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Would you like to inspect the original subtitles? These are the user uploaded subtitles that are being translated: 1 00:00:14,082 --> 00:00:15,649 ( thunder rumbling ) 2 00:00:15,649 --> 00:00:18,419 ( rain falling ) 3 00:00:47,848 --> 00:00:49,650 >> Man: HOW MANY PAGES 4 00:00:49,650 --> 00:00:52,520 IS THE U.S. TAX CODE? 5 00:00:52,520 --> 00:00:56,524 >> ( phone beeping ) 6 00:00:56,524 --> 00:00:57,758 >> Woman: HOW MANY PAGES 7 00:00:57,758 --> 00:00:59,627 THE STIMULUS BILL IS? 8 00:00:59,627 --> 00:01:01,495 >> Man: NO, NO, THE TAX CODE. 9 00:01:01,495 --> 00:01:03,597 >> Woman: TAX CODE? UM, A LOT. 10 00:01:03,597 --> 00:01:05,499 I DON'T KNOW OFF THE TOP 11 00:01:05,499 --> 00:01:06,500 OF MY HEAD. 12 00:01:06,500 --> 00:01:08,336 >> ( extension ringing ) 13 00:01:08,336 --> 00:01:09,337 >> Woman 2: WELCOME 14 00:01:09,337 --> 00:01:10,338 TO THE UNITED STATES 15 00:01:10,338 --> 00:01:11,705 GOVERNMENT PRINTING OFFICE. 16 00:01:11,705 --> 00:01:13,174 >> Man: YES, UM, I WAS TRYING 17 00:01:13,174 --> 00:01:14,175 TO FIND OUT HOW LARGE 18 00:01:14,175 --> 00:01:15,243 THE TAX CODE IS. 19 00:01:15,243 --> 00:01:16,677 >> Woman 2: I'M SORRY? 20 00:01:16,677 --> 00:01:18,512 >> Man: THE U.S. TAX CODE. 21 00:01:18,512 --> 00:01:19,780 I WAS CURIOUS HOW MANY PAGES 22 00:01:19,780 --> 00:01:20,781 IT IS. 23 00:01:20,781 --> 00:01:22,250 >> Woman 2: I'M NOT FAMILIAR 24 00:01:22,250 --> 00:01:23,284 WITH THAT, SIR. 25 00:01:23,284 --> 00:01:24,652 I DON'T KNOW WHAT 26 00:01:24,652 --> 00:01:26,254 YOU'RE REFERENCING. 27 00:01:26,254 --> 00:01:27,421 >> Man: IT'S THE DOCUMENT 28 00:01:27,421 --> 00:01:28,722 THAT CONGRESS COMES UP WITH 29 00:01:28,722 --> 00:01:30,258 TO TELL THE INTERNAL REVENUE 30 00:01:30,258 --> 00:01:32,560 SERVICE HOW TO TAX AMERICANS. 31 00:01:32,560 --> 00:01:35,263 >> Woman 2: OH! ARE YOU DEALING 32 00:01:35,263 --> 00:01:36,330 WITH A RECENT CODE? 33 00:01:36,330 --> 00:01:37,831 >> Man: A-A WHAT? 34 00:01:37,831 --> 00:01:40,201 >> Woman 2: RECENTLY FOR 19-- 35 00:01:40,201 --> 00:01:42,770 FOR 2008 OR NINE OR WHAT? 36 00:01:42,770 --> 00:01:43,871 >> Man: I MEAN, I GUESS, 37 00:01:43,871 --> 00:01:44,872 LIKE, RIGHT NOW. 38 00:01:44,872 --> 00:01:46,607 >> ( extension ringing ) 39 00:01:46,607 --> 00:01:47,608 >> Woman 3: HELLO, 40 00:01:47,608 --> 00:01:48,609 INTERNAL REVENUE. 41 00:01:48,609 --> 00:01:49,743 >> Man: YES, I WAS TRYING 42 00:01:49,743 --> 00:01:51,145 TO FIND OUT HOW MANY PAGES 43 00:01:51,145 --> 00:01:52,146 THE TAX CODE IS. 44 00:01:52,146 --> 00:01:53,381 >> Woman 3: I WOULDN'T KNOW. 45 00:01:53,381 --> 00:01:54,382 I HAVE NO IDEA. 46 00:01:54,382 --> 00:01:55,549 >> Man: WHAT ABOUT THE HEAD 47 00:01:55,549 --> 00:01:56,550 OF THE IRS, I MEAN, 48 00:01:56,550 --> 00:01:57,551 WOULD HE KNOW? 49 00:01:57,551 --> 00:01:58,619 >> Woman 3: WELL, I'M SURE 50 00:01:58,619 --> 00:01:59,687 HE WOULD, BUT YOU PROBABLY 51 00:01:59,687 --> 00:02:00,788 WON'T GET THROUGH TO HIM. 52 00:02:00,788 --> 00:02:02,256 >> Man: SO, IT'S KIND OF LIKE 53 00:02:02,256 --> 00:02:03,391 SENSITIVE INFORMATION 54 00:02:03,391 --> 00:02:04,392 THAT CAN'T BE-- 55 00:02:04,392 --> 00:02:05,493 >> Woman 3: NO, IT'S NOT 56 00:02:05,493 --> 00:02:06,560 SENSITIVE, IT'S JUST THAT 57 00:02:06,560 --> 00:02:07,561 NONE OF US KNOW. 58 00:02:07,561 --> 00:02:08,829 WE HAVE NO WAY OF TELLING YOU 59 00:02:08,829 --> 00:02:09,830 HOW MANY PAGES 60 00:02:09,830 --> 00:02:10,831 ARE IN THE TAX CODE. 61 00:02:10,831 --> 00:02:11,832 WE'RE LOOKING AT VOLUMES 62 00:02:11,832 --> 00:02:12,833 AND VOLUMES AND VOLUMES 63 00:02:12,833 --> 00:02:13,834 AND VOLUMES! 64 00:02:13,834 --> 00:02:15,403 THE ONLY THING I CAN SAY 65 00:02:15,403 --> 00:02:17,238 IS MAYBE, UM... 66 00:02:17,238 --> 00:02:19,440 YOUR LIBRARY WOULD HAVE 67 00:02:19,440 --> 00:02:20,441 THAT INFORMATION, 68 00:02:20,441 --> 00:02:21,575 BECAUSE WE DON'T HAVE IT 69 00:02:21,575 --> 00:02:23,311 ON OUR COMPUTER. 70 00:02:23,311 --> 00:02:24,312 >> * APRIL 15th 71 00:02:24,312 --> 00:02:25,313 * HAS COME AGAIN 72 00:02:25,313 --> 00:02:26,314 * IT'S TIME TO MAIL 73 00:02:26,314 --> 00:02:27,415 * YOUR RETURNS IN 74 00:02:27,415 --> 00:02:29,483 * TO SEE WHAT YOU HAVE TO PAY 75 00:02:29,483 --> 00:02:30,884 * OR WHAT'S COMING BACK 76 00:02:30,884 --> 00:02:32,586 ( fiddle plays ) 77 00:02:32,586 --> 00:02:33,721 * WELL, IT'S ALL PENCILS 78 00:02:33,721 --> 00:02:35,323 * AND CALCULATORS 79 00:02:35,323 --> 00:02:36,324 * FORMS, RECEIPTS 80 00:02:36,324 --> 00:02:37,625 * AN HOUR LATER 81 00:02:37,625 --> 00:02:39,327 * UNCLE SAM WILL GET 82 00:02:39,327 --> 00:02:42,196 * THAT OLD CHECK 83 00:02:42,196 --> 00:02:44,565 * WILL IT BE ENOUGH TO PAY 84 00:02:44,565 --> 00:02:45,899 * FOR ALL THE STUFF 85 00:02:45,899 --> 00:02:47,401 * WE GOT TODAY? 86 00:02:47,401 --> 00:02:49,203 * TODAY WE'RE NOT THE SAME 87 00:02:49,203 --> 00:02:52,206 * AS WE ONCE WERE 88 00:02:52,206 --> 00:02:54,608 * WARS AND ROADS AND EDUCATION 89 00:02:54,608 --> 00:02:55,943 * EVERYTHING THAT MAKES 90 00:02:55,943 --> 00:02:57,211 * A NATION 91 00:02:57,211 --> 00:02:58,212 * CAN'T BE PAID FOR 92 00:02:58,212 --> 00:03:00,648 * WITH A BROKEN CODE 93 00:03:00,648 --> 00:03:03,484 * WE GOTTA FIX THE SYSTEM 94 00:03:03,484 --> 00:03:05,886 * OR GO HOME 95 00:03:05,886 --> 00:03:08,289 * FIX THE SYSTEM 96 00:03:08,289 --> 00:03:11,225 * OR GO HOME 97 00:03:11,225 --> 00:03:12,560 * WE'LL CUT TAXES DOWN 98 00:03:12,560 --> 00:03:13,894 * OR RAISE THEM HIGH 99 00:03:13,894 --> 00:03:16,297 * EITHER WAY THE FLAG WILL FLY 100 00:03:16,297 --> 00:03:17,298 * THAT'S THE MESS 101 00:03:17,298 --> 00:03:20,734 * THAT WE'RE DEALING WITH 102 00:03:20,734 --> 00:03:22,236 * THE FARE IS FLAT 103 00:03:22,236 --> 00:03:23,537 * THE FLAT IS FAIR 104 00:03:23,537 --> 00:03:24,538 * UNCLE SAM'S DOWN 105 00:03:24,538 --> 00:03:25,773 * TO HIS UNDERWEAR 106 00:03:25,773 --> 00:03:26,840 * WHILE EVERYONE 107 00:03:26,840 --> 00:03:30,411 * PREACHES THEIR NEW PLAN 108 00:03:30,411 --> 00:03:31,512 * WELL, I DON'T CARE 109 00:03:31,512 --> 00:03:33,013 * IF YOU WROTE A BOOK 110 00:03:33,013 --> 00:03:34,014 * I DO THINK CONGRESS IS 111 00:03:34,014 --> 00:03:35,549 * FULL OF CROOKS 112 00:03:35,549 --> 00:03:37,251 * THAT DON'T CHANGE A THING 113 00:03:37,251 --> 00:03:39,253 * FOR UNCLE SAM 114 00:03:39,253 --> 00:03:41,955 * GOTTA FIX THE SYSTEM 115 00:03:41,955 --> 00:03:44,358 * OR GO HOME 116 00:03:44,358 --> 00:03:46,927 * GOTTA FIX THE SYSTEM 117 00:03:46,927 --> 00:03:49,663 * OR GO HOME 118 00:03:49,663 --> 00:03:52,032 * TIERED TAX, FLAT TAX, V.A.T. 119 00:03:52,032 --> 00:03:53,033 * WHICH PLAN IS 120 00:03:53,033 --> 00:03:54,668 * THE BEST OF THESE? 121 00:03:54,668 --> 00:03:59,407 * I CAN'T EVEN READ MY W2 122 00:03:59,407 --> 00:04:00,541 * EX-TAX, GAS TAX 123 00:04:00,541 --> 00:04:01,609 * GONNA NEED SOME EX-LAX 124 00:04:01,609 --> 00:04:02,610 * BABY BOOMERS ALL RETIRE 125 00:04:02,610 --> 00:04:03,611 * WHILE OUR DEBT 126 00:04:03,611 --> 00:04:04,512 * IS CLIMBING HIGHER 127 00:04:04,512 --> 00:04:05,546 * HERE COME MY CONSUMPTION BASE 128 00:04:05,546 --> 00:04:06,447 >> * WHERE MY MONEY? 129 00:04:06,447 --> 00:04:07,648 >> * MISPLACED SOMEWHERE 130 00:04:07,648 --> 00:04:08,649 * IN THE CODE 131 00:04:08,649 --> 00:04:10,551 * GOTTA FIX THE SYSTEM 132 00:04:10,551 --> 00:04:12,653 * OR GO HOME 133 00:04:12,653 --> 00:04:15,423 * GOTTA FIX THE SYSTEM 134 00:04:15,423 --> 00:04:18,426 * OR GO HOME 135 00:04:32,306 --> 00:04:34,375 >> Thorndike: THE PROBLEM 136 00:04:34,375 --> 00:04:36,610 WITH TAXES AND DEMOCRACY 137 00:04:36,610 --> 00:04:38,579 IS THAT TAXES ARE COMPLICATED 138 00:04:38,579 --> 00:04:41,582 AND TEDIOUS AND UNPLEASANT. 139 00:04:41,582 --> 00:04:42,583 PEOPLE DON'T WANT 140 00:04:42,583 --> 00:04:43,584 TO TALK ABOUT THEM. 141 00:04:43,584 --> 00:04:44,685 THEY DON'T WANT TO READ 142 00:04:44,685 --> 00:04:45,686 ABOUT THEM. 143 00:04:45,686 --> 00:04:47,321 THEY WANT TO COMPLAIN ABOUT 144 00:04:47,321 --> 00:04:48,656 THEM, BUT ACTUALLY LEARNING 145 00:04:48,656 --> 00:04:50,023 SOMETHING ABOUT THEM 146 00:04:50,023 --> 00:04:51,725 IS NO FUN FOR ANYBODY, 147 00:04:51,725 --> 00:04:53,861 AND YET THEY ARE SO IMPORTANT 148 00:04:53,861 --> 00:04:55,529 TO THE WAY THE GOVERNMENT WORKS, 149 00:04:55,529 --> 00:04:57,030 TO THE WAY THE ECONOMY 150 00:04:57,030 --> 00:04:58,899 FUNCTIONS, WE CAN'T AFFORD 151 00:04:58,899 --> 00:05:00,568 TO NOT PAY ATTENTION 152 00:05:00,568 --> 00:05:02,870 TO WHAT KIND OF TAXES WE HAVE. 153 00:05:02,870 --> 00:05:04,104 >> TROOPS OF AN ALIEN SOURCE 154 00:05:04,104 --> 00:05:05,506 ARE APPROACHING FROM THE SKY. 155 00:05:05,506 --> 00:05:06,507 RADIO CONTACT HAS BEEN 156 00:05:06,507 --> 00:05:07,508 ATTEMPTED, BUT CANNOT 157 00:05:07,508 --> 00:05:08,509 BE ESTABLISHED. 158 00:05:08,509 --> 00:05:09,777 INSTRUCTIONS ARE TO PREPARE 159 00:05:09,777 --> 00:05:10,778 FOR AN ATTACK 160 00:05:10,778 --> 00:05:12,346 BY AN UNKNOWN ENEMY. 161 00:05:12,346 --> 00:05:13,414 >> THE ONE OBLIGATION 162 00:05:13,414 --> 00:05:15,349 THAT EVERY CITIZEN HAS 163 00:05:15,349 --> 00:05:16,984 IS TO PAY THEIR TAXES, 164 00:05:16,984 --> 00:05:19,086 AND THERE'S 175 MILLION 165 00:05:19,086 --> 00:05:20,421 TAXPAYERS WHO INTERACT 166 00:05:20,421 --> 00:05:21,555 IN THE TAX SYSTEM, 167 00:05:21,555 --> 00:05:22,623 SO THAT'S THE ONE THING 168 00:05:22,623 --> 00:05:23,691 THAT THE FEDERAL GOVERNMENT HAS 169 00:05:23,691 --> 00:05:24,758 THAT EVERYBODY HAS A STAKE IN. 170 00:05:24,758 --> 00:05:26,026 >> THERE'S NOT AN AMERICAN 171 00:05:26,026 --> 00:05:27,495 BREATHING TODAY THAT'S NOT 172 00:05:27,495 --> 00:05:28,662 AFFECTED BY THE TAX CODE. 173 00:05:28,662 --> 00:05:30,564 IT AFFECTS HIS OR HER JOB, 174 00:05:30,564 --> 00:05:31,999 IT AFFECTS WHETHER OR NOT 175 00:05:31,999 --> 00:05:33,634 YOU CAN AFFORD TO, UH, 176 00:05:33,634 --> 00:05:34,768 BUY A CAR, 177 00:05:34,768 --> 00:05:36,370 WHETHER YOUR JOB'S GONNA 178 00:05:36,370 --> 00:05:37,638 STILL BE THERE NEXT YEAR... 179 00:05:37,638 --> 00:05:38,672 EVERYTHING A PERSON 180 00:05:38,672 --> 00:05:39,673 IN THIS COUNTRY DOES 181 00:05:39,673 --> 00:05:41,041 IS AFFECTED BY THE TAX CODE. 182 00:05:41,041 --> 00:05:42,776 >> I WILL SUCCEED IN CREATING 183 00:05:42,776 --> 00:05:45,112 A PERFECT BEING. 184 00:05:45,112 --> 00:05:46,547 >> WHEN YOU THINK ABOUT HOW 185 00:05:46,547 --> 00:05:47,548 THE TAX LAWS AFFECT 186 00:05:47,548 --> 00:05:48,782 EVERY ASPECT OF OUR LIVES, 187 00:05:48,782 --> 00:05:49,850 JUST ABOUT-- HOUSING 188 00:05:49,850 --> 00:05:51,919 AND HEALTHCARE AND EDUCATION 189 00:05:51,919 --> 00:05:53,020 AND FAMILY AND DIVORCE 190 00:05:53,020 --> 00:05:54,522 AND MARRIAGE, CHILDCARE... 191 00:05:54,522 --> 00:05:55,589 IT GOES ON AND ON. 192 00:05:55,589 --> 00:05:56,590 RETIREMENT. 193 00:05:56,590 --> 00:05:57,825 THERE'S SUCH A CONNECTION 194 00:05:57,825 --> 00:05:59,927 BETWEEN THE WAY WE TAX, 195 00:05:59,927 --> 00:06:02,162 WHOM WE TAX, WHOM WE DON'T, 196 00:06:02,162 --> 00:06:03,864 & THE WAY GOVERNMENT FUNCTIONS. 197 00:06:03,864 --> 00:06:05,065 >> HEY, WHO DO YOU THINK 198 00:06:05,065 --> 00:06:06,400 YOU ARE, ANYWAY? 199 00:06:06,400 --> 00:06:07,067 >> ANSWER ME, 200 00:06:07,067 --> 00:06:08,068 OR I'LL DESTROY YOU! 201 00:06:08,068 --> 00:06:09,069 >> YOU'RE UP AGAINST 202 00:06:09,069 --> 00:06:10,538 THE FUNDAMENTAL LIMITATION 203 00:06:10,538 --> 00:06:11,805 THAT THE TAX CODE HAS BECOME 204 00:06:11,805 --> 00:06:12,806 A REAL MONSTROSITY 205 00:06:12,806 --> 00:06:14,074 IN TERMS OF THE COMPLEXITY 206 00:06:14,074 --> 00:06:15,075 OF THE BURDEN. 207 00:06:15,075 --> 00:06:16,444 >> Linder: WE HAVE CREATED 208 00:06:16,444 --> 00:06:17,878 A MONSTER... 209 00:06:20,681 --> 00:06:21,815 THAT SEEMS NOT TO BE ABLE 210 00:06:21,815 --> 00:06:22,816 TO BE CONTROLLED. 211 00:06:22,816 --> 00:06:25,519 >> ( screaming ) 212 00:06:25,519 --> 00:06:26,520 >> YOU ADD IN ALL OF 213 00:06:26,520 --> 00:06:27,655 THE CRAZY POLITICAL 214 00:06:27,655 --> 00:06:28,889 ACTION COMMITTEES, 215 00:06:28,889 --> 00:06:30,424 AND EVERYBODY HAS AN AGENDA, 216 00:06:30,424 --> 00:06:31,425 AND THE LOBBYISTS, 217 00:06:31,425 --> 00:06:33,093 AND, YOU KNOW, YOU HAVE A MESS. 218 00:06:33,093 --> 00:06:34,628 >> ( screaming ) 219 00:06:34,628 --> 00:06:35,729 >> IN THE LAST 20 YEARS, 220 00:06:35,729 --> 00:06:37,130 I THINK WE'VE AMENDED THE THING 221 00:06:37,130 --> 00:06:38,131 14,000 TIMES, ADDED 222 00:06:38,131 --> 00:06:40,601 THREE MILLION NEW WORDS. 223 00:06:40,601 --> 00:06:43,604 >> AAH! JULIE! AAH! 224 00:06:43,604 --> 00:06:44,938 >> EVEN THOSE WHO WOULD LIKE 225 00:06:44,938 --> 00:06:45,939 TO MAKE IT EFFICIENT 226 00:06:45,939 --> 00:06:46,940 AND MAKE IT WORK, 227 00:06:46,940 --> 00:06:47,975 IT'S STILL A MONSTER. 228 00:06:47,975 --> 00:06:49,977 NOBODY UNDERSTANDS IT. 229 00:06:49,977 --> 00:06:50,844 >> EVERY TIME YOU ADD 230 00:06:50,844 --> 00:06:51,712 A NEW PROVISION-- 231 00:06:51,712 --> 00:06:52,980 AND THERE'S BEEN 14,000 NEW ONES 232 00:06:52,980 --> 00:06:53,981 IN THE LAST 20 YEARS-- 233 00:06:53,981 --> 00:06:55,015 YOU HAVE TO PUT SOMETHING 234 00:06:55,015 --> 00:06:56,116 IN A FORM TO COVER THAT. 235 00:06:56,116 --> 00:06:57,751 >> Shaviro: THE AVERAGE AMERICAN 236 00:06:57,751 --> 00:06:58,919 SPENDS, I THINK, 57 HOURS 237 00:06:58,919 --> 00:07:00,654 WORKING ON THEIR TAXES. 238 00:07:00,654 --> 00:07:02,022 MANY OF THEM HIRE ACCOUNTANTS 239 00:07:02,022 --> 00:07:03,023 BECAUSE IT'S BECOME 240 00:07:03,023 --> 00:07:04,525 SO HORRIBLY COMPLICATED. 241 00:07:04,525 --> 00:07:06,627 >> Man: PERHAPS THE 1st QUESTION 242 00:07:06,627 --> 00:07:08,128 YOU SHOULD ASK YOURSELF IS, 243 00:07:08,128 --> 00:07:09,129 "DO I REALLY ENJOY 244 00:07:09,129 --> 00:07:10,464 DOING FIGURES?" 245 00:07:10,464 --> 00:07:11,565 IF YOU HAVE A DISTASTE 246 00:07:11,565 --> 00:07:12,733 FOR MATHEMATICS, 247 00:07:12,733 --> 00:07:14,001 IS IS NOT THE WORK FOR YOU. 248 00:07:14,001 --> 00:07:15,135 >> IT IS SO COMPLICATED, 249 00:07:15,135 --> 00:07:16,136 YOU HAVE NO IDEA 250 00:07:16,136 --> 00:07:17,137 WHETHER OR NOT 251 00:07:17,137 --> 00:07:18,506 YOU'VE DONE IT RIGHT OR NOT. 252 00:07:18,506 --> 00:07:20,040 >> TAXES. BUDGETS. 253 00:07:20,040 --> 00:07:22,009 PAPERWORK POLLUTION. 254 00:07:22,009 --> 00:07:23,143 THERE'S JUST NO GETTING 255 00:07:23,143 --> 00:07:24,745 AROUND IT. 256 00:07:24,745 --> 00:07:26,113 >> WHETHER IT'S AN INDIVIDUAL 257 00:07:26,113 --> 00:07:27,681 OR A SMALL BUSINESS OPERATOR, 258 00:07:27,681 --> 00:07:28,682 HE CAN CALL THE IRS 259 00:07:28,682 --> 00:07:29,783 THREE DIFFERENT TIMES 260 00:07:29,783 --> 00:07:30,851 AND GET THREE ANSWERS 261 00:07:30,851 --> 00:07:31,985 ABOUT THE SAME QUESTION. 262 00:07:31,985 --> 00:07:33,020 IT'S SO COMPLICATED 263 00:07:33,020 --> 00:07:34,588 THE IRS DOESN'T UNDERSTAND IT. 264 00:07:34,588 --> 00:07:35,989 >> WE WANT THE TAXPAYERS TO KNOW 265 00:07:35,989 --> 00:07:37,124 THAT WE'RE HERE TO HELP. 266 00:07:37,124 --> 00:07:39,026 AFTER ALL, THEY ARE THE ONES 267 00:07:39,026 --> 00:07:41,161 THAT WE REALLY WORK FOR. 268 00:07:41,161 --> 00:07:42,996 >> THE IRS, CONTRARY 269 00:07:42,996 --> 00:07:44,231 TO WHAT MOST PEOPLE THINK, 270 00:07:44,231 --> 00:07:45,633 REALLY HAS NOTHING TO SAY 271 00:07:45,633 --> 00:07:46,800 ABOUT WHAT THE TAX CODE IS. 272 00:07:46,800 --> 00:07:48,502 IT'S JUST GIVEN THE TAX CODE 273 00:07:48,502 --> 00:07:49,503 THAT'S PASSED BY THE CONGRESS 274 00:07:49,503 --> 00:07:50,504 AND THE ADMINISTRATION. 275 00:07:50,504 --> 00:07:51,171 IT'S THEN ADMINISTERED. 276 00:07:51,171 --> 00:07:52,640 >> NONE OF US EVER HESITATES 277 00:07:52,640 --> 00:07:53,741 TO CRITICIZE CONGRESS 278 00:07:53,741 --> 00:07:54,842 AT EVERY OPPORTUNITY, 279 00:07:54,842 --> 00:07:56,610 BUT HOW MANY EVER STOP TO THINK 280 00:07:56,610 --> 00:07:57,845 ABOUT THE BROAD POWERS 281 00:07:57,845 --> 00:07:59,513 OF CONGRESS AND HOW THESE POWERS 282 00:07:59,513 --> 00:08:01,148 AFFECT EVERY ONE OF US? 283 00:08:01,148 --> 00:08:02,616 >> THE WAY THE CONGRESS 284 00:08:02,616 --> 00:08:03,884 OF THE UNITED STATES WORKS, 285 00:08:03,884 --> 00:08:05,018 THINGS HAVE TO BE 286 00:08:05,018 --> 00:08:07,788 IN A JUST TOTAL... 287 00:08:07,788 --> 00:08:09,523 SMACK-AGAINST-THE-WALL CRISIS 288 00:08:09,523 --> 00:08:11,659 FOR ANYTHING TO GET FIXED. 289 00:08:11,659 --> 00:08:12,660 >> ( screams ) 290 00:08:12,660 --> 00:08:13,661 >> THE TAX SYSTEM IS 291 00:08:13,661 --> 00:08:14,862 SO COMPLICATED THAT A LOT 292 00:08:14,862 --> 00:08:16,129 OF PEOPLE FEEL LIKE THEY'RE 293 00:08:16,129 --> 00:08:17,665 NOT GETTING THEIR FAIR SHARE 294 00:08:17,665 --> 00:08:18,932 OF ALL THE TAX BREAKS. 295 00:08:18,932 --> 00:08:20,167 >> ALMOST EVERYBODY FEELS 296 00:08:20,167 --> 00:08:21,168 THAT THE OTHER GUY 297 00:08:21,168 --> 00:08:23,203 IS ESCAPING TAXES. 298 00:08:23,203 --> 00:08:25,072 >> AND AS THEY BELIEVE 299 00:08:25,072 --> 00:08:27,074 INCREASINGLY THAT IT'S NOT FAIR, 300 00:08:27,074 --> 00:08:28,075 THAT REFLECTS ON ALL 301 00:08:28,075 --> 00:08:29,309 OF GOVERNMENT. 302 00:08:29,309 --> 00:08:30,544 >> ONE RESULT IS 303 00:08:30,544 --> 00:08:32,613 THE APRIL 15th PHENOMENON. 304 00:08:32,613 --> 00:08:34,214 THIS ALIEN FORCE, YOU KNOW, 305 00:08:34,214 --> 00:08:35,916 FROM MARS OR SOMETHING, 306 00:08:35,916 --> 00:08:37,685 IS TAKING AWAY 307 00:08:37,685 --> 00:08:38,952 YOUR HARD-EARNED MONEY, 308 00:08:38,952 --> 00:08:40,220 NOT "I'M PARTICIPATING 309 00:08:40,220 --> 00:08:41,221 IN A COMMUNITY 310 00:08:41,221 --> 00:08:43,624 WHERE WE MADE COMMON DECISIONS, 311 00:08:43,624 --> 00:08:45,793 AND I'M GLAD TO BE ABLE 312 00:08:45,793 --> 00:08:46,827 TO PARTICIPATE IN IT," 313 00:08:46,827 --> 00:08:47,828 WHICH IS THE WAY 314 00:08:47,828 --> 00:08:49,096 A HEALTHY SOCIETY WOULD WORK. 315 00:08:49,096 --> 00:08:50,097 >> I DON'T THINK IT'S 316 00:08:50,097 --> 00:08:51,198 AN EXAGGERATION TO SAY THAT 317 00:08:51,198 --> 00:08:52,600 OUR DEMOCRACY AS WE'VE KNOWN IT 318 00:08:52,600 --> 00:08:53,601 IS AT STAKE. 319 00:08:53,601 --> 00:08:54,602 >> WE LIVE LIKE PARTS 320 00:08:54,602 --> 00:08:55,603 OF A MACHINE. 321 00:08:55,603 --> 00:08:56,804 WE DON'T KNOW OUR FATHERS 322 00:08:56,804 --> 00:08:57,938 OR MOTHERS, WE'RE RAISED 323 00:08:57,938 --> 00:08:58,939 IN CUBICLES, THE SICK 324 00:08:58,939 --> 00:08:59,973 AND THE OLD ARE PUT TO DEATH... 325 00:08:59,973 --> 00:09:01,975 >> IT IS THE ONE AND ONLY WAY 326 00:09:01,975 --> 00:09:04,144 TO MAINTAIN THE SUPREME RACE. 327 00:09:04,144 --> 00:09:05,212 HAVE YOU FORGOTTEN-- 328 00:09:05,212 --> 00:09:08,048 >> OUR PEOPLE HAVE FORGOTTEN. 329 00:09:08,048 --> 00:09:10,250 THEY HAVE BEEN MADE TO FORGET. 330 00:09:10,250 --> 00:09:11,351 >> IF WE BELIEVE THAT WE 331 00:09:11,351 --> 00:09:12,352 OUGHT TO HAVE, UH, 332 00:09:12,352 --> 00:09:14,688 FEDERAL ASSISTANCE FOR, 333 00:09:14,688 --> 00:09:16,123 NOT JUST HURRICANES AND FLOODS, 334 00:09:16,123 --> 00:09:17,758 YOU KNOW, BUT HIGHWAYS 335 00:09:17,758 --> 00:09:19,760 AND OUR COURT SYSTEM 336 00:09:19,760 --> 00:09:21,228 AND POLICE ON THE STREET 337 00:09:21,228 --> 00:09:22,830 AND OUR EDUCATION SYSTEM 338 00:09:22,830 --> 00:09:23,864 AND OUR HEALTH SYSTEM 339 00:09:23,864 --> 00:09:24,865 AND THE FOOD 340 00:09:24,865 --> 00:09:25,999 AND DRUG ADMINISTRATION... 341 00:09:25,999 --> 00:09:27,067 IF WE WANT A SECURITIES 342 00:09:27,067 --> 00:09:28,135 AND EXCHANGE COMMISSION, 343 00:09:28,135 --> 00:09:29,136 IF WE WANT A FEDERAL 344 00:09:29,136 --> 00:09:30,137 TRADE COMMISSION, 345 00:09:30,137 --> 00:09:31,371 IF WE WANT TO HAVE THE THINGS 346 00:09:31,371 --> 00:09:32,640 THAT WE'VE GROWN USED TO, 347 00:09:32,640 --> 00:09:33,907 WHICH MAY BE EXCESSIVE NOW. 348 00:09:33,907 --> 00:09:35,142 I MEAN, SOME OF THEM MAY BE, 349 00:09:35,142 --> 00:09:36,677 AND OTHERS WE WANT TO LOOK AT. 350 00:09:36,677 --> 00:09:37,911 BUT IF WE WANT GOVERNMENT, 351 00:09:37,911 --> 00:09:38,979 FEDERAL GOVERNMENT, 352 00:09:38,979 --> 00:09:40,948 TO LOOK AFTER THE PUBLIC 353 00:09:40,948 --> 00:09:41,949 IN LOTS OF WAYS, 354 00:09:41,949 --> 00:09:42,950 'CAUSE SOCIETY IS 355 00:09:42,950 --> 00:09:44,284 SO COMPLICATED, WE WILL NOT 356 00:09:44,284 --> 00:09:46,119 BE ABLE TO AFFORD THAT. 357 00:09:46,119 --> 00:09:47,254 >> THE CURRENT TAX SYSTEM 358 00:09:47,254 --> 00:09:48,789 JUST ISN'T UP TO THAT CHALLENGE. 