you were reminding me it wasn't instantaneous. >> not at all. it took 18 months for tax cuts to kick in. in 1981, kemp roth plan was blueprint for tax cuts.
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it was a democratic congress right now. they had a lot of influence. they convinced ronald reagan they had to phase it in. neil: "wall street journal" editorializing about phasing them in. >> editorial page was saying how terrible idea phase them. you have to do it now. wasn't kicked in in 83, economy went from negative to positive. neil: '86? >> '86 was different one. neil: it brought the overall rates down. >> top marginal rate came down to 28% t was 70% when reagan first came into office. was down in the 30s. eventually 28. >> they closed loopholes including favorable real estate loophole that hurt donald trump. he went out and attacked left and right. >> he won. they turned that one around. >> bill clinton gave him a big break in '93 or '94. >> it was second mortgage deduction. you weren't allowed to deduct on the second mortgage. that was turned around. >> not talking about.
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talking about interest on debt you use to buy real estate. >> trump got second mortgage interest rate turned around. >> interest on debt was bigger to donald trump because he lost all the money and -- neil: bottom line, guys, you're very smart. >> we're getting in the weeds. neil: this is boring. >> princeton university. neil: do you think this is multiyear effort we're beginning to see here? it was back then? >> it's a multiyear effort. this idea you have to go small for the permanent thing, i thank god they're not buying into that. first of all nothing is permanent in washington. neil: you think you can grow your way out of it? >> absolutely. >> you're speaking to the choir here. >> as long as the government doesn't continue to grow. >> by the way, you're speaking to the choir. like asking him do you you think communism is worse than capitalism. >> that's true. you're the same way, charlie. >> i know i have to be clear you're asking -- >> both of us. neil: the reason i mention, there is this arcane process,
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budget reconciliation, reconciliation where simple majority does it. but i'm told, parcel american tearians can get crazy to say, wait a minute, three-year cost of the tax cut is going to cost you beyond 10 years. >> right. neil: no, no, you need democrats involved and need a 60 votes. >> i don't know about that. we have precedent in what george bush did. with the 10-year phase out. who knows what will happen 10 years. >> that ended up being a 12-year phaseout only for wealthy. their tax cut was rescindedded. >> if we get the economy growing, donald trump gets economy out of the 1.5%,. >> it's a three. >> he will get reelected. nobody will care. >> by the way, reagan went to 4.6 when tax cuts kicked in. next year in '84, 7.3%. neil: average though? >> average was over 3.5%. >> 4%. >> take out the first two years,
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we didn't have tax -- you bring up a great point, whether any democrats would come along. art laffer is optimistic, i would say pollyannish. yes we get democrats. grover norquist who has better feel for the votes says no democrats. >> we have a chance to get the economy growing health thinkly. >> it is existing. >> we're not in recession and low interest rates. possibly tax cut. neil: steve mnuchin and gary cohn and sean spicer outlining what we now know of a blueprint that calls for sweeping tax cuts across the board. let's listen to sean spicer. >> obviously today we're here to talk about the president's effort to provide tax relief to both our corporations that will help grow jobs, to middle americans. two people here to explain it, director of our national economic council, gary cohn, is going to walk through why we're doing what we're doing. then the personal side of the tax. then secretary of the treasury steven mnuchin will walk through the business side in corporate side of what the president is
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doing, to bring jobs back to this country, to make sure businesses more competitive and help our economy growing. at the end, we'll be glad to take questions on this. you are being very -- provided a one page are that provides top level aspects of the plan. both the director and the secretary will go into further detail and take your questions. without any further adieu, director gary cohn. >> thank you, sean, and good afternoon to everyone, and thank you for being here. this is a quite an historic day for us and one we've been looking forward to for a long time, one we're very excited about. we have a once in a generation opportunity to do something really big. president trump has made tax reform a priority and we have a republican congress that wants to get it done and this is something that quite honestly i hope that democrats would support too, because it is good for the american people.
