tv On the Money KOFY October 1, 2017 7:30pm-8:00pm PDT
hi everyone, welcome to "on the money." i'm becky quick. there's no such thing as a free lunch. unless you're a student in new york city's public schools. everybody gets one. is it really a good idea? if you're buy organize selling a house, a new trend that could save you cash. but realtors beware. the president's tax plan. what it might mean to you and will it pass? we know warren buffett's a doll but literally? a cartoon starring the oracle of omaha can give you advice whenever you want. "on th >> this is "on the money." your money, your life, your now becky quick. from learning the abcs to taking the s.a.t.s, many factors come together to help a child
succeed, including one we may not think about too often, and that's food. but some children would rather go hungry, even when they are eligible for free meals, just because of tl stigma attached. what's the solution? that's" getting good grades can be challenging enough. let alone trying to do it on an empty stomach. new york city is the largest public school district in the country. educating 1.1 million children. and this year every child is eligible for a free lunch, regardless of parents' income. new york's not alone in offering universal free lunch. boston, chicago, dallas, detroit, and philadelphia have similar programs. and new york city school system, 75% of the children were already eligible for free or reduced lunch. the criteria was an annual family income less than $37,000 for a family of three. yet one-third of those kids who qualified chose not to eat. and the participation rates get worse. as the children grow older. advocates hope the free lunch
program will get rid of lunch shaming, when students decide to skip lunch rather than show they can't afford to pay for it. supporters say this will help all families save about $300 a year. joining us to talk about whether universal free lunch is the right is a new york city councilmember. also jim fetakukis with the american enterprise institute. ben, why don't we start with this. this was a program that you were very much in favor of. why is that, and tell also little bit about your personal experience too. >> new york city is one of the wealthiest cities in the world. and it's hard to imagine that we still have hunger. so i wanted to take that on. i grew up in the city. i went to a public high school. and i grew up on the upper east side. i grew up with a single mom. and we lived with my grandparents, which made me a little bit different than a lot of the other kids from the upper east side that were going to the bronx high school of science in that not only did i come from a single parent household but a
multi-generational household, which if you want to add on to that, meant that i was eligible for free or reduced school lunch. and so every day when it came towards lunchtime, all the kids would go out and buy lunch. and i had to choose between food and friends. so i would just go with the other kids, not buy lunch, because i didn't have any money to buy it. and i would tell them i wasn't hungry because the truth is i was starving. >> all right. so jim, let's weigh in on this. i'm not going to expect you to come out against free lunch for kids who need it but why do you think it's going to far to give everyone free lunch? >> listen, i like the school lunch program. the research we've done, you know, backs up research elsewhere that it's a -- it's a great program. in fact, you know -- i would like it to be even a better program, i would like it to be a program that actually gave tastier or more nutritious lunches to kids who need it. i think primarily parents should
pay and create lunches for their own kids. and if they can't or if that is a burden, then i absolutely think they should be subsidized. 75% -- as you mentioned, 75% of the kids in the new york school system already get a subsidized lunch. so that is not like -- that is not a group that is a minority, that is most kids. i think that argues against the stigma argument. and there are other ways to deal with that issue to the extent it seems to be a real issue in the new york city school system, than giving lunches for all. they've tried some things in other places like san francisco, you can give kids debit cards, you can have every kid punch a code into a system. there's other things you can do. i want to focus on the kids who need it and make it even better for them, rather than expanding it to kids who don't. >> i completely understand trying to get rid of the stigma. ben work, that have solved the problem if you could use a debit card or if everybody was punching a code in and nobody knew when cash was being
exchanged? >> so that was something that folks did consider. what we still ended up with is a lot of the administrative costs and when you look at how much money we were spending on trying to chase parents down for forms, managing a credit card-type system, having a point of sale, having people doing that enforcement, when the federal government said, if you've got 75% of your city that qualifies, we will cover it for everyone. >> so the federal government is picking up the funds for this for the extra 200,000 kids in the school system in new york city that isn't there? >> absolutely. it's fully covered. every single child will be treated the same. no one will have to worry about whether or not their family can afford it. we will no longer have two lines, one line for kids on free and reduced, one line for kids who can afford to pay. we'll actually be giving kids an even start in life. >> jim, let's talk about t just the idea that, okay, we're going to get rid of the administrative and overhead costs. any time that you're trying to sort out who has it and who doesn't have it.