359 00:09:48,789 --> 00:09:50,157 WE'RE GONNA NEED AN EFFICIENT 360 00:09:50,157 --> 00:09:51,291 WAY OF RAISING REVENUE, 361 00:09:51,291 --> 00:09:52,292 AND ONE THAT IS FAIR 362 00:09:52,292 --> 00:09:53,293 AND THAT PEOPLE 363 00:09:53,293 --> 00:09:54,294 PERCEIVE TO BE FAIR. 364 00:09:54,294 --> 00:09:55,295 >> WE FACE PROBLEMS 365 00:09:55,295 --> 00:09:56,730 IN THIS COUNTRY RIGHT NOW, 366 00:09:56,730 --> 00:09:57,731 FISCAL PROBLEMS 367 00:09:57,731 --> 00:09:58,732 OVER THE LONG TERM 368 00:09:58,732 --> 00:09:59,900 THAT ARE SO SERIOUS 369 00:09:59,900 --> 00:10:01,001 THAT WE SHOULD ALL FEAR 370 00:10:01,001 --> 00:10:02,369 FOR THE SAFETY OF OUR CHILDREN 371 00:10:02,369 --> 00:10:03,937 DOWN THE ROAD. 372 00:10:03,937 --> 00:10:05,272 AMERICANS CANNOT IGNORE 373 00:10:05,272 --> 00:10:06,740 THAT THEY'RE GONNA HAVE 374 00:10:06,740 --> 00:10:07,941 TO JUST COWBOY UP 375 00:10:07,941 --> 00:10:10,043 AND DEAL WITH THIS NASTY, 376 00:10:10,043 --> 00:10:12,646 BORING, TEDIOUS TOPIC, 377 00:10:12,646 --> 00:10:14,648 UH, BECAUSE IT'S JUST TOO-- 378 00:10:14,648 --> 00:10:16,984 TOO IMPORTANT TO IGNORE. 379 00:11:06,734 --> 00:11:08,101 OBJECTIONS TO TAXATION 380 00:11:08,101 --> 00:11:09,102 ARE FRAMED IN TERMS 381 00:11:09,102 --> 00:11:11,038 OF WHY THIS IS UNFAIR TO ME, 382 00:11:11,038 --> 00:11:12,039 WHY THIS IS UNFAIR 383 00:11:12,039 --> 00:11:13,040 TO PEOPLE LIKE ME, 384 00:11:13,040 --> 00:11:14,274 WHY IT TREATS OTHER PEOPLE 385 00:11:14,274 --> 00:11:16,143 DIFFERENTLY THAN IT TREATS ME, 386 00:11:16,143 --> 00:11:18,245 AND I THINK THAT THAT OUTRAGE 387 00:11:18,245 --> 00:11:19,246 THAT CAN DEVELOP 388 00:11:19,246 --> 00:11:20,480 AROUND SPECIAL TREATMENT 389 00:11:20,480 --> 00:11:21,982 AND FAVORITISM, UH, 390 00:11:21,982 --> 00:11:23,851 IS A KEY TO UNDERSTANDING 391 00:11:23,851 --> 00:11:26,119 AMERICAN TAX HISTORY. 392 00:11:30,958 --> 00:11:31,959 THE U.S. WAS BORN 393 00:11:31,959 --> 00:11:32,960 OF A TAX REVOLT, 394 00:11:32,960 --> 00:11:33,961 BUT IT WAS ACTUALLY 395 00:11:33,961 --> 00:11:35,896 NOT A REVOLT AGAINST HIGH TAXES. 396 00:11:35,896 --> 00:11:36,897 THE BOSTON TEA PARTY 397 00:11:36,897 --> 00:11:37,898 WAS A REVOLT AGAINST 398 00:11:37,898 --> 00:11:38,899 TAX LOOPHOLES. 399 00:11:38,899 --> 00:11:40,968 THE BRITISH HAD PASSED A LAW 400 00:11:40,968 --> 00:11:42,002 THAT GRANTED CERTAIN 401 00:11:42,002 --> 00:11:43,003 SPECIAL FAVORS 402 00:11:43,003 --> 00:11:44,004 TO A FEW MERCHANTS 403 00:11:44,004 --> 00:11:45,272 WHO WERE SELLING TEA, 404 00:11:45,272 --> 00:11:46,406 AND AMERICAN MERCHANTS 405 00:11:46,406 --> 00:11:47,507 RESENTED THE MONOPOLY 406 00:11:47,507 --> 00:11:48,942 THAT HAD BEEN GRANTED HERE 407 00:11:48,942 --> 00:11:50,043 AND THE TAX EXEMPTIONS 408 00:11:50,043 --> 00:11:51,411 THAT HAD BEEN GRANTED, 409 00:11:51,411 --> 00:11:52,445 AND THEIR OBJECTIONS 410 00:11:52,445 --> 00:11:53,446 TO THE BRITISH TAX 411 00:11:53,446 --> 00:11:54,447 WERE REALLY DIRECTED 412 00:11:54,447 --> 00:11:55,448 AT THE LOOPHOLES 413 00:11:55,448 --> 00:11:56,884 THAT WERE A PART OF THAT TAX, 414 00:11:56,884 --> 00:11:57,885 NOT AT THE TAX ITSELF. 415 00:11:57,885 --> 00:11:59,519 IT'S IMPORTANT BECAUSE IT IS 416 00:11:59,519 --> 00:12:01,088 AMERICANS' FIRST EXPERIENCE 417 00:12:01,088 --> 00:12:03,290 WITH REALLY, UH, THROWING DOWN-- 418 00:12:03,290 --> 00:12:05,225 WELL, THROWING THE TEA 419 00:12:05,225 --> 00:12:06,226 INTO THE HARBOR-- 420 00:12:06,226 --> 00:12:07,227 BUT SIMPLY TO SAY 421 00:12:07,227 --> 00:12:08,395 WE ARE NOT GONNA STAND FOR 422 00:12:08,395 --> 00:12:09,797 THIS KIND OF SPECIAL TREATMENT. 423 00:12:09,797 --> 00:12:10,864 WE ARE NOT GONNA STAND 424 00:12:10,864 --> 00:12:12,099 FOR TAXES THAT DON'T TREAT 425 00:12:12,099 --> 00:12:13,300 EVERYONE EQUALLY. 426 00:12:13,300 --> 00:12:14,835 THAT'S THE KIND OF TAX REVOLT 427 00:12:14,835 --> 00:12:16,169 IT WAS, AND THERE ARE MORE 428 00:12:16,169 --> 00:12:17,237 TAX REVOLTS LIKE THAT 429 00:12:17,237 --> 00:12:18,238 OVER THE COURSE 430 00:12:18,238 --> 00:12:19,272 OF AMERICAN HISTORY. 431 00:12:19,272 --> 00:12:21,942 >> ( cannon fires ) 432 00:12:21,942 --> 00:12:23,176 >> MANY OF THE ARGUMENTS 433 00:12:23,176 --> 00:12:24,177 OVER TAXATION 434 00:12:24,177 --> 00:12:25,278 IN THE EARLY REPUBLIC, 435 00:12:25,278 --> 00:12:26,279 IN THE EARLY YEARS 436 00:12:26,279 --> 00:12:27,414 AFTER THE CONSTITUTION 437 00:12:27,414 --> 00:12:28,381 WAS RATIFIED, 438 00:12:28,381 --> 00:12:29,416 WERE ABOUT TAXATION. 439 00:12:29,416 --> 00:12:32,019 THOMAS JEFFERSON'S PARTY 440 00:12:32,019 --> 00:12:33,120 GENERALLY BELIEVED 441 00:12:33,120 --> 00:12:34,454 THAT THE FEDERAL GOVERNMENT 442 00:12:34,454 --> 00:12:35,555 SHOULD CONFINE ITSELF 443 00:12:35,555 --> 00:12:37,090 TO IMPORT DUTIES 444 00:12:37,090 --> 00:12:38,091 AND FUND ITSELF 445 00:12:38,091 --> 00:12:39,392 THROUGH A TARIFF. 446 00:12:39,392 --> 00:12:43,063 THE FEDERALISTS INSISTED 447 00:12:43,063 --> 00:12:44,264 ON USING INTERNAL TAXES, 448 00:12:44,264 --> 00:12:46,333 AS WELL, AND THAT PRODUCED 449 00:12:46,333 --> 00:12:47,801 QUITE A BIT OF CONFLICT, 450 00:12:47,801 --> 00:12:50,070 INCLUDING THE WHISKEY REBELLION, 451 00:12:50,070 --> 00:12:51,071 AN INTERNAL TAX 452 00:12:51,071 --> 00:12:53,340 MORE POORLY TOLERATED 453 00:12:53,340 --> 00:12:54,441 IN THIS PERIOD OF TIME. 454 00:12:54,441 --> 00:12:55,843 IT OUTRAGED FARMERS, 455 00:12:55,843 --> 00:12:57,577 WHO WERE DEPENDING ON-- 456 00:12:57,577 --> 00:12:59,079 ON THE PRODUCTION OF WHISKEY 457 00:12:59,079 --> 00:13:00,080 TO MAKE THEIR LIVING 458 00:13:00,080 --> 00:13:01,882 AND WHO FELT THAT IT WAS UNFAIR 459 00:13:01,882 --> 00:13:03,583 TO IMPOSE A TAX ON THEIR PRODUCT 460 00:13:03,583 --> 00:13:05,018 SPECIFICALLY. 461 00:13:05,018 --> 00:13:06,453 IT POSED A SIGNIFICANT THREAT 462 00:13:06,453 --> 00:13:07,921 TO THE FEDERAL GOVERNMENT, 463 00:13:07,921 --> 00:13:09,156 BUT IN MANY RESPECTS GAVE 464 00:13:09,156 --> 00:13:10,290 THE FEDERAL GOVERNMENT 465 00:13:10,290 --> 00:13:11,892 AN OPPORTUNITY TO DEMONSTRATE 466 00:13:11,892 --> 00:13:12,893 FOR THE FIRST TIME 467 00:13:12,893 --> 00:13:13,894 THAT IT WAS ABLE 468 00:13:13,894 --> 00:13:14,995 TO TAKE CARE OF ITSELF. 469 00:13:14,995 --> 00:13:16,263 THE FEDERAL GOVERNMENT SENT 470 00:13:16,263 --> 00:13:17,998 TROOPS INTO WESTERN PENNSYLVANIA 471 00:13:17,998 --> 00:13:19,266 AND QUELLED THE REBELLION 472 00:13:19,266 --> 00:13:21,001 AND ESTABLISHED 473 00:13:21,001 --> 00:13:22,335 THAT THE FEDERAL GOVERNMENT 474 00:13:22,335 --> 00:13:23,971 NOT ONLY HAD THE LEGAL AUTHORITY 475 00:13:23,971 --> 00:13:25,105 TO IMPOSE THESE TAXES, 476 00:13:25,105 --> 00:13:26,139 BUT ALSO HAD THE POWER 477 00:13:26,139 --> 00:13:28,108 TO IMPOSE THEM, AS WELL. 478 00:13:28,108 --> 00:13:31,544 >> ** ( "Yankee Doodle Dandy" ) 479 00:13:35,849 --> 00:13:36,984 >> Fox: DURING THE CIVIL WAR, 480 00:13:36,984 --> 00:13:38,852 LINCOLN KNEW THAT THE GOVERNMENT 481 00:13:38,852 --> 00:13:39,853 NEEDED REVENUE, 482 00:13:39,853 --> 00:13:41,154 AND SO THEY ACTUALLY ADOPTED 483 00:13:41,154 --> 00:13:42,555 THE FIRST FEDERAL INCOME TAX. 484 00:13:42,555 --> 00:13:44,091 >> ONE OF THE STRIKING THINGS 485 00:13:44,091 --> 00:13:45,392 ABOUT THIS WARTIME TAX 486 00:13:45,392 --> 00:13:46,559 WAS THAT IT WAS CONDUCTED 487 00:13:46,559 --> 00:13:48,261 IN PUBLIC, AND ANYONE 488 00:13:48,261 --> 00:13:49,529 COULD GO AND ASK TO SEE THEM. 489 00:13:49,529 --> 00:13:50,931 THEY COULD GO TO THE LOCAL 490 00:13:50,931 --> 00:13:52,199 COLLECTOR'S OFFICE AND SAY, 491 00:13:52,199 --> 00:13:53,200 "I WANT TO SEE 492 00:13:53,200 --> 00:13:54,234 MY NEIGHBOR'S TAX RETURN." 493 00:13:54,234 --> 00:13:55,502 THIS WAS ABOUT AS UNPOPULAR 494 00:13:55,502 --> 00:13:57,437 AS YOU WOULD EXPECT IT TO BE. 495 00:13:57,437 --> 00:13:58,972 PEOPLE REALLY FELT LIKE THIS 496 00:13:58,972 --> 00:13:59,973 WAS AN INVASION 497 00:13:59,973 --> 00:14:00,974 ON THEIR PRIVACY. 498 00:14:00,974 --> 00:14:02,109 THEY DIDN'T WANT PEOPLE 499 00:14:02,109 --> 00:14:03,110 PAWING AROUND 500 00:14:03,110 --> 00:14:04,377 IN THEIR PERSONAL AFFAIRS, 501 00:14:04,377 --> 00:14:05,578 BUT THERE WERE MANY PEOPLE 502 00:14:05,578 --> 00:14:06,579 AT THE TIME, INCLUDING 503 00:14:06,579 --> 00:14:07,580 MANY POLITICAL LEADERS, 504 00:14:07,580 --> 00:14:08,648 WHO FELT THAT THIS WAS 505 00:14:08,648 --> 00:14:09,649 A VITAL COMPONENT 506 00:14:09,649 --> 00:14:10,650 OF THE INCOME TAX, 507 00:14:10,650 --> 00:14:11,651 BECAUSE IT ENSURED 508 00:14:11,651 --> 00:14:12,953 BETTER COMPLIANCE. 509 00:14:12,953 --> 00:14:14,154 IF YOUR NEIGHBORS COULD GO IN 510 00:14:14,154 --> 00:14:15,388 AND LOOK AT YOUR TAX RETURNS 511 00:14:15,388 --> 00:14:16,523 AND SEE THAT YOU WEREN'T 512 00:14:16,523 --> 00:14:18,058 REPORTING A REASONABLE AMOUNT 513 00:14:18,058 --> 00:14:19,292 OF MONEY, THEY COULD REPORT 514 00:14:19,292 --> 00:14:20,560 YOU TO THE TAX COLLECTORS, 515 00:14:20,560 --> 00:14:21,561 AND THEY MIGHT GO 516 00:14:21,561 --> 00:14:23,196 AND INVESTIGATE, 517 00:14:23,196 --> 00:14:26,433 WHICH THEY HAD THE RIGHT TO DO. 518 00:14:26,433 --> 00:14:28,068 THE SOUTH WAS MUCH MORE 519 00:14:28,068 --> 00:14:29,169 RELUCTANT TO IMPOSE 520 00:14:29,169 --> 00:14:31,138 HEAVY TAXES, AND RELIED 521 00:14:31,138 --> 00:14:32,272 MUCH MORE THAN THE NORTH 522 00:14:32,272 --> 00:14:34,207 ON LOANS, ON PRINTING 523 00:14:34,207 --> 00:14:35,909 PAPER MONEY... 524 00:14:35,909 --> 00:14:38,278 ALSO ON JUST CONFISCATING 525 00:14:38,278 --> 00:14:39,379 GOODS THAT THEY NEEDED 526 00:14:39,379 --> 00:14:40,380 FOR THEIR-- 527 00:14:40,380 --> 00:14:41,448 FOR FIGHTING THE WAR, 528 00:14:41,448 --> 00:14:42,449 AND THE RESULTS WERE 529 00:14:42,449 --> 00:14:43,616 FINANCIALLY DISASTROUS 530 00:14:43,616 --> 00:14:44,684 FOR THE CONFEDERACY. 531 00:14:44,684 --> 00:14:46,286 THEY NEVER WERE ABLE TO DEVELOP 532 00:14:46,286 --> 00:14:47,287 A ROBUST TAX SYSTEM, 533 00:14:47,287 --> 00:14:48,288 AND I THINK, IN PART, 534 00:14:48,288 --> 00:14:49,689 THIS IS A-- WAS A CULTURAL 535 00:14:49,689 --> 00:14:51,624 RESISTANCE TO TAX POLICY, 536 00:14:51,624 --> 00:14:53,026 ESPECIALLY IN THE EARLY YEARS 537 00:14:53,026 --> 00:14:54,027 OF THE WAR. 538 00:14:54,027 --> 00:14:55,028 >> WELL, NO ONE LOVED 539 00:14:55,028 --> 00:14:56,429 THE INCOME TAX IN THE CIVIL WAR. 540 00:14:56,429 --> 00:14:57,430 IT WAS A NECESSITY, 541 00:14:57,430 --> 00:14:59,266 LIKE ALL TAXES ARE, 542 00:14:59,266 --> 00:15:01,935 BUT IT WAS TREMENDOUSLY HELPFUL 543 00:15:01,935 --> 00:15:04,004 IN ENABLING THE UNION 544 00:15:04,004 --> 00:15:05,372 TO PAY FOR THE WAR 545 00:15:05,372 --> 00:15:08,141 WITHOUT ENTIRELY RESORTING 546 00:15:08,141 --> 00:15:09,609 TO BORROWING, AND YOU COULD 547 00:15:09,609 --> 00:15:11,211 ARGUE THAT THE INCOME TAX 548 00:15:11,211 --> 00:15:12,479 REALLY HELPED THE UNION 549 00:15:12,479 --> 00:15:14,347 WIN THE WAR. 550 00:15:14,347 --> 00:15:16,383 >> SURRENDER... 551 00:15:16,383 --> 00:15:20,053 MY POOR ARMY. 552 00:15:20,053 --> 00:15:21,154 >> Weisman: BUT AS SOON 553 00:15:21,154 --> 00:15:22,155 AS THE WAR WAS OVER, 554 00:15:22,155 --> 00:15:23,523 EVERYONE WANTED TO REPEAL IT. 555 00:15:23,523 --> 00:15:26,359 IT WAS A, UH, DISTASTEFUL TAX, 556 00:15:26,359 --> 00:15:27,961 AND THEY REPEALED IT 557 00:15:27,961 --> 00:15:29,596 STEP BY STEP. 558 00:15:29,596 --> 00:15:30,597 BUT AS THEY DID SO, 559 00:15:30,597 --> 00:15:32,432 STARTING IN THE 1860s 560 00:15:32,432 --> 00:15:34,467 AND THEN THE 1870s, 561 00:15:34,467 --> 00:15:36,203 UH, THERE WERE WARNINGS, 562 00:15:36,203 --> 00:15:37,370 EVEN FROM REPUBLICANS, 563 00:15:37,370 --> 00:15:39,372 WHO SAID, "THIS TAX 564 00:15:39,372 --> 00:15:40,373 WILL COME BACK. 565 00:15:40,373 --> 00:15:41,474 WE'LL HAVE TO TURN BACK 566 00:15:41,474 --> 00:15:42,475 TO BACK TO IT AGAIN, 567 00:15:42,475 --> 00:15:43,743 EITHER BECAUSE OF A CRISIS, 568 00:15:43,743 --> 00:15:46,980 UH, IN OUR-- A MILITARY CRISIS, 569 00:15:46,980 --> 00:15:48,315 A WAR, OR BECAUSE OF 570 00:15:48,315 --> 00:15:49,482 AN ECONOMIC CRISIS, 571 00:15:49,482 --> 00:15:50,650 AND THIS IS THE TAX 572 00:15:50,650 --> 00:15:52,752 THAT AMERICANS ARE GONNA HAVE 573 00:15:52,752 --> 00:15:54,687 TO GET USED TO IN THE FUTURE." 574 00:15:54,687 --> 00:15:58,391 >> ( out-of-tune piano playing ) 575 00:16:01,128 --> 00:16:02,129 >> WHAT HAPPENED 576 00:16:02,129 --> 00:16:03,363 AT THE TURN OF THE CENTURY 577 00:16:03,363 --> 00:16:04,364 WAS THE EMERGENCE 578 00:16:04,364 --> 00:16:05,365 OF A MIDDLE CLASS 579 00:16:05,365 --> 00:16:07,200 AND AN UPPER MIDDLE CLASS 580 00:16:07,200 --> 00:16:08,401 OF PROFESSIONALS. 581 00:16:08,401 --> 00:16:10,370 THE MAN WHO SYMBOLIZED THEM 582 00:16:10,370 --> 00:16:12,439 WAS, UH, TEDDY ROOSEVELT, 583 00:16:12,439 --> 00:16:15,275 AND WHO EMBRACED THE INCOME TAX, 584 00:16:15,275 --> 00:16:16,276 ALTHOUGH HE DIDN'T 585 00:16:16,276 --> 00:16:17,677 GET IT PASSED, BUT HE EMBRACED 586 00:16:17,677 --> 00:16:20,247 IT DURING HIS PRESIDENCY. 587 00:16:20,247 --> 00:16:21,348 >> Thorndike: THERE IS 588 00:16:21,348 --> 00:16:23,183 A CONTINUAL AND FAIRLY SPIRITED 589 00:16:23,183 --> 00:16:24,784 DEBATE ABOUT HOW TO REINTRODUCE 590 00:16:24,784 --> 00:16:26,019 THE INCOME TAX IN A WAY 591 00:16:26,019 --> 00:16:27,020 THAT WOULD PASS 592 00:16:27,020 --> 00:16:28,155 CONSTITUTIONAL MUSTER 593 00:16:28,155 --> 00:16:30,190 AND THAT WOULD ALLOW LAWMAKERS 594 00:16:30,190 --> 00:16:31,491 TO REDUCE THEIR DEPENDENCE 595 00:16:31,491 --> 00:16:32,492 ON TARIFF DUTIES 596 00:16:32,492 --> 00:16:33,493 AND REPLACE THEM 597 00:16:33,493 --> 00:16:35,362 WITH SOMETHING MORE PROGRESSIVE. 598 00:16:35,362 --> 00:16:36,563 >> BY 1913, WE HAD 599 00:16:36,563 --> 00:16:38,731 THE 16th AMENDMENT, 600 00:16:38,731 --> 00:16:39,732 WHICH WAS NECESSARY 601 00:16:39,732 --> 00:16:41,268 BECAUSE OF THE SUPREME COURT 602 00:16:41,268 --> 00:16:42,269 DECISION THAT SAID 603 00:16:42,269 --> 00:16:44,204 THAT, UH, YOU COULDN'T HAVE 604 00:16:44,204 --> 00:16:45,705 THE INCOME TAX CONSTITUTIONALLY 605 00:16:45,705 --> 00:16:47,374 WITHOUT THE AMENDMENT. 606 00:16:47,374 --> 00:16:48,375 >> Thorndike: RIGHT AROUND 607 00:16:48,375 --> 00:16:49,376 THE SAME TIME THAT 608 00:16:49,376 --> 00:16:51,111 WOODROW WILSON BECAME PRESIDENT, 609 00:16:51,111 --> 00:16:52,345 THE INCOME TAX WAS PART 610 00:16:52,345 --> 00:16:54,081 OF THE REFORMS THAT HE THEN 611 00:16:54,081 --> 00:16:55,082 ENACTED INTO LAW 612 00:16:55,082 --> 00:16:56,483 THROUGH STATUTE. 613 00:16:56,483 --> 00:16:58,085 SO, YOU CREATE THIS INCOME TAX 614 00:16:58,085 --> 00:17:00,253 IN 1913, IT, UH, BARELY GETS 615 00:17:00,253 --> 00:17:01,788 ITS FEET ON THE GROUND 616 00:17:01,788 --> 00:17:03,590 BEFORE WORLD WAR ONE, 617 00:17:03,590 --> 00:17:05,592 ONCE AGAIN, DISRUPTS 618 00:17:05,592 --> 00:17:06,593 TARIFF REVENUES, 619 00:17:06,593 --> 00:17:07,827 CREATES A REVENUE CRISIS 620 00:17:07,827 --> 00:17:09,396 FOR THE FEDERAL GOVERNMENT, 621 00:17:09,396 --> 00:17:10,597 AND CONGRESS TURNS 622 00:17:10,597 --> 00:17:11,598 TO THE INCOME TAX 623 00:17:11,598 --> 00:17:12,599 AS THE MOST LIKELY 624 00:17:12,599 --> 00:17:13,633 REPLACEMENT FOR THIS 625 00:17:13,633 --> 00:17:15,335 IN THE TIME OF WAR. 626 00:17:15,335 --> 00:17:17,670 >> Man: THREE THOUSAND MILES 627 00:17:17,670 --> 00:17:19,839 FROM HOME, AN AMERICAN ARMY 628 00:17:19,839 --> 00:17:21,741 IS FIGHTING FOR YOU. 629 00:17:21,741 --> 00:17:24,577 EVERYTHING YOU HOLD WORTHWHILE 630 00:17:24,577 --> 00:17:25,578 IS AT STAKE. 631 00:17:25,578 --> 00:17:27,080 >> Fox: DURING WORLD WAR ONE, 632 00:17:27,080 --> 00:17:28,581 THE TOP TAX RATE MOVES 633 00:17:28,581 --> 00:17:32,152 FROM 7% TO 77%, 634 00:17:32,152 --> 00:17:35,088 AND SUDDENLY TAXES BECOME 635 00:17:35,088 --> 00:17:36,456 A HUGE CONCERN OF 636 00:17:36,456 --> 00:17:37,790 A LOT OF PEOPLE. 637 00:17:37,790 --> 00:17:39,559 PEOPLE CAME TO CONGRESS-- 638 00:17:39,559 --> 00:17:40,627 THE FIRST DEDUCTION, 639 00:17:40,627 --> 00:17:41,661 THE FIRST ONE THAT WAS 640 00:17:41,661 --> 00:17:43,396 REALLY FOCUSED ON THE TAX LAWS, 641 00:17:43,396 --> 00:17:44,797 WAS THE CHARITABLE DEDUCTION, 642 00:17:44,797 --> 00:17:45,798 AND THAT'S BECAUSE 643 00:17:45,798 --> 00:17:47,334 PRESIDENTS OF UNIVERSITIES 644 00:17:47,334 --> 00:17:48,635 AND COLLEGE CAME TO CONGRESS 645 00:17:48,635 --> 00:17:50,103 AND SAID, "LOOK, WE'RE NOT 646 00:17:50,103 --> 00:17:51,171 GETTING CONTRIBUTIONS. 647 00:17:51,171 --> 00:17:52,305 YOU'RE TAKING 77% 648 00:17:52,305 --> 00:17:53,306 OF THE TOP DOLLARS 649 00:17:53,306 --> 00:17:54,407 OF RICH PEOPLE." 650 00:17:54,407 --> 00:17:55,542 SO CONGRESS SAID, WELL, 651 00:17:55,542 --> 00:17:56,543 WE'LL GIVE YOU 652 00:17:56,543 --> 00:17:57,710 A CHARITABLE DEDUCTION, 653 00:17:57,710 --> 00:18:00,113 AND VERY MUCH, THAT'S THE WAY 654 00:18:00,113 --> 00:18:01,448 THE LAWS EVOLVED. 655 00:18:01,448 --> 00:18:03,383 SO, IN THE EARLY 1920s, 656 00:18:03,383 --> 00:18:04,384 SUDDENLY THERE WAS 657 00:18:04,384 --> 00:18:05,385 A SPECIAL RATE 658 00:18:05,385 --> 00:18:06,386 FOR CAPITAL GAINS, 659 00:18:06,386 --> 00:18:08,121 A LOW RATE FOR CAPITAL GAINS. 660 00:18:08,121 --> 00:18:09,122 THERE WAS RELIEF 661 00:18:09,122 --> 00:18:10,123 FOR CONTRIBUTIONS 662 00:18:10,123 --> 00:18:11,191 TO RETIREMENT PLANS, 663 00:18:11,191 --> 00:18:12,825 AND LITTLE BY LITTLE, 664 00:18:12,825 --> 00:18:14,394 THE INCOME TAX BECAME 665 00:18:14,394 --> 00:18:15,428 SOMETHING OTHER THAN 666 00:18:15,428 --> 00:18:17,264 A REVENUE RAISING SYSTEM. 667 00:18:17,264 --> 00:18:20,133 IT BECAME ALSO, AS IT IS TODAY, 668 00:18:20,133 --> 00:18:22,269 A WAY OF TRYING TO MICROMANAGE 669 00:18:22,269 --> 00:18:23,803 THE WAY PEOPLE BEHAVE, 670 00:18:23,803 --> 00:18:24,837 OR TO GIVE THEM RELIEF 671 00:18:24,837 --> 00:18:25,905 FOR CERTAIN BEHAVIOR 672 00:18:25,905 --> 00:18:27,140 HOPING THAT THEY WILL 673 00:18:27,140 --> 00:18:28,241 BEHAVE IN THAT WAY. 674 00:18:28,241 --> 00:18:29,576 >> Man: THE WAR IS OVER, 675 00:18:29,576 --> 00:18:33,280 AND THERE'LL NEVER BE ANOTHER. 676 00:18:33,280 --> 00:18:34,714 >> ( marching bands playing ) 677 00:18:34,714 --> 00:18:36,316 >> Thorndike: THE WAR ENDS, 678 00:18:36,316 --> 00:18:37,317 AND THERE'S A SORT OF 679 00:18:37,317 --> 00:18:38,318 SCALING BACK. 680 00:18:38,318 --> 00:18:39,686 THERE'S A, "YOU KNOW, WE DON'T 681 00:18:39,686 --> 00:18:41,154 NEED AS MUCH MONEY ANYMORE. 682 00:18:41,154 --> 00:18:42,555 WE DO NEED TO RETIRE SOME DEBT, 683 00:18:42,555 --> 00:18:44,557 BUT WE CAN LET GO 684 00:18:44,557 --> 00:18:46,159 SOME OF THAT WARTIME TAXATION, 685 00:18:46,159 --> 00:18:47,594 SOME OF THAT PAINFUL, 686 00:18:47,594 --> 00:18:49,829 SACRIFICIAL WARTIME TAXATION." 687 00:18:49,829 --> 00:18:51,231 THE LEADER OF THAT EFFORT 688 00:18:51,231 --> 00:18:52,232 AFTER WORLD WAR ONE 689 00:18:52,232 --> 00:18:53,700 WAS ANDREW MELLON, 690 00:18:53,700 --> 00:18:55,635 WHO WAS SUCH A POWERFUL 691 00:18:55,635 --> 00:18:57,237 TREASURY SECRETARY 692 00:18:57,237 --> 00:18:58,238 THAT HE SERVED 693 00:18:58,238 --> 00:18:59,506 IN THREE ADMINISTRATIONS. 694 00:18:59,506 --> 00:19:00,707 PEOPLE OFTEN SAID 695 00:19:00,707 --> 00:19:02,409 THAT THREE DIFFERENT PRESIDENTS 696 00:19:02,409 --> 00:19:03,743 SERVED UNDER HIM. 697 00:19:03,743 --> 00:19:05,412 BUT I THINK WHAT'S MOST STRIKING 698 00:19:05,412 --> 00:19:06,946 ABOUT ANDREW MELLON IS NOT 699 00:19:06,946 --> 00:19:07,947 THAT HE CUT TAXES, 700 00:19:07,947 --> 00:19:09,416 WHICH I THINK ALMOST ANYONE 701 00:19:09,416 --> 00:19:10,583 WOULD'VE DONE IN THE WAKE 702 00:19:10,583 --> 00:19:11,918 OF WORLD WAR ONE, BUT THAT HE, 703 00:19:11,918 --> 00:19:12,919 BY CUTTING TAXES, 704 00:19:12,919 --> 00:19:14,187 BY SORT OF DE-FANGING 705 00:19:14,187 --> 00:19:15,622 THE INCOME TAX, UH, 706 00:19:15,622 --> 00:19:17,524 AND MAKING IT MORE MODERATE, 707 00:19:17,524 --> 00:19:19,259 ENSURED THAT IT WOULD SURVIVE. 708 00:19:19,259 --> 00:19:20,393 IF WOODROW WILSON MADE 709 00:19:20,393 --> 00:19:21,928 THE WORLD SAFE FOR DEMOCRACY, 710 00:19:21,928 --> 00:19:23,463 ANDREW MELLON MADE THE WORLD 711 00:19:23,463 --> 00:19:25,465 SAFE FOR INCOME TAXATION. 712 00:19:25,465 --> 00:19:27,200 HE MADE IT A TAX 713 00:19:27,200 --> 00:19:28,601 THAT PEOPLE COULD TOLERATE. 714 00:19:28,601 --> 00:19:30,537 >> FDR: YESTERDAY, 715 00:19:30,537 --> 00:19:36,776 DECEMBER 7th, 1941, 716 00:19:36,776 --> 00:19:38,978 A DATE WHICH WILL 717 00:19:38,978 --> 00:19:42,315 LIVE IN INFAMY... 