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the president is going to seize this opportunity by leading the most significant tax reform legislation since 1986 and one of the biggest tax cuts in the american history. we have been working on this for a long time. we've had great meetings. we had great meeting last night with the leadership of the house and the senate. we have agreed on many important principles of tax reform. we look forward to working together with the house and senate very closely in the weeks ahead. the president has focused on three things since his campaign, job creation, economic growth, and helping the low and middle income families who have been left behind by this economy. he understands there are a lot of people in this country that feel like they work hard and they just can not get ahead. they are sick of turning their paychecks over to washington and having no idea of how those dollars are spent. they are frustrated by tax code that is so complicated they
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can't even do their own taxes. that's why tax reform is such a big priority to this president. he cares about making the economy work better for all american people. here is a little history. when president kennedy cut taxes in the early 1960, the top rate on personal was over 90%, there was rampant tax avoidance. then 20 areas later, president reagan took rates down to 28% for individuals. since then, rates have been creeping back up and more loopholes and special interest tax breaks made their way back into the tax code, disadvantaging average americans. and then, on the business side, when president reagan left office in 1988, the corporate tax rate was 34%. it hasn't changed much since. for the last 25 years other countries have been aggressively cutting their tax rate, moving
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to a territorial system in ard to attract business and the u.s. has done none of that in 2017 we are still stuck with a 1988 corporate tax. that's why we are now one of the least competitive countries in the developed world when it comes to corporate tax. so tax reform is long overdue. we are going to cut taxes for businesses to make them competitive, and we're going to cut taxes for the american people, especially low and middle income families. today, i'm going to outline the principles we have put in place for personal tax reform, and then i'm going to hand it over to secretary mnuchin to talk about the business side. first, there are a few statistics for you on the individual side. in 1935 we had a one-page tax form consisting of 34 lines with two pages of instructions. today, the basic 1040 form has
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79 lines and 211 tanks of instructions. instead of a single form, the irs now has 199 tax forms on individual side of our tax code. taxpayers spend nearly 7 billion hours complying with these tax codes every year. and nearly 90% of the taxpayers need some help in filing their taxes. we're going to cut taxes and simplify the tax code by taking the current seven tax brackets we have today and reducing them to only three brackets. 10% bracket, a 25% bracket, and a 35% bracket. we're going to double the standard deduction. so that a married couple won't pay any taxes on the first $24,000 of income they earn. in essence we are creating a zero tax rate, yes, a zero tax rate for the first $24,000 that a couple earns.
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the larger standard deduction also leads to simplification because far fewer taxpayers will need to itemize, which means their tax form can go back, yes, to that one simple page that i talked about earlier. families in this country will also benefit from tax relief to help them with child and dependent care expenses. we are going to repeal the alternative minimum tax. the amt creates significant complication and burdens which require taxpayers to do their taxes twice to see which is higher. that makes no sense, and we should have one simple tax code. as we all know, job creation and economic growth is the top priority of the administration. nothing drives economic growth like capitalinvestment. therefore, we are going to return the top capital-gains tax rate and dividend rate to 20%, repealing the harmful full 3.8%
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obamacare tax on dividends and capital gains. that tax has been a direct hit on investment income and small business owners. we're going to repeal the death tax. the threat of being hit by the death tax leaves small business owners and farmers in this country to waste countless hours around resources on complicated estate planning to make sure their children aren't hit with a huge tax when they die. no one wants to see their children have to sell the family business to pay an unfair tax. we're going to eliminate most of the tax breaks that are mainly benefits to high income individuals. homeownership, charitable giving and retirement savings will be protected. but other tax benefits will be eliminated. this isn't going to be easy. doing big things never is. we will be attacked from the left and we will be attacked from the right but one thing is certain, i would never ever bet
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against this president. he will get this done for the american people. with that, i'm going to turn it over to secretary mnuchin to go through the business tax plan. then we'll both come back and take questions. >> thank you, gary. so as gary said, we've been working on this plan for a very considerable period of time and our objective is to make u.s. businesses the most competitive in the world. right now we have a 35% corporate rate on worldwide income and deferral. it is perhaps the most complicated and uncompetitive business rate in the world. not a surprise that companies leave trillions of dollars offshore. under the trump plan, we will have a massive tax cut for businesses, and massive tax reform and simplification. as the president said during the campaign, we will lower the
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business rate to 15%. we will make it a territorial system. we will have a one-time tax on overseas profits that will bring back trillions of dollars offshore to be invested here in the united states, to purchase capital and to create jobs. the president is determined to unleash economic growth for businesses. this is not about large corporations. small and medium-sized businesses will be eligible for the business rate as well. as gary said, we have had very productive meetings with the house and senate working weekly to get this done. we will continue to do that. we are determined to move this as fast as we can and get this done this year. i would also just comment that we will hold listening sessions. one thing this president has done very well, is listen.