there's a decent argument for that. >> again, the issue of things like two lines, again, to me that sounds like a solvable problem. you already have a situation where kids don't like these lunches, end up throwing a lot away, there's a lot of waste. there's a tremendous problem with kids not eating these lunches. see, that is where the focus should be. making sure these are lunches that aren't being thrown out. i want kids to be well fed to have nutritious lunches. just don't want kids who don't need it, who are eating two lunches, or substituting as some research has found, substitute the school lunch or breakfast in some cases for what they get at home. let's make the existing system better and use our resources there for people who really need it. >> ben? >> so i think we both agree about trying to make the lunch system better. if i was running for class president, i'd be running on that too. but the key thing here is the scientific method, having
evidence-based governance. so this wasn't just rolled out willy-nilly. first we tested it in grade schools, we saw an increase in uptake. middle schools, we saw an increauptake. we've rolled it out to everyone including high schools, i expect to see a uptake. once we see the limits in increase in uptake for a universal school lunch program, my full intent is to start focusing on school food quality and environment. and whatever types of economic nudges we can create to get more kids to participate. >> the number was astounding, only 31% of high school kids that are willing to go ahead and do this, which shows you there must be a social stigma attached. >> i was one of those high school kids. >> it's going to be really interesting to watch how this plays out. you both made excellent points. thank you, both of you, for joining me. >> t now here's a look at what's making news as we head into a new week "on the money." america's economy grew at a faster pace than first thought. the final reading of the gross
domestic product, the broadest measure of the size and scope of the u.s. economy an annual rate of 3.1%, slightly above the previous number of 3%. stronger business spending led to the upward revision. the s&p 500 hit a record high in early trading on friday. the dow and the nasdaq climbed on friday. there's no escaping modern technolog, even when you fly. delta is now offering free in-flight texting on most of its flights. it's part of delta's multi-billion dollar investment to improve customer experience. alaska airlines started offering free texting back in january. up next, we're mone . sell or buying a home? forget the realtor's 6%. there's a new pricing plan that's gaining traction and coul. later, big tax changes could be ahead if congress passes the gop tax overhaul. we'll get an early look at the numbers. right now a look at how the stock market e just like the people
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home sellers may be in the driver's seat in today's real estate market. but that doesn't mean that they are exempt from paying real estate agents hefty commissions to try and get the job done. what if there was just a flat fee? it's something that some are betting is the wave of the future, and maybe even of the present. diana olick reports on "a sign of the times." >> reporter: the signs are everywhere. competition is fierce for real estate agents. with a number of listings historically low, agents are doing all they can to lure sellers and that means changing the business model. >> for purple bricks, again, i th what's great about our model is it is new in the u.s. but it's been prove anyo uk in three years. >> reporter: purple bricks launched in los angeles with $60 million in investor backing. it is a flat-fee brokerage, charging $3,200 to sell your home. the traditional broker fee is 6%
of the sale price of a home. for a homeowner that sells for around $250,000, which is near the median sale price in the u.s., that means a commission of around $15,000. >> i think what made it successful abroad and will make it successful in the u.s. is the hybrid nature of the model. we do use technology, at the same time we believe a real estate agent will be center of the transaction. >> reporter: it uses technology that is fast becoming standard in the business. home tours. appointment portals to schedule a showing. help in staging. but there is a local agent working closely with each seller and purple bricks is enticing those agents, offering them exclusive territories. >> we're going to assign you a group of territories defined by zip codes that no one in our office can compete with. as an agent, you own that market. >> reporter: purple bricks is not alone. really launched recently with a similar model in the san francisco bay area. its flat fee is higher, just under $5,000. but home prices there are higher
too. really's ceo says as the company expands to other markets it may lower that fee. but the model is new. last year just 2% of commissions were paid as a flat fee. consumers are still split on the idea. >> because they're getting paid $3,200. they're not working for something. >> we would have thought a it, sure. i mean, you'd look at a $6,000 commission verse at $3,200. and you'd have to say, what am i getting for that money? >> reporter: one thing for sure, the longer the supply of homes for sale remains so very low, the the competition among agents will increase. that could mean more models to save consumers >> you know, diana, you point out it's different in different areas. like san francisco where real estate prices are higher, maybe they start at $4,500. what happens once you get into really high-end homes, a million dollars or more? are you talking about cutting from $60,000 fees down to $6,000? $ $5,000? seems hard to imagine you'd