718 00:19:42,315 --> 00:19:46,253 >> ( explosions ) 719 00:19:48,921 --> 00:19:51,891 >> THE UNITED STATES OF AMERICA 720 00:19:51,891 --> 00:19:52,892 WAS SUDDENLY 721 00:19:52,892 --> 00:19:54,827 AND DELIBERATELY ATTACKED 722 00:19:54,827 --> 00:19:57,630 BY NAVAL AND AIR FORCES 723 00:19:57,630 --> 00:20:01,668 OF THE EMPIRE OF JAPAN. 724 00:20:01,668 --> 00:20:03,636 NO MATTER HOW LONG IT MAY 725 00:20:03,636 --> 00:20:06,373 TAKE US TO OVERCOME 726 00:20:06,373 --> 00:20:09,276 THIS PREMEDITATED INVASION, 727 00:20:09,276 --> 00:20:10,777 THE AMERICAN PEOPLE 728 00:20:10,777 --> 00:20:12,779 IN THEIR RIGHTEOUS MIGHT 729 00:20:12,779 --> 00:20:14,381 WILL WIN THROUGH 730 00:20:14,381 --> 00:20:15,448 TO ABSOLUTE VICTORY. 731 00:20:15,448 --> 00:20:16,916 >> ( people cheering ) 732 00:20:16,916 --> 00:20:18,318 >> BEFORE WORLD WAR TWO-- 733 00:20:18,318 --> 00:20:21,421 1939, 1940-- NO MORE THAN 10% 734 00:20:21,421 --> 00:20:22,922 OF HOUSEHOLDS PAID 735 00:20:22,922 --> 00:20:23,923 THE INCOME TAX. 736 00:20:23,923 --> 00:20:26,626 IT REMAINED A CLASS TAX. 737 00:20:26,626 --> 00:20:28,695 BUT THEN PEARL HARBOR HAPPENED, 738 00:20:28,695 --> 00:20:31,298 AND HITLER INVADED EUROPE. 739 00:20:31,298 --> 00:20:32,532 AND FRANKLIN ROOSEVELT 740 00:20:32,532 --> 00:20:33,566 CAME TO THE CONGRESS 741 00:20:33,566 --> 00:20:35,034 AND CAME TO THE AMERICAN PEOPLE 742 00:20:35,034 --> 00:20:36,536 AND SAID THAT THE FUTURE 743 00:20:36,536 --> 00:20:37,537 OF THE UNITED STATES 744 00:20:37,537 --> 00:20:38,538 WAS AT STAKE. 745 00:20:38,538 --> 00:20:39,672 AND HE SAID, "SO, WE HAVE 746 00:20:39,672 --> 00:20:41,774 TO MOVE FROM A TAX ON THE FEW 747 00:20:41,774 --> 00:20:43,676 TO A MASS TAX 748 00:20:43,676 --> 00:20:45,878 THAT IS ON THE MANY." 749 00:20:45,878 --> 00:20:47,680 >> BUT THE RICH PAY THE TAXES. 750 00:20:47,680 --> 00:20:50,283 WHY SHOULD I WORRY? 751 00:20:50,283 --> 00:20:51,351 >> THAT'S WHERE WE'RE 752 00:20:51,351 --> 00:20:52,785 FOOLING OURSELVES. 753 00:20:52,785 --> 00:20:53,786 >> THIS WAS A REALLY 754 00:20:53,786 --> 00:20:54,787 IMPORTANT CHANGE. 755 00:20:54,787 --> 00:20:56,689 THEY LOWER THE EXEMPTIONS, 756 00:20:56,689 --> 00:20:58,691 AND SUDDENLY MILLIONS OF PEOPLE 757 00:20:58,691 --> 00:20:59,692 WHO HAVE NEVER PAID 758 00:20:59,692 --> 00:21:00,993 AN INCOME TAX IN THE PAST 759 00:21:00,993 --> 00:21:02,829 AND WHO HAVE, SOME OF THEM, 760 00:21:02,829 --> 00:21:03,863 ASPIRED TO THE NOTION 761 00:21:03,863 --> 00:21:05,064 OF SOMEDAY GETTING TO PAY 762 00:21:05,064 --> 00:21:06,366 INCOME TAX, 'CAUSE IT WOULD MEAN 763 00:21:06,366 --> 00:21:07,367 THAT THEY WERE RICH, 764 00:21:07,367 --> 00:21:08,435 WELL, THEY WERE NOT ALL 765 00:21:08,435 --> 00:21:09,636 THAT RICH AND SUDDENLY FINDING 766 00:21:09,636 --> 00:21:10,970 THEMSELVES PAYING INCOME TAXES. 767 00:21:10,970 --> 00:21:13,706 >> THE 1942 REVENUE BILL 768 00:21:13,706 --> 00:21:15,442 WILL IMPOSE THE HEAVIEST 769 00:21:15,442 --> 00:21:17,444 TAX BURDEN EVER PLACED 770 00:21:17,444 --> 00:21:19,646 UPON THE AMERICAN CITIZENS. 771 00:21:19,646 --> 00:21:20,713 >> FOR SINGLE PEOPLE, 772 00:21:20,713 --> 00:21:21,848 NOW THE VALUE OF DOLLARS 773 00:21:21,848 --> 00:21:22,849 WERE DIFFERENT-- 774 00:21:22,849 --> 00:21:24,083 OF A DOLLAR WAS DIFFERENT. 775 00:21:24,083 --> 00:21:25,552 BUT SINGLE PEOPLE PAID A TAX 776 00:21:25,552 --> 00:21:27,820 ON INCOME OVER $500 777 00:21:27,820 --> 00:21:31,391 UNDER THE 1942-43 REVENUE ACTS. 778 00:21:31,391 --> 00:21:32,725 >> THE NATIONAL ASSOCIATION 779 00:21:32,725 --> 00:21:34,026 OF MANUFACTURERS, 780 00:21:34,026 --> 00:21:35,595 YOU KNOW, INTERESTED IN, 781 00:21:35,595 --> 00:21:37,697 TODAY, NOT PAYING MORE TAXES 782 00:21:37,697 --> 00:21:39,599 THAN THEY ABSOLUTELY HAVE TO-- 783 00:21:39,599 --> 00:21:41,868 THEY SAID THAT NO BUSINESS 784 00:21:41,868 --> 00:21:42,869 SHOULD MAKE MORE 785 00:21:42,869 --> 00:21:44,537 THAN THEY ABSOLUTELY NEEDED 786 00:21:44,537 --> 00:21:47,574 TO STAY ALIVE, AND TAXES 787 00:21:47,574 --> 00:21:49,776 SHOULD CONSUME EVERYTHING ELSE. 788 00:21:49,776 --> 00:21:52,345 >> CORPORATION RATES 789 00:21:52,345 --> 00:21:54,914 HAVE ALSO BEEN SUBSTANTIALLY 790 00:21:54,914 --> 00:21:57,550 INCREASED ON BOTH NORMAL 791 00:21:57,550 --> 00:21:59,786 AND EXCESS PROFITS. 792 00:21:59,786 --> 00:22:01,521 WE BELIEVE THESE RATES 793 00:22:01,521 --> 00:22:03,523 ARE ADEQUATE TO PREVENT 794 00:22:03,523 --> 00:22:07,894 ANYONE REALIZING UNDUE PROFITS 795 00:22:07,894 --> 00:22:10,129 OUT OF THE WAR EFFORT. 796 00:22:10,129 --> 00:22:11,431 >> THIS IS A BIG CHANGE. 797 00:22:11,431 --> 00:22:12,532 IT MAKES THE INCOME TAX 798 00:22:12,532 --> 00:22:13,633 MUCH MORE PRODUCTIVE, 799 00:22:13,633 --> 00:22:14,634 HELPS IT RAISE MUCH, 800 00:22:14,634 --> 00:22:16,068 MUCH MORE MONEY. 801 00:22:16,068 --> 00:22:17,904 IT ALSO POSES ALL SORTS 802 00:22:17,904 --> 00:22:18,905 OF DIFFICULTIES 803 00:22:18,905 --> 00:22:20,373 FOR THE FEDERAL GOVERNMENT, 804 00:22:20,373 --> 00:22:21,574 BECAUSE THEY HAVE TO INSTRUCT 805 00:22:21,574 --> 00:22:22,742 ALL OF THESE PEOPLE IN HOW 806 00:22:22,742 --> 00:22:24,010 TO PAY THEIR INCOME TAXES, WHICH 807 00:22:24,010 --> 00:22:25,111 IS NOT AN EASY THING TO DO. 808 00:22:25,111 --> 00:22:26,613 THEY INSTITUTED A HUGE 809 00:22:26,613 --> 00:22:28,147 PUBLIC RELATIONS CAMPAIGN 810 00:22:28,147 --> 00:22:29,482 TO TELL PEOPLE THAT THIS 811 00:22:29,482 --> 00:22:30,750 WAS THEIR RESPONSIBILITY, 812 00:22:30,750 --> 00:22:31,951 THEY WERE GONNA HAVE TO DO IT. 813 00:22:31,951 --> 00:22:33,620 THEY WANTED TO MAKE A CONNECTION 814 00:22:33,620 --> 00:22:34,621 BETWEEN THE SACRIFICE 815 00:22:34,621 --> 00:22:35,688 THAT PEOPLE WERE MAKING 816 00:22:35,688 --> 00:22:36,723 ON THE BATTLEFIELD 817 00:22:36,723 --> 00:22:37,724 AND THE FINANCIAL SACRIFICE 818 00:22:37,724 --> 00:22:38,925 THAT WAS BEING ASKED OF PEOPLE 819 00:22:38,925 --> 00:22:39,926 ON THE HOME FRONT. 820 00:22:39,926 --> 00:22:41,794 >> I AM WILLING TO PAY TAXES 821 00:22:41,794 --> 00:22:43,796 TO PROVIDE NATIONAL DEFENSE 822 00:22:43,796 --> 00:22:44,797 FOR MY COUNTRY, 823 00:22:44,797 --> 00:22:46,132 TO SEE THAT WE HAVE 824 00:22:46,132 --> 00:22:48,868 AN ARMY, A NAVY, AND AIRPLANES 825 00:22:48,868 --> 00:22:50,637 STRONG ENOUGH TO PROTECT US 826 00:22:50,637 --> 00:22:52,605 AGAINST ANY INVADERS. 827 00:22:52,605 --> 00:22:53,673 >> IT WASN'T JUST ABOUT 828 00:22:53,673 --> 00:22:55,174 CHANGING A FINANCIAL INSTRUMENT; 829 00:22:55,174 --> 00:22:56,676 IT WAS REALLY ABOUT CHANGING 830 00:22:56,676 --> 00:22:57,677 POLITICAL CULTURE 831 00:22:57,677 --> 00:22:58,678 AND CIVIL RITUALS 832 00:22:58,678 --> 00:22:59,679 IN AN IMPORTANT WAY, 833 00:22:59,679 --> 00:23:00,680 AND REALLY CREATING 834 00:23:00,680 --> 00:23:01,881 A WHOLE NEW CIVIC RITUAL. 835 00:23:01,881 --> 00:23:02,882 I MEAN, AMERICANS 836 00:23:02,882 --> 00:23:04,484 HAD NEVER BEEN UNITED 837 00:23:04,484 --> 00:23:06,553 BY THIS ANNUAL RESPONSIBILITY 838 00:23:06,553 --> 00:23:08,788 BEFORE, AND SUDDENLY, UH-- 839 00:23:08,788 --> 00:23:10,857 IT WAS ACTUALLY IN MARCH, THEN, 840 00:23:10,857 --> 00:23:11,991 BUT WHAT LATER GOT MOVED 841 00:23:11,991 --> 00:23:13,960 TO APRIL-- APRIL 15tH HAS BECOME 842 00:23:13,960 --> 00:23:15,094 SORT OF A NATIONAL 843 00:23:15,094 --> 00:23:16,929 ANTI-HOLIDAY, YOU KNOW? 844 00:23:16,929 --> 00:23:18,831 IT'S A DAY THAT WE ALL RECOGNIZE 845 00:23:18,831 --> 00:23:20,533 AS PART OF OUR CIVIC 846 00:23:20,533 --> 00:23:22,101 RESPONSIBILITIES, AS OUR-- 847 00:23:22,101 --> 00:23:23,570 AS OUR-- IN OUR ROLE 848 00:23:23,570 --> 00:23:24,704 AS AMERICANS. 849 00:24:43,683 --> 00:24:45,785 >> Weisman: FOR AS LONG 850 00:24:45,785 --> 00:24:47,987 AS AMERICANS HAVE BEEN DEBATING 851 00:24:47,987 --> 00:24:49,221 THE INCOME TAX, 852 00:24:49,221 --> 00:24:50,523 THEY'VE BEEN DEBATING 853 00:24:50,523 --> 00:24:52,191 TWO DEFINITIONS OF, 854 00:24:52,191 --> 00:24:53,893 UH, MORALITY. 855 00:24:53,893 --> 00:24:56,262 ON THE ONE SIDE IS WHAT I CALL 856 00:24:56,262 --> 00:24:58,865 VIRTUE, WHICH IS THIS IDEA 857 00:24:58,865 --> 00:25:00,166 THAT AMERICANS HAVE 858 00:25:00,166 --> 00:25:02,669 THAT THEIR-- THAT WEALTH 859 00:25:02,669 --> 00:25:04,203 THAT THEY GAIN IS THE RESULT 860 00:25:04,203 --> 00:25:06,105 OF VIRTUOUS BEHAVIOR-- 861 00:25:06,105 --> 00:25:08,908 SAVING, INVESTING, HARD WORK, 862 00:25:08,908 --> 00:25:10,743 TAKING RISKS, AND THAT YOU DON'T 863 00:25:10,743 --> 00:25:11,744 WANT A TAX SYSTEM 864 00:25:11,744 --> 00:25:13,646 THAT PUNISHES THAT, 865 00:25:13,646 --> 00:25:14,914 AND THEREFORE, YOU DON'T WANT 866 00:25:14,914 --> 00:25:15,948 TO PUNISH PEOPLE 867 00:25:15,948 --> 00:25:17,550 AS THEY MAKE MORE MONEY. 868 00:25:17,550 --> 00:25:18,618 BUT ON THE OTHER HAND, 869 00:25:18,618 --> 00:25:20,052 AMERICANS BELIEVE 870 00:25:20,052 --> 00:25:21,954 IN ESSENTIAL FAIRNESS, 871 00:25:21,954 --> 00:25:24,056 AND THAT, ESPECIALLY IN A TIME 872 00:25:24,056 --> 00:25:25,592 OF WAR AND SACRIFICE, 873 00:25:25,592 --> 00:25:26,959 YOU HAVE TO HAVE A SYSTEM 874 00:25:26,959 --> 00:25:28,294 THAT'S FAIR AND SUPPORTED 875 00:25:28,294 --> 00:25:30,162 BY EVERYONE, AND THAT SYSTEM 876 00:25:30,162 --> 00:25:31,163 DOES THE OPPOSITE. 877 00:25:31,163 --> 00:25:33,265 THAT SYSTEM WOULD MAKE PEOPLE 878 00:25:33,265 --> 00:25:34,701 WHO HAVE MORE MONEY 879 00:25:34,701 --> 00:25:37,169 PAY TAXES AT A HIGHER RATE. 880 00:25:37,169 --> 00:25:39,238 I THINK MOST OF US WOULD 881 00:25:39,238 --> 00:25:40,573 SYMPATHIZE WITH EITHER 882 00:25:40,573 --> 00:25:41,674 OF THOSE VIEWS, 883 00:25:41,674 --> 00:25:43,743 AND MAYBE WE GO BACK AND FORTH. 884 00:25:43,743 --> 00:25:45,077 I THINK THAT'S PROBABLY TRUE 885 00:25:45,077 --> 00:25:46,078 OF MOST AMERICANS, 886 00:25:46,078 --> 00:25:47,246 BUT AT ANY GIVEN TIME, 887 00:25:47,246 --> 00:25:50,717 ONE OF THE IDEAS IS UPPERMOST. 888 00:25:50,717 --> 00:25:52,719 >> THESE ISSUES, MANY OF WHICH 889 00:25:52,719 --> 00:25:54,887 NOW INVOLVE AN ECONOMIC CONCERN, 890 00:25:54,887 --> 00:25:57,023 WERE OF VIRTUALLY NO CONCERN 891 00:25:57,023 --> 00:25:58,024 UNTIL THE KENNEDY 892 00:25:58,024 --> 00:25:59,291 ADMINISTRATION. 893 00:25:59,291 --> 00:26:01,293 >> ( fanfare ) 894 00:26:01,293 --> 00:26:02,595 >> * KENNEDY, KENNEDY 895 00:26:02,595 --> 00:26:03,930 * KENNEDY, KENNEDY, KENNEDY 896 00:26:03,930 --> 00:26:06,232 * KENNEDY, KEN-NE-DY FOR ME 897 00:26:06,232 --> 00:26:09,368 >> Various Voices: KENNEDY! 898 00:26:09,368 --> 00:26:10,670 >> THE FIRST PRESIDENT 899 00:26:10,670 --> 00:26:11,671 OF THE MODERN ERA 900 00:26:11,671 --> 00:26:12,672 TO EMBRACE THE ISSUE 901 00:26:12,672 --> 00:26:13,873 OF THE INCOME TAX 902 00:26:13,873 --> 00:26:15,642 WAS JOHN F. KENNEDY. 903 00:26:15,642 --> 00:26:17,043 >> SUCH A BILL WILL BE PRESENTED 904 00:26:17,043 --> 00:26:18,044 TO THE CONGRESS 905 00:26:18,044 --> 00:26:19,679 FOR ACTION NEXT YEAR. 906 00:26:19,679 --> 00:26:20,680 IT WILL INCLUDE 907 00:26:20,680 --> 00:26:22,014 AN ACROSS-THE-BOARD, 908 00:26:22,014 --> 00:26:23,750 TOP-TO-BOTTOM CUT 909 00:26:23,750 --> 00:26:24,917 IN BOTH CORPORATE 910 00:26:24,917 --> 00:26:27,153 AND PERSONAL INCOME TAXES. 911 00:26:27,153 --> 00:26:28,154 IT WILL INCLUDE 912 00:26:28,154 --> 00:26:30,289 LONG-NEEDED TAX REFORMS 913 00:26:30,289 --> 00:26:32,825 THAT LOGIC AND EQUITY DEMAND, 914 00:26:32,825 --> 00:26:34,226 AND IT WILL DATE THAT 915 00:26:34,226 --> 00:26:36,696 CUT IN TAXES TO TAKE EFFECT 916 00:26:36,696 --> 00:26:39,298 AS OF THE START OF NEXT YEAR, 917 00:26:39,298 --> 00:26:41,901 JANUARY 1963. 918 00:26:41,901 --> 00:26:42,969 >> KENNEDY CAME ALONG 919 00:26:42,969 --> 00:26:43,970 AND HIS TAX ADVISORS 920 00:26:43,970 --> 00:26:44,971 CAME ALONG AND SAID, 921 00:26:44,971 --> 00:26:46,038 "BUT THESE HIGH RATES 922 00:26:46,038 --> 00:26:48,107 RETARD ECONOMIC GROWTH," 923 00:26:48,107 --> 00:26:49,909 AND THAT BEGAN 924 00:26:49,909 --> 00:26:51,844 THE REAL CONVERSATION 925 00:26:51,844 --> 00:26:52,979 ABOUT THE RELATIONSHIP 926 00:26:52,979 --> 00:26:54,346 BETWEEN TAX RATES 927 00:26:54,346 --> 00:26:56,282 AND ECONOMIC OUTCOMES. 928 00:26:56,282 --> 00:26:57,316 >> HE HADN'T GIVEN OUT 929 00:26:57,316 --> 00:26:58,317 LITTLE INCREASES 930 00:26:58,317 --> 00:26:59,719 IN THE PERSONAL EXEMPTION 931 00:26:59,719 --> 00:27:00,920 OR THE STANDARD DEDUCTION. 932 00:27:00,920 --> 00:27:01,954 HE'D ACTUALLY GONE IN 933 00:27:01,954 --> 00:27:03,289 AND SLASHED THE WORLD WAR TWO 934 00:27:03,289 --> 00:27:04,791 AND KOREAN WAR TAX RATES, 935 00:27:04,791 --> 00:27:05,792 THE MARGINAL RATES, 936 00:27:05,792 --> 00:27:06,926 ACROSS THE BOARD. 937 00:27:06,926 --> 00:27:08,194 HE TOOK THE TOP RATE DOWN 938 00:27:08,194 --> 00:27:10,096 FROM 91% TO 70, 939 00:27:10,096 --> 00:27:11,698 AND THE BOTTOM RATE DOWN 940 00:27:11,698 --> 00:27:14,000 FROM 20 TO 14. 941 00:27:14,000 --> 00:27:15,001 AND WE HAD SEVERAL 942 00:27:15,001 --> 00:27:16,068 GOOD YEARS OF GROWTH 943 00:27:16,068 --> 00:27:17,403 AFTER THE KENNEDY TAX CUTS, 944 00:27:17,403 --> 00:27:19,071 UNLIKE THE LATER CUTS 945 00:27:19,071 --> 00:27:20,272 OF THE 1970s, WHICH WERE 946 00:27:20,272 --> 00:27:21,974 JUST THESE LITTLE HANDOUTS 947 00:27:21,974 --> 00:27:23,109 ON THE FIRST TWO OR THREE 948 00:27:23,109 --> 00:27:25,044 OF FIVE DOLLARS THAT YOU EARNED. 949 00:27:25,044 --> 00:27:26,378 >> Weisman: I THINK IT WAS 950 00:27:26,378 --> 00:27:28,214 REALLY IN THE 1970s 951 00:27:28,214 --> 00:27:31,784 THAT TAXES BECAME A BIG NATIONAL 952 00:27:31,784 --> 00:27:33,252 AND ALMOST MORAL ISSUE. 953 00:27:33,252 --> 00:27:34,320 >> Shaviro: PEOPLE STARTED 954 00:27:34,320 --> 00:27:35,421 GETTING A LOT MORE UNHAPPY 955 00:27:35,421 --> 00:27:36,422 WITH THE GOVERNMENT. 956 00:27:36,422 --> 00:27:37,890 YOU HAVE THE VIETNAM WAR 957 00:27:37,890 --> 00:27:39,025 AND NIXON AND WATERGATE 958 00:27:39,025 --> 00:27:40,359 AND ALL THOSE THINGS. 959 00:27:40,359 --> 00:27:41,694 AND ALSO, IN THE 1970s, 960 00:27:41,694 --> 00:27:43,863 YOU GET INCREDIBLE TAX INCREASES 961 00:27:43,863 --> 00:27:45,264 THAT WEREN'T ACTUALLY ENACTED 962 00:27:45,264 --> 00:27:46,432 BY THE CONGRESS. 963 00:27:46,432 --> 00:27:47,967 IT WAS BECAUSE OF INFLATION. 964 00:27:47,967 --> 00:27:49,068 IT TURNED OUT THAT WHEN 965 00:27:49,068 --> 00:27:50,302 THERE WAS HIGH INFLATION, 966 00:27:50,302 --> 00:27:51,704 PEOPLE WERE BEING PUSHED 967 00:27:51,704 --> 00:27:53,072 INTO HIGHER TAX BRACKETS. 968 00:27:53,072 --> 00:27:54,206 IT MIGHT BE THAT YOU USED 969 00:27:54,206 --> 00:27:55,207 TO PAY TAXES AT 30%. 970 00:27:55,207 --> 00:27:56,308 NOW, YOU REALLY HAVE 971 00:27:56,308 --> 00:27:57,710 THE SAME SPENDING POWER 972 00:27:57,710 --> 00:27:58,878 AS BEFORE, BUT NOW YOU'RE 973 00:27:58,878 --> 00:28:00,479 PAYING SOME TAX AT 40%. 974 00:28:00,479 --> 00:28:01,480 >> SO, WE DECIDED 975 00:28:01,480 --> 00:28:02,882 AT THE END OF THE '70s 976 00:28:02,882 --> 00:28:03,883 THAT WE NEEDED TO TRY 977 00:28:03,883 --> 00:28:04,984 THAT AGAIN-- WE NEEDED 978 00:28:04,984 --> 00:28:06,719 TO REPEAT THE KENNEDY EXPERIMENT 979 00:28:06,719 --> 00:28:07,720 TO SEE IF LOWERING 980 00:28:07,720 --> 00:28:08,721 THE MARGINAL RATES 981 00:28:08,721 --> 00:28:10,056 AND PERHAPS PUTTING ON 982 00:28:10,056 --> 00:28:11,357 THE INVESTMENT TAX CREDIT 983 00:28:11,357 --> 00:28:12,725 THAT HE HAD ALSO USED 984 00:28:12,725 --> 00:28:13,726 TO SPUR INVESTMENT, 985 00:28:13,726 --> 00:28:14,727 MIGHT GET US OUT 986 00:28:14,727 --> 00:28:15,928 OF THE STAGFLATION. 987 00:28:15,928 --> 00:28:17,129 >> AND, OF COURSE, THE MAN 988 00:28:17,129 --> 00:28:19,331 WHO RODE THAT ISSUE 989 00:28:19,331 --> 00:28:20,867 INTO THE WHITE HOUSE 990 00:28:20,867 --> 00:28:22,935 WAS RONALD REAGAN, 991 00:28:22,935 --> 00:28:24,436 WHO I LIKE TO THINK OF 992 00:28:24,436 --> 00:28:25,437 AS THE POET LAUREATE 993 00:28:25,437 --> 00:28:27,206 OF CAPITALISM. 994 00:28:27,206 --> 00:28:28,841 >> Reagan: I'M A CITIZEN. 995 00:28:28,841 --> 00:28:30,076 I'M NOT AN OFFICEHOLDER 996 00:28:30,076 --> 00:28:31,077 OR A PARTY OFFICIAL. 997 00:28:31,077 --> 00:28:32,078 I'LL MAKE A SPEECH 998 00:28:32,078 --> 00:28:33,145 AT A BUS STOP IF ENOUGH 999 00:28:33,145 --> 00:28:34,947 PEOPLE ARE WAITIN'. 1000 00:28:34,947 --> 00:28:35,948 I WAS A DEMOCRAT 1001 00:28:35,948 --> 00:28:37,216 MOST OF MY LIFE. 1002 00:28:37,216 --> 00:28:39,051 I HAVE A LONG PENANCE TO DO. 1003 00:28:39,051 --> 00:28:40,753 >> ( laughter ) 1004 00:28:40,753 --> 00:28:41,888 >> IF YOU'RE UNWILLING 1005 00:28:41,888 --> 00:28:43,189 TO MEET THIS CHALLENGE, 1006 00:28:43,189 --> 00:28:44,857 THEN YOU'D BETTER START 1007 00:28:44,857 --> 00:28:46,425 PREPARING, DECIDING WHAT 1008 00:28:46,425 --> 00:28:47,860 YOU'LL TELL YOUR CHILDREN 1009 00:28:47,860 --> 00:28:48,861 IT WAS THAT YOU FOUND 1010 00:28:48,861 --> 00:28:50,329 MORE IMPORTANT THAN FREEDOM. 1011 00:28:50,329 --> 00:28:52,098 THEY'LL WANNA KNOW. 1012 00:28:52,098 --> 00:28:54,333 IN THIS PRESENT CRISIS, 1013 00:28:54,333 --> 00:28:56,068 GOVERNMENT IS NOT 1014 00:28:56,068 --> 00:28:58,070 THE SOLUTION TO OUR PROBLEMS. 1015 00:28:58,070 --> 00:29:00,206 GOVERNMENT IS THE PROBLEM. 1016 00:29:00,206 --> 00:29:01,240 FROM TIME TO TIME, 1017 00:29:01,240 --> 00:29:02,809 WE'VE BEEN TEMPTED TO BELIEVE 1018 00:29:02,809 --> 00:29:04,010 THAT SOCIETY HAS BECOME 1019 00:29:04,010 --> 00:29:05,845 TOO COMPLEX TO BE MANAGED 1020 00:29:05,845 --> 00:29:06,846 BY SELF-RULE, 1021 00:29:06,846 --> 00:29:08,014 THAT GOVERNMENT BY 1022 00:29:08,014 --> 00:29:09,481 AN ELITE GROUP IS SUPERIOR 1023 00:29:09,481 --> 00:29:12,084 TO GOVERNMENT FOR, BY, 1024 00:29:12,084 --> 00:29:14,453 AND OF THE PEOPLE. 1025 00:29:14,453 --> 00:29:16,455 >> NO ONE BEFORE OR SINCE 1026 00:29:16,455 --> 00:29:18,925 HAS, UH, PAINTED SUCH 1027 00:29:18,925 --> 00:29:20,526 A VISIONARY PICTURE 1028 00:29:20,526 --> 00:29:22,528 OF HOW AMERICANS ARE BURDENED 1029 00:29:22,528 --> 00:29:24,897 BY THE TAX SYSTEM. 1030 00:29:24,897 --> 00:29:26,833 >> IN SHORT, A PUNITIVE 1031 00:29:26,833 --> 00:29:28,801 TAX SYSTEM MUST BE REPLACED 1032 00:29:28,801 --> 00:29:30,169 BY ONE THAT RESTORES 1033 00:29:30,169 --> 00:29:31,871 INCENTIVE FOR THE WORKER 1034 00:29:31,871 --> 00:29:33,472 AND FOR INDUSTRY, 1035 00:29:33,472 --> 00:29:35,107 A SYSTEM THAT REWARDS 1036 00:29:35,107 --> 00:29:37,076 INITIATIVE AND EFFORT 1037 00:29:37,076 --> 00:29:39,912 AND ENCOURAGES THRIFT. 1038 00:29:39,912 --> 00:29:41,247 NOW, ALL THESE THINGS 1039 00:29:41,247 --> 00:29:42,514 ARE POSSIBLE. 1040 00:29:42,514 --> 00:29:43,950 NONE OF THEM WILL BE EASY, 1041 00:29:43,950 --> 00:29:45,918 BUT THE CHOICE IS CLEAR. 1042 00:29:45,918 --> 00:29:47,219 WE CAN GO ON LETTING 1043 00:29:47,219 --> 00:29:48,220 THE COUNTRY SLIP 1044 00:29:48,220 --> 00:29:49,221 OVER THE BRINK 1045 00:29:49,221 --> 00:29:50,222 OF FINANCIAL RUIN 1046 00:29:50,222 --> 00:29:51,523 WITH THE DISASTER WHICH THIS 1047 00:29:51,523 --> 00:29:52,959 MEANS FOR THE INDIVIDUAL, 1048 00:29:52,959 --> 00:29:54,293 OR WE CAN FIND THE WILL 1049 00:29:54,293 --> 00:29:55,962 TO WORK TOGETHER, 1050 00:29:55,962 --> 00:29:57,496 TO RESTORE CONFIDENCE 1051 00:29:57,496 --> 00:29:58,497 IN OURSELVES 1052 00:29:58,497 --> 00:29:59,999 AND TO REGAIN THE CONFIDENCE 1053 00:29:59,999 --> 00:30:01,100 OF THE WORLD. 1054 00:30:01,100 --> 00:30:02,134 >> Fox: RONALD REAGAN 1055 00:30:02,134 --> 00:30:03,970 CAME INTO OFFICE BELIEVING 1056 00:30:03,970 --> 00:30:05,137 THAT HIGH TAX RATES 1057 00:30:05,137 --> 00:30:07,039 DISCOURAGE ECONOMIC GROWTH 1058 00:30:07,039 --> 00:30:08,140 AND DISCOURAGE PEOPLE 1059 00:30:08,140 --> 00:30:09,208 FROM WORKING HARDER. 1060 00:30:09,208 --> 00:30:10,209 THE CONTEXT FOR HIM 1061 00:30:10,209 --> 00:30:11,911 WAS THE MOVIE INDUSTRY. 1062 00:30:11,911 --> 00:30:14,113 >> Man: ALL RIGHT, GET ON STAGE, 1063 00:30:14,113 --> 00:30:15,882 YOU PRIMA DONNAS. LET'S GO! 1064 00:30:15,882 --> 00:30:17,049 GET ON FOR STAGE FOUR... 1065 00:30:17,049 --> 00:30:18,985 >> HEY, FELLAS! 1066 00:30:18,985 --> 00:30:20,186 GET A LOAD OF THIS WIRE. 1067 00:30:20,186 --> 00:30:22,021 >> ANYBODY I KNOW? 1068 00:30:22,021 --> 00:30:23,422 >> WE'RE GOING ON TOUR. 1069 00:30:23,422 --> 00:30:24,623 WHAT DO YOU KNOW, BOSTON, 1070 00:30:24,623 --> 00:30:26,225 PHILADELPHIA, WASHINGTON... 1071 00:30:26,225 --> 00:30:27,860 >> WASHINGTON? HEY, WOULDN'T IT 1072 00:30:27,860 --> 00:30:29,195 BE SOMETHING IF THE PRESIDENT 1073 00:30:29,195 --> 00:30:30,196 CAME TO SEE US, 1074 00:30:30,196 --> 00:30:31,197 THE CHIEF HIMSELF? 