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we have had hundreds of business leaders here from all different types of areas. manufacturers, retail, airlines, community banks, big banks. we are listening and we have been taking feedback. finally i would just add the president's objective is creating economic growth, and as we have said before, we believe we can get back to 3% or higher gdp that is sustainable in this country. the overall economic plan consists of massive tax cuts and tax reform. regulatory relief, and renegotiating trade deals. with that, we will unlock the economic growth that's been held back for too long in this country. with that, we would both be happy to take a few questions. in the back. reporter: thank you, mr. secretary. when you talk about the individual tax rates, you're also talking about eliminating some of those tax breaks.
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are you talking about eliminating tax deductions and which ones are you talking about eliminating and which ones you are talking about keeping? >> correct, we'll eliminate on the personal side all tax deductions other than mortgage interest and charitable deductions. we think that will be sweeping reform. adam. reporter: thank you, secretary, talk about lowering dividends and capital-gains taxes how does that mesh with what you said this morning about protecting the middle class from the very, very wealthy who might be able to take advantage, i don't know a better word than loopholes, that would give them a lower tax rate? >> what we said the business rate is going to be available for small and medium-sized businesses as well as for corporations. however, we will make sure that there are rules in place so that wealthy people can't create pass-throughs and use that as a mechanism to avoid paying the tax rate that they should be on the personal side. i would just say on the dividend
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rate, we believe that restoring the 20% capital gains rate is critical to investment in this country. reporter: mr. secretary, another question about the pass-through. the initial plan that the president as a candidate outlined, also included freelance or contract workers in that 15%. what is your rate on repatriation of fund overseas and gary cohn, what about the marriage penalty, president promised to eliminate that. >> comment on rate of repatriation, we're working with the house and senate on that, but i will say it will be very competitive rate that will bring back trillions of dollars. as it relates to the definition of contractors and things along those lines. those are details we will be working with congress on as we turn this into a bill that will get signed by the president. >> so as secretary mnuchin said, we are working very diligently with the house and senate, coming up with final details of the bill.
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you're going into very micro details. reporter: very important. >> very important, we agree. our basic premise here is to simplify the tax system, lower rates, and make it easy. we don't want to penalize people. we want to make the system very fair. that is one of the things on our list that we're going to work on just as secretary mnuchin said. we'll get back to you with definitive answers on all the details. reporter: on the 10, 25 and 35% rates, do you have income brackets established that you will propose? >> again, we are in constant dialogue with the house and the senate. as secretary said, we're holding a bunch of lessening groups right now. we have outlines. we have a broad brush view of where they're going to be. we're running enormous amount of data on the proposals right now. we will be back here with very firm details. we're very confident where they're going to be.
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we wanted to get out and give you a broad brush overview where we are. the president very much believes taking input as secretary said over the next month. we have a lot of different discussions with a lot of difficult groups that are interested. >> deductions, mean state and local income taxes being eliminated, that being eliminated? >> yes. reporter: how about health care? >> yes. reporter: mr. secretary, thank you, mr. cohn, either one of you, when you talk about repealing 3.8% obamacare tax, small businesses an investment income, is this your first attempt, official first attempt i guess to start pulling back on obamacare? and also what you do you say to your fellow republicans who say that this tax reform package is more about corporations versus cutting the deficit? >> look, this tax reform package is about growing the economy, creating jobs. it is about the economy. you know, as i started, you know, president trump comes in every day and talks to the two of us about economic growth,
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economic prosperity, and jobs and what are we doing to stimulate economic growth. that is how we're looking at this plan. the 3.8% tax on capital gains, dividends, interest, the president looks at that very seriously as being a tax on capital being spent to stimulate economic growth. people putting investment capital to work, and people being taxed on their personal businesses. so we're trying to get rid of that, to be more stimulative, to have capitol go back into the economy to create more jobs. reporter: you said obamacare. more businesses taxed with obamacare? >> it is business. it is to estimate business investment. we're trying to stimulate business investment. reporter: so on, first of all, does it pay for itself? is this plan ref you knew neutral? and secondly, what in here is non-negotiable? when it goes over to congress, congress comes back with 20% corporate tax rate or vat added in, will the president refuse to sign that?