be a cut it that much. how does it work? >> reporter: you know, i spoke to the ceos about that. they said in california they're keeping that flat fee the same because of the varying prices of homes across california. but they did say as they move out into other states where the median price of homes is far lower, california's the most expensive in the nation, they'll consider lowering that flat fee in order to entice morselers to use them. >> it's definitely an area that is ripe for some sort of disruption. diana,. up next, we are "on the money." your tax bracket could be changing. we're going to take a look at how your tax bill and deductions could be different in the and later, what if warren and later, what if warren buffett could give your kids
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- we might have to choose between hawaii or your face. hawaii! what? haha...hawaii! you might have less coverage than you think. visit aflac.com and keep your lifestyle healthy. aflac! president trump released the republican tax reform plan this week. while short on details, the overhaul promises a simpler tax code and big tax cuts, but for whom? scott hodges, the president of the nonpartisan tax foundation, good to see you, thank you for joining us. let's talk about this. i know that this is still pretty much the bare bones, we don't know eve detail. it does talk about personal income tax rates cut from seven brackets to three. we're talking about 12%, 25%, and 35%. it's probably the 0% that falls in there too. is this a viable plan? >> it certainly is. and i think that it's a real step in the right direction. not only in just simplifying the tax system, but creating a more
dynamic tax system, one that's more conducive to economic growth. that's really the key here is getting the economy going again. and the tax system is simply holding us back in so many different ways. >> how is -- i under simpler, by making it fewer tax bracks. but how does this unleash economic growth? what's the factor with that? just a tax cut essentially for a lot of people? >> well, the big changes are on the corporate or business side of the tax code. where they're calling for reducing the top corpora rate fr 35% to 20%. and reducing the tax rate on smaller businesses. what we call passer businesses. down to 25%. and our economic analysis shows that business tax changes are the most pro-growth tax reforms that you can do. they not only boost productivity, but they boost wages in the long run. and that makes workers' standard of livings much better off in the long-term. >> if we cut the tax rate, are
we going to be missing the revenue? will it have up somewh necessarily. well, certainly they're going to have to work to what we call broaden the tax base. eliminate a lot of the loopholes in the code. maybe make some other modifications such as limiting the amount of interest that companies canada duct from their taxes. all of those things will help reduce the overall revenue loss, but maybe not entirely. >> let's go back to personal taxes. because that's what so many people are going to care about. what does it mean to me, what will i be paying? and the plan as it's proposed eliminates all itemized deductions except for mortgage interest and for charitable deductions. so what does that mean for most taxpayers? will they save money with lower rates with these itemized deductions, most of them being cut out? >> that's the real balance here is how far can we reduce tax rates to make up for some of the deductions that we're going to lose? now at the bottom end they're going to make some big changes. they're increasing the standard deduction. the zero bracket, if you will.
so that a couple wil an income taxes up to $24,000 a year. that's great. so even when you reduce some of the deductions that we get and lower rates the combination of these things will make most people much better off. >> sounds like at the bottom of the scale and the top of the scale, those people will probably be better off. i have heard that some -- grumbling that when you get to some of the blue states, northeastern states and new york, new jersey, connecticut, california, those states where you get state deductions -- a de-uction for state taxes, that's going away. will those in those states pay more or less? >> those earning between $100,000 and $220,000 may be slightly less off. they're paying high property taxes, high state taxes in those districts. it's possible that even by reducing tax rates and helping at the bottom with that zero bracket, that they may paying a slight increase in taxes. >> it's going to be interesting
to see this move through congress. we'll see. it's going to take awhile. scott, thank you very much for joining us. up next "on the money," a look at the news for the week ahead. the oracle of omaha on demand. the animated v demand. the animated version warren buffett with tips to help kids think . my experience with usaa has been excellent.