1075 00:30:31,197 --> 00:30:32,431 >> Weisman: HE'D MAKE A CERTAIN 1076 00:30:32,431 --> 00:30:33,866 NUMBER OF MOVIES, AND THEN 1077 00:30:33,866 --> 00:30:36,068 ANYTIME HE MADE ANOTHER MOVIE, 1078 00:30:36,068 --> 00:30:37,369 HE FIGURED THAT 80 OR 90% 1079 00:30:37,369 --> 00:30:39,005 OF THE INCOME HE WAS 1080 00:30:39,005 --> 00:30:40,506 GETTING FROM THAT MOVIE 1081 00:30:40,506 --> 00:30:42,141 WOULD GO TO THE FEDERAL 1082 00:30:42,141 --> 00:30:43,475 GOVERNMENT, SO HE WOULD STOP 1083 00:30:43,475 --> 00:30:44,610 MAKING MOVIES AND GO OFF 1084 00:30:44,610 --> 00:30:45,611 AND RIDE HORSES. 1085 00:30:45,611 --> 00:30:46,979 HE JUST BECAME CONVINCED, 1086 00:30:46,979 --> 00:30:48,480 BASED ON HIS PERSONAL EXPERIENCE 1087 00:30:48,480 --> 00:30:49,481 THAT A HIGH TAX RATE 1088 00:30:49,481 --> 00:30:50,482 DISCOURAGES PEOPLE 1089 00:30:50,482 --> 00:30:51,951 FROM WORKING HARD 1090 00:30:51,951 --> 00:30:54,120 AND-- AND GOING THE EXTRA MILE 1091 00:30:54,120 --> 00:30:55,121 TO BE PRODUCTIVE. 1092 00:30:55,121 --> 00:30:57,189 AND HE RODE THAT IDEA-- I-- 1093 00:30:57,189 --> 00:30:58,925 BECAUSE HE BELIEVED IT 1094 00:30:58,925 --> 00:31:00,026 AND BECAUSE HE WAS SUCH 1095 00:31:00,026 --> 00:31:01,160 A GREAT COMMUNICATOR, 1096 00:31:01,160 --> 00:31:02,561 HE RODE IT INTO THE WHITE HOUSE, 1097 00:31:02,561 --> 00:31:04,663 AND HE RODE IT INTO THE BRAINS 1098 00:31:04,663 --> 00:31:06,432 OF AMERICANS. 1099 00:31:06,432 --> 00:31:07,433 >> WE MUST GO FORWARD 1100 00:31:07,433 --> 00:31:09,435 WITH A TAX RELIEF PACKAGE. 1101 00:31:09,435 --> 00:31:11,670 I SHALL ASK FOR A 10% REDUCTION 1102 00:31:11,670 --> 00:31:12,671 ACROSS THE BOARD 1103 00:31:12,671 --> 00:31:15,074 IN PERSONAL INCOME TAX RATES 1104 00:31:15,074 --> 00:31:16,475 FOR EACH OF THE NEXT 1105 00:31:16,475 --> 00:31:17,576 THREE YEARS. 1106 00:31:17,576 --> 00:31:19,311 >> Fox: HE WAS THE SPONSOR, 1107 00:31:19,311 --> 00:31:20,312 THE SUPPORTER OF 1108 00:31:20,312 --> 00:31:22,181 THE ECONOMIC RECOVERY TAX ACT 1109 00:31:22,181 --> 00:31:24,450 OF 1981, AND IT'S THE FIRST TIME 1110 00:31:24,450 --> 00:31:25,451 THEY GAVE A NAME 1111 00:31:25,451 --> 00:31:26,452 TO A TAX REFORM. 1112 00:31:26,452 --> 00:31:28,087 >> THE IMPORTANT THING NOW 1113 00:31:28,087 --> 00:31:29,088 IS TO HOLD TO A FIRM, 1114 00:31:29,088 --> 00:31:30,923 STEADY COURSE. 1115 00:31:30,923 --> 00:31:32,624 TONIGHT, I WANT TO TALK WITH YOU 1116 00:31:32,624 --> 00:31:33,625 ABOUT THE NEXT STEPS 1117 00:31:33,625 --> 00:31:34,626 THAT WE MUST TAKE 1118 00:31:34,626 --> 00:31:35,627 ON THAT COURSE, 1119 00:31:35,627 --> 00:31:37,129 ADDITIONAL REDUCTIONS 1120 00:31:37,129 --> 00:31:38,130 IN FEDERAL SPENDING 1121 00:31:38,130 --> 00:31:39,131 THAT WILL HELP LOWER 1122 00:31:39,131 --> 00:31:40,132 OUR INTEREST RATES, 1123 00:31:40,132 --> 00:31:41,500 OUR INFLATION, 1124 00:31:41,500 --> 00:31:42,935 AND BRING US CLOSER 1125 00:31:42,935 --> 00:31:45,004 TO FULL ECONOMIC RECOVERY. 1126 00:31:45,004 --> 00:31:46,272 >> DAVID STOCKMAN ADMITTED, 1127 00:31:46,272 --> 00:31:47,273 WHEN HE WAS THE HEAD 1128 00:31:47,273 --> 00:31:48,607 OF THE CONGRESSIONAL BUDGET 1129 00:31:48,607 --> 00:31:49,608 OFFICE FOR REAGAN, 1130 00:31:49,608 --> 00:31:50,609 WAS THAT IN FIGHTING 1131 00:31:50,609 --> 00:31:53,512 FOR LOW TAX RATES, HE EXPECTED 1132 00:31:53,512 --> 00:31:55,314 THE REAGAN REVOLUTION ALSO 1133 00:31:55,314 --> 00:31:56,983 TO REDUCE GOVERNMENT, 1134 00:31:56,983 --> 00:31:57,984 BUT THEY FOUND-- 1135 00:31:57,984 --> 00:31:59,185 THE REPUBLICANS FOUND-- 1136 00:31:59,185 --> 00:32:01,120 THAT THE-- THERE WAS TOO MUCH 1137 00:32:01,120 --> 00:32:02,454 ENTRENCHED IN THE GOVERNMENT 1138 00:32:02,454 --> 00:32:04,623 PROGRAMS, AND SO GOVERNMENT 1139 00:32:04,623 --> 00:32:05,992 SPENDING WENT WAY UP. 1140 00:32:05,992 --> 00:32:07,226 SO, IT REALLY DIDN'T TEST 1141 00:32:07,226 --> 00:32:09,128 SUPPLY-SIDE ECONOMICS 1142 00:32:09,128 --> 00:32:11,163 IN THE BEST OF CONDITIONS. 1143 00:32:11,163 --> 00:32:13,199 >> REAGAN SOMETIMES GETS CREDIT 1144 00:32:13,199 --> 00:32:14,700 FOR MASSIVELY LOWER TAXING, 1145 00:32:14,700 --> 00:32:15,968 BUT THAT SHORT PERIOD 1146 00:32:15,968 --> 00:32:17,970 BETWEEN '80 AND '84 WERE-- 1147 00:32:17,970 --> 00:32:18,971 WHEN I WAS HERE-- 1148 00:32:18,971 --> 00:32:21,173 HE, UH, LOWERED THE TAX RATES, 1149 00:32:21,173 --> 00:32:22,274 AND THAT WAS VERY GOOD, 1150 00:32:22,274 --> 00:32:23,409 BUT HE ALSO HAD THREE TAX 1151 00:32:23,409 --> 00:32:25,144 INCREASES-- SOCIAL SECURITY 1152 00:32:25,144 --> 00:32:26,145 TAXES WENT UP, 1153 00:32:26,145 --> 00:32:27,413 AND OTHER REVENUES WENT UP, 1154 00:32:27,413 --> 00:32:29,215 AND IT WAS ALL CANCELED OUT 1155 00:32:29,215 --> 00:32:31,050 AND, UH, SPENDING WENT UP 1156 00:32:31,050 --> 00:32:33,019 AND THE DEFICIT EXPLODED. 1157 00:32:33,019 --> 00:32:34,020 >> ONE OF THE THINGS 1158 00:32:34,020 --> 00:32:35,121 ABOUT REAGAN WAS THAT WHEN HE 1159 00:32:35,121 --> 00:32:36,188 WAS CONVINCED THAT WE NEEDED 1160 00:32:36,188 --> 00:32:37,189 HIGHER TAXES, HE JUST WENT OUT 1161 00:32:37,189 --> 00:32:38,190 AND GAVE A SPEECH. 1162 00:32:38,190 --> 00:32:39,258 >> WE'RE WITHIN SIGHT 1163 00:32:39,258 --> 00:32:40,259 OF THE SAFE PORT 1164 00:32:40,259 --> 00:32:41,660 OF ECONOMIC RECOVERY. 1165 00:32:41,660 --> 00:32:43,395 DO WE MAKE PORT 1166 00:32:43,395 --> 00:32:45,264 OR GO AGROUND ON THE SHOALS 1167 00:32:45,264 --> 00:32:47,233 OF SELFISHNESS, PARTISANSHIP, 1168 00:32:47,233 --> 00:32:49,535 AND JUST PLAIN BULL-HEADEDNESS? 1169 00:32:49,535 --> 00:32:51,003 THE MEASURE THAT CONGRESS 1170 00:32:51,003 --> 00:32:52,371 IS ABOUT TO VOTE ON, 1171 00:32:52,371 --> 00:32:53,672 WHILE NOT PERFECT IN THE EYES 1172 00:32:53,672 --> 00:32:54,673 OF ANY ONE OF US, 1173 00:32:54,673 --> 00:32:56,408 WILL BRING US CLOSER 1174 00:32:56,408 --> 00:32:57,776 TO THE GOAL 1175 00:32:57,776 --> 00:32:59,045 OF A BALANCED BUDGET, 1176 00:32:59,045 --> 00:33:01,180 RESTORED INDUSTRIAL POWER, 1177 00:33:01,180 --> 00:33:02,314 AND EMPLOYMENT FOR ALL 1178 00:33:02,314 --> 00:33:04,083 WHO WANT TO WORK. 1179 00:33:04,083 --> 00:33:05,784 TOGETHER, WE CAN REACH 1180 00:33:05,784 --> 00:33:07,653 THAT GOAL. 1181 00:33:07,653 --> 00:33:08,787 >> ON A BIPARTISAN BASIS 1182 00:33:08,787 --> 00:33:10,256 IN THE SENATE AND THE HOUSE, 1183 00:33:10,256 --> 00:33:12,158 PEOPLE REALLY BEGAN TO STUDY 1184 00:33:12,158 --> 00:33:13,159 WHAT TAXES DO 1185 00:33:13,159 --> 00:33:14,226 THROUGH THE ECONOMY, 1186 00:33:14,226 --> 00:33:15,527 HOW PEOPLE CHANGE THEIR BEHAVIOR 1187 00:33:15,527 --> 00:33:16,528 IN RESPONSE TO 1188 00:33:16,528 --> 00:33:17,596 DIFFERENT TAX POLICIES. 1189 00:33:17,596 --> 00:33:18,597 >> Burman: IN THE EARLY '80s, 1190 00:33:18,597 --> 00:33:19,598 TAX SHELTERS 1191 00:33:19,598 --> 00:33:20,666 WERE REALLY RAMPANT. 1192 00:33:20,666 --> 00:33:22,268 THERE WERE STORIES ALL THE TIME 1193 00:33:22,268 --> 00:33:23,369 ABOUT RICH DEVELOPERS 1194 00:33:23,369 --> 00:33:25,071 WHO BUILT EMPTY OFFICE BUILDINGS 1195 00:33:25,071 --> 00:33:26,072 THAT MADE NO SENSE 1196 00:33:26,072 --> 00:33:27,439 FROM AN ECONOMIC PERSPECTIVE 1197 00:33:27,439 --> 00:33:29,075 BUT SAVED THEM AN ENORMOUS 1198 00:33:29,075 --> 00:33:30,476 AMOUNT OF MONEY IN TAXES, 1199 00:33:30,476 --> 00:33:31,477 AND PEOPLE SAW THAT 1200 00:33:31,477 --> 00:33:32,478 AS JUST A TRAVESTY. 1201 00:33:32,478 --> 00:33:33,645 THEY THOUGHT IT WAS UNFAIR 1202 00:33:33,645 --> 00:33:35,081 RICH PEOPLE WERE GETTING AWAY 1203 00:33:35,081 --> 00:33:36,448 WITH MURDER, AND THEY UNDERSTOOD 1204 00:33:36,448 --> 00:33:37,449 THAT THE TAX SYSTEM 1205 00:33:37,449 --> 00:33:38,450 WAS UNRAVELING. 1206 00:33:38,450 --> 00:33:39,718 >> YOU COULD ACTUALLY SELL 1207 00:33:39,718 --> 00:33:41,153 TAX CREDITS-- BUSINESSES 1208 00:33:41,153 --> 00:33:42,254 COULD SELL INVESTMENT 1209 00:33:42,254 --> 00:33:43,555 TAX CREDITS THEY DIDN'T NEED. 1210 00:33:43,555 --> 00:33:44,556 THERE WAS A MARKET 1211 00:33:44,556 --> 00:33:45,824 IN THE WALL STREET JOURNAL. 1212 00:33:45,824 --> 00:33:47,126 YOU COULD BUY THE RIGHT 1213 00:33:47,126 --> 00:33:48,394 NOT TO PAY TAXES. 1214 00:33:48,394 --> 00:33:49,395 >> WE HAD A SITUATION 1215 00:33:49,395 --> 00:33:50,462 WHERE HALF OF 1216 00:33:50,462 --> 00:33:51,797 OUR BIG CORPORATIONS WEREN'T 1217 00:33:51,797 --> 00:33:54,133 PAYING ANY TAXES, AND MANY OF 1218 00:33:54,133 --> 00:33:55,767 THE OTHER ONES, THE OTHER HALF, 1219 00:33:55,767 --> 00:33:57,469 WERE PAYING QUITE A BIT. 1220 00:33:57,469 --> 00:33:59,605 >> REAGAN CAME TO BELIEVE 1221 00:33:59,605 --> 00:34:01,707 THAT THIS REALLY WASN'T RIGHT, 1222 00:34:01,707 --> 00:34:03,542 AND, UH, HE WAS A MAN 1223 00:34:03,542 --> 00:34:05,244 OF CERTAIN VERY STRONG 1224 00:34:05,244 --> 00:34:06,245 CONVICTIONS. 1225 00:34:06,245 --> 00:34:07,479 SO HE SAID TO HIS SECRETARY 1226 00:34:07,479 --> 00:34:09,615 OF THE TREASURY IN 1984, 1227 00:34:09,615 --> 00:34:11,383 "COME UP WITH A PROPOSAL 1228 00:34:11,383 --> 00:34:12,518 THAT VASTLY SIMPLIFIES 1229 00:34:12,518 --> 00:34:13,585 THE LAWS, THAT'S FAIR 1230 00:34:13,585 --> 00:34:14,853 TO EVERYBODY, THAT DOESN'T 1231 00:34:14,853 --> 00:34:17,089 REALLY RAISE MORE REVENUE, 1232 00:34:17,089 --> 00:34:18,824 BUT DOES IT IN A SENSIBLE, 1233 00:34:18,824 --> 00:34:19,825 ECONOMICALLY SOUND 1234 00:34:19,825 --> 00:34:22,294 AND FAIR WAY, AND THAT MAKES 1235 00:34:22,294 --> 00:34:24,496 THE TAX LAWS MORE TRANSPARENT." 1236 00:34:24,496 --> 00:34:25,664 >> REAGAN DIDN'T PUT A LOT 1237 00:34:25,664 --> 00:34:26,798 OF PRECONDITIONS ON IT. 1238 00:34:26,798 --> 00:34:27,866 HE SAID, "I WANT LOWER 1239 00:34:27,866 --> 00:34:28,867 MARGINAL TAX RATES, 1240 00:34:28,867 --> 00:34:30,469 AND I'M GONNA KEEP THE TAX BREAK 1241 00:34:30,469 --> 00:34:31,703 FOR MORTGAGE INTEREST." 1242 00:34:31,703 --> 00:34:33,705 HE THOUGHT THAT WAS SACROSANCT. 1243 00:34:33,705 --> 00:34:35,241 BASICALLY, EVERYTHING ELSE 1244 00:34:35,241 --> 00:34:36,308 WAS ON THE TABLE. 1245 00:34:36,308 --> 00:34:37,709 >> ONCE TAX REFORM IS OUT THERE, 1246 00:34:37,709 --> 00:34:38,710 ANYONE WHO KILLS IT, 1247 00:34:38,710 --> 00:34:39,711 THE SAYING WAS, 1248 00:34:39,711 --> 00:34:40,712 HE HAS A DEAD CAT 1249 00:34:40,712 --> 00:34:42,148 ON HIS DOORSTEP. 1250 00:34:42,148 --> 00:34:43,482 ANYONE WHO KILLED TAX REFORM 1251 00:34:43,482 --> 00:34:45,184 WAS IMMEDIATELY UNDER SUSPICION, 1252 00:34:45,184 --> 00:34:46,352 HAVING DONE IT AS SOME SORT 1253 00:34:46,352 --> 00:34:47,353 OF SLEAZY PAYOFF 1254 00:34:47,353 --> 00:34:48,520 TO THE INTEREST GROUPS-- 1255 00:34:48,520 --> 00:34:49,855 WHICH, IT'S TRUE ENOUGH, 1256 00:34:49,855 --> 00:34:51,190 HATED IT-- SO REAGAN HAS 1257 00:34:51,190 --> 00:34:52,258 THIS RISK OF A DEAD CAT 1258 00:34:52,258 --> 00:34:53,292 ON HIS DOORSTEP. 1259 00:34:53,292 --> 00:34:54,560 HE-- I THINK HE GENUINELY 1260 00:34:54,560 --> 00:34:56,362 BELIEVED AND WANTED TO DO IT, 1261 00:34:56,362 --> 00:34:57,563 BUT HE IS SORT OF FORCED 1262 00:34:57,563 --> 00:34:58,664 POLITICALLY TO COME UP 1263 00:34:58,664 --> 00:35:00,266 WITH A PLAN THAT'S MORE FEASIBLE 1264 00:35:00,266 --> 00:35:01,667 THAN THE PURE TREASURY ONE PLAN. 1265 00:35:01,667 --> 00:35:02,834 THEN IT GOES TO THE HOUSE, 1266 00:35:02,834 --> 00:35:04,403 WHERE-- OF REPRESENTATIVES, 1267 00:35:04,403 --> 00:35:06,138 WHERE CONGRESSMAN ROSTENKOWSKI, 1268 00:35:06,138 --> 00:35:07,206 THE DEMOCRATIC CHAIR 1269 00:35:07,206 --> 00:35:08,674 OF THE WAYS AND MEANS COMMITTEE, 1270 00:35:08,674 --> 00:35:10,676 HE HAS TO DO SOMETHING, TOO. 1271 00:35:10,676 --> 00:35:12,811 >> ( shouting, cat yowls ) 1272 00:35:12,811 --> 00:35:14,346 >> THE HOUSE PLAN, ACTUALLY, 1273 00:35:14,346 --> 00:35:15,347 THEY RESTORED A LOT 1274 00:35:15,347 --> 00:35:16,548 OF THE SPECIAL TAX BREAKS 1275 00:35:16,548 --> 00:35:17,783 AND THE RATES WENT BACK UP. 1276 00:35:17,783 --> 00:35:19,418 REAGAN ORIGINALLY HAD PROPOSED 1277 00:35:19,418 --> 00:35:21,287 A TOP RATE OF 35%. 1278 00:35:21,287 --> 00:35:22,421 THE RATE WAS EVEN HIGHER 1279 00:35:22,421 --> 00:35:23,422 IN THE HOUSE PLAN, 1280 00:35:23,422 --> 00:35:24,690 AND IT-- AND THEY RESTORED 1281 00:35:24,690 --> 00:35:26,558 A LOT OF THE SPECIAL TAX BREAKS. 1282 00:35:26,558 --> 00:35:28,427 >> IT WAS A TAX REFORM PROPOSAL 1283 00:35:28,427 --> 00:35:29,695 THAT DIED, FRANKLY, 1284 00:35:29,695 --> 00:35:31,430 LEGISLATIVELY, NUMEROUS TIMES, 1285 00:35:31,430 --> 00:35:32,764 AND RONALD REAGAN HAD TO REACH 1286 00:35:32,764 --> 00:35:34,166 INTO THE CONGRESS AND SAY, 1287 00:35:34,166 --> 00:35:35,501 "NO, WE HAVE TO FINISH 1288 00:35:35,501 --> 00:35:36,768 OUR JOB HERE," 1289 00:35:36,768 --> 00:35:39,305 AND WOULD RESURRECT TAX REFORM. 1290 00:35:39,305 --> 00:35:40,172 >> Shaviro: THEN IT GOES 1291 00:35:40,172 --> 00:35:40,839 TO THE SENATE, 1292 00:35:40,839 --> 00:35:41,707 TO SENATOR PACKWOOD 1293 00:35:41,707 --> 00:35:42,774 OF THE SENATE FINANCE COMMITTEE. 1294 00:35:42,774 --> 00:35:44,310 INITIALLY, I THINK IT'S FAIR 1295 00:35:44,310 --> 00:35:45,711 TO SAY HE REALLY HATED IT. 1296 00:35:45,711 --> 00:35:46,712 HE CAME AROUND A BIT, 1297 00:35:46,712 --> 00:35:47,713 BUT PART OF THE THING 1298 00:35:47,713 --> 00:35:48,714 WAS THAT HE WOULD BE 1299 00:35:48,714 --> 00:35:49,815 THE ONE WHO KILLED IT. 1300 00:35:49,815 --> 00:35:50,682 HE DIDN'T WANNA BE 1301 00:35:50,682 --> 00:35:51,550 THE ONE WHO KILLED IT, 1302 00:35:51,550 --> 00:35:52,551 SO HE HAD TO DO SOMETHING ELSE. 1303 00:35:52,551 --> 00:35:53,719 >> PACKWOOD AND HIS STAFF 1304 00:35:53,719 --> 00:35:54,753 CAME UP WITH THE IDEA, 1305 00:35:54,753 --> 00:35:55,754 WHAT THEY CALLED 1306 00:35:55,754 --> 00:35:56,755 THE 27% SOLUTION. 1307 00:35:56,755 --> 00:35:58,290 THEY WOULD TAX CAPITAL GAINS 1308 00:35:58,290 --> 00:35:59,458 THE SAME AS OTHER INCOME. 1309 00:35:59,458 --> 00:36:00,726 BEFORE THAT, CAPITAL GAINS 1310 00:36:00,726 --> 00:36:01,760 HAD ALWAYS BEEN TAXED 1311 00:36:01,760 --> 00:36:02,761 AT A LOWER RATE, 1312 00:36:02,761 --> 00:36:03,862 AND BY ELIMINATING 1313 00:36:03,862 --> 00:36:05,331 A WHOLE HOST OF DEDUCTIONS 1314 00:36:05,331 --> 00:36:06,332 AND TAX BREAKS, 1315 00:36:06,332 --> 00:36:07,433 AND BY PUTTING A BIG TAX 1316 00:36:07,433 --> 00:36:08,734 INCREASE ON CORPORATIONS, 1317 00:36:08,734 --> 00:36:10,336 THEY WERE ABLE TO LOWER 1318 00:36:10,336 --> 00:36:13,205 THE TOP RATE TO 27%. 1319 00:36:13,205 --> 00:36:14,606 WHICH WAS VERY, VERY APPEALING, 1320 00:36:14,606 --> 00:36:15,741 AND REAGAN LIKED IT A LOT. 1321 00:36:15,741 --> 00:36:16,742 >> McIntyre: SO, WE MANAGED 1322 00:36:16,742 --> 00:36:18,210 TO GET A TAX REFORM 1323 00:36:18,210 --> 00:36:19,678 THAT WAS A TERRIFIC DEAL 1324 00:36:19,678 --> 00:36:21,380 FOR LOW- AND MIDDLE-INCOME 1325 00:36:21,380 --> 00:36:23,215 PEOPLE, OVERALL RAISE TAXES 1326 00:36:23,215 --> 00:36:24,750 ON CORPORATIONS AND THE WEALTHY, 1327 00:36:24,750 --> 00:36:25,751 BUT CUT TAXES 1328 00:36:25,751 --> 00:36:26,885 ON ENOUGH WEALTHY PEOPLE 1329 00:36:26,885 --> 00:36:28,287 AND ENOUGH CORPORATIONS 1330 00:36:28,287 --> 00:36:30,489 TO KEEP THOSE LOBBYING FORCES 1331 00:36:30,489 --> 00:36:32,224 AT BAY. 1332 00:36:32,224 --> 00:36:33,225 >> Fox: THEY ELIMINATED 1333 00:36:33,225 --> 00:36:34,226 ABOUT A THIRD OF ALL 1334 00:36:34,226 --> 00:36:35,694 THE SPECIAL RELIEF PROVISIONS. 1335 00:36:35,694 --> 00:36:36,962 THEY BROUGHT TAX RATES DOWN 1336 00:36:36,962 --> 00:36:37,996 FOR EVERYBODY. 1337 00:36:37,996 --> 00:36:40,599 ONLY... PEOPLE SAID, 1338 00:36:40,599 --> 00:36:41,933 "NOT GONNA LAST," 1339 00:36:41,933 --> 00:36:44,603 BECAUSE PROVIDING TAX RELIEF 1340 00:36:44,603 --> 00:36:45,604 IS SO MUCH A PART 1341 00:36:45,604 --> 00:36:47,439 OF THE POLITICAL CAMPAIGNS. 1342 00:36:47,439 --> 00:36:48,507 "WHAT CAN I OFFER PEOPLE 1343 00:36:48,507 --> 00:36:49,675 THAT WILL MAKE THEM THINK 1344 00:36:49,675 --> 00:36:50,576 I'M FOR THEM?" 1345 00:36:53,612 --> 00:36:55,881 >> ( G.H.W. Bush speaking ) 1346 00:37:00,552 --> 00:37:03,655 >> ( cheering ) 1347 00:37:03,655 --> 00:37:05,824 >> ( Clinton speaking ) 1348 00:37:10,629 --> 00:37:12,564 ...THE OLD-FASHIONED WAY. 1349 00:37:12,564 --> 00:37:15,401 >> ( G.W. Bush speaking ) 1350 00:37:19,405 --> 00:37:23,375 >> ( Obama speaking ) 1351 00:37:23,375 --> 00:37:24,376 ...UNDER MY PLAN... 1352 00:37:24,376 --> 00:37:26,812 >> ( cheering ) 1353 00:37:39,425 --> 00:37:40,626 >> BY THE ELEMENTS ALONE, 1354 00:37:40,626 --> 00:37:41,860 THEY WILL GROW TO MILLIONS 1355 00:37:41,860 --> 00:37:43,429 OF TIMES THEIR ORIGINAL SIZE 1356 00:37:43,429 --> 00:37:44,930 IN LESS TIME THAN IT TAKES 1357 00:37:44,930 --> 00:37:47,766 FOR THE SUN TO RISE AND FALL. 1358 00:37:53,805 --> 00:37:55,073 >> Mitchell: THE TAX SYSTEM 1359 00:37:55,073 --> 00:37:57,343 HAS BECOME A BIT OF A PLAYPEN 1360 00:37:57,343 --> 00:37:58,344 FOR POLITICIANS 1361 00:37:58,344 --> 00:37:59,345 OF BOTH PARTIES. 1362 00:37:59,345 --> 00:38:00,746 WHETHER THEY'RE REPUBLICANS 1363 00:38:00,746 --> 00:38:02,414 OR DEMOCRATS, IT SEEMS LIKE 1364 00:38:02,414 --> 00:38:04,516 FOR EVERY REAL OR IMAGINED 1365 00:38:04,516 --> 00:38:06,051 PROBLEM IN THE COUNTRY, 1366 00:38:06,051 --> 00:38:08,320 SOME POLITICIAN HAS AN ANSWER 1367 00:38:08,320 --> 00:38:09,821 THAT INVOLVES MORE COMPLICATION 1368 00:38:09,821 --> 00:38:10,856 OF THE TAX CODE. 1369 00:38:10,856 --> 00:38:12,391 >> WHAT YOU ARE LOOKING AT NOW 1370 00:38:12,391 --> 00:38:13,492 USED TO BE A GREAT CITY. 1371 00:38:13,492 --> 00:38:14,926 THAT WAS LONG AGO. 1372 00:38:14,926 --> 00:38:16,528 >> GEE! 1373 00:38:16,528 --> 00:38:17,929 >> IT'S THE HOME 1374 00:38:17,929 --> 00:38:19,731 OF MONSTERS NOW. 1375 00:38:19,731 --> 00:38:20,999 >> OUR TAX SYSTEM, IN THE WAY 1376 00:38:20,999 --> 00:38:22,368 IT'S USED BY GOVERNMENT, 1377 00:38:22,368 --> 00:38:23,369 IT'S BASICALLY 1378 00:38:23,369 --> 00:38:24,870 A VOTE-BUYING SYSTEM. 1379 00:38:24,870 --> 00:38:26,004 IT IS USED TO CURRY FAVOR 1380 00:38:26,004 --> 00:38:27,639 WITH VOTERS. 1381 00:38:27,639 --> 00:38:28,640 >> Burman: POLITICIANS 1382 00:38:28,640 --> 00:38:29,741 IN BOTH PARTIES HAVE COME 1383 00:38:29,741 --> 00:38:30,742 TO SEE THE INCOME TAX 1384 00:38:30,742 --> 00:38:32,744 AS A KIND OF CHRISTMAS TREE 1385 00:38:32,744 --> 00:38:33,879 FULL OF GOODIES THEY CAN 1386 00:38:33,879 --> 00:38:35,481 GIVE AWAY FOR ONE CONSTITUENCY 1387 00:38:35,481 --> 00:38:36,815 OR ANOTHER, AND THERE'S BEEN 1388 00:38:36,815 --> 00:38:38,450 THIS BIPARTISAN CONSENSUS 1389 00:38:38,450 --> 00:38:40,352 THAT THE WAY TO PANDER 1390 00:38:40,352 --> 00:38:41,353 TO THE ELECTORATE 1391 00:38:41,353 --> 00:38:42,754 IS BY CREATING NEW TAX CREDITS 1392 00:38:42,754 --> 00:38:44,590 TARGETED AT PARTICULAR GROUPS. 1393 00:38:44,590 --> 00:38:45,457 >> ( growls ) 1394 00:38:45,457 --> 00:38:46,458 >> IT'S THAT MONSTER AGAIN! 1395 00:38:46,458 --> 00:38:47,459 >> AND WE CAN CONTROL 1396 00:38:47,459 --> 00:38:48,494 HIS ACTIONS, DON'T WORRY. 1397 00:38:48,494 --> 00:38:49,495 >> WHY THE TAX CODE? 1398 00:38:49,495 --> 00:38:50,729 WHY NOT JUST SEND THE MONEY 1399 00:38:50,729 --> 00:38:51,730 OUT IN A CHECK? 1400 00:38:51,730 --> 00:38:53,565 WELL, THINGS GET HIDDEN 1401 00:38:53,565 --> 00:38:54,566 IN THE TAX CODE, 1402 00:38:54,566 --> 00:38:55,634 AND YOU GET CREDIT 1403 00:38:55,634 --> 00:38:56,868 FOR TWO THINGS WHEN YOU PUT 1404 00:38:56,868 --> 00:38:58,504 A SUBSIDY-- A SPECIAL 1405 00:38:58,504 --> 00:38:59,805 TAX BREAK INTO THE TAX CODE. 1406 00:38:59,805 --> 00:39:01,840 A), YOU GET CREDIT 1407 00:39:01,840 --> 00:39:02,908 FOR THE SUBSIDY, 1408 00:39:02,908 --> 00:39:05,110 AND B), YOU'VE CUT TAXES. 1409 00:39:05,110 --> 00:39:06,645 SO YOU DIDN'T INCREASE 1410 00:39:06,645 --> 00:39:07,646 GOVERNMENT SPENDING, 1411 00:39:07,646 --> 00:39:08,647 YOU CUT TAXES, 1412 00:39:08,647 --> 00:39:10,048 AND, WOW, THAT'S A TWOFER. 1413 00:39:10,048 --> 00:39:11,383 >> I DON'T UNDERSTAND. 1414 00:39:11,383 --> 00:39:12,384 WHY DO YOU HAVE 1415 00:39:12,384 --> 00:39:13,819 SUCH MONSTERS ANYWAY? 1416 00:39:13,819 --> 00:39:15,721 YOU'RE SO ADVANCED AND ALL. 1417 00:39:15,721 --> 00:39:16,722 >> Sheppard: CONGRESSPEOPLE 1418 00:39:16,722 --> 00:39:17,789 HAVE TO LOOK LIKE 1419 00:39:17,789 --> 00:39:20,526 THEY'RE DOING SOMETHING. 1420 00:39:20,526 --> 00:39:21,927 THERE'S-- THE WHOLE IMPETUS 1421 00:39:21,927 --> 00:39:23,729 IN WASHINGTON IS TO, 1422 00:39:23,729 --> 00:39:25,130 YOU KNOW, AS BILL CLINTON 1423 00:39:25,130 --> 00:39:26,131 USED TO PUT IT, 1424 00:39:26,131 --> 00:39:28,400 FEEL YOUR PAIN, YOU KNOW? 1425 00:39:28,400 --> 00:39:29,401 "LET'S GIVE 'EM 1426 00:39:29,401 --> 00:39:31,169 A LITTLE TAX CREDIT FOR IT, 1427 00:39:31,169 --> 00:39:32,471 AND IT'S NOT GONNA MAKE 1428 00:39:32,471 --> 00:39:33,705 A DENT IN THE REAL PROBLEM, 1429 00:39:33,705 --> 00:39:34,840 BUT IT'S GONNA LOOK LIKE 1430 00:39:34,840 --> 00:39:36,442 WE'RE DOING SOMETHING." 