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>> let me first say, again, the core principles of this, we've been meeting with the house and senate, and they agree 100%. the core businesses make business rates competitive, bring back trillions of dollars to create jobs, simplify personal taxes, create a middle income tax cut. so those core principles are non-negotiable and that is something that we all feel strongly about. as it relates to, will it pay for itself, again i think as we've said, we're working on lots of details as to this. we have over 100 people in the treasury that have been working on tax and scoring lots of different scenarios. this will pay for itself with growth and with reduced, reduction of different deductions, and closing loopholes. reporter: if it turns out the congressional estimates, if it turns out actually won't be paid for bygrowth, would -- is
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president comfortable with that, will he find something? >> let me say again, when we look at deficits, the deficit has gone from 10 to $20 trillion in the lasted a administration. that is a problem, and president is concerned about that. this plan is going to lower the debt-to-gdp. the economic plan under trump will grow the economy and will create massive amounts of revenues, trillions of dollars in additional revenues. let's go in the back. reporter: if you don't replace some of the revenue with a border adjustment tax, how will you make up for the deficit caused by the reduction in the corporate tax rate? >> okay, well, again today we're putting out the core principles which include rates, because we think that is a very important part of the plan. we will be working very closely as i said with the house and the senate to turn this into a bill that can be passed and president can sign.
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there is lots and lots of details that will go into how that will pay for itself. reporter: mr. secretary? >> yes. reporter: territorial tax system, that a border adjustment tax? what isit? >> a territorial tax system means u.s. companies will pay income on income-related to the u.s. so, it is territorial, u.s. companies will not be subject to worldwide income which made them uncompetitive. reporter: is there reason to be concerned perhaps republicans might not go along with this like they did not go along with the obamacare replacement? >> there is a lot of desire from everybody to pass tax reform. as gary said, we're at historic moment and republicans and democrats want to create jobs, and want to help the american people. and as i said, the core principles of this, we have agreement on and we will work forward on the details.
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go in the back. reporter: thank you, mr. secretary. quick question, you bring up repeal of the death tax, the estate tax. this is an issue that has been going on for decades and, it used to be they are always talking about phasing out the death tax over a period of years. groups such as jim martin's 60 plus seniors association, said they wouldn't accept it and wanted an immediate killing of the death tax. is that what this is going to be or is it going to be a phase-out measure again? >> right now, our initial proposal is to immediately phase out when this proposal becomes effective to phase out the death tax immediately. reporter: phase -- >> immediately. with the implementation of the new tax, the death tax would disappear. reporter: two questions. this is obviously a statement of core principles. just one page.
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obviously tax reform would be much more complicated. when will we see the details, when will we see the actual plan? >> we're moving as quickly as we can. we are working with the house and senate on all the details and, this is everybody, has an agreement. we're going to move this as fast as we can. when we have an agreement, we will release the details and go through with all of you. reporter: my second question, will the president release his taxreturns so that -- >> president has no intention, president has released plenty of information and i think has given more financial disclosure than anybody else, i think the american population has plenty of information on his taxes. right there. right there. excuse me, other people. they have the right to ask questions. reporter: my question to, you, mr. secretary or mr. cohn, you mentioned middle class tax cuts work. middle-class families watching
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this tonight on this news, family. what does it mean for them? >> it will be a tax cut. >> how much? >> will mean a tax cut. you're asking the same question we got asked over here. we have will let you know the specific details at the appropriate moment. we are in very robust discussions with the senate, with the house leadership. they are progressing very quickly. and we will continue to give you more details as we have them. >> we'll take two more. back in the forth row. reporter: exactly a year ago, then candidate trump was asked if he believes in raising taxes on wealthy. he said, i do, i do, including myself. i do. my question why isn't he doing that? will the president end up paying more or less taxes as a result of this plan? >> let me just comment. i can't comment on the president's tax situation since i don't have access to that okay. i would comment that our
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objective, okay, is the reduction in taxes will be offset by significant reduction of, deductions and other items. so that the effective tax rate, okay, is what we're focused on. one more question. right here. reporter: you may not have seen the president's tax returns, according to our estimations, by 2005 returns, getting rid of alternative tax, would only pay 5.3 million in federal income taxes. so your response to those critics who say, a lot of what you presented here today could save the president or benefit his own businesses. >> let me comment. what this is about creating jobs and creating check growth, and that is, that is what massive tax cuts, massive tax reform, simplifying the system is what we're going to do. the amt is just another example of a third complicated, set of rules. thank you, everybody. appreciate you guys.
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. >> okay, cheryl casone here, i thought sean spicer was going to come up there. that's the upshot. the tax cut is on, the details have yet to be worked out. cheryl in for trish regan, they're convinced this is going to pass by the end the year, we shall see. >> i would like your take before we start the show, looked like gary cohn was giddy in the beginning of the q&a, they seem so ready, and you're right very confident. neil cavuto, thank you very much. the wait is over, treasury secretary steve mnuchin and president trump's top economic adviser gary cohn just unveiling the president's big tax plan.

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