tv Ali Velshi on Target Al Jazeera February 11, 2016 9:00pm-9:31pm EST
bridges. that's our program. thank you for watching. i'm john siegenthaler. i'll see you back here tomorrow night. ali velshi is next. ♪ >> i'm ali velshi "on target - the troubling truth about taxes in america. rich people really do play by a whole different set of rules. soaking the riches, back in style for democrats. the latest example is hillary clinton's proposal to slap a 4% sur charge on annual income above $5 million, raising what are known as marginal tax rates
on the wealthy americans to levels that haven't been seen in 30 years, before the last major overhaul of the tax code in 1986. it essentially creates a top bracket. income above 467,000 is taxed at a marginal rate of 39.6%. only the income above that level is taxed at this rate. clinton's campaign says the fair share surcharge would bring in over 150 billion over the course of 10 years. for clinton the plan is not just about addressing income and equality or raising revenue for the government. it's about changing the perception that she's too cosy for wall street banks. that's a few perpetuated in park by a rival for the democratic nomination, bernie sanders. he is making life uncomfortable for clinton by hammering the banks and saying income
inequality is the great moral issue of our time. clinton's surcharge idea is her latest attempt to persuade liberal democrats that she shares their outrage over inequality, and proposes targetting the rich by collecting more money in estate taxes and raising taxes paid by investment fund managers. whatever the true motivations are, clinton is tapping into a real feeling, a real sentiment among americans that the system is not fair. a gallop pole found 53% of adults say money and wealth should be more evenly distributed in america. among democrats, it's 86%. in terms of what to do with the problem. gallop found 52% of americans agree that the government should redistribute wealth by heavy taxes on the rich. that is the highest since gallop
started asking this question in 1998. but what candidates say about taxation on the rich during a presidential campaign and what's after an election is rarely the same thing. if hillary clinton is the next president. the chances of her millionaire surcharge getting through a republican congress are slim to none. a reason to that is wealthy americans buy influence in congress. mary snow has that story. >> when presidential candidates talk up a tax plan, the key part is how to tackle the rich. >> it reduces and eliminates most of the deductions and loop holes available to special interests and the rich. in other words, it will cost a fortune. the rule says that millionaires should pay 30% income tax rates instead of 10, 15, 20, and i
want to go further. >> a flat tax that everyone pays, that is flat and fair. and hedge fund billion airs no longer pay a tax. >> it is appropriate to ask the wealthy corporations to stop paying their fair. >> behind the anger, the low taxes paid by the richest americans. the average tax rate they pay dropped since the 1990s, when bill clinton was president. in 1995 the tax rate on the 400 richest taxpayers was 30%, dropping to 17% by 2012. a year after that it climbed to 23%. still, that's less than the 25% paid by single taxpayers earning between 37 and a little more than 90,000. here is the thing. it's the u.s. tax code itself in laws approved by congress that allow the wealthy to reduce how much they pay uncle sam. >> if by tax rate or a loophole we need something that no one
knew was in the tax system, and the rich people hired lawyers to ferret out these things and are exploiting them. that goes on some. most of what is going on are rich people are taking advantages of tax preferences deliberately inserted into the tax bill. this is not accidental. >> case in point is capital gains. that's income made from investment and taxed at a lower rate. >> one thing of controversy is carried interest, it's shared profits a partner earns when investing for clients. it's taxed at a lower rate than ordinary income. critics point to the camen islands in and lux 'em burg, where the super rich can pork their money. the wealthy can afford high priced accountants and lawyers, they can buy influence. >> if you take campaign finance, and you take tax law creation
and put them together, it's not a pretty picture. what you see are people giving a lot of funny to members of congress, and they protecting - creating tax preferences that rich people enjoy. >> even though the tax preferenc preferences are a source of debate. the talk is that it will translate into a challenge when it comes to how much rich americans pay you have mentioned some tax rates have gone up for the rich. >> they have. some of the breaks under president george bush's tax rate expired. the rate went up significantly for the top taxpayers. however, critics say there's too many breaks when it comes to reality and tax holdings. >> we are not talking about people doing anything illegal.