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tuesday auto sales are released for the month. wednesday we'll be getting a read on the services sector with the nonmanufacturing index. also the an verse tear of t.a.r.p. from 2008, the $700 billion bailout plan of the u.s. financial industry. looking for dinner ideas? thursday is national taco day, even though it's always been taco tuesdays in our house. friday we'll see how many jobs were gamed or lost in september with the closely watched billionaire investor warren buffett is a character. now he's also a >> it's always easier to look back at something you've done than to see what path you should take next. >> that's great. still need some financial advice. >> that clip is from warren buffett's "secret millionaires club," one of many kid shows available to stream any time on amazon channels. andy hayward is the chairman and ceo, thank you for being here. >> my pleasure, thank you. >> we're familiar with warren buffett. but how did he wind up in the
kid's cartoon? >> well, war ran has always been concerned about teaching people, promoting financial literacy. we went to warren and proposed to him that we would do a show together that would teach kids lessons about business and finance. he loved the idea, he wrote a curriculum, he records his own voices. we had a lot of fun doing it. >> what does the curriculum entail? we're talking about younger kids, not necessarily high school kids. why is that? >> one of warren's favorite expressions is, the change cha habit are too light to be felt until they're too heavy to be broken. by high school kids have habits established. he felt it was important to start with young kids and tief them positive lessons and values about money. w dolls that goes along with it. >> the more you learn, the more you earn. the best investment you can make is an investment in yourself. >> what type of feedback do you get from the kids watching these things? >> of course the shows are all about positive values, and we have conflict and crisis and
humor and jeopardy and all the tools of positive good storytelling. and th cartoons one would see. but the idea of having this kind of cartoon on this channel is all about content with a purpose. things that are positive value. that it's not another 1,000 empty calories but kids will take something away from it. >> this show is part of, as you mentioned, a broader channel on amazon where you can get a lot of these different things. it's the kids genius cartoons plus channel. what type of other things are on there, and why partner with amazon? >> well, you couldn't get a better partner than amazon. we're launching a streaming service. it's a multi-year deal that we have with amazon. and we're in the 80 million plus amazon prime households. it's being offered to them. and the beauty of that is that amazon is on such a growth curve of its own. there will be a 200 million subscribers forecast within three years. we'll be participating in that as it goes up. the channel has all kinds of
things for kids. they're going to learn. if you're interested in science, we have thomas edison's secret lab where a group of young scientists discover a secret lab where they have adventures in science. if you have a toddler, we have a show called baby genius, developmental values are put forth. so everything has got something that the kids are going to take. you're a mom, you know. it's hard to find shows today that kids are getting something out of. >> i would say, as a mom, you get concerned about the amount of screen time. you're competing not only with television at this point, but also with the computer. and all the games that are pushed out of them. how do you say that this is one that's okay? >> well, we have a ethos around the channel. everything is positive value entertainment. there's nothing of violence in there. there's no inappropriate language. there's no negative stereotypes. there's no behavior that you would be troubled by as a parent to see your kids viewing. and there's no commercials. >> it's a good time to be a content creator with all these different ways of getting
content out there, i suppose. >> absolutely. we're very fortunate to have amazon as a partner on this. we're two years ahead of the disney announced streaming kids service that will start in 2019. we're very excited about that. >> andy, thank you for the time, we really appreciate it. >> thank you, becky, my pleasure. >> that's the show for today. i'm becky quick. thank you so much for joining us. next week, the robot tax. if a human worker is replaced by a rot bot, should there be a tax to replace the lost revenue? we'll talk about it. we're "on the money." have a great weekend, we'll see you next week.
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