1431 00:39:36,442 --> 00:39:37,443 >> WELL, NOW, WHERE DO YOU THINK 1432 00:39:37,443 --> 00:39:38,444 THIS COUNTRY WOULD BE 1433 00:39:38,444 --> 00:39:39,445 WITHOUT POLITICIANS? 1434 00:39:39,445 --> 00:39:40,779 DO YOU THINK THAT THE AVERAGE 1435 00:39:40,779 --> 00:39:41,980 CITIZEN WOULD TAKE TIME OFF 1436 00:39:41,980 --> 00:39:43,081 TO HELP RUN THE COUNTRY? 1437 00:39:43,081 --> 00:39:44,550 >> THERE ARE MANY WHO WOULD. 1438 00:39:44,550 --> 00:39:45,951 >> AHH! ALL THE AVERAGE CITIZEN 1439 00:39:45,951 --> 00:39:47,553 THINKS ABOUT IS MAKING MONEY. 1440 00:39:47,553 --> 00:39:49,655 HE'S GOT NO TIME FOR POLITICS. 1441 00:39:49,655 --> 00:39:50,956 >> THE PUBLIC IS BEING TAUGHT 1442 00:39:50,956 --> 00:39:53,625 THAT TO PAY TAXES IS PAINFUL. 1443 00:39:53,625 --> 00:39:55,093 THAT'S WHY YOU NEED, 1444 00:39:55,093 --> 00:39:56,094 QUOTE, RELIEF. 1445 00:39:56,094 --> 00:39:57,696 IT'S AN AFFLICTION, 1446 00:39:57,696 --> 00:39:58,797 AND IF YOU CAN MITIGATE 1447 00:39:58,797 --> 00:39:59,798 THAT IN SOME WAY, 1448 00:39:59,798 --> 00:40:01,433 IF POLITICIANS CAN OFFER YOU 1449 00:40:01,433 --> 00:40:02,968 JUST SOME MORE RELIEF FROM THAT, 1450 00:40:02,968 --> 00:40:04,803 YOU'LL BE BETTER OFF. 1451 00:40:04,803 --> 00:40:06,071 >> WE FOUND, TO OUR REGRET, 1452 00:40:06,071 --> 00:40:07,773 THAT IT MADE UNCONTROLLABLE 1453 00:40:07,773 --> 00:40:09,608 MONSTERS, AS WELL. 1454 00:40:09,608 --> 00:40:10,742 >> THE TAX SYSTEM HAS NOW 1455 00:40:10,742 --> 00:40:11,743 GOTTEN TO THE POINT 1456 00:40:11,743 --> 00:40:12,744 WHERE CONGRESS USES 1457 00:40:12,744 --> 00:40:13,745 THE TAX SYSTEM 1458 00:40:13,745 --> 00:40:14,746 THE WAY MY MOTHER 1459 00:40:14,746 --> 00:40:16,114 USED CHICKEN SOUP. 1460 00:40:16,114 --> 00:40:18,584 IT'S A CURE-ALL FOR ANY ILL 1461 00:40:18,584 --> 00:40:19,585 AFFECTING SOCIETY 1462 00:40:19,585 --> 00:40:20,619 OR THE ECONOMY. 1463 00:40:20,619 --> 00:40:21,653 >> Burman: YOU COULD PICK 1464 00:40:21,653 --> 00:40:22,788 ALMOST ANY PROGRAM AREA 1465 00:40:22,788 --> 00:40:25,123 YOU WANT-- THERE'S A TAX PROGRAM 1466 00:40:25,123 --> 00:40:26,191 THAT LOOKS BASICALLY 1467 00:40:26,191 --> 00:40:27,693 LIKE A GOVERNMENT PROGRAM 1468 00:40:27,693 --> 00:40:28,694 RUN BY AN AGENCY, 1469 00:40:28,694 --> 00:40:29,695 BUT IT'S RUN BY 1470 00:40:29,695 --> 00:40:30,829 THE IRS, INSTEAD. 1471 00:40:30,829 --> 00:40:32,230 >> YOU KNOW, THE LITTLE CREDITS 1472 00:40:32,230 --> 00:40:33,832 FOR THIS AND THAT ARE OFFENSIVE 1473 00:40:33,832 --> 00:40:36,735 BECAUSE THEY DON'T WORK. 1474 00:40:36,735 --> 00:40:38,003 YOU KNOW, THEY COST MONEY, 1475 00:40:38,003 --> 00:40:39,137 AND THEY DON'T WORK. 1476 00:40:39,137 --> 00:40:42,240 THAT'S NOT A GOOD COMBINATION. 1477 00:40:42,240 --> 00:40:45,977 >> ( screaming ) 1478 00:40:45,977 --> 00:40:47,579 >> THE GENERAL PRINCIPLE, 1479 00:40:47,579 --> 00:40:48,580 I THINK, YOU DERIVE 1480 00:40:48,580 --> 00:40:50,048 FROM MOST TAX RELIEF 1481 00:40:50,048 --> 00:40:51,850 IS THAT THE MOST RELIEF 1482 00:40:51,850 --> 00:40:52,851 GOES TO PEOPLE 1483 00:40:52,851 --> 00:40:54,586 WHO NEED IT THE LEAST; 1484 00:40:54,586 --> 00:40:56,221 THE LEAST RELIEF GOES TO PEOPLE 1485 00:40:56,221 --> 00:40:57,623 WHO NEED IT THE MOST. 1486 00:40:57,623 --> 00:40:59,758 >> SURVEY SHOWS AMERICAN PEOPLE 1487 00:40:59,758 --> 00:41:00,759 TODAY BETTER HOUSED 1488 00:41:00,759 --> 00:41:02,728 THAN ANY PEOPLE IN HISTORY. 1489 00:41:02,728 --> 00:41:03,762 WHEN I FIRST READ THAT 1490 00:41:03,762 --> 00:41:04,963 ON THE RELEASE, I THOUGHT 1491 00:41:04,963 --> 00:41:06,698 TO MYSELF, "THEY CALL THAT NEWS? 1492 00:41:06,698 --> 00:41:08,500 EVERYONE KNOWS THAT!" 1493 00:41:08,500 --> 00:41:10,068 >> Fox: NOW, I WRITE 1494 00:41:10,068 --> 00:41:11,537 AND HAVE TALKED A LOT ABOUT 1495 00:41:11,537 --> 00:41:12,638 HOW THE HOME MORTGAGE 1496 00:41:12,638 --> 00:41:13,639 INTEREST DEDUCTION 1497 00:41:13,639 --> 00:41:14,773 IS SOMETHING SACRED. 1498 00:41:14,773 --> 00:41:16,174 I MEAN, IT'S A THIRD RAIL. 1499 00:41:16,174 --> 00:41:18,544 NO CANDIDATE IS GOING TO SAY 1500 00:41:18,544 --> 00:41:19,811 THAT WE OUGHT TO ELIMINATE IT 1501 00:41:19,811 --> 00:41:20,879 OR GREATLY CURTAIL IT. 1502 00:41:20,879 --> 00:41:21,913 I THINK THAT THE QUESTION 1503 00:41:21,913 --> 00:41:22,914 THAT YOU'D ASK 1504 00:41:22,914 --> 00:41:23,982 FOR THE HOME MORTGAGE INTEREST 1505 00:41:23,982 --> 00:41:25,216 DEDUCTION IS THE QUESTION 1506 00:41:25,216 --> 00:41:26,618 YOU'D ASK FOR ALL RELIEF: 1507 00:41:26,618 --> 00:41:27,953 WHY IS IT THERE? 1508 00:41:27,953 --> 00:41:29,187 >> THE PROOF OF THE PUDDING 1509 00:41:29,187 --> 00:41:31,990 IS IN THE EATING, AS THEY SAY, 1510 00:41:31,990 --> 00:41:34,025 AND THAT PARTICULAR KIND 1511 00:41:34,025 --> 00:41:36,194 OF PUDDING TASTES 1512 00:41:36,194 --> 00:41:38,697 RIGHT NICE TO US. 1513 00:41:38,697 --> 00:41:42,100 >> IN 2006, THE BOTTOM 52% 1514 00:41:42,100 --> 00:41:45,571 OF ALL TAXPAYERS, OVER 50%, 1515 00:41:45,571 --> 00:41:46,938 THEY GOT JUST 2% 1516 00:41:46,938 --> 00:41:48,840 OF THAT 66 BILLION. 1517 00:41:48,840 --> 00:41:52,944 THE TOP 3% GOT ABOUT 30%. 1518 00:41:52,944 --> 00:41:54,946 WELL, CAN YOU IMAGINE 1519 00:41:54,946 --> 00:41:57,583 IN THIS SENATE FINANCE COMMITTEE 1520 00:41:57,583 --> 00:41:58,917 HEARING SAYING, "WE ARE NOW 1521 00:41:58,917 --> 00:42:00,919 ANNOUNCING" JUST THAT OUTCOME? 1522 00:42:00,919 --> 00:42:02,721 "WE'RE GONNA GIVE 30% 1523 00:42:02,721 --> 00:42:03,922 TO THE TOP THREE OF YOU, 1524 00:42:03,922 --> 00:42:06,024 AND THE OTHER 52%, 1525 00:42:06,024 --> 00:42:07,092 WHY DON'T YOU JUST GET 1526 00:42:07,092 --> 00:42:08,093 OUT OF THE MEETING? 1527 00:42:08,093 --> 00:42:10,261 GO HOME, 'CAUSE WE DON'T CARE 1528 00:42:10,261 --> 00:42:12,831 TO HELP YOU BECOME HOMEOWNERS," 1529 00:42:12,831 --> 00:42:13,832 AND THAT WOULD BE OUTRAGEOUS. 1530 00:42:13,832 --> 00:42:14,833 IT COULDN'T HAPPEN, 1531 00:42:14,833 --> 00:42:15,834 BUT IT DOES HAPPEN 1532 00:42:15,834 --> 00:42:17,235 IN THE TAX LAWS, AND SO MANY 1533 00:42:17,235 --> 00:42:18,336 OF THOSE THINGS OCCUR 1534 00:42:18,336 --> 00:42:20,238 BECAUSE IT'S NOT TRANSPARENT. 1535 00:42:20,238 --> 00:42:22,007 AND POLITICIANS 1536 00:42:22,007 --> 00:42:23,241 DON'T WANT TO TALK ABOUT IT, 1537 00:42:23,241 --> 00:42:24,576 BECAUSE THEY TALK ABOUT 1538 00:42:24,576 --> 00:42:25,577 HOW MARVELOUS IS IT 1539 00:42:25,577 --> 00:42:26,878 TO HELP YOU OWN A HOME. 1540 00:42:26,878 --> 00:42:27,746 >> Man: HOMES THAT ARE 1541 00:42:27,746 --> 00:42:28,847 THE FINEST THAT CAN BE HAD 1542 00:42:28,847 --> 00:42:29,848 FOR THE MEANS 1543 00:42:29,848 --> 00:42:30,849 AND THE MODE OF LIFE 1544 00:42:30,849 --> 00:42:33,652 OF THOSE WHO LOVE, HOPE, 1545 00:42:33,652 --> 00:42:35,587 SLEEP, WORK, EAT... 1546 00:42:35,587 --> 00:42:37,155 YES, LIVE IN THEM 1547 00:42:37,155 --> 00:42:39,825 FOR AMERICA. 1548 00:42:39,825 --> 00:42:41,059 >> THE CHILDCARE CREDIT. 1549 00:42:41,059 --> 00:42:42,327 I MEAN, CHILDCARE 1550 00:42:42,327 --> 00:42:44,362 IS EXPENSIVE FOR EVERYBODY. 1551 00:42:44,362 --> 00:42:45,864 IT'S INCREDIBLY EXPENSIVE. 1552 00:42:45,864 --> 00:42:46,998 YOU HAVE TO-- IF YOU HAVE 1553 00:42:46,998 --> 00:42:47,999 ONE CHILD, LET ALONE 1554 00:42:47,999 --> 00:42:49,300 TWO CHILDREN IN CHILDCARE... 1555 00:42:49,300 --> 00:42:50,936 AND SO CONGRESS ENACTED 1556 00:42:50,936 --> 00:42:52,638 A CHILDCARE CREDIT. 1557 00:42:52,638 --> 00:42:54,773 WELL, WHO GETS IT? 1558 00:42:54,773 --> 00:42:56,307 WELL, YOU ONLY GET A CREDIT, 1559 00:42:56,307 --> 00:42:57,876 WHICH IS A DOLLAR-FOR-DOLLAR 1560 00:42:57,876 --> 00:42:59,210 CREDIT AGAINST YOUR TAXES-- 1561 00:42:59,210 --> 00:43:00,779 IT OFFSETS A DOLLAR OF TAXES-- 1562 00:43:00,779 --> 00:43:03,148 IF YOU OWE TAXES. 1563 00:43:03,148 --> 00:43:04,149 BUT LISTEN TO THIS-- 1564 00:43:04,149 --> 00:43:06,251 AND IT JUST SEEMS SO STRIKING, 1565 00:43:06,251 --> 00:43:07,753 THE UNFAIR-- 1566 00:43:07,753 --> 00:43:08,754 IF YOU EARN HUNDREDS 1567 00:43:08,754 --> 00:43:10,021 OF THOUSANDS, OR MILLIONS 1568 00:43:10,021 --> 00:43:11,156 OF DOLLARS, AND YOU HAVE 1569 00:43:11,156 --> 00:43:12,190 TWO KIDS IN CHILDCARE 1570 00:43:12,190 --> 00:43:13,391 AND YOU'RE THE EXECUTIVE 1571 00:43:13,391 --> 00:43:15,226 OF SOME TOP COMPANY, 1572 00:43:15,226 --> 00:43:18,196 YOU GET THE $1200 TAX CREDIT. 1573 00:43:18,196 --> 00:43:20,298 IF YOU EARN $25,000 1574 00:43:20,298 --> 00:43:22,634 AND YOU DON'T OWE INCOME TAXES, 1575 00:43:22,634 --> 00:43:24,770 YOU DON'T GET ANY HELP, 1576 00:43:24,770 --> 00:43:25,771 YET YOU'RE THE ONES 1577 00:43:25,771 --> 00:43:27,673 WHO NEED THE HELP THE MOST. 1578 00:43:27,673 --> 00:43:29,040 >> THAT'S THE KIND OF BUSINESS 1579 00:43:29,040 --> 00:43:30,341 WE LIKE. 1580 00:43:30,341 --> 00:43:31,409 >> THESE ARE OUTCOMES 1581 00:43:31,409 --> 00:43:32,744 THAT, IF THEY DON'T MAKE 1582 00:43:32,744 --> 00:43:34,012 SOCIAL SENSE, IF THEY DON'T 1583 00:43:34,012 --> 00:43:35,046 MAKE ECONOMIC SENSE, 1584 00:43:35,046 --> 00:43:37,182 AND THEY DRIVE UP TAX RATES, 1585 00:43:37,182 --> 00:43:38,850 WE OUGHT TO SAY 1586 00:43:38,850 --> 00:43:39,851 TO OUR POLITICIANS, 1587 00:43:39,851 --> 00:43:43,021 AND I'M ASKING THEM, "WHY?" 1588 00:43:43,021 --> 00:43:44,155 >> ALL RIGHT, ALL RIGHT, 1589 00:43:44,155 --> 00:43:45,724 HOLD OFF THE QUESTIONS. 1590 00:43:45,724 --> 00:43:47,893 >> WHY THE MYSTERY, BILL? 1591 00:43:47,893 --> 00:43:49,294 >> RIGHT NOW WE HAVE TAX CREDITS 1592 00:43:49,294 --> 00:43:50,295 FOR BABY-SITTERS, 1593 00:43:50,295 --> 00:43:51,429 TAX CREDITS FOR COLLEGE, 1594 00:43:51,429 --> 00:43:53,865 YOU KNOW, TAX CREDITS FOR KIDS, 1595 00:43:53,865 --> 00:43:55,233 AND, YOU KNOW, THIS IS 1596 00:43:55,233 --> 00:43:56,802 THE KIND OF JUNK 1597 00:43:56,802 --> 00:43:58,937 THAT MAKES THE TAX CODE 1598 00:43:58,937 --> 00:44:00,105 TENS OF THOUSANDS 1599 00:44:00,105 --> 00:44:01,106 OF PAGES LONG. 1600 00:44:01,106 --> 00:44:02,107 IT'S THE KIND OF JUNK 1601 00:44:02,107 --> 00:44:03,942 THAT CREATES THE FIELD DAY 1602 00:44:03,942 --> 00:44:04,943 FOR THE POLITICIANS 1603 00:44:04,943 --> 00:44:06,077 AND THE TAX LAWYERS 1604 00:44:06,077 --> 00:44:07,813 TO PLAY THEIR GAMES. 1605 00:44:07,813 --> 00:44:08,814 >> IT'S JUST NOT CLEAR 1606 00:44:08,814 --> 00:44:09,815 THAT YOU SHOULD REALLY 1607 00:44:09,815 --> 00:44:10,816 BE USING THE TAX SYSTEM 1608 00:44:10,816 --> 00:44:11,917 TO ENCOURAGE HOME OWNERSHIP, 1609 00:44:11,917 --> 00:44:12,918 OR ANYTHING ELSE LIKE THAT. 1610 00:44:12,918 --> 00:44:13,919 >> THE TAX SYSTEM 1611 00:44:13,919 --> 00:44:14,953 SHOULD RAISE REVENUE 1612 00:44:14,953 --> 00:44:15,954 AND THEN TRY TO DO 1613 00:44:15,954 --> 00:44:17,388 AS LITTLE ELSE AS POSSIBLE, 1614 00:44:17,388 --> 00:44:18,957 BECAUSE ALMOST EVERYTHING ELSE 1615 00:44:18,957 --> 00:44:20,892 THAT IT DOES IS HARMFUL. 1616 00:44:28,233 --> 00:44:29,901 >> BUT WHAT PEOPLE DON'T REALIZE 1617 00:44:29,901 --> 00:44:31,369 IS WHILE THE FEDERAL GOVERNMENT 1618 00:44:31,369 --> 00:44:32,470 SPENDS THREE TRILLION 1619 00:44:32,470 --> 00:44:33,739 A YEAR, ROUGHLY, 1620 00:44:33,739 --> 00:44:36,174 IN DIRECT SPENDING PROGRAMS, 1621 00:44:36,174 --> 00:44:39,110 IT ALSO SPENDS INDIRECTLY 1622 00:44:39,110 --> 00:44:41,312 $1 TRILLION A YEAR 1623 00:44:41,312 --> 00:44:42,981 IN TAX PREFERENCES. 1624 00:44:42,981 --> 00:44:44,382 BY THAT I MEAN 1625 00:44:44,382 --> 00:44:46,384 THE FEDERAL GOVERNMENT FORGOES 1626 00:44:46,384 --> 00:44:47,385 RECEIVING REVENUES 1627 00:44:47,385 --> 00:44:49,454 OF ABOUT $1 TRILLION A YEAR 1628 00:44:49,454 --> 00:44:51,256 BECAUSE OF DEDUCTIONS, 1629 00:44:51,256 --> 00:44:53,124 CREDITS, EXEMPTIONS, 1630 00:44:53,124 --> 00:44:55,193 AND EXCLUSIONS IN THE TAX CODE. 1631 00:44:55,193 --> 00:44:56,795 >> WHAT HAPPENS TO THE AVERAGE 1632 00:44:56,795 --> 00:44:58,263 PERSON IS, IF YOU LOOK 1633 00:44:58,263 --> 00:45:00,031 AT THE HUNDREDS, 1634 00:45:00,031 --> 00:45:01,032 IF NOT THOUSANDS 1635 00:45:01,032 --> 00:45:02,167 OF SPECIAL PREFERENCES 1636 00:45:02,167 --> 00:45:03,168 IN THE TAX CODE, 1637 00:45:03,168 --> 00:45:04,903 I BET EVERY SINGLE PERSON 1638 00:45:04,903 --> 00:45:06,204 WATCHING THIS BENEFITS 1639 00:45:06,204 --> 00:45:07,205 FROM ONE OR TWO 1640 00:45:07,205 --> 00:45:08,774 OF THOSE SPECIAL PREFERENCES, 1641 00:45:08,774 --> 00:45:10,141 AND THEY THINK, "WE'D BETTER 1642 00:45:10,141 --> 00:45:11,342 KEEP THE SYSTEM IN PLACE, 1643 00:45:11,342 --> 00:45:12,744 BECAUSE I BENEFIT FROM-- 1644 00:45:12,744 --> 00:45:14,212 FROM LOOPHOLE 'A' 1645 00:45:14,212 --> 00:45:16,281 AND LOOPHOLE 'G.'" 1646 00:45:16,281 --> 00:45:18,016 WELL, WHAT THEY DON'T REALIZE 1647 00:45:18,016 --> 00:45:19,117 IS THAT THEIR NEIGHBORS 1648 00:45:19,117 --> 00:45:20,118 ARE BENEFITTING 1649 00:45:20,118 --> 00:45:21,887 FROM LOOPHOLE "E" 1650 00:45:21,887 --> 00:45:23,288 AND LOOPHOLE "L," 1651 00:45:23,288 --> 00:45:24,522 AND THEN THE NEIGHBOR 1652 00:45:24,522 --> 00:45:26,224 ON THE OTHER SIDE 1653 00:45:26,224 --> 00:45:27,225 IS BENEFITTING 1654 00:45:27,225 --> 00:45:28,259 FROM LOOPHOLE "W" 1655 00:45:28,259 --> 00:45:30,028 AND LOOPHOLE "C." 1656 00:45:30,028 --> 00:45:31,029 AND SO EVERYONE IS, 1657 00:45:31,029 --> 00:45:33,464 IN SOME WAY, HAS THEIR SNOUT 1658 00:45:33,464 --> 00:45:35,133 IN THE TROUGH OF SPECIAL 1659 00:45:35,133 --> 00:45:36,367 INTEREST TAX PROVISIONS, 1660 00:45:36,367 --> 00:45:37,468 BUT WHAT DOES THAT MEAN? 1661 00:45:37,468 --> 00:45:38,536 AT THE END OF THE DAY, 1662 00:45:38,536 --> 00:45:41,940 THE RATE IS HIGHER 1663 00:45:41,940 --> 00:45:42,941 ON ALL OF US 1664 00:45:42,941 --> 00:45:44,542 ON THE INCOME THAT IS TAXED. 1665 00:45:44,542 --> 00:45:45,977 >> YOU SEE THAT ALMOST HALF 1666 00:45:45,977 --> 00:45:47,445 OF ALL INCOME THAT INDIVIDUALS 1667 00:45:47,445 --> 00:45:49,447 COULD BE TAXED ON 1668 00:45:49,447 --> 00:45:51,549 WILL NOT BE TAXED. 1669 00:45:51,549 --> 00:45:53,251 AND PROBABLY PEOPLE WATCHING 1670 00:45:53,251 --> 00:45:55,220 THIS WILL SAY, "WELL, JOHN, 1671 00:45:55,220 --> 00:45:56,221 THAT'S FABULOUS." 1672 00:45:56,221 --> 00:45:58,790 BUT THERE ARE CONSEQUENCES. 1673 00:45:58,790 --> 00:45:59,858 THE FIRST CONSEQUENCE 1674 00:45:59,858 --> 00:46:00,959 IS THAT THERE'S REALLY 1675 00:46:00,959 --> 00:46:02,027 A CLOSE RELATIONSHIP 1676 00:46:02,027 --> 00:46:03,028 BETWEEN TAX RATES 1677 00:46:03,028 --> 00:46:04,495 AND WHAT CAN BE TAXED. 1678 00:46:04,495 --> 00:46:05,496 SO, IF ONLY HALF 1679 00:46:05,496 --> 00:46:06,932 OF ALL INCOME CAN BE TAXED, 1680 00:46:06,932 --> 00:46:07,933 PEOPLE HAVE TO PAY 1681 00:46:07,933 --> 00:46:09,034 MUCH HIGHER TAX RATES 1682 00:46:09,034 --> 00:46:11,236 THAN THEY WOULD OTHERWISE. 1683 00:46:11,236 --> 00:46:12,337 >> WOULDN'T YOU RATHER 1684 00:46:12,337 --> 00:46:14,873 GIVE UP 50 CENTS OF LOOPHOLES 1685 00:46:14,873 --> 00:46:17,175 FOR A DOLLAR OF LOWER TAX RATES? 1686 00:46:17,175 --> 00:46:18,176 THAT'S, IN EFFECT, 1687 00:46:18,176 --> 00:46:21,312 WHAT TAX REFORM IS ALL ABOUT. 1688 00:46:21,312 --> 00:46:22,814 >> SIMPLIFYING THE TAX LAWS, 1689 00:46:22,814 --> 00:46:23,815 MAKING SENSE OF 1690 00:46:23,815 --> 00:46:24,816 THE TAX LAWS, 1691 00:46:24,816 --> 00:46:26,017 THERE ISN'T A POLITICIAN 1692 00:46:26,017 --> 00:46:27,018 WHO WON'T TELL YOU 1693 00:46:27,018 --> 00:46:28,019 THAT THEY'RE FOR IT, 1694 00:46:28,019 --> 00:46:29,120 AND THEN THEY'LL GO OUT 1695 00:46:29,120 --> 00:46:30,521 AND SAY, "AND WHAT I'M OFFERING 1696 00:46:30,521 --> 00:46:31,522 NOW IS A CREDIT HERE, 1697 00:46:31,522 --> 00:46:33,191 AN ADDITIONAL DEDUCTION HERE." 1698 00:46:33,191 --> 00:46:35,226 NOBODY WANTS TO ELIMINATE 1699 00:46:35,226 --> 00:46:36,962 THE RELIEF THAT'S ALREADY THERE. 1700 00:46:36,962 --> 00:46:38,396 ALMOST NO ONE. 1701 00:46:38,396 --> 00:46:40,899 SO, THE POLITICIANS 1702 00:46:40,899 --> 00:46:43,168 ALL ARE FOR DECENCY, 1703 00:46:43,168 --> 00:46:44,402 HONESTY IN THE TAX SYSTEM, 1704 00:46:44,402 --> 00:46:46,938 SIMPLIFICATION, TRANSPARENCY... 1705 00:46:46,938 --> 00:46:48,239 YOU'LL HEAR THAT, AND YOU'LL 1706 00:46:48,239 --> 00:46:49,507 SAY, "OH, THAT'S SOMEBODY 1707 00:46:49,507 --> 00:46:50,508 I'M IN FAVOR OF," 1708 00:46:50,508 --> 00:46:52,043 BUT WHEN IT COMES DOWN 1709 00:46:52,043 --> 00:46:54,079 TO ACTUALLY DEPRIVING ANYBODY 1710 00:46:54,079 --> 00:46:55,113 OF THESE PROVISIONS, 1711 00:46:55,113 --> 00:46:56,314 IT'S VERY HARD TO GET THEM 1712 00:46:56,314 --> 00:46:57,515 TO DO IT. 1713 00:47:02,420 --> 00:47:04,222 >> REPORT PRELIMINARY FINDINGS. 1714 00:47:04,222 --> 00:47:05,857 >> IN HIS SECOND TERM, 1715 00:47:05,857 --> 00:47:06,858 PRESIDENT BUSH SAID 1716 00:47:06,858 --> 00:47:08,126 THAT ONE OF HIS OBJECTIVES 1717 00:47:08,126 --> 00:47:09,394 WAS TO SIMPLIFY THE TAX CODE 1718 00:47:09,394 --> 00:47:11,262 FOR VERY GOOD REASONS-- 1719 00:47:11,262 --> 00:47:13,131 THE BURDEN IS GREAT 1720 00:47:13,131 --> 00:47:14,966 ON THE TAXPAYER. 1721 00:47:14,966 --> 00:47:16,567 >> G.W. Bush: UH, I AM... 1722 00:47:16,567 --> 00:47:18,369 FIRM IN MY DESIRE 1723 00:47:18,369 --> 00:47:19,470 TO GET SOMETHIN' DONE. 1724 00:47:19,470 --> 00:47:21,306 WE'RE GONNA TAKE THEIR WORK, 1725 00:47:21,306 --> 00:47:23,208 AND WE'LL GO TO THE CONGRESS 1726 00:47:23,208 --> 00:47:24,575 AND SAY, "LET'S WORK TOGETHER 1727 00:47:24,575 --> 00:47:26,444 TO ACHIEVE SOMETHING, UH, 1728 00:47:26,444 --> 00:47:27,445 VERY CONSTRUCTIVE 1729 00:47:27,445 --> 00:47:29,247 FOR THE AMERICAN PEOPLE." 1730 00:47:29,247 --> 00:47:30,982 >> UNFORTUNATELY, OTHER 1731 00:47:30,982 --> 00:47:32,317 PRIORITIES TOOK THE PLACE 1732 00:47:32,317 --> 00:47:34,052 OF THAT, AND THE PRESIDENT 1733 00:47:34,052 --> 00:47:35,553 WAS, INSTEAD, YOU KNOW, 1734 00:47:35,553 --> 00:47:37,155 AT THAT POINT, PREOCCUPIED 1735 00:47:37,155 --> 00:47:38,623 WITH THE SOCIAL SECURITY REFORM, 1736 00:47:38,623 --> 00:47:40,025 WHICH DIDN'T-- DIDN'T-- 1737 00:47:40,025 --> 00:47:41,092 DIDN'T GO OVER SO WELL. 1738 00:47:41,092 --> 00:47:43,995 >> WELL, THAT'S THE STORY 1739 00:47:43,995 --> 00:47:46,531 ON THAT PARTICULAR PROJECT. 1740 00:47:46,531 --> 00:47:47,565 >> THESE POLITICIANS 1741 00:47:47,565 --> 00:47:49,100 DON'T WILLING GIVE UP POWER. 1742 00:47:49,100 --> 00:47:50,601 THEY'RE NOT GOING TO 1743 00:47:50,601 --> 00:47:52,037 GIVE UP THE POWER THEY HAVE 1744 00:47:52,037 --> 00:47:53,438 UNDER OUR CURRENT TAX CODE. 1745 00:47:53,438 --> 00:47:54,439 >> IF ONLY THERE WERE 1746 00:47:54,439 --> 00:47:55,440 MORE POWER, BETTY! 1747 00:47:55,440 --> 00:47:56,441 >> IS THERE ANY WAY 1748 00:47:56,441 --> 00:47:57,575 TO GENERATE MORE POWER? 1749 00:47:57,575 --> 00:47:59,344 WE'VE GOT TO HAVE MORE! 1750 00:47:59,344 --> 00:48:03,214 >> ( screeching ) 1751 00:48:03,214 --> 00:48:04,449 >> POLITICS HAS SCREWED UP 1752 00:48:04,449 --> 00:48:05,583 ALL EFFORTS TO, UH, 1753 00:48:05,583 --> 00:48:06,985 DO TAX SIMPLIFICATION. 1754 00:48:06,985 --> 00:48:08,553 I MEAN, YOU KNOW, I PERSONALLY 1755 00:48:08,553 --> 00:48:10,188 DEFINE POLITICS 1756 00:48:10,188 --> 00:48:11,189 AS A CURIOUS FORM 1757 00:48:11,189 --> 00:48:12,490 OF JUVENILE DELINQUENCY. 1758 00:48:12,490 --> 00:48:15,060 >> ( blows landing ) 1759 00:48:15,060 --> 00:48:16,094 >> WELL, WHAT HAPPENS 1760 00:48:16,094 --> 00:48:17,095 WHEN YOU TRY TO PUSH 1761 00:48:17,095 --> 00:48:18,096 A GOOD IDEA THROUGH 1762 00:48:18,096 --> 00:48:19,330 THE LEGISLATIVE PROCESS, 1763 00:48:19,330 --> 00:48:20,999 EVERYBODY-- EVERY POLITICIAN 1764 00:48:20,999 --> 00:48:22,067 SAYS IN SO MANY WORDS, 1765 00:48:22,067 --> 00:48:25,236 "WHAT'S IN IT FOR ME, OR PEOPLE 1766 00:48:25,236 --> 00:48:26,938 THAT ARE SIGNIFICANT TO ME, 1767 00:48:26,938 --> 00:48:29,975 LIKE MY CAMPAIGN CONTRIBUTORS?" 1768 00:48:29,975 --> 00:48:31,342 >> SAY, WHAT THEY TEACHING YOU 1769 00:48:31,342 --> 00:48:32,944 UP AT THAT YANKEE UNIVERSITY, 1770 00:48:32,944 --> 00:48:34,179 BAD MANNERS? 