Tuesday, November 30, 2010

Senate Again Fails to Repeal 1099 Requirements

Washington, D.C. (November 29, 2010)
By Michael Cohn

The Senate voted Monday evening on a competing pair of amendments to repeal the expanded 1099 information reporting requirements that were included in the health care reform bill, but failed for the second time this fall to roll back the controversial requirements.

The provision, which was included in the health care reform bill, would require companies to report on any purchases of goods or services of over $600 from a single vendor during the calendar year to the Internal Revenue Service on a Form 1099-MISC. The dueling amendments, from Senate Finance Committee Chairman Max Baucus, D-Mont., and Sen. Mike Johanns, R-Neb., mainly differed in how they would be paid. They were attached to a larger food safety bill, which overcame a procedural hurdle to move forward by a vote of 69-26, shortly before the vote on the amendments.

“There are two big differences between our two amendments,” said Baucus. “First, my alternative is especially friendly to small businesses. It takes extra measures to permit the IRS to waive certain duplicative reporting requirements for small businesses that use credit cards to pay their bills. Second, our two versions differ about paying for the change. The alternative offered by my colleague from Nebraska would give the unelected director of OMB [the Office of Management and Budget] unprecedented authority to slash spending, all on his own. The Johanns alternative would thus abdicate Congress’s responsibility over the budget. For these reasons, I urge my colleagues to oppose the Johanns amendment and support my alternative.”

Johanns contended that the Baucus amendment would add $19 billion to the federal deficit and drive up the overall cost of the health care bill.

He noted that his own amendment would direct the Office of Management and Budget to identify $39 billion in unspent and unobligated accounts to replace the revenue that might have been generated by the 1099 paperwork mandate, representing only about 5 percent of the total funds in unspent and unobligated accounts and giving the administration discretion to ensure the funds do not affect ongoing and necessary programs.

“Every small business out there is asking the question, ‘Why is the cost of this health care bill falling on my back?’” said Johanns. “You can’t go anyplace in this country without people asking, ‘What is this about the 1099 requirement?’ They are concerned they are going to spend on accountants for compliance with this requirement. They are asking, ‘Why are you picking on us?’ Why would you add $19 billion to the federal deficit, and that’s what the Baucus amendment does. You simply won’t find better offsets than the ones mine has. My phone is ringing off the hook, and we can’t go along with these offsets. The Baucus amendment simply does not pay for these offsets. In the end, it hampers the next generation. It adds to the national debt.”

Sen. Tom Harkin, D-Iowa, one of the lead sponsors of the food safety bill, the FDA Food Safety and Modernization Act, recommended that neither amendment should be approved.

“If the Baucus or Johanns amendment is adopted, it will kill the bill,” he said. “There’s no doubt about it. Revenue measures have to originate in the House. I hope this body will reject any extraneous amendments.”

The Johanns amendment received 61 votes in support and 35 votes in opposition, but failed to reach the two-thirds margin needed. The Baucus amendment received 44 votes in support and 53 in opposition and thus did not pass either.

The Senate failed to pass a repeal of the 1099 reporting requirements in September after Democrats and Republicans introduced competing amendments to the Small Business Jobs Act (see Senate Fails to Repeal 1099 Requirements).

After his amendment was defeated, Baucus vowed to continue fighting to repeal the expanded 1099 requirements. Although the requirements had not yet gone into effect, he noted, many small business owners expressed concerns the requirements would create an onerous paperwork burden.

“Small business owners voiced legitimate concerns that these requirements would be burdensome, and the Senate should act in response to those concerns," Baucus said in a statement. "I am disappointed that we weren’t able to repeal these requirements today, but I intend to keep working until we do. Our bill will allow small business owners to direct their focus onto job creation and growth rather than on paperwork. We will keep up our fight on behalf of small businesses so they can continue their critical work to create jobs and help the economy recover.”

Monday, November 29, 2010

Senate pushing to repeal reviled IRS rule

It would be a darned shame if Congress fails to repeal this provision in the Health care bill.

By Charles Riley, staff reporterNovember 29, 2010: 2:40 PM ET

NEW YORK (CNNMoney.com) -- Lawmakers will get a chance Monday to undo a piece of health care reform that businesses big and small say will cost jobs.

The Senate is set to consider whether to repeal the new requirement that businesses notify the Internal Revenue Service of purchases over $600.

The provision was adopted in March as part of the massive health care reform law.

Starting in 2012, businesses will be required to issue 1099 tax forms not only to contracted workers (as they already do) but also to any individual or corporation from which they buy more than $600 in goods or services in a year.

The measure is expected to raise about $17 billion over 10 years by increasing tax compliance, but small business owners have argued the measure would increase paperwork, and drive up costs.

Republicans have led the charge to repeal the provision, but they have been joined by some key Democrats including Sen. Max Baucus, the Finance Committee chairman who introduced one of two amendments that would eliminate the new requirements.

Even President Obama no longer defends the provision.

Earlier this month, one day after after suffering a "shellacking" in the congressional election, Obama announced that he would support repealing the measure in the spirit of helping the business community.

Republican Sen. Mike Johanns of Nebraska authored the second amendment.

The Washington Punch List
"Senators will have a clear choice between a fiscally responsible end to the 1099 mandate or one that tacks on billions more to the health care law's already bloated price tag and adds to our national debt," Johanns said in a statement.

But the move faces an uphill battle, at least for now. Neither amendment up for consideration on Monday is expected to get the 67-vote supermajority required for passage, according to multiple aides on both sides of the aisle.

In September, both a Republican-backed proposal to repeal tax requirements and a Democratic plan to amend it failed to pass the necessary procedural votes to move it forward.

-CNN's Ted Barrett contributed to this report. To top of page

Saturday, November 27, 2010

How Congress' tax-cut decision may