everything that the wealthy and superwealthy are doing to not pay the same tax rates is legal. >> when we talk about the tax code, that is legal. where the grey area comes this is the wealthy, affording advisors coming up with strategies. goal is to pay taxes. maybe some of the strategies are aggressive. they are testing the i.r.s. some complaints are they don't have enough resources. >> it's the tale of two tax systems. i'm looking at how to make is fair for everywhere. that is coming up
according to benjamin franklin, two things are true in the world, death and taxes. how is a debate. amanda says the richest class should be taxed less. i can hear you laughing, you can count on for arthur laugher for being a member of the economic board for president obama. he joins me from nashville. good to see you again. >> good to see you. thank you for having me on the show. you finally got the topic that needs to be discussed by all of us. >> tell me your initial thoughts. >> mary has not got a half of
it, but has got a good half. the rich pay less than she says. if you look at warren buffet, and this is my piece in the wall street journalist. he paid $7 million in taxes with $13 billion in income. that's 0.06 of 100% because he count pay taxes on unrealized capital gains. only when you realise do you collect it. he doesn't realise it. all the trading is done. she's right. totally correct. what you have to do is lower statutory tax rates, and broaden the base so it gets in the loopholes, and you'll collect it. i did jerry brown's flat tax in 1992 which would have eliminated all the garbage and nonsense that you are talking about. >> i'm never smart enough to disagree with you. you are talking about the idea that if the tax rates are lower
overall. people who are not realising, not cashing in on their stock, not taking the money might do so and pay the taxes at a lower rate. >> if there were no differential tax rates and the loopholes are closed, they wouldn't hire the lawyers and accountants. look at how many people in the president obama administration will switch jobs, what the heck do you think they'll do. they are going over with goldman sacks, they'll take advantage of the rules. it's corrupt to the core. if it's bad to the u.s., you she see what it's like in the u.s. or north africa. >> that's the point. you don't want to have unfair tax systems. do you agree then that things that carry interest and capital games are skewing the system. >> of course they are. what you need to do is everyone would pay taxes fair and square if it was a fair system. you do what jerry brown proposes, a 13% flat tax on all
income, which is how much you earn, how much you give away, and your increase in wealth, that's the income. you pay 13%, and everyone does from beginning to end. you'll get tonnes of money, and stop getting the lawyers and accountants, favour grabbers, we'll have a society living on morality. >> should we be thinking differently about someone like me that earns their income through labour, earns it and gets a check from someone. versus someone that invests in capital. as far as you are concerned, everyone should be taxed based on what they earn. >> from the first dollar to the last dollar, then if you want to help people. using spending. don't hide it. write a check, and they'll know what they are getting from what they are. that's the way honesty and transparency does it. we are losing the race. we are becoming an oligarchic society like ukraine and some
other places. >> when we talk of you as being the far side of economics, the concept of it trickling down doesn't work in an oligarchy society. >> you need to tax the rich the same as everyone else. warren buffet, in 2010, paid 0.6 of 100% in taxes. look at the piece in "the wall street journal." you guys are getting it. rich people buy politicians. when you see a group of people hanging with obama. it's people trying to get favors from him and his administration, they have been successful well obama, believe me when i tell you. >> you and me agree on a bunch of things. let me ask you this. let's say you go with the flat tax system or a variance of it, what happens to the person that earns as a wage, something again - close to the poverty
line, someone that earns 20,000 a year. should they pay a recipient of that. >> of course they should be. they should be paid the same way, and if you want to help them, write them a check. a tax system is negative system, telling people what not to do. spending tells them what to do. what about people that are not on the codes, families with kids, and you get someone that doesn't file a tax return, why would you do a tax credit for children when you don't hit everyone that has children. you write a check and get everyone you are saying tax the same way and give money to those in society or government that they give it back to. >> exactly, that's what you are supposed to do. so it's transparent, everyone knows what we are doing, it's done correctly, fairly. i'm not against helping the poor. i'm against trying to create
loopholes so that everyone can sur cum vent it and none of us can understand what is going on. >> you have been advising one or more candidates. >> pretty much. >> how much influence can a presidential candidate or president have on the economy? >> phenomenal. ronald reagan had a huge influence, correctly. you had jimmy carter, and others hurt it badly. you need a low rate flat tax, to provide least incentives not to report income. and the at least place to hide the income. close the loopholes in the kay many i would say, whatever they are. all these things, and the unrealized capital gains, that's a killer of all killers, no one pays tax on that. not a dollar. >> i live in new york. i know gristidis well.
you were on a radio show, and i think i herd that you said the g.o.p. candidate may win 45-46. states in the election. your home state of california and new york - i would have to grow hair before they vote. >> i don't know how you get to the 45 states. do you believe that? >> yes. take a look at the west. they are doing everything wrong with regard to taxes, they don't understand taxes. she said we should use the buffet rule. the buffet rule is they should pay pay one hundredths. it's ridiculous going along with a person like that using hillary clinton as a tax dodge, it's wrong. trump - if you look at cruz,
rand paul, all of them. they want lower rates and a broader base. get rid of the loopholes, dodges and gimmicks. then you can have a system collecting revenues. and spend it being socially responsible. >> who is the best. >> they are all a mix. i don't have a winner. i'll tell you after the election. >> always a pleasure to have you on the show. >> it's a great subject. this is it. this is - what mary said shows exactly how rich people respond when the raise taxes. they use the influence to get around them. they can buy things you and i can't. >> always a pleasure. a former economic advisor to president ronald reagan, the chairman of laver investments coming up, the dark side of cheap oil. take it from me the reality is not always pretty.