1771 00:48:34,179 --> 00:48:35,580 >> THE SPECIAL INTEREST GROUPS 1772 00:48:35,580 --> 00:48:36,948 AND THE POLITICIANS HAVE 1773 00:48:36,948 --> 00:48:38,149 A VERY COZY RELATIONSHIP 1774 00:48:38,149 --> 00:48:39,384 WHERE THEY GET TO EXCHANGE 1775 00:48:39,384 --> 00:48:40,385 CAMPAIGN CASH 1776 00:48:40,385 --> 00:48:42,687 FOR SPECIAL INTEREST LOOPHOLES, 1777 00:48:42,687 --> 00:48:43,688 AND THAT'S A GAME 1778 00:48:43,688 --> 00:48:45,223 THAT THE AMERICAN PEOPLE LOSE, 1779 00:48:45,223 --> 00:48:46,491 BUT IT'S THE SPECIAL INTEREST 1780 00:48:46,491 --> 00:48:47,592 GROUPS AND THE POLITICIANS 1781 00:48:47,592 --> 00:48:48,593 THAT WIN. 1782 00:48:48,593 --> 00:48:50,195 >> THE RHETORIC IS ALWAYS THERE 1783 00:48:50,195 --> 00:48:51,296 TO HELP THE PEOPLE, AH, 1784 00:48:51,296 --> 00:48:52,297 STICK IT TO ONE GROUP 1785 00:48:52,297 --> 00:48:53,298 VERSUS THE OTHER, 1786 00:48:53,298 --> 00:48:54,299 CLASS WARFARE, 1787 00:48:54,299 --> 00:48:55,300 THAT SORT OF THING-- 1788 00:48:55,300 --> 00:48:56,567 THAT'S ALL THEY TALK ABOUT, 1789 00:48:56,567 --> 00:48:57,635 BUT IT'S ALL POLITICS. 1790 00:48:57,635 --> 00:48:59,037 >> DON'T RILE ME, BOY. 1791 00:48:59,037 --> 00:49:00,638 DON'T RILE ME. 1792 00:49:00,638 --> 00:49:02,107 >> WE HAVE 35,000 LOBBYISTS 1793 00:49:02,107 --> 00:49:03,441 IN WASHINGTON WHOSE SOLE JOB 1794 00:49:03,441 --> 00:49:05,110 IS MOSTLY TO GET 1795 00:49:05,110 --> 00:49:07,145 A TAX BREAK FOR THEIR EMPLOYERS. 1796 00:49:07,145 --> 00:49:08,213 >> WHAT PEOPLE WILL DO 1797 00:49:08,213 --> 00:49:09,380 WILL BE TO LOBBY 1798 00:49:09,380 --> 00:49:11,382 FOR VERY, VERY NARROW BENEFITS, 1799 00:49:11,382 --> 00:49:13,384 YOU KNOW, A PARTICULAR EXEMPTION 1800 00:49:13,384 --> 00:49:15,353 FOR A PARTICULAR PRODUCT, 1801 00:49:15,353 --> 00:49:16,587 OR A PARTICULAR EXEMPTION 1802 00:49:16,587 --> 00:49:18,289 FOR SOMETHING THAT IS 1803 00:49:18,289 --> 00:49:19,690 MANUFACTURED IN A CERTAIN WAY, 1804 00:49:19,690 --> 00:49:21,259 OR A PARTICULAR EXEMPTION 1805 00:49:21,259 --> 00:49:22,493 FOR RESEARCH. 1806 00:49:22,493 --> 00:49:23,628 >> A BUSINESS CAN COME IN 1807 00:49:23,628 --> 00:49:24,996 AND MAKE A BIG DONATION 1808 00:49:24,996 --> 00:49:26,164 TO A MEMBER OF CONGRESS, 1809 00:49:26,164 --> 00:49:27,665 AND HE'LL HEAR THEM OUT 1810 00:49:27,665 --> 00:49:29,034 ABOUT PARTICULAR THINGS 1811 00:49:29,034 --> 00:49:30,035 THEY WAY, VERSUS 1812 00:49:30,035 --> 00:49:31,036 SOME OTHER BUSINESS 1813 00:49:31,036 --> 00:49:32,103 OR A LABOR UNION 1814 00:49:32,103 --> 00:49:33,271 OR A NONPROFIT, 1815 00:49:33,271 --> 00:49:35,540 EVEN CHURCH GROUPS AND OTHERS. 1816 00:49:35,540 --> 00:49:37,675 >> YEAH, MAC, FOR FIVE Gs, 1817 00:49:37,675 --> 00:49:39,677 IT'S IN THE BAG. 1818 00:49:39,677 --> 00:49:41,279 >> IF YOU HAVE ENOUGH LOBBYISTS 1819 00:49:41,279 --> 00:49:42,547 IN WASHINGTON SO THAT THERE 1820 00:49:42,547 --> 00:49:43,548 ARE 70 LOBBYISTS 1821 00:49:43,548 --> 00:49:45,116 FOR EVERY MEMBER OF CONGRESS... 1822 00:49:45,116 --> 00:49:46,517 I THINK MOST AMERICAN CITIZENS 1823 00:49:46,517 --> 00:49:47,618 UNDERSTAND AS THEY SIT 1824 00:49:47,618 --> 00:49:49,154 AT THE DINNER TABLE AT NIGHT, 1825 00:49:49,154 --> 00:49:50,455 "MAN, I'M GROSSLY OUTMANNED 1826 00:49:50,455 --> 00:49:51,556 UP THERE." 1827 00:49:51,556 --> 00:49:52,590 >> NOW, I HAD OBSERVED 1828 00:49:52,590 --> 00:49:53,691 THE PROCESS OF MEMBERS 1829 00:49:53,691 --> 00:49:55,360 SEEKING COMMITTEE ASSIGNMENTS 1830 00:49:55,360 --> 00:49:56,361 FOR A LOT OF YEARS, 1831 00:49:56,361 --> 00:49:58,163 AND PARTICIPATED IN THE PROCESS. 1832 00:49:58,163 --> 00:50:00,298 I DON'T RECALL EVER HAVING HAD 1833 00:50:00,298 --> 00:50:01,566 A MEMBER COME TO ME 1834 00:50:01,566 --> 00:50:02,633 AND SAY, "DICK, I WANT TO BE 1835 00:50:02,633 --> 00:50:03,634 ON WAYS AND MEANS 1836 00:50:03,634 --> 00:50:05,170 BECAUSE I'M INTERESTED 1837 00:50:05,170 --> 00:50:06,237 IN THE TAX CODE." 1838 00:50:06,237 --> 00:50:08,406 IT WAS, "I WANNA BE 1839 00:50:08,406 --> 00:50:09,407 ON WAYS AND MEANS 1840 00:50:09,407 --> 00:50:11,109 BECAUSE IT'S AN EXCELLENT 1841 00:50:11,109 --> 00:50:12,177 COMMITTEE FROM WHICH 1842 00:50:12,177 --> 00:50:13,178 TO RAISE THE FUNDS 1843 00:50:13,178 --> 00:50:14,179 FOR MY CAMPAIGN." 1844 00:50:14,179 --> 00:50:16,347 SAME WITH SENATE FINANCE. 1845 00:50:16,347 --> 00:50:18,383 WELL, HOW DO YOU RAISE FUNDS? 1846 00:50:18,383 --> 00:50:21,319 YOU, IN FACT, PEDDLE TAX FAVORS. 1847 00:50:21,319 --> 00:50:24,055 >> ( calling auction ) 1848 00:50:24,055 --> 00:50:27,058 >> ( man shouts ) 1849 00:50:27,058 --> 00:50:28,326 >> "WE'LL GET THIS CAMPAIGN 1850 00:50:28,326 --> 00:50:29,327 HELP FOR YOU, 1851 00:50:29,327 --> 00:50:30,361 WE'LL DO THAT FOR YOU, 1852 00:50:30,361 --> 00:50:31,429 WE'LL DO THIS FOR YOU. 1853 00:50:31,429 --> 00:50:32,830 YOU'VE GOTTA, UH, YOU'VE GOTTA 1854 00:50:32,830 --> 00:50:33,831 HELP MY CLIENT OUT 1855 00:50:33,831 --> 00:50:35,333 WITH THIS LITTLE TAX PROBLEM 1856 00:50:35,333 --> 00:50:36,334 THEY'RE HAVING." 1857 00:50:36,334 --> 00:50:37,468 WE HAVE TAX EXEMPTIONS 1858 00:50:37,468 --> 00:50:39,204 FOR SPECIFIC MANUFACTURERS 1859 00:50:39,204 --> 00:50:41,072 OF CEILING FANS. 1860 00:50:41,072 --> 00:50:42,073 >> I CAN'T GET IT OUT 1861 00:50:42,073 --> 00:50:43,074 OF MY MIND, JAMES. 1862 00:50:43,074 --> 00:50:44,075 WE'RE CROOKS. 1863 00:50:44,075 --> 00:50:45,476 >> ( chuckles ) 1864 00:50:45,476 --> 00:50:46,477 YOU TALK AS IF 1865 00:50:46,477 --> 00:50:48,246 YOU'RE JUST FINDING THAT OUT. 1866 00:50:48,246 --> 00:50:49,514 >> AS LONG AS WE'RE ELECTING 1867 00:50:49,514 --> 00:50:50,748 PEOPLE AND THEY'VE GOT FRIENDS 1868 00:50:50,748 --> 00:50:51,782 WHO HELP THEM GET ELECTED, 1869 00:50:51,782 --> 00:50:52,783 AND THEY'VE GOT FRIENDS 1870 00:50:52,783 --> 00:50:53,851 WHO ARE GIVING THEM MONEY, 1871 00:50:53,851 --> 00:50:54,852 OR GIVING THEM JOBS 1872 00:50:54,852 --> 00:50:56,087 AFTER THEY LEAVE, 1873 00:50:56,087 --> 00:50:57,188 THERE ARE ALWAYS GONNA BE 1874 00:50:57,188 --> 00:50:58,356 REASONS WHY LAWMAKERS WANT 1875 00:50:58,356 --> 00:50:59,490 TO DO FAVORS FOR CERTAIN PEOPLE. 1876 00:50:59,490 --> 00:51:00,691 SOMETIMES THEY'RE GOOD REASONS. 1877 00:51:00,691 --> 00:51:01,692 SOMETIMES THEY WANT 1878 00:51:01,692 --> 00:51:02,693 TO HELP AN INDUSTRY. 1879 00:51:02,693 --> 00:51:04,095 SOMETIMES THEY WANT TO HELP 1880 00:51:04,095 --> 00:51:05,096 A COMPANY THAT'S 1881 00:51:05,096 --> 00:51:06,097 IN THEIR DISTRICT-- I MEAN, 1882 00:51:06,097 --> 00:51:07,098 THESE ARE GOOD REASONS, 1883 00:51:07,098 --> 00:51:08,166 BUT ALL OF THAT LEADS THEM 1884 00:51:08,166 --> 00:51:09,234 TO CLUTTER UP THE TAX CODE. 1885 00:51:09,234 --> 00:51:10,468 >> WE HAVE A BULLETIN 1886 00:51:10,468 --> 00:51:11,469 JUST RECEIVED. 1887 00:51:11,469 --> 00:51:12,503 ACCORDING TO A REPORT 1888 00:51:12,503 --> 00:51:13,504 NOT YET CONFIRMED, 1889 00:51:13,504 --> 00:51:14,572 A BEAST OF SEEMINGLY 1890 00:51:14,572 --> 00:51:15,640 GIGANTIC PROPORTIONS 1891 00:51:15,640 --> 00:51:16,641 HAS BEEN SIGHTED 1892 00:51:16,641 --> 00:51:17,642 LURKING IN THE HILLS 1893 00:51:17,642 --> 00:51:20,111 DUE NORTHEAST OF TOWN. 1894 00:51:20,111 --> 00:51:21,112 >> ( gavel strikes ) 1895 00:51:21,112 --> 00:51:22,480 >> WE'LL COME TO ORDER. 1896 00:51:22,480 --> 00:51:25,383 UM, I'M COMMITTED TO, UM, 1897 00:51:25,383 --> 00:51:27,385 DO ALL WE POSSIBLY CAN, 1898 00:51:27,385 --> 00:51:29,387 THIS COMMITTEE, THIS YEAR, 1899 00:51:29,387 --> 00:51:30,521 TO SET THE STAGE 1900 00:51:30,521 --> 00:51:33,491 FOR SIGNIFICANT TAX REFORM. 1901 00:51:33,491 --> 00:51:34,859 MY-- I BELIEVE THAT VIRTUALLY 1902 00:51:34,859 --> 00:51:37,462 NO ONE IN THE CONGRESS 1903 00:51:37,462 --> 00:51:39,264 HAS A SUFFICIENT GRASP 1904 00:51:39,264 --> 00:51:40,431 OF THE CODE. 1905 00:51:40,431 --> 00:51:41,766 >> THERE'S A DOZEN PROPOSALS 1906 00:51:41,766 --> 00:51:43,201 THAT HAVE BEEN INTRODUCED 1907 00:51:43,201 --> 00:51:44,202 INTO CONGRESS-- 1908 00:51:44,202 --> 00:51:45,203 I'M NOT GONNA NAME 1909 00:51:45,203 --> 00:51:46,404 THE SPONSORS-- TO REVAMP 1910 00:51:46,404 --> 00:51:47,505 OR REFORM THE TAX CODE, 1911 00:51:47,505 --> 00:51:48,539 INCLUDING PROPOSALS 1912 00:51:48,539 --> 00:51:50,441 FOR A FAIR TAX, FLAT TAX... 1913 00:51:50,441 --> 00:51:51,442 >> THERE SEEMS TO BE 1914 00:51:51,442 --> 00:51:52,543 A CONSENSUS GATHERING 1915 00:51:52,543 --> 00:51:54,212 THAT WE NEED, QUOTE, TAX REFORM. 1916 00:51:54,212 --> 00:51:55,413 THERE IS NOT A CONSENSUS, 1917 00:51:55,413 --> 00:51:57,315 HOWEVER, ABOUT WHAT THAT MEANS. 1918 00:51:57,315 --> 00:51:58,516 >> HOW, AS WE MOVE FORWARD 1919 00:51:58,516 --> 00:52:00,485 WITH, UH, THE DISCUSSION 1920 00:52:00,485 --> 00:52:03,188 ON TAX REFORM, UH, 1921 00:52:03,188 --> 00:52:04,822 SHOULD WE FACTOR IN 1922 00:52:04,822 --> 00:52:06,891 THE, UH, NEED FOR US, 1923 00:52:06,891 --> 00:52:07,892 AS A GOVERNMENT, 1924 00:52:07,892 --> 00:52:11,162 TO BE FISCALLY, UH, RESPONSIBLE? 1925 00:52:11,162 --> 00:52:12,163 >> "HOW DO WE MOVE 1926 00:52:12,163 --> 00:52:13,164 TO ANY OF THESE SYSTEMS 1927 00:52:13,164 --> 00:52:14,165 WHEN MANY OF THEM WOULD DO AWAY 1928 00:52:14,165 --> 00:52:15,300 WITH THE POPULAR EXEMPTIONS 1929 00:52:15,300 --> 00:52:16,301 AND DEDUCTIONS, 1930 00:52:16,301 --> 00:52:17,302 SUCH AS THE DEDUCTIONS 1931 00:52:17,302 --> 00:52:18,569 FOR MORTGAGE INTEREST PAYMENTS?" 1932 00:52:18,569 --> 00:52:20,205 >> JUST, ALL THINGS BEING EQUAL, 1933 00:52:20,205 --> 00:52:21,272 IS THERE A-- TEND TO BE 1934 00:52:21,272 --> 00:52:22,273 A MORE EFFICIENT WAY 1935 00:52:22,273 --> 00:52:24,909 TO RAISE REVENUE... 1936 00:52:24,909 --> 00:52:27,178 UM, COMPARED WITH OTHER WAYS? 1937 00:52:27,178 --> 00:52:28,713 >> AS YOU SAID, MR. CHAIRMAN, 1938 00:52:28,713 --> 00:52:30,581 OUR TAX SYSTEM IS BADLY BROKEN. 1939 00:52:30,581 --> 00:52:32,450 NO ONE QUARRELS WITH THAT. 1940 00:52:32,450 --> 00:52:33,884 YOU MENTION THE TRAIN WRECK 1941 00:52:33,884 --> 00:52:36,187 COMING IN 2010. 1942 00:52:36,187 --> 00:52:37,422 >> I'M SORRY, I'M GONNA HAVE 1943 00:52:37,422 --> 00:52:38,689 TO CLOSE THIS HEARING DOWN. 1944 00:52:38,689 --> 00:52:40,958 WE'RE WAY LATE FOR A VOTE. 1945 00:52:40,958 --> 00:52:43,461 MEETING'S ADJOURNED. 1946 00:53:22,400 --> 00:53:23,534 >> Burman: A LONG-STANDING ISSUE 1947 00:53:23,534 --> 00:53:24,669 IN TAX POLICY IS WHETHER 1948 00:53:24,669 --> 00:53:25,870 YOU SHOULD TAX INCOME-- 1949 00:53:25,870 --> 00:53:27,838 HOW MUCH PEOPLE PRODUCE, 1950 00:53:27,838 --> 00:53:28,839 OR CONSUMPTION-- 1951 00:53:28,839 --> 00:53:30,741 HOW MUCH THEY SPEND, 1952 00:53:30,741 --> 00:53:32,410 AND THERE'S BEEN A PHILOSOPHICAL 1953 00:53:32,410 --> 00:53:33,444 DEBATE THAT'S GONE BACK 1954 00:53:33,444 --> 00:53:34,445 TO HOBBES AND LOCKE 1955 00:53:34,445 --> 00:53:35,446 AND PHILOSOPHERS 1956 00:53:35,446 --> 00:53:36,514 HUNDREDS OF YEARS AGO. 1957 00:53:36,514 --> 00:53:37,982 >> YES, IT'S AMAZING 1958 00:53:37,982 --> 00:53:39,284 WHEN YOU STOP AND THINK 1959 00:53:39,284 --> 00:53:40,785 ABOUT IT. 1960 00:53:40,785 --> 00:53:42,520 >> AMERICANS HAVE BEEN 1961 00:53:42,520 --> 00:53:43,721 SCHIZOPHRENIC IN THE WAY 1962 00:53:43,721 --> 00:53:45,356 THAT WE GO ABOUT TAXES. 1963 00:53:45,356 --> 00:53:46,691 AT SOME TIMES, WE WANTED 1964 00:53:46,691 --> 00:53:48,259 TO JUST TAX THE CONSUMPTION-- 1965 00:53:48,259 --> 00:53:49,527 THAT IS, THE SALE OF THINGS-- 1966 00:53:49,527 --> 00:53:50,661 AND OTHER TIMES, WE WANT 1967 00:53:50,661 --> 00:53:52,263 TO TAX JUST INCOME. 1968 00:53:52,263 --> 00:53:53,398 AT OTHER TIMES, WE WANT 1969 00:53:53,398 --> 00:53:54,399 TO TAX SAVINGS, 1970 00:53:54,399 --> 00:53:55,733 OR THE RETURN TO INVESTMENT 1971 00:53:55,733 --> 00:53:56,834 THROUGH CAPITAL GAINS 1972 00:53:56,834 --> 00:53:57,835 AND DIVIDENDS, 1973 00:53:57,835 --> 00:53:59,370 AND WHAT IT'S COME DOWN TO NOW 1974 00:53:59,370 --> 00:54:00,538 IS THAT WE JUST BASICALLY 1975 00:54:00,538 --> 00:54:01,639 TAX EVERYTHING. 1976 00:54:01,639 --> 00:54:02,507 >> Shaviro: EVER SINCE 1977 00:54:02,507 --> 00:54:03,508 THERE'S BEEN A TAX, THE PHRASE 1978 00:54:03,508 --> 00:54:04,509 "TAX REFORM" HAS BEEN 1979 00:54:04,509 --> 00:54:05,510 VERY POPULAR. 1980 00:54:05,510 --> 00:54:06,677 HOW CAN YOU BE AGAINST IT? 1981 00:54:06,677 --> 00:54:07,812 TO AN EXTENT, EVERYONE 1982 00:54:07,812 --> 00:54:08,913 WILL DEFINE TAX REFORM 1983 00:54:08,913 --> 00:54:10,047 AS "WHAT I WANT, 1984 00:54:10,047 --> 00:54:11,549 THAT'S TAX REFORM." 1985 00:54:11,549 --> 00:54:12,550 >> NOW, NONE OF LIKE 1986 00:54:12,550 --> 00:54:13,818 CRYSTAL-GAZING, SO LET'S 1987 00:54:13,818 --> 00:54:14,819 TAKE A LOOK AT WHAT IS 1988 00:54:14,819 --> 00:54:16,654 ACTUALLY HAPPENING NOW. 1989 00:54:16,654 --> 00:54:18,022 >> WE DO HAVE A TAX SYSTEM TODAY 1990 00:54:18,022 --> 00:54:19,023 WHICH IS A HYBRID. 1991 00:54:19,023 --> 00:54:20,358 WE CALL IT AN INCOME TAX, 1992 00:54:20,358 --> 00:54:21,559 AND THAT'S KIND OF FUNNY, 1993 00:54:21,559 --> 00:54:22,560 BECAUSE IT'S NOT. 1994 00:54:22,560 --> 00:54:23,994 IT'S ABOUT ONE THIRD INCOME TAX, 1995 00:54:23,994 --> 00:54:25,463 ONE THIRD CONSUMPTION TAX, 1996 00:54:25,463 --> 00:54:26,564 ONE THIRD NEITHER. 1997 00:54:26,564 --> 00:54:27,932 >> Burman: CONSUMPTION, SPENDING 1998 00:54:27,932 --> 00:54:29,334 IS BASICALLY JUST THE DIFFERENCE 1999 00:54:29,334 --> 00:54:30,601 BETWEEN THE AMOUNT YOU EARN 2000 00:54:30,601 --> 00:54:31,702 AND THE AMOUNT YOU SAVE 2001 00:54:31,702 --> 00:54:33,304 AND THE AMOUNT YOU PAY IN TAXES, 2002 00:54:33,304 --> 00:54:34,639 BUT UNDER OUR CURRENT INCOME TAX 2003 00:54:34,639 --> 00:54:35,706 THERE ARE A LOT OF WAYS 2004 00:54:35,706 --> 00:54:36,941 IN WHICH YOU CAN BASICALLY 2005 00:54:36,941 --> 00:54:38,443 GET A DEDUCTION FOR SAVINGS, 2006 00:54:38,443 --> 00:54:39,744 SO IT'S MOVING IN THE DIRECTION 2007 00:54:39,744 --> 00:54:40,778 OF A CONSUMPTION TAX. 2008 00:54:40,778 --> 00:54:41,779 SO, IF YOU PUT MONEY 2009 00:54:41,779 --> 00:54:42,913 INTO YOUR HOUSE, YOU GET 2010 00:54:42,913 --> 00:54:44,615 TO DEDUCT THE MORTGAGE INTEREST. 2011 00:54:44,615 --> 00:54:45,850 IF YOU PUT MONEY INTO AN IRA 2012 00:54:45,850 --> 00:54:47,952 OR INTO A 401(k), 2013 00:54:47,952 --> 00:54:49,520 OR YOUR EMPLOYER PUTS MONEY 2014 00:54:49,520 --> 00:54:50,521 INTO A PENSION, 2015 00:54:50,521 --> 00:54:51,522 THAT'S NOT INCLUDED 2016 00:54:51,522 --> 00:54:52,523 IN YOUR INCOME. 2017 00:54:52,523 --> 00:54:53,924 SO, AGAIN, THAT'S THE SAME KIND 2018 00:54:53,924 --> 00:54:55,360 OF TAX TREATMENT AS YOU GET 2019 00:54:55,360 --> 00:54:56,494 UNDER A CONSUMPTION TAX. 2020 00:54:58,763 --> 00:55:01,499 >> YOU MUST UNDERSTAND. 2021 00:55:05,703 --> 00:55:08,038 >> EVERY ECONOMIST WILL TELL YOU 2022 00:55:08,038 --> 00:55:09,607 THAT MANY WILL FAVOR 2023 00:55:09,607 --> 00:55:10,608 A CONSUMPTION TAX. 2024 00:55:10,608 --> 00:55:12,343 BUT IF YOU HAVE AN INCOME TAX 2025 00:55:12,343 --> 00:55:13,944 WHICH DOESN'T TRY TO DO 2026 00:55:13,944 --> 00:55:15,813 ALL OF THE MANIPULATING 2027 00:55:15,813 --> 00:55:17,848 OF THE WAY IN WHICH WE BEHAVE, 2028 00:55:17,848 --> 00:55:18,849 STAYS OUT OF IT, 2029 00:55:18,849 --> 00:55:20,485 AND IT LETS THE MARKETS, 2030 00:55:20,485 --> 00:55:22,353 YOU KNOW, PRETTY MUCH CONTROL 2031 00:55:22,353 --> 00:55:23,654 THOSE THINGS, THAT WE'D HAVE 2032 00:55:23,654 --> 00:55:24,655 A STRONGER ECONOMY. 2033 00:55:24,655 --> 00:55:25,856 THAT MEANS HIGHER WAGES, 2034 00:55:25,856 --> 00:55:27,958 MORE SAVINGS, MORE INVESTMENT, 2035 00:55:27,958 --> 00:55:29,960 STRONGER COMPANIES, MORE-- 2036 00:55:29,960 --> 00:55:31,095 MORE COMPANIES THAT CAN 2037 00:55:31,095 --> 00:55:32,563 COMPETE INTERNATIONALLY. 2038 00:55:32,563 --> 00:55:34,098 THAT'S A HUGE ADVANTAGE. 2039 00:55:34,098 --> 00:55:36,000 >> EVERYONE IN THE POLICY WORLD 2040 00:55:36,000 --> 00:55:37,468 WOULD PREFER A BROAD-BASED, 2041 00:55:37,468 --> 00:55:38,469 LOW-RATE INCOME TAX 2042 00:55:38,469 --> 00:55:40,037 TO ONE LIKE WHAT WE HAVE NOW, 2043 00:55:40,037 --> 00:55:41,872 BUT NONETHELESS, TAX REFORM 2044 00:55:41,872 --> 00:55:43,107 HAS KIND OF BEEN CONVERTED 2045 00:55:43,107 --> 00:55:44,809 INTO... IT'S NOW PREDOMINATELY 2046 00:55:44,809 --> 00:55:45,810 IDENTIFIED WITH 2047 00:55:45,810 --> 00:55:47,512 HAVING A CONSUMPTION TAX. 2048 00:55:47,512 --> 00:55:48,779 >> NOW, THERE ARE MANY WAYS 2049 00:55:48,779 --> 00:55:49,947 YOU CAN GO ABOUT CREATING 2050 00:55:49,947 --> 00:55:51,482 A CONSUMPTION-BASED TAX. 2051 00:55:51,482 --> 00:55:52,483 >> ONE EXAMPLE OF 2052 00:55:52,483 --> 00:55:53,718 A CONSUMPTION-BASED TAX 2053 00:55:53,718 --> 00:55:55,119 IS TO HAVE A NATIONAL SALES TAX, 2054 00:55:55,119 --> 00:55:57,555 BUT A FLAT TAX, 2055 00:55:57,555 --> 00:55:59,424 AT LEAST PROPERLY DEFINED, 2056 00:55:59,424 --> 00:56:01,792 IS ALSO A CONSUMPTION-BASED TAX. 2057 00:56:01,792 --> 00:56:02,793 >> THERE'S MORE TO IT 2058 00:56:02,793 --> 00:56:03,794 THAN THAT, JOE. 2059 00:56:03,794 --> 00:56:05,530 THERE'S SOMETHING BEHIND THIS, 2060 00:56:05,530 --> 00:56:07,732 SOMETHING WE DON'T UNDERSTAND. 2061 00:56:07,732 --> 00:56:08,999 >> CERTAIN TYPES OF INCOME, 2062 00:56:08,999 --> 00:56:10,601 CAPITAL INCOME IN PARTICULAR, 2063 00:56:10,601 --> 00:56:11,736 DON'T GET TAXED 2064 00:56:11,736 --> 00:56:13,604 UNDER A CONSUMPTION TAX, 2065 00:56:13,604 --> 00:56:14,805 AND THAT WILL LEAVE 2066 00:56:14,805 --> 00:56:15,806 CERTAIN PEOPLE 2067 00:56:15,806 --> 00:56:17,074 WITH MUCH LOWER TAX BILLS. 2068 00:56:17,074 --> 00:56:19,677 MUCH, MUCH LOWER TAX BILLS. 2069 00:56:19,677 --> 00:56:21,479 RICH PEOPLE WILL PAY 2070 00:56:21,479 --> 00:56:23,147 CONSIDERABLY LESS, 2071 00:56:23,147 --> 00:56:24,682 UNLESS THE SYSTEM 2072 00:56:24,682 --> 00:56:26,551 IS DESIGNED CAREFULLY. 2073 00:56:26,551 --> 00:56:29,420 >> HA! WHAT AN IMAGINATION. 2074 00:56:29,420 --> 00:56:30,688 >> RIGHT. THAT'S JUST WHAT 2075 00:56:30,688 --> 00:56:32,122 IT TAKES MOST OF ALL, 2076 00:56:32,122 --> 00:56:34,024 CREATIVE IMAGINATION. 2077 00:56:34,024 --> 00:56:35,460 >> THE ADVANTAGE OF TAXING 2078 00:56:35,460 --> 00:56:36,794 SPENDING RATHER THAN INCOME 2079 00:56:36,794 --> 00:56:38,563 IS THAT IT'S THOUGHT 2080 00:56:38,563 --> 00:56:39,597 TO BE MORE EFFICIENT. 2081 00:56:39,597 --> 00:56:40,831 IT ENCOURAGES YOU TO SAVE. 2082 00:56:40,831 --> 00:56:41,966 THE CURRENT TAX SYSTEM 2083 00:56:41,966 --> 00:56:43,968 BASICALLY DISCOURAGES SAVING, 2084 00:56:43,968 --> 00:56:45,636 AND THERE'S NOT ANY PARTICULAR 2085 00:56:45,636 --> 00:56:46,837 REASON WE WANT PEOPLE TO SAVE 2086 00:56:46,837 --> 00:56:48,205 LESS THAN THEY WOULD OTHERWISE. 2087 00:56:48,205 --> 00:56:49,206 AND IF YOU LOOK AT 2088 00:56:49,206 --> 00:56:50,908 THE HORRIBLY ANEMIC SAVINGS RATE 2089 00:56:50,908 --> 00:56:51,976 IN THE UNITED STATES, 2090 00:56:51,976 --> 00:56:53,444 IT CERTAINLY WOULD BE 2091 00:56:53,444 --> 00:56:54,845 A GOOD IDEA TO RAISE IT. 2092 00:56:54,845 --> 00:56:56,881 RIGHT NOW, IT'S AROUND ZERO. 2093 00:56:56,881 --> 00:56:58,816 >> WHEN WE RETURN 2094 00:56:58,816 --> 00:57:00,451 POWER TO THE PEOPLE, 2095 00:57:00,451 --> 00:57:01,986 OPPORTUNITY TO THE AMERICAN 2096 00:57:01,986 --> 00:57:03,153 PEOPLE, RESPONSIBILITY 2097 00:57:03,153 --> 00:57:04,489 TO THE AMERICAN PEOPLE, 2098 00:57:04,489 --> 00:57:05,890 THIS NATION IS GONNA MOVE AHEAD 2099 00:57:05,890 --> 00:57:07,057 IN A WAY THAT'LL ASTOUND 2100 00:57:07,057 --> 00:57:08,759 OURSELVES AND THE WORLD. 2101 00:57:08,759 --> 00:57:11,562 REST UP, BECAUSE, MY FRIENDS, 2102 00:57:11,562 --> 00:57:13,664 OUR JOURNEY HAS JUST BEGUN. 2103 00:57:13,664 --> 00:57:15,099 SO, I RAN FOR PRESIDENT 2104 00:57:15,099 --> 00:57:17,034 IN BOTH 1996 AND 2000 2105 00:57:17,034 --> 00:57:18,969 ON THE FLAT TAX. 2106 00:57:18,969 --> 00:57:20,204 FORTUNATELY, THE MESSAGE 2107 00:57:20,204 --> 00:57:21,739 DID BETTER THAN THE MESSENGER. 2108 00:57:21,739 --> 00:57:22,740 UNDER THE PROPOSAL 2109 00:57:22,740 --> 00:57:23,874 THAT I HAD, FOR EXAMPLE, 2110 00:57:23,874 --> 00:57:25,142 YOU'D HAVE A SINGLE RATE, 2111 00:57:25,142 --> 00:57:27,011 17%, THAT WOULD APPLY 2112 00:57:27,011 --> 00:57:28,913 AFTER GENEROUS EXEMPTIONS 2113 00:57:28,913 --> 00:57:30,748 FOR ADULTS AND FOR CHILDREN, 2114 00:57:30,748 --> 00:57:31,749 AND THERE'D BE NO TAX 2115 00:57:31,749 --> 00:57:32,750 ON YOUR SAVINGS. 2116 00:57:32,750 --> 00:57:34,151 EVERYTHING WOULD BE TAX-FREE 2117 00:57:34,151 --> 00:57:35,653 ON YOUR SAVINGS, AND THERE'D 2118 00:57:35,653 --> 00:57:36,654 BE NO DEATH TAX. 2119 00:57:36,654 --> 00:57:38,222 I THINK YOU SHOULD BE ALLOWED 2120 00:57:38,222 --> 00:57:39,223 TO LEAVE THE WORLD 2121 00:57:39,223 --> 00:57:40,625 UNMOLESTED BY THE IRS. 2122 00:57:40,625 --> 00:57:41,626 YOU PAID ENOUGH 2123 00:57:41,626 --> 00:57:42,760 DURING YOUR LIFETIME, 2124 00:57:42,760 --> 00:57:44,061 OR AS OUR FOUNDERS WOULD SAY, 2125 00:57:44,061 --> 00:57:45,062 "NO TAXATION 2126 00:57:45,062 --> 00:57:46,597 WITHOUT RESPIRATION." 2127 00:57:46,597 --> 00:57:47,732 >> YOU EARN YOUR INCOME, 2128 00:57:47,732 --> 00:57:49,500 YOU REPORT YOUR INCOME, 2129 00:57:49,500 --> 00:57:50,501 YOU DEDUCT 2130 00:57:50,501 --> 00:57:51,602 YOUR FAMILY ALLOWANCE, 2131 00:57:51,602 --> 00:57:52,603 YOU APPLY THE RATE, 2132 00:57:52,603 --> 00:57:53,604 AND YOU'RE DONE. 2133 00:57:53,604 --> 00:57:54,839 >> THE PERKS OF THE FLAT TAX 2134 00:57:54,839 --> 00:57:56,774 IS IT UNLEASHES PEOPLE'S MINDS, 2135 00:57:56,774 --> 00:57:58,643 THINKING, CREATIVITY, 2136 00:57:58,643 --> 00:58:01,145 ONTO PRODUCTIVE PURSUITS. 2137 00:58:01,145 --> 00:58:02,647 INSTEAD OF SPENDING 2138 00:58:02,647 --> 00:58:04,048 SIX BILLION HOURS, YOU COULD-- 2139 00:58:04,048 --> 00:58:05,683 A YEAR WITH FILLING OUT FORMS, 2140 00:58:05,683 --> 00:58:06,884 YOU COULD WASTE THE TIME. 2141 00:58:06,884 --> 00:58:08,252 THAT WOULD BE MORE PRODUCTIVE 2142 00:58:08,252 --> 00:58:09,286 THAN, YOU KNOW, LET 2143 00:58:09,286 --> 00:58:11,188 THE BRAIN REGENERATE. 2144 00:58:11,188 --> 00:58:12,222 >> IT JUST DOESN'T TAKE 2145 00:58:12,222 --> 00:58:13,223 MUCH TIME TO EXPLAIN 2146 00:58:13,223 --> 00:58:14,224 THE FLAT TAX. 2147 00:58:14,224 --> 00:58:15,225 IT'S JUST THERE. 2148 00:58:15,225 --> 00:58:16,226 THAT'S IT, MAN. 2149 00:58:16,226 --> 00:58:17,227 THAT'S ABOUT IT. 2150 00:58:17,227 --> 00:58:18,663 ANYBODY CAN DO IT. 2151 00:58:19,930 --> 00:58:21,532 >> ( cheering ) 2152 00:58:21,532 --> 00:58:23,634 >> AND I ENDORSE THE FAIR TAX, 2153 00:58:23,634 --> 00:58:25,202 BECAUSE IT'S THE BEST HOPE WE 2154 00:58:25,202 --> 00:58:27,672 HAVE OF FINALLY CHANGING 2155 00:58:27,672 --> 00:58:29,640 THE TAX SYSTEM IN THIS COUNTRY. 2156 00:58:29,640 --> 00:58:30,741 >> Boortz: THERE WAS THIS GROUP 2157 00:58:30,741 --> 00:58:31,742 OF BUSINESSMEN 2158 00:58:31,742 --> 00:58:33,010 IN HOUSTON, TEXAS. 2159 00:58:33,010 --> 00:58:34,078 THEY JUST HAD THIS LITTLE-- 2160 00:58:34,078 --> 00:58:35,212 CALL IT A GAME, IF YOU WANT, 2161 00:58:35,212 --> 00:58:36,947 I DON'T KNOW, BUT THEY WOULD 2162 00:58:36,947 --> 00:58:38,849 TACKLE PROBLEMS. 2163 00:58:38,849 --> 00:58:40,250 >> TWO OTHER FELLOWS AND MYSELF 2164 00:58:40,250 --> 00:58:41,251 WERE HAVING LUNCH, 2165 00:58:41,251 --> 00:58:43,253 AND IN OUR USUAL WAY, 2166 00:58:43,253 --> 00:58:45,089 WE WERE COMPLAINING 2167 00:58:45,089 --> 00:58:46,891 ABOUT THE STATE OF AFFAIRS 2168 00:58:46,891 --> 00:58:48,225 IN THE COUNTRY. 2169 00:58:48,225 --> 00:58:49,560 >> AND THEY SAID, OKAY, 2170 00:58:49,560 --> 00:58:50,995 WE'RE GOING TO NOW HIRE 2171 00:58:50,995 --> 00:58:53,163 COMPLETELY IMPARTIAL EXPERTS, 2172 00:58:53,163 --> 00:58:54,298 AND WE'RE GONNA ASK THEM 2173 00:58:54,298 --> 00:58:55,600 TO COME UP WITH A NEW WAY 2174 00:58:55,600 --> 00:58:56,701 OF COLLECTING REVENUE 2175 00:58:56,701 --> 00:58:58,235 FOR THE FEDERAL GOVERNMENT. 2176 00:58:58,235 --> 00:58:59,837 >> WE ENDED UP TAKING TWO YEARS 2177 00:58:59,837 --> 00:59:02,139 AND $23 MILLION, UH, 2178 00:59:02,139 --> 00:59:04,575 TO COMPLETE THIS STUDY, 2179 00:59:04,575 --> 00:59:06,243 OUT OF WHICH CAME 2180 00:59:06,243 --> 00:59:07,945 THE FAIR TAX. 2181 00:59:07,945 --> 00:59:09,079 >> WE STOP TAXING INCOME, 2182 00:59:09,079 --> 00:59:11,281 AND START TAXING CONSUMPTION. 2183 00:59:11,281 --> 00:59:12,282 >> Boortz: YOU GET RID OF ALL 2184 00:59:12,282 --> 00:59:13,818 CORPORATE INCOME TAX. GONE. 2185 00:59:13,818 --> 00:59:15,052 NO PERSONAL INCOME TAXES. 2186 00:59:15,052 --> 00:59:16,053 IT'S GONE. 2187 00:59:16,053 --> 00:59:17,121 PAYROLL TAXES. GONE. 2188 00:59:17,121 --> 00:59:19,724 ESTATE TAX, DEATH TAX. GONE. 2189 00:59:19,724 --> 00:59:22,326 CAPITAL GAINS TAXES. GONE. 2190 00:59:22,326 --> 00:59:24,328 AND ALL OF THIS IS REPLACED 2191 00:59:24,328 --> 00:59:28,132 BY ONE EMBEDDED FEDERAL 2192 00:59:28,132 --> 00:59:30,601 RETAIL SALES TAX. 2193 00:59:30,601 --> 00:59:31,936 >> WHEN YOU BUY SOMETHING NEW 2194 00:59:31,936 --> 00:59:32,937 AT THE RETAIL LEVEL, 2195 00:59:32,937 --> 00:59:34,071 YOU PAY THE TAX. YOU KNOW 2196 00:59:34,071 --> 00:59:35,339 EXACTLY WHAT YOU'RE PAYING. 2197 00:59:35,339 --> 00:59:37,942 >> IF YOU BUY USED GOODS 2198 00:59:37,942 --> 00:59:39,977 AND SERVICES-- A USED HOUSE 2199 00:59:39,977 --> 00:59:41,278 OR A USED CAR-- 2200 00:59:41,278 --> 00:59:43,814 YOU PAY NO SALES TAX. 2201 00:59:43,814 --> 00:59:45,850 >> EVERY HOUSEHOLD WILL GET 2202 00:59:45,850 --> 00:59:46,851 A CASH DISTRIBUTION 2203 00:59:46,851 --> 00:59:48,753 AT THE BEGINNING OF EVERY MONTH 2204 00:59:48,753 --> 00:59:50,888 THAT WILL TOTALLY UNTAX THEM 2205 00:59:50,888 --> 00:59:52,957 UP TO POVERTY-LEVEL SPENDING. 2206 00:59:52,957 --> 00:59:54,759 >> IT ESSENTIALLY UNTAXES 2207 00:59:54,759 --> 00:59:56,894 EVERY POOR AND ELDERLY PERSON 2208 00:59:56,894 --> 00:59:59,063 FROM THEIR BASIC NECESSITIES 2209 00:59:59,063 --> 01:00:01,098 SUCH AS FOOD AND MEDICINE 2210 01:00:01,098 --> 01:00:02,667 AND BASIC UTILITIES. 2211 01:00:02,667 --> 01:00:03,901 >> AND I KNOW-- I KNOW TAXES 2212 01:00:03,901 --> 01:00:05,335 ARE BORING, BUT WHAT'S BORING 2213 01:00:05,335 --> 01:00:06,336 ABOUT GETTING 100% 2214 01:00:06,336 --> 01:00:07,337 OF YOUR PAYCHECK? 2215 01:00:07,337 --> 01:00:10,107 WHAT'S BORING ABOUT NOT HAVING 2216 01:00:10,107 --> 01:00:11,108 TO KEEP TAX RECORDS? 2217 01:00:11,108 --> 01:00:12,710 WHAT'S BORING ABOUT NOT HAVING 2218 01:00:12,710 --> 01:00:13,711 TO KEEP RECEIPTS? 2219 01:00:13,711 --> 01:00:15,045 WHAT'S BORING ABOUT NOT EVER 2220 01:00:15,045 --> 01:00:17,181 WORRYING ABOUT AN IRS AUDIT? 2221 01:00:17,181 --> 01:00:18,683 THOSE THINGS AREN'T BORING. 2222 01:00:18,683 --> 01:00:19,884 THEY'RE NOT-- THAT CAN BE 2223 01:00:19,884 --> 01:00:21,652 THE REALITY, IF PEOPLE 2224 01:00:21,652 --> 01:00:22,653 GET ON THE BANDWAGON 2225 01:00:22,653 --> 01:00:24,054 WITH THE FAIR TAX. 2226 01:00:24,054 --> 01:00:26,724 >> NOW, IN THE POLITICAL WORLD, 2227 01:00:26,724 --> 01:00:27,825 THE CONSUMPTION TAX IS 2228 01:00:27,825 --> 01:00:29,293 BASICALLY A CONSERVATIVE MOVE. 2229 01:00:29,293 --> 01:00:30,294 IT'S BASICALLY A WAY 2230 01:00:30,294 --> 01:00:31,428 OF SAYING WE'RE GONNA TAX 2231 01:00:31,428 --> 01:00:32,429 RICH PEOPLE LESS. 2232 01:00:32,429 --> 01:00:33,831 THEY SAVE MORE THAN POOR PEOPLE, 2233 01:00:33,831 --> 01:00:34,832 SO THEY HAVE MORE OF 2234 01:00:34,832 --> 01:00:35,866 THEIR INCOME COMES FROM SAVING. 2235 01:00:35,866 --> 01:00:36,867 WE'RE GONNA MAKE IT 2236 01:00:36,867 --> 01:00:37,868 LESS PROGRESSIVE 2237 01:00:37,868 --> 01:00:39,036 BY NOT TAXING THEM AS MUCH. 2238 01:00:39,036 --> 01:00:40,037 IN THE ACADEMIC WORLD, 2239 01:00:40,037 --> 01:00:41,038 IT'S VERY DIFFERENT. 2240 01:00:41,038 --> 01:00:42,039 YOU HAVE PEOPLE WHO ARE 2241 01:00:42,039 --> 01:00:43,440 LIBERAL DEMOCRATS WHO FAVOR IT 2242 01:00:43,440 --> 01:00:45,142 AS MUCH AS CONSERVATIVE 2243 01:00:45,142 --> 01:00:46,744 REPUBLICANS, AND THE ARGUMENT 2244 01:00:46,744 --> 01:00:47,745 IS FOR A PROGRESSIVE 2245 01:00:47,745 --> 01:00:49,013 CONSUMPTION TAX OF ONE KIND 2246 01:00:49,013 --> 01:00:50,014 OR ANOTHER, IT WOULD 2247 01:00:50,014 --> 01:00:51,348 APPROXIMATELY AS PROGRESSIVE 2248 01:00:51,348 --> 01:00:52,750 AS THE SYSTEM WE HAVE NOW. 2249 01:00:52,750 --> 01:00:54,251 >> REGARDING A VALUE-ADDED TAX, 2250 01:00:54,251 --> 01:00:55,786 IN EFFECT, A VALUE-ADDED TAX 2251 01:00:55,786 --> 01:00:56,921 IS JUST A DIFFERENT FORM 2252 01:00:56,921 --> 01:00:58,022 OF NATIONAL SALES TAX. 2253 01:00:58,022 --> 01:00:59,023 IT'S WHAT THEY CALL 2254 01:00:59,023 --> 01:01:00,691 A NATIONAL SALES TAX IN EUROPE, 2255 01:01:00,691 --> 01:01:02,126 AND THE REASON THAT THE EUROPEAN 2256 01:01:02,126 --> 01:01:03,193 COUNTRIES HAVE PUT IN 2257 01:01:03,193 --> 01:01:04,194 A VALUE-ADDED TAX 2258 01:01:04,194 --> 01:01:06,330 INSTEAD OF A NATIONAL SALES TAX 2259 01:01:06,330 --> 01:01:07,932 IS BECAUSE THE VALUE-ADDED TAX, 2260 01:01:07,932 --> 01:01:08,933 IN SOME SENSE, 2261 01:01:08,933 --> 01:01:10,234 IS SELF-ENFORCING. 2262 01:01:10,234 --> 01:01:11,769 >> ONE QUESTION IS WHY DOES-- 2263 01:01:11,769 --> 01:01:13,003 WHY DO EUROPEAN COUNTRIES 2264 01:01:13,003 --> 01:01:14,004 RELY SO HEAVILY 2265 01:01:14,004 --> 01:01:15,105 ON VALUE-ADDED TAXES? 2266 01:01:15,105 --> 01:01:16,106 THEY RELY MUCH MORE 2267 01:01:16,106 --> 01:01:17,174 ON CONSUMPTION TAXES 2268 01:01:17,174 --> 01:01:18,776 THAN WE DO IN THE UNITED STATES, 2269 01:01:18,776 --> 01:01:20,477 AND THE REASON IS, I THINK, 2270 01:01:20,477 --> 01:01:21,846 THAT THEY DON'T RELY 2271 01:01:21,846 --> 01:01:23,047 ON THE WHOLE TAX SYSTEM-- 2272 01:01:23,047 --> 01:01:24,048 THEY DON'T RELY 2273 01:01:24,048 --> 01:01:25,049 ON THE TAX SYSTEM 2274 01:01:25,049 --> 01:01:26,150 AS THEIR PRIMARY MEANS 2275 01:01:26,150 --> 01:01:28,853 OF PROVIDING PROGRESSIVITY. 2276 01:01:28,853 --> 01:01:29,720 >> I THINK IN 2277 01:01:29,720 --> 01:01:30,788 THE ADVANCED COUNTRIES, 2278 01:01:30,788 --> 01:01:31,989 THE DEVELOPED COUNTRIES 2279 01:01:31,989 --> 01:01:33,858 OF THE WORLD, THERE IS 2280 01:01:33,858 --> 01:01:35,359 MUCH MORE EMPHASIS 2281 01:01:35,359 --> 01:01:36,393 ON THE ROLE OF THE-- 2282 01:01:36,393 --> 01:01:39,096 OF THE NATIONAL GOVERNMENT. 2283 01:01:39,096 --> 01:01:40,097 >> THEY FINANCE A LOT 2284 01:01:40,097 --> 01:01:41,331 OF THEIR HIGHER EDUCATION 2285 01:01:41,331 --> 01:01:42,733 THROUGH THE GOVERNMENT. 2286 01:01:42,733 --> 01:01:44,234 THEY HAVE UNIVERSAL HEALTH 2287 01:01:44,234 --> 01:01:45,803 INSURANCE THAT THEY FINANCE, 2288 01:01:45,803 --> 01:01:47,004 AND SO, UH, YOU CAN'T JUST 2289 01:01:47,004 --> 01:01:48,005 LOOK AT THE TAX. 2290 01:01:48,005 --> 01:01:49,139 YOU ALSO HAVE TO LOOK 2291 01:01:49,139 --> 01:01:51,175 AT WHAT THE TAX PAYS FOR. 2292 01:01:51,175 --> 01:01:52,777 >> THOSE COUNTRIES TEND TO HAVE 2293 01:01:52,777 --> 01:01:54,478 MUCH HIGHER TAXES THAN WE DO. 2294 01:01:54,478 --> 01:01:55,479 SO, THEY COMBINED 2295 01:01:55,479 --> 01:01:56,480 THE INCOME TAX 2296 01:01:56,480 --> 01:01:57,848 WITH A CONSUMPTION TAX. 2297 01:01:57,848 --> 01:02:00,350 AND YOU SEE IN FRANCE AND ITALY 2298 01:02:00,350 --> 01:02:01,786 AND SWEDEN AND NORWAY 2299 01:02:01,786 --> 01:02:02,787 AND DENMARK AND ALL 2300 01:02:02,787 --> 01:02:03,788 OF THOSE COUNTRIES 2301 01:02:03,788 --> 01:02:05,289 MUCH HIGHER LEVELS OF TAX-- 2302 01:02:05,289 --> 01:02:07,191 IN FACT, OUR CURRENT TOTAL 2303 01:02:07,191 --> 01:02:08,993 FEDERAL TAX BURDEN 2304 01:02:08,993 --> 01:02:10,460 IS AMONG THE LOWEST 2305 01:02:10,460 --> 01:02:11,929 OF ALL DEVELOPED COUNTRIES 2306 01:02:11,929 --> 01:02:12,930 IN THE WORLD, AND YET 2307 01:02:12,930 --> 01:02:14,198 WE FEEL WE'RE OVERTAXED. 2308 01:02:14,198 --> 01:02:15,766 WELL, MAYBE WE FEEL OVERTAXED 2309 01:02:15,766 --> 01:02:16,767 'CAUSE WE DON'T LIKE 2310 01:02:16,767 --> 01:02:18,102 THE SERVICES, BUT RELATIVE 2311 01:02:18,102 --> 01:02:20,437 TO OUR INCOME, WE'RE VERY LOW. 2312 01:02:20,437 --> 01:02:23,173 SO, IN EUROPE, HIGHER-- 2313 01:02:23,173 --> 01:02:24,875 MUCH HIGHER TAXES 2314 01:02:24,875 --> 01:02:26,977 AND HIGHER SOCIAL SERVICES. 2315 01:02:26,977 --> 01:02:29,146 SO, THAT'S THE TRADEOFF. 2316 01:02:29,146 --> 01:02:30,781 UM, ARE WE WILLING 2317 01:02:30,781 --> 01:02:33,017 TO EXPERIENCE THAT? 2318 01:02:33,017 --> 01:02:36,286 >> YOU KNOW, I NEVER REALIZED 2319 01:02:36,286 --> 01:02:37,922 JUST HOW MUCH 2320 01:02:37,922 --> 01:02:39,556 THESE THINGS MEANT... 2321 01:02:39,556 --> 01:02:41,325 UNTIL NOW. 2322 01:02:52,937 --> 01:02:54,071 >> Fox: ONE OF THE THINGS 2323 01:02:54,071 --> 01:02:55,272 THAT YOU REALLY KNOW IN-- 2324 01:02:55,272 --> 01:02:57,007 WHEN IT COMES TO TAXATION, 2325 01:02:57,007 --> 01:02:59,209 IS THAT NO MATTER HOW BAD 2326 01:02:59,209 --> 01:03:00,510 THE SYSTEM MIGHT BE, 2327 01:03:00,510 --> 01:03:02,412 AND I THINK IT'S REALLY, UH, 2328 01:03:02,412 --> 01:03:05,049 INDEFENSIBLE, IT'S THE SYSTEM 2329 01:03:05,049 --> 01:03:06,416 THAT IN SOME WAY PEOPLE KNOW. 2330 01:03:06,416 --> 01:03:07,818 THEY DON'T REALLY KNOW IT, 2331 01:03:07,818 --> 01:03:08,819 BUT THEY-- IT'S WHAT 2332 01:03:08,819 --> 01:03:09,920 THEY'RE FAMILIAR WITH. 2333 01:03:09,920 --> 01:03:11,088 AND SO EVEN THOUGH THEY-- 2334 01:03:11,088 --> 01:03:12,489 THEY'RE UNHAPPY PAYING 2335 01:03:12,489 --> 01:03:13,958 ACCOUNTANTS AND OTHERS TO-- 2336 01:03:13,958 --> 01:03:14,959 EVEN THOUGH THEY KNOW 2337 01:03:14,959 --> 01:03:15,960 THEY HAVE TO KEEP 2338 01:03:15,960 --> 01:03:17,027 FAR TOO MANY RECORDS, 2339 01:03:17,027 --> 01:03:18,495 IT'S TOUGH FOR THEM 2340 01:03:18,495 --> 01:03:19,997 TO SAY, WELL, LET'S GO 2341 01:03:19,997 --> 01:03:21,465 TO A SIMPLIFIED SYSTEM 2342 01:03:21,465 --> 01:03:23,233 THAT THEY DON'T REALLY KNOW 2343 01:03:23,233 --> 01:03:24,234 AND THEY DON'T 2344 01:03:24,234 --> 01:03:25,235 NECESSARILY TRUST. 2345 01:03:25,235 --> 01:03:26,503 "ARE YOU GONNA CUT OUT 2346 01:03:26,503 --> 01:03:27,571 ALL OF MY DEDUCTIONS, 2347 01:03:27,571 --> 01:03:28,572 OR MOST OF THEM? 2348 01:03:28,572 --> 01:03:29,874 TAX ME ON A LOT OF FRINGE 2349 01:03:29,874 --> 01:03:31,541 BENEFITS AND OTHER THINGS? 2350 01:03:31,541 --> 01:03:32,542 AND THEN ONCE 2351 01:03:32,542 --> 01:03:34,211 YOU HAVE THEM GONE, 2352 01:03:34,211 --> 01:03:35,479 ARE YOU GONNA UP MY TAX RATES 2353 01:03:35,479 --> 01:03:36,981 ABOVE WHAT YOU SAID? 2354 01:03:36,981 --> 01:03:38,348 CAN I TRUST YOU?" 2355 01:03:38,348 --> 01:03:40,017 SO, HOW DO YOU BUILD 2356 01:03:40,017 --> 01:03:41,852 A REFORM MOVEMENT 2357 01:03:41,852 --> 01:03:44,321 THAT IS BUILT ON TRUST 2358 01:03:44,321 --> 01:03:45,990 RATHER THAN JUST PROMISES? 2359 01:03:45,990 --> 01:03:47,091 AND I THINK THAT'S ONE 2360 01:03:47,091 --> 01:03:48,392 OF THE GREAT CHALLENGES. 2361 01:03:48,392 --> 01:03:49,526 >> IF YOU'VE AN ACTIVIST 2362 01:03:49,526 --> 01:03:50,594 OUT THERE AND YOU WANT 2363 01:03:50,594 --> 01:03:51,929 TO MAKE AMERICA BETTER, 2364 01:03:51,929 --> 01:03:53,030 YOU WANT OUR TAX SYSTEM 2365 01:03:53,030 --> 01:03:54,498 TO BE SIMPLE AND FAIR, 2366 01:03:54,498 --> 01:03:56,633 WHAT'S THE BEST WAY TO GO? 2367 01:03:56,633 --> 01:03:58,002 >> Man: WHAT WOULD HE LIKE 2368 01:03:58,002 --> 01:03:59,003 FOR DINNER? 2369 01:03:59,003 --> 01:04:00,437 HE JUST LOVES CHOCOLATE CAKE. 2370 01:04:00,437 --> 01:04:02,506 GO AHEAD, TRY ONE. 2371 01:04:02,506 --> 01:04:03,507 ALL YOU HAVE TO DO 2372 01:04:03,507 --> 01:04:04,975 IS FOLLOW THE RECIPE. 2373 01:04:04,975 --> 01:04:07,144 THIS IS GOING TO BE EASY. 2374 01:04:07,144 --> 01:04:09,146 LET'S SEE, WHAT'S NEXT? 2375 01:04:09,146 --> 01:04:10,414 >> THE GOAL OF FUNDAMENTAL 2376 01:04:10,414 --> 01:04:11,415 TAX REFORM SHOULD BE 2377 01:04:11,415 --> 01:04:12,582 SIMPLICITY, NUMBER ONE. 2378 01:04:12,582 --> 01:04:13,583 YOU KNOW, WE HAVE 2379 01:04:13,583 --> 01:04:14,651 AN AMAZINGLY COMPLEX 2380 01:04:14,651 --> 01:04:17,154 TAX SYSTEM, UH, THAT, UH, 2381 01:04:17,154 --> 01:04:18,889 BY SOME ESTIMATES 2382 01:04:18,889 --> 01:04:20,224 COSTS AMERICANS 2383 01:04:20,224 --> 01:04:22,192 OVER $280 BILLION A YEAR 2384 01:04:22,192 --> 01:04:23,593 TO COMPLY WITH. 2385 01:04:23,593 --> 01:04:24,594 >> YOU MUST STIR 2386 01:04:24,594 --> 01:04:25,595 THE INGREDIENTS 2387 01:04:25,595 --> 01:04:26,931 IN YOUR CHOCOLATE CAKE. 2388 01:04:26,931 --> 01:04:27,932 TO STIR IS 2389 01:04:27,932 --> 01:04:28,999 TO MIX FOOD MATERIALS 2390 01:04:28,999 --> 01:04:30,167 WITH A CIRCULAR MOTION 2391 01:04:30,167 --> 01:04:31,635 TO SECURE A UNIFORM 2392 01:04:31,635 --> 01:04:33,403 CONSISTENCY. 2393 01:04:33,403 --> 01:04:34,638 >> YOU REALLY HAVE TO THINK 2394 01:04:34,638 --> 01:04:36,173 ABOUT REFORMING THE TAX CODE 2395 01:04:36,173 --> 01:04:37,274 EITHER INCREMENTALLY 2396 01:04:37,274 --> 01:04:39,910 OR AS ONE BIG CHANGE. 2397 01:04:39,910 --> 01:04:41,078 UH, THERE'S REALLY ABOUT 2398 01:04:41,078 --> 01:04:43,447 50 REASONS, AND THEY ARE CHINA, 2399 01:04:43,447 --> 01:04:45,582 INDIA, JAPAN, MALAYSIA... 2400 01:04:45,582 --> 01:04:46,917 YOU NAME THE COUNTRY. 2401 01:04:46,917 --> 01:04:47,918 SOUTH KOREA 2402 01:04:47,918 --> 01:04:49,319 AND THE ENTIRE EUROPEAN UNION. 2403 01:04:49,319 --> 01:04:50,587 EVERYBODY IN THE WORLD 2404 01:04:50,587 --> 01:04:51,588 IS WORKING TO BECOME 2405 01:04:51,588 --> 01:04:52,589 MORE COMPETITIVE. 2406 01:04:52,589 --> 01:04:54,358 IT IS A COMPETITIVE 2407 01:04:54,358 --> 01:04:55,359 GLOBAL ECONOMY. 2408 01:04:55,359 --> 01:04:56,961 EVERYONE'S TRYING TO COMPETE, 2409 01:04:56,961 --> 01:04:58,195 BECAUSE IF YOU CAN COMPETE 2410 01:04:58,195 --> 01:04:59,429 BETTER, YOU PROSPER MORE. 2411 01:04:59,429 --> 01:05:01,198 >> BUT YOU REALLY HAVE TO ASK 2412 01:05:01,198 --> 01:05:02,599 IF THE ONLY PART OF THE COUNTRY 2413 01:05:02,599 --> 01:05:03,700 THAT'S REALLY BOOMING 2414 01:05:03,700 --> 01:05:05,035 IS THE CAPITAL, IS THERE 2415 01:05:05,035 --> 01:05:06,036 SOMETHING WRONG 2416 01:05:06,036 --> 01:05:07,071 WITH THE GOVERNMENT, 2417 01:05:07,071 --> 01:05:08,138 AND I THINK THERE IS. 2418 01:05:08,138 --> 01:05:09,339 IT'S TOO SELF-CENTERED. 2419 01:05:09,339 --> 01:05:10,440 IT'S TOO WORRIED ABOUT 2420 01:05:10,440 --> 01:05:11,541 ITS OWN WELL-BEING, 2421 01:05:11,541 --> 01:05:13,077 AND IT IS NOT DOING 2422 01:05:13,077 --> 01:05:14,078 WHAT IS NECESSARY 2423 01:05:14,078 --> 01:05:15,579 TO MAKE THE COUNTRY GROW. 2424 01:05:15,579 --> 01:05:16,613 >> CREAM BUTTER MEANS 2425 01:05:16,613 --> 01:05:17,614 TO MANIPULATE 2426 01:05:17,614 --> 01:05:18,615 WITH AN INSTRUMENT 2427 01:05:18,615 --> 01:05:19,683 UNTIL IT BECOMES SOFT 2428 01:05:19,683 --> 01:05:21,251 AND SMOOTH. 2429 01:05:21,251 --> 01:05:22,252 >> WHEN YOU FIND YOURSELF 2430 01:05:22,252 --> 01:05:23,253 SITTING DOWN AND RUNNING NUMBERS 2431 01:05:23,253 --> 01:05:24,288 TO FIGURE OUT WHERE IT MAKES 2432 01:05:24,288 --> 01:05:25,489 MORE SENSE FOR YOU TO LIVE 2433 01:05:25,489 --> 01:05:26,523 AND WHAT KIND OF HOUSE 2434 01:05:26,523 --> 01:05:28,058 YOU SHOULD HAVE, YOU REALIZE 2435 01:05:28,058 --> 01:05:29,159 THE EXTENT TO WHICH TAX 2436 01:05:29,159 --> 01:05:30,160 ACTUALLY CONTROLS 2437 01:05:30,160 --> 01:05:31,561 YOUR DAY-TO-DAY CHOICES. 2438 01:05:31,561 --> 01:05:33,030 >> WE LIKE TO USE THE TAX CODE 2439 01:05:33,030 --> 01:05:34,264 TO DO LITTLE TOKEN THINGS, 2440 01:05:34,264 --> 01:05:35,265 AND WE'VE BEEN DOING 2441 01:05:35,265 --> 01:05:37,334 MORE OF THOSE IN THE PAST 2442 01:05:37,334 --> 01:05:39,336 20 YEARS, AND THAT'S WHY 2443 01:05:39,336 --> 01:05:40,470 WE HAVE THESE FOUR-PAGE 2444 01:05:40,470 --> 01:05:41,638 TAX RETURNS. 2445 01:05:41,638 --> 01:05:43,107 >> THIS SOCIAL ENGINEERING 2446 01:05:43,107 --> 01:05:44,308 BUSINESS-- THEY GIVE YOU 2447 01:05:44,308 --> 01:05:46,310 A HOUSING INTEREST TAX CREDIT 2448 01:05:46,310 --> 01:05:47,611 SO YOU'LL BUY A HOME, 2449 01:05:47,611 --> 01:05:48,645 AND THEN THEY GIVE YOU 2450 01:05:48,645 --> 01:05:49,646 A MARRIAGE PENALTY 2451 01:05:49,646 --> 01:05:50,647 SO YOU'LL LIVE IN IT 2452 01:05:50,647 --> 01:05:51,648 OUT OF WEDLOCK. 2453 01:05:51,648 --> 01:05:52,983 WHAT ARE THEY TRYING TO DO? 2454 01:05:52,983 --> 01:05:54,051 JUST LEAVE PEOPLE ALONE. 2455 01:05:54,051 --> 01:05:55,585 >> THAT'S RIGHT, POUR IT IN. 2456 01:05:55,585 --> 01:05:57,254 THE RECIPE SAYS "CREAM 2457 01:05:57,254 --> 01:05:58,455 THE BUTTER," SO PUT IN 2458 01:05:58,455 --> 01:06:00,524 LOTS OF CREAM. 2459 01:06:00,524 --> 01:06:01,525 >> WE USE THE TAX CODE 2460 01:06:01,525 --> 01:06:02,526 FOR A LOT OF THINGS 2461 01:06:02,526 --> 01:06:04,528 OTHER THAN JUST COLLECTING TAX, 2462 01:06:04,528 --> 01:06:06,063 AND ACTUALLY, A LOT OF TIMES, 2463 01:06:06,063 --> 01:06:07,164 WE'RE NOT VERY SERIOUS 2464 01:06:07,164 --> 01:06:08,365 ABOUT COLLECTING TAX! 2465 01:06:08,365 --> 01:06:09,366 >> THERE'S OVER 2466 01:06:09,366 --> 01:06:10,667 $300 BILLION A YEAR-- 2467 01:06:10,667 --> 01:06:13,003 $300 BILLION A YEAR 2468 01:06:13,003 --> 01:06:15,005 OF TAXES THAT ARE NOT PAID 2469 01:06:15,005 --> 01:06:16,640 THAT-- THAT SHOULD BE PAID, 2470 01:06:16,640 --> 01:06:17,774 YOU KNOW, UNDER THE LAW. 2471 01:06:17,774 --> 01:06:19,076 SO, LOOK AT IT THAT WAY, 2472 01:06:19,076 --> 01:06:20,144 THAT MEANS EVERYBODY 2473 01:06:20,144 --> 01:06:21,278 THAT'S HONESTLY PAYING 2474 01:06:21,278 --> 01:06:22,279 IS PAYING 20% MORE 2475 01:06:22,279 --> 01:06:23,280 THAN THEY NEED TO 2476 01:06:23,280 --> 01:06:24,448 TO MAKE UP FOR THE $300 BILLION 2477 01:06:24,448 --> 01:06:25,549 THAT'S NOT BEING PAID. 2478 01:06:25,549 --> 01:06:27,151 SO, WHEN YOU ADD THAT TOGETHER, 2479 01:06:27,151 --> 01:06:29,119 THAT'S AN ENORMOUS INEFFICIENCY. 2480 01:06:29,119 --> 01:06:30,154 >> JUST LOOK AT THAT 2481 01:06:30,154 --> 01:06:31,521 SILKY SMOOTH TEXTURE 2482 01:06:31,521 --> 01:06:33,023 OF THAT BATTER. 2483 01:06:33,023 --> 01:06:35,625 >> SNEAK, UH, TAXES. 2484 01:06:35,625 --> 01:06:37,694 WE SOMETIMES GET A TAX INCREASE 2485 01:06:37,694 --> 01:06:39,096 AND WE DON'T EVEN KNOW IT, 2486 01:06:39,096 --> 01:06:40,097 BECAUSE THE CODE 2487 01:06:40,097 --> 01:06:41,098 IS SO COMPLICATED. 2488 01:06:41,098 --> 01:06:42,566 I'VE BEEN HIT WITH SNEAK ATTACKS 2489 01:06:42,566 --> 01:06:44,101 MANY, MANY, MANY TIMES, 2490 01:06:44,101 --> 01:06:45,569 AND DIDN'T REALIZE IT 2491 01:06:45,569 --> 01:06:47,804 UNTIL AFTER THE FACT. 2492 01:06:47,804 --> 01:06:50,040 >> I THINK PEOPLE WANT A-- 2493 01:06:50,040 --> 01:06:51,041 THE SIMPLEST-- 2494 01:06:51,041 --> 01:06:52,176 THE SIMPLEST TAX SYSTEM 2495 01:06:52,176 --> 01:06:53,777 WE CAN POSSIBLY GIVE THEM, 2496 01:06:53,777 --> 01:06:55,812 AND-- AND-- AND ONE 2497 01:06:55,812 --> 01:06:57,047 THAT'S TRANSPARENT, 2498 01:06:57,047 --> 01:06:58,448 THAT THEY CAN UNDERSTAND, UH, 2499 01:06:58,448 --> 01:07:00,450 WHERE-- WHY THEY HAVE TO PAY 2500 01:07:00,450 --> 01:07:01,451 THE AMOUNT OF TAX 2501 01:07:01,451 --> 01:07:02,652 THEY HAVE TO PAY. 2502 01:07:02,652 --> 01:07:04,554 >> NO, MARGIE, YOUR CAKE 2503 01:07:04,554 --> 01:07:05,622 DIDN'T TURN OUT SO WELL 2504 01:07:05,622 --> 01:07:07,591 BECAUSE YOU MISUNDERSTOOD 2505 01:07:07,591 --> 01:07:09,626 A TERM IN YOUR COOKBOOK. 2506 01:07:09,626 --> 01:07:10,627 >> ONE OF THE THINGS 2507 01:07:10,627 --> 01:07:12,429 THAT, UH, PEOPLE TALK ABOUT 2508 01:07:12,429 --> 01:07:13,530 IN TERMS OF THE TAX CODE 2509 01:07:13,530 --> 01:07:14,598 IS WHETHER IT'S FAIR, 2510 01:07:14,598 --> 01:07:15,699 AND THAT'S, OF COURSE, 2511 01:07:15,699 --> 01:07:18,135 A VERY GENERAL TERM 2512 01:07:18,135 --> 01:07:20,370 THAT IS, UH, VERY SUBJECT 2513 01:07:20,370 --> 01:07:21,371 TO INTERPRETATION 2514 01:07:21,371 --> 01:07:22,372 AS TO WHAT EVERYBODY 2515 01:07:22,372 --> 01:07:23,573 THINKS IS FAIR. 2516 01:07:23,573 --> 01:07:24,674 >> WE HAVE TO RECOGNIZE 2517 01:07:24,674 --> 01:07:26,210 THAT THERE ARE INEQUALITIES 2518 01:07:26,210 --> 01:07:27,211 IN THE COUNTRY. 2519 01:07:27,211 --> 01:07:28,478 THERE ARE TENSIONS BECAUSE 2520 01:07:28,478 --> 01:07:29,746 OF ECONOMIC INEQUALITIES. 2521 01:07:29,746 --> 01:07:30,747 WE NEED TO DEBATE 2522 01:07:30,747 --> 01:07:32,316 WHY THOSE INEQUALITIES 2523 01:07:32,316 --> 01:07:33,350 HAVE COME ABOUT, 2524 01:07:33,350 --> 01:07:34,751 AND WE NEED TO DEBATE 2525 01:07:34,751 --> 01:07:36,420 HOW MUCH WE WANNA DO 2526 01:07:36,420 --> 01:07:38,488 TO LEVEL OUT THOSE INEQUALITIES, 2527 01:07:38,488 --> 01:07:40,090 BECAUSE ONLY IF WE HAVE 2528 01:07:40,090 --> 01:07:41,525 THAT DEBATE CAN WE PROCEED 2529 01:07:41,525 --> 01:07:42,559 INTELLIGENTLY. 2530 01:07:42,559 --> 01:07:44,094 >> LATER, YOU MAY BE REQUIRED 2531 01:07:44,094 --> 01:07:45,262 TO BEAT EGG WHITES STIFF, 2532 01:07:45,262 --> 01:07:47,531 BUT NOT DRY, OR SO THAT THEY 2533 01:07:47,531 --> 01:07:48,732 HOLD THE GREATEST AMOUNT 2534 01:07:48,732 --> 01:07:50,267 OF AIR WITHOUT LOSING 2535 01:07:50,267 --> 01:07:51,868 THEIR ELASTICITY. 2536 01:07:51,868 --> 01:07:53,170 >> YOU NEED TO MAKE SURE 2537 01:07:53,170 --> 01:07:54,304 THAT YOU'RE GENERATING 2538 01:07:54,304 --> 01:07:55,505 ENOUGH REVENUE, AT LEAST 2539 01:07:55,505 --> 01:07:56,606 OVER A BUSINESS CYCLE, 2540 01:07:56,606 --> 01:07:57,607 WHERE YOU CAN PAY 2541 01:07:57,607 --> 01:07:58,608 YOUR CURRENT BILLS, 2542 01:07:58,608 --> 01:07:59,743 AND WHERE, ULTIMATELY, 2543 01:07:59,743 --> 01:08:01,778 OVER TIME, YOU'RE PROJECTED 2544 01:08:01,778 --> 01:08:03,613 TO GENERATED ENOUGH REVENUE 2545 01:08:03,613 --> 01:08:05,182 THAT YOU CAN KEEP THE PROMISES 2546 01:08:05,182 --> 01:08:06,783 THAT YOU INTEND TO KEEP, 2547 01:08:06,783 --> 01:08:08,252 AND THAT'S WHAT WASHINGTON 2548 01:08:08,252 --> 01:08:09,753 HAS FAILED ON. 2549 01:08:09,753 --> 01:08:11,121 >> YES, EVEN MARGIE FOUND 2550 01:08:11,121 --> 01:08:12,389 THAT SHE COULD LEARN TO COOK 2551 01:08:12,389 --> 01:08:13,390 WHEN SHE DISCOVERED 2552 01:08:13,390 --> 01:08:14,791 THE SIGNIFICANCE OF THE TERMS 2553 01:08:14,791 --> 01:08:15,892 USED IN COOKING... 2554 01:08:15,892 --> 01:08:17,827 AND TIM WILL NEVER KNOW 2555 01:08:17,827 --> 01:08:19,829 SHE RUINED HER FIRST CAKE. 2556 01:08:24,701 --> 01:08:26,270 >> WHAT COALESCENCE OF THINGS, 2557 01:08:26,270 --> 01:08:27,304 WHAT CAN HAPPEN 2558 01:08:27,304 --> 01:08:29,139 THAT MAKES TAX REFORM POSSIBLE? 2559 01:08:29,139 --> 01:08:30,807 YOU NEED A STRONG PRESIDENT. 2560 01:08:30,807 --> 01:08:32,309 MY GUESS IS THAT IT WOULD HAVE 2561 01:08:32,309 --> 01:08:33,310 TO BE IN A SECOND-- 2562 01:08:33,310 --> 01:08:34,344 A SECOND TERM. 2563 01:08:34,344 --> 01:08:37,747 UH, SECONDLY, YOU NEED LEADERS 2564 01:08:37,747 --> 01:08:39,183 WITHIN THE PARTY 2565 01:08:39,183 --> 01:08:40,684 WHO SAY IN THE BACK ROOMS, 2566 01:08:40,684 --> 01:08:42,519 "LOOK IT, THIS IS SERIOUS. 2567 01:08:42,519 --> 01:08:43,620 WE NEED TO GET TOGETHER 2568 01:08:43,620 --> 01:08:44,621 AND PROVIDE 2569 01:08:44,621 --> 01:08:46,323 THE CONGRESSIONAL LEADERSHIP." 2570 01:08:46,323 --> 01:08:47,524 AND, THIRD, IT NEEDS TO BE 2571 01:08:47,524 --> 01:08:48,792 SOME GRASSROOTS MOVEMENT. 2572 01:08:48,792 --> 01:08:49,826 MOST GREAT MOVEMENTS 2573 01:08:49,826 --> 01:08:50,827 ACTUALLY COME FROM 2574 01:08:50,827 --> 01:08:53,297 THE GRASSROOTS. 2575 01:08:53,297 --> 01:08:54,298 SO, YOU NEED ALL 2576 01:08:54,298 --> 01:08:55,299 OF THOSE ELEMENTS, 2577 01:08:55,299 --> 01:08:57,734 AND I'M STILL OPTIMISTIC ENOUGH 2578 01:08:57,734 --> 01:08:58,735 ABOUT THIS COUNTRY 2579 01:08:58,735 --> 01:09:00,370 AND ITS PEOPLE TO BELIEVE 2580 01:09:00,370 --> 01:09:02,172 THAT WE'RE CAPABLE OF THAT. 2581 01:09:02,172 --> 01:09:03,573 >> I DON'T KNOW THAT MANY PEOPLE 2582 01:09:03,573 --> 01:09:05,609 WHO LIKE TO PAY TAXES, 2583 01:09:05,609 --> 01:09:08,445 BUT TAXES ARE A NECESSARY THING 2584 01:09:08,445 --> 01:09:09,879 WHEN YOU ARE TRYING TO FINANCE 2585 01:09:09,879 --> 01:09:11,648 A GOVERNMENT, AND TO MEET 2586 01:09:11,648 --> 01:09:12,749 THE BROADER INTERESTS 2587 01:09:12,749 --> 01:09:14,484 OF SOCIETY THAT OTHERWISE 2588 01:09:14,484 --> 01:09:15,785 CAN'T BE MET 2589 01:09:15,785 --> 01:09:16,886 BY THE PRIVATE SECTOR, 2590 01:09:16,886 --> 01:09:17,887 OR AREN'T BEING MET 2591 01:09:17,887 --> 01:09:19,489 BY OTHER LEVELS OF GOVERNMENT, 2592 01:09:19,489 --> 01:09:20,490 LIKE THE STATE 2593 01:09:20,490 --> 01:09:21,791 AND LOCAL LEVEL OF GOVERNMENT, 2594 01:09:21,791 --> 01:09:22,792 IN THE CASE 2595 01:09:22,792 --> 01:09:24,261 OF THE FEDERAL GOVERNMENT. 2596 01:09:24,261 --> 01:09:25,595 SO THEY'RE A NECESSARY EVIL. 2597 01:09:25,595 --> 01:09:26,696 >> THERE IS ANOTHER WAY 2598 01:09:26,696 --> 01:09:27,697 OF LOOKING AT TAXES. 2599 01:09:27,697 --> 01:09:28,698 THE OTHER WAY OF 2600 01:09:28,698 --> 01:09:29,833 LOOKING AT TAXES IS THAT 2601 01:09:29,833 --> 01:09:31,935 WHEN APRIL 15th COMES ALONG, 2602 01:09:31,935 --> 01:09:34,738 YOU'RE HAPPY BECAUSE YOU CAN 2603 01:09:34,738 --> 01:09:35,839 CONTRIBUTE AS A MEMBER 2604 01:09:35,839 --> 01:09:37,841 OF THE COMMUNITY TO ACHIEVING 2605 01:09:37,841 --> 01:09:39,276 THE COMMUNITY GOALS 2606 01:09:39,276 --> 01:09:40,344 THAT ARE ESTABLISHED 2607 01:09:40,344 --> 01:09:41,511 BY A DEMOCRATIC 2608 01:09:41,511 --> 01:09:42,912 PARTICIPATORY PROCESS. 2609 01:09:42,912 --> 01:09:44,814 IN THAT SENSE, 2610 01:09:44,814 --> 01:09:46,683 TAXES ARE A GOOD THING. 2611 01:09:46,683 --> 01:09:47,951 >> YOU KNOW, THE WAY YOU TAX, 2612 01:09:47,951 --> 01:09:49,219 A LOT OF PEOPLE ARGUE, 2613 01:09:49,219 --> 01:09:50,420 REALLY DEFINES WHAT YOU ARE 2614 01:09:50,420 --> 01:09:51,655 AS A COUNTRY. 2615 01:09:51,655 --> 01:09:52,722 >> WE'RE GOING TO HAVE 2616 01:09:52,722 --> 01:09:53,990 TO FIND A WAY TO-- TO PAY 2617 01:09:53,990 --> 01:09:55,359 NOT ONLY FOR ALL THE DEBTS 2618 01:09:55,359 --> 01:09:56,693 WE'RE ACCUMULATING RIGHT NOW, 2619 01:09:56,693 --> 01:09:57,694 BUT ALSO TO PAY 2620 01:09:57,694 --> 01:09:59,629 FOR ALL OF THE PROMISES 2621 01:09:59,629 --> 01:10:01,565 WE'VE MADE TO SENIOR CITIZENS, 2622 01:10:01,565 --> 01:10:02,766 UH, AND YOU NEED 2623 01:10:02,766 --> 01:10:03,833 A WORKING TAX SYSTEM. 2624 01:10:03,833 --> 01:10:04,834 YOU NEED A TAX SYSTEM 2625 01:10:04,834 --> 01:10:06,236 THAT'S PERCEIVED AS FAIR 2626 01:10:06,236 --> 01:10:07,537 AND CAN RAISE ENOUGH REVENUE. 2627 01:10:07,537 --> 01:10:08,605 IT'S GONNA NEED TO RAISE 2628 01:10:08,605 --> 01:10:09,606 A LOT MORE REVENUE 2629 01:10:09,606 --> 01:10:10,607 THAN THE CURRENT SYSTEM. 2630 01:10:10,607 --> 01:10:12,309 THE CONGRESSIONAL BUDGET OFFICE 2631 01:10:12,309 --> 01:10:13,577 PROJECTS THAT IF CURRENT-- 2632 01:10:13,577 --> 01:10:14,944 IF CURRENT TRENDS CONTINUE-- 2633 01:10:14,944 --> 01:10:16,246 HEALTH COSTS CONTINUE 2634 01:10:16,246 --> 01:10:17,647 TO GROW FASTER THAN THE ECONOMY 2635 01:10:17,647 --> 01:10:18,648 AND BABY BOOMERS AGE 2636 01:10:18,648 --> 01:10:21,318 AND RETIRE-- UH, THAT SPENDING 2637 01:10:21,318 --> 01:10:22,319 ON THREE PROGRAMS 2638 01:10:22,319 --> 01:10:23,320 FOR THE ELDERLY-- 2639 01:10:23,320 --> 01:10:24,588 SOCIAL SECURITY, MEDICAID, 2640 01:10:24,588 --> 01:10:25,855 AND MEDICARE-- WILL TAKE UP 2641 01:10:25,855 --> 01:10:26,856 18% OF GDP. 2642 01:10:26,856 --> 01:10:28,758 THAT IS THE HISTORICAL AVERAGE 2643 01:10:28,758 --> 01:10:29,759 OF ALL SPENDING 2644 01:10:29,759 --> 01:10:31,328 FOR THE GOVERNMENT. 2645 01:10:31,328 --> 01:10:32,529 >> Fox: YOU'VE GOTTA COME 2646 01:10:32,529 --> 01:10:33,563 TO TERMS WITH THE FACT 2647 01:10:33,563 --> 01:10:34,831 THAT OVER THE LONG RUN, 2648 01:10:34,831 --> 01:10:36,400 WE CAN'T AFFORD THE BENEFITS 2649 01:10:36,400 --> 01:10:38,268 WITHOUT INCREASING THE TAXES, 2650 01:10:38,268 --> 01:10:39,303 AND YOU CAN'T IMAGINE 2651 01:10:39,303 --> 01:10:40,837 ANYBODY SAYING THAT. 2652 01:10:40,837 --> 01:10:42,406 NOW, OBVIOUSLY, THE CANDIDATES 2653 01:10:42,406 --> 01:10:43,607 ARE SAYING, "WE'RE GONNA HAVE 2654 01:10:43,607 --> 01:10:44,608 YOU PAY LESS TAXES." 2655 01:10:44,608 --> 01:10:45,842 >> WE CAN'T AFFORD TO LOWER 2656 01:10:45,842 --> 01:10:46,843 ANYBODY'S TAXES, 2657 01:10:46,843 --> 01:10:47,944 AND THE ONLY WAY YOU CAN 2658 01:10:47,944 --> 01:10:49,679 GET REGULAR, AVERAGE PEOPLE'S 2659 01:10:49,679 --> 01:10:51,815 ATTENTION ABOUT TAX REFORM 2660 01:10:51,815 --> 01:10:52,816 IS IF YOU TELL 'EM 2661 01:10:52,816 --> 01:10:54,918 YOU ARE GONNA LOWER THEIR TAXES. 2662 01:10:54,918 --> 01:10:56,019 THERE-- YOU KNOW, IF YOU JUST 2663 01:10:56,019 --> 01:10:57,020 SAY, "WELL, WE'RE GONNA 2664 01:10:57,020 --> 01:10:58,455 REARRANGE, AND YOU'RE GONNA 2665 01:10:58,455 --> 01:10:59,689 PAY ABOUT THE SAME AMOUNT," 2666 01:10:59,689 --> 01:11:00,690 THEY'RE NOT GONNA WANT 2667 01:11:00,690 --> 01:11:01,558 TO LISTEN TO THAT. 2668 01:11:01,558 --> 01:11:03,693 >> SOMETIMES YOU HAVE TO MAKE 2669 01:11:03,693 --> 01:11:05,395 CHOICES THAT DON'T SOUND 2670 01:11:05,395 --> 01:11:07,063 POLITICALLY CONVENIENT, 2671 01:11:07,063 --> 01:11:08,432 BECAUSE THE ALTERNATIVE 2672 01:11:08,432 --> 01:11:10,400 IS JUST TOO DREADFUL TO IMAGINE. 2673 01:11:10,400 --> 01:11:12,602 >> UNTIL THERE IS A CONCEPTION 2674 01:11:12,602 --> 01:11:14,338 OF PARTICIPATING 2675 01:11:14,338 --> 01:11:15,839 IN A DEMOCRATIC SOCIETY, 2676 01:11:15,839 --> 01:11:17,941 AND A CONCEPTION WHICH IS REAL, 2677 01:11:17,941 --> 01:11:19,876 NOT JUST WORDS, BUT IT MEANS 2678 01:11:19,876 --> 01:11:21,445 YOU REALLY ARE PARTICIPATING 2679 01:11:21,445 --> 01:11:22,712 IN A DEMOCRATIC SOCIETY-- 2680 01:11:22,712 --> 01:11:23,813 UNTIL THAT'S THE CASE, 2681 01:11:23,813 --> 01:11:24,948 DISCUSSION OF TAXES IS, 2682 01:11:24,948 --> 01:11:27,651 UH, FIDDLING WITH TECHNICALITIES 2683 01:11:27,651 --> 01:11:29,919 AND MISSING THE POINT. 2684 01:11:29,919 --> 01:11:31,455 >> Fox: WHAT'S HAPPENED IS 2685 01:11:31,455 --> 01:11:33,690 THAT WE FEEL LESS CONNECTED, 2686 01:11:33,690 --> 01:11:36,025 AND SO THE APPEAL 2687 01:11:36,025 --> 01:11:37,093 NOT TO PAY TAXES-- 2688 01:11:37,093 --> 01:11:38,094 IT'S YOUR MONEY; 2689 01:11:38,094 --> 01:11:40,564 YOU CAN DO BETTER WITH IT-- 2690 01:11:40,564 --> 01:11:42,999 MEANS THAT WHY ARE YOU HELPING 2691 01:11:42,999 --> 01:11:44,601 SOMEBODY ELSE WHO DOESN'T 2692 01:11:44,601 --> 01:11:46,035 HAVE SOME IMMEDIATE CONNECTION 2693 01:11:46,035 --> 01:11:47,637 TO YOUR FAMILY OR NEIGHBORHOOD 2694 01:11:47,637 --> 01:11:48,638 OR COMMUNITY? 2695 01:11:48,638 --> 01:11:50,640 IT USED TO BE PEOPLE WENT 2696 01:11:50,640 --> 01:11:52,642 TO SCHOOL WITH THE PEOPLE 2697 01:11:52,642 --> 01:11:53,643 THEY WORKED WITH, 2698 01:11:53,643 --> 01:11:56,346 AND-- AND MANAGERS, OWNERS, 2699 01:11:56,346 --> 01:11:58,848 THEIR KIDS, WORKERS, 2700 01:11:58,848 --> 01:11:59,949 YOU KNOW, BLUE COLLAR, 2701 01:11:59,949 --> 01:12:00,950 WHITE COLLAR-- 2702 01:12:00,950 --> 01:12:02,719 THERE WAS AN ENORMOUS MIX 2703 01:12:02,719 --> 01:12:03,920 AND INTERACTION. 2704 01:12:03,920 --> 01:12:04,921 AND I THINK THERE WAS 2705 01:12:04,921 --> 01:12:06,756 A MUCH GREATER SENSE OF-- 2706 01:12:06,756 --> 01:12:08,758 THAT WE'RE ALL IN THIS TOGETHER. 2707 01:12:08,758 --> 01:12:09,959 IN ORDER FOR THESE THINGS 2708 01:12:09,959 --> 01:12:11,861 TO HAPPEN AGAIN, SOMEHOW 2709 01:12:11,861 --> 01:12:13,630 WE MUST CAPTURE THAT SENSE 2710 01:12:13,630 --> 01:12:16,733 THAT WE ARE A-- ONE NATION. 2711 01:12:16,733 --> 01:12:18,902 YOU KNOW, WE ARE A COMMUNITY, 2712 01:12:18,902 --> 01:12:20,870 AND THEN WE HAVE TO DECIDE, 2713 01:12:20,870 --> 01:12:21,871 WELL, WHAT IS IT 2714 01:12:21,871 --> 01:12:23,373 THAT THE FEDERAL GOVERNMENT 2715 01:12:23,373 --> 01:12:24,508 SHOULD DO, AS OPPOSED TO 2716 01:12:24,508 --> 01:12:25,909 THE STATE OR LOCAL GOVERNMENT, 2717 01:12:25,909 --> 01:12:27,043 AS OPPOSED TO OURSELVES 2718 01:12:27,043 --> 01:12:28,044 INDIVIDUALLY? 2719 01:12:28,044 --> 01:12:29,513 THOSE ARE TOUGH DECISIONS, 2720 01:12:29,513 --> 01:12:30,647 BUT WHAT CAN THE FEDERAL 2721 01:12:30,647 --> 01:12:31,981 GOVERNMENT DO BEST, 2722 01:12:31,981 --> 01:12:33,750 AND WHAT SHOULDN'T IT DO? 2723 01:12:33,750 --> 01:12:36,052 AND WE NEED THOSE CONVERSATIONS 2724 01:12:36,052 --> 01:12:37,053 TO BE GOING ON 2725 01:12:37,053 --> 01:12:39,556 THROUGHOUT THE COUNTRY. 2726 01:12:49,032 --> 01:12:50,534 >> Thorndike: YOU KNOW, THERE'S 2727 01:12:50,534 --> 01:12:51,601 A REASON WHY I'VE SPENT MY LIFE 2728 01:12:51,601 --> 01:12:52,602 ON THIS ISSUE. 2729 01:12:52,602 --> 01:12:53,703 IT'S THAT IT IS SIMPLY 2730 01:12:53,703 --> 01:12:55,839 TOO IMPORTANT TO IGNORE, 2731 01:12:55,839 --> 01:12:58,575 AND INERTIA IS SO STRONG 2732 01:12:58,575 --> 01:13:02,045 THAT IT REQUIRES ALL OF US 2733 01:13:02,045 --> 01:13:03,880 TO PAY ATTENTION 2734 01:13:03,880 --> 01:13:04,948 SO THAT THE TAX SYSTEM 2735 01:13:04,948 --> 01:13:06,683 DOESN'T JUST GET WORSE, 2736 01:13:06,683 --> 01:13:07,684 DOESN'T JUST GET 2737 01:13:07,684 --> 01:13:08,685 MORE COMPLICATED, 2738 01:13:08,685 --> 01:13:09,686 DOESN'T JUST GET 2739 01:13:09,686 --> 01:13:10,687 MORE INEFFICIENT. 2740 01:13:10,687 --> 01:13:12,422 OTHER PEOPLE WILL PAY ATTENTION. 2741 01:13:12,422 --> 01:13:13,423 THE WRONG PEOPLE 2742 01:13:13,423 --> 01:13:14,424 WILL PAY ATTENTION, 2743 01:13:14,424 --> 01:13:15,792 AND THEY'LL GET THE TAX SYSTEM 2744 01:13:15,792 --> 01:13:17,093 TO DO WHAT THEY WANT IT TO DO. 2745 01:13:17,093 --> 01:13:20,029 SO, IF AMERICANS AS A WHOLE 2746 01:13:20,029 --> 01:13:21,498 WANT TO PREVENT PEOPLE 2747 01:13:21,498 --> 01:13:23,500 FROM MAKING OUT LIKE BANDITS 2748 01:13:23,500 --> 01:13:24,568 AND WANT A TAX SYSTEM 2749 01:13:24,568 --> 01:13:25,935 THAT TREATS THEM FAIRLY 2750 01:13:25,935 --> 01:13:26,970 AND THAT IS GOOD 2751 01:13:26,970 --> 01:13:28,137 FOR THE COUNTRY AS A WHOLE, 2752 01:13:28,137 --> 01:13:29,706 THEY HAVE TO ENGAGE THIS TOPIC. 2753 01:13:29,706 --> 01:13:30,707 YOU CAN'T AVOID IT, 2754 01:13:30,707 --> 01:13:31,708 AND YOU CAN'T JUST 2755 01:13:31,708 --> 01:13:32,709 COMPLAIN ABOUT IT. 2756 01:13:32,709 --> 01:13:34,644 >> WHAT THE POLITICIANS FEAR, 2757 01:13:34,644 --> 01:13:36,446 IN THEIR HEART OF HEARTS, 2758 01:13:36,446 --> 01:13:37,847 THE WASHINGTON POLITICIANS, 2759 01:13:37,847 --> 01:13:39,082 I THINK, IS NOT A LOSS 2760 01:13:39,082 --> 01:13:40,083 OF REVENUE. 2761 01:13:40,083 --> 01:13:41,618 THEY KNOW, OVER TIME, 2762 01:13:41,618 --> 01:13:43,119 WASHINGTON WILL GET ITS-- 2763 01:13:43,119 --> 01:13:44,588 ITS TAKE, WILL GET ITS CUT. 2764 01:13:44,588 --> 01:13:46,055 IT'LL DO JUST FINE. 2765 01:13:46,055 --> 01:13:47,123 WHAT THEY REALLY FEAR 2766 01:13:47,123 --> 01:13:48,725 IS THE LOSS OF POWER. 2767 01:13:48,725 --> 01:13:50,727 >> Boortz: WE HAVE A RIGHT, 2768 01:13:50,727 --> 01:13:52,796 WHEN GOVERNMENT BECOMES ABUSIVE, 2769 01:13:52,796 --> 01:13:54,598 OF LIBERTY TO ABOLISH 2770 01:13:54,598 --> 01:13:55,732 OR CHANGE GOVERNMENT. 2771 01:13:55,732 --> 01:13:58,201 THIS IS CHANGING GOVERNMENT. 2772 01:13:58,201 --> 01:13:59,903 >> UH, EVERY AMERICAN CITIZEN 2773 01:13:59,903 --> 01:14:00,904 SAY, "IF I DON'T LIKE 2774 01:14:00,904 --> 01:14:03,473 THIS TAX CODE, 2775 01:14:03,473 --> 01:14:05,241 I NEED TO SERIOUSLY DETERMINE 2776 01:14:05,241 --> 01:14:07,210 WHAT, IN MY MIND, IS A WORKABLE 2777 01:14:07,210 --> 01:14:09,212 OPTION AND GET BEHIND THAT." 2778 01:14:09,212 --> 01:14:11,615 >> IF TAXPAYERS DEMANDED IT, 2779 01:14:11,615 --> 01:14:13,483 THE POLITICIANS 2780 01:14:13,483 --> 01:14:14,618 AND THE POLITICAL LEADERS 2781 01:14:14,618 --> 01:14:15,685 WOULD RESPOND, AND WE COULD 2782 01:14:15,685 --> 01:14:16,853 GET A DRAMATICALLY BETTER 2783 01:14:16,853 --> 01:14:18,021 TAX SYSTEM FOR EVERYBODY. 2784 01:14:18,021 --> 01:14:20,089 >> WASHINGTON HAS OVERPROMISED 2785 01:14:20,089 --> 01:14:22,158 AND UNDERPERFORMED, 2786 01:14:22,158 --> 01:14:24,761 AND IT'S TIME THAT THAT STOP. 2787 01:14:24,761 --> 01:14:27,531 AND IT NEED TO STOP NOW. 2788 01:14:27,531 --> 01:14:28,732 >> I THINK EVERY AMERICAN 2789 01:14:28,732 --> 01:14:29,966 OUGHT TO START UNDERSTANDING 2790 01:14:29,966 --> 01:14:31,134 THERE IS A WAY TO FIX THIS. 2791 01:14:31,134 --> 01:14:32,135 WE DON'T HAVE TO LIVE 2792 01:14:32,135 --> 01:14:33,570 WITH THIS ONEROUS BURDEN. 2793 01:14:33,570 --> 01:14:34,638 WE DON'T HAVE TO CONTINUE 2794 01:14:34,638 --> 01:14:35,905 TO SAY, "OH, WE'RE LOSING GROUND 2795 01:14:35,905 --> 01:14:37,040 WITH THE CHINESE, LOSING GROUND 2796 01:14:37,040 --> 01:14:38,041 WITH THE MEXICANS." NONSENSE! 2797 01:14:38,041 --> 01:14:39,242 LET'S START GAINING NOW. 2798 01:14:39,242 --> 01:14:40,577 LET'S START EMPOWERING 2799 01:14:40,577 --> 01:14:41,645 AMERICANS AGAIN. 2800 01:14:41,645 --> 01:14:42,679 >> THE CURRENT SYSTEM 2801 01:14:42,679 --> 01:14:44,047 IS A DISASTER FOR OUR CHILDREN 2802 01:14:44,047 --> 01:14:45,048 AND GRANDCHILDREN. 2803 01:14:45,048 --> 01:14:46,683 DEMOCRATS AND REPUBLICANS ALIKE 2804 01:14:46,683 --> 01:14:47,884 CARE ABOUT THEIR CHILDREN. 2805 01:14:47,884 --> 01:14:48,885 >> THE REST OF THE WORLD 2806 01:14:48,885 --> 01:14:49,886 IS CHANGING. 2807 01:14:49,886 --> 01:14:50,887 THE REST OF THE WORLD 2808 01:14:50,887 --> 01:14:52,055 IS BECOMING MORE COMPETITIVE. 2809 01:14:52,055 --> 01:14:54,190 WE HAVE TO KEEP WORKING, 2810 01:14:54,190 --> 01:14:55,191 EVERY YEAR, TO BECOME 2811 01:14:55,191 --> 01:14:56,192 MORE COMPETITIVE, 2812 01:14:56,192 --> 01:14:57,193 AND A BIG PLACE TO DO THAT 2813 01:14:57,193 --> 01:14:58,061 IS IN THE TAX CODE. 2814 01:14:58,061 --> 01:15:00,063 >> I, FOR ONE, AM NOT CONVINCED 2815 01:15:00,063 --> 01:15:01,164 THAT UNHAPPINESS WITH 2816 01:15:01,164 --> 01:15:03,099 THE TAX SYSTEM IS GONNA BE 2817 01:15:03,099 --> 01:15:04,200 STRONG ENOUGH TO GET IT 2818 01:15:04,200 --> 01:15:06,703 TO CHANGE, UH, ON ITS OWN RIGHT. 2819 01:15:06,703 --> 01:15:07,971 I JUST-- I JUST DON'T THINK 2820 01:15:07,971 --> 01:15:10,139 THAT LAWMAKERS WILL MUSTER 2821 01:15:10,139 --> 01:15:11,140 THE WILL TO MAKE 2822 01:15:11,140 --> 01:15:12,208 A FUNDAMENTAL CHANGE 2823 01:15:12,208 --> 01:15:13,209 IN THE TAX SYSTEM 2824 01:15:13,209 --> 01:15:15,679 UNTIL THEIR HAND IS FORCED. 2825 01:15:15,679 --> 01:15:17,280 UM, WE'RE JUST WAITING 2826 01:15:17,280 --> 01:15:18,514 FOR THAT MOMENT.179239

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