al jazeera america. u.s. oil prices dipped below $30 a barrel for the first time since 2003. 12 years, great news for drivers and consumers who are enjoying gas prices below $2 a gallon. cheap oil means pain for americans with jobs in the energy industry, and there are many of those. worldwide an estimated 250,000 jobs have been lost since oil prices started falling from the 2014 high of $107 a barrel.
the steep drop means losses for millions of americans who own oil company stocks in the retirement plans. many invest. port follows are suffering because the stock market had a brutal beginning. to discuss all of these things, steven looeb is here. he says low oil prices is not sustainable. he predicts oil will go up dramatically, and could do at any time. why is it not sustainable. a lot of people are happy with the oil in the $30 range or lower. my gas prices are cheaper than a long time. what is wrong with keeping it like this? >> you are basically producing oil below cost. all the excess oil that you may have. it's not much. it may be a million barrels. it doesn't take much excess.
we may have a million barrels a day. at most that is excess. so that - those barrels, and more barrels are produced at a dramatic loss. not one fracking company in this company is profitable on a cash basis, some are losing - they are losing more per year than their companies are worth. some will say that was the goal of the saudis. >> it could have been part of the goal. on the other hand fracking was never a long-term solution for energy. everyone knew that. you had huge depletion rates, few basins to frack from and somewhere around 2020, 2020/2021 you'll making and come down. lose judges was $110, 107 - the frackers were losing money at
those prices. saudis have enough oil that they can produce for the next 30 years. >> you can't get oil out of the oil sands, you can do what they do in west texas. you still make money on that. >> except one hing. their budget. cost for yil. they have to protect their fields, they are strunded by shi'ites, and all the troubles and costs they have to spend supporting the populous, keeping things calms, statements are that the all-in costs of $80 to $100, and that's why you see the saudis borrowing money, which
they never had to do. burning up the reshes and running huge deficits, this is not sustainable for them. >> let's talk about the world. you have saudi arabia running a deficit. the golf cuntsies are running -- the gulf countries are running a deficit. >> it's hit the u.s. oil, yes, maybe 2 # 50,000 lost within the oil industry, but it has tremendous tentacles. rail traffic is way down because in order to frack it takes a tremendous amount of energy to bet the energy. it takes massive amounts of water, sand. a lot of labour, it's not chief, likes a 5 pore $10 commodity. you could need almost as much
energy in total as you get from the fracked oil. it may not be economic at any price. one reason they may drill, the cost of extracting oil has gone down. some managed to make use of it. the reasons the costs went down, oil has gone down, costs have gone town, oil's tentacles extend anywhere. >> you and i speak for many years, and the last time it was $10, you and i were talking. but it was going to the other way, up. there was an argument by alan greenspan and energy experts around the world, and that is that the benefit to the consumer from low price of oil outweighs the energy to the larger
economy. do you think it's true. i think it's true for companies consuming it. if you look at what it happening now, what sebbing store of the world has the best economic stat sticks, so maybe china. the sector that comes from being the poor man. it's europe. they don't produce oil. they consume it. >> there's no side to the ledger on that. >> for us it was probably the most vital industry. even though we were not generating energy. >> it circulated money around the economy. now you cut that out. rails have gone to pieces. team that produce sand, water. they have multiple effects throughout the economy. it's good for someone that wants
to go and by something at wall street, et cetera, and it's completely independent on oil, worse than the financial stray. basically, this is not good for america to see a huge industry shut down. if the industry was not producing much it's like producing a lot of topper. it's like if you needed 10 tonnes of copper to produce nine tonnes and you do it and do it and do it. a lot of people dependent on copper will be killed. people that like cheap copper will benefit. in this world producing oil doesn't produce anyone. >> we'll see lay offs, and stocks going down. >> let me ask you about a topic that you have break-in about. this is the worse case scenario for solar, wind, energy, no one
is motivated to invest in those. >> that's right. now you are dependent on a climate debate. and that - whatever you may think, it's still up in the air as to what is going to happen in that debate. the one bright thing here if i can make reference to a movie out now. what you see in the oil industry is something highly irrational. what saudi arabia from an economic point of view makes no sense. to continue fracking makes no sense, when this reverses, it will reverse in a way that is unbelievable. >> this is a big conversation, we'll have it many times. you are one the smartest guys on energy out there. that is our show for the day. i'm ali velshi, thank you for joining us. the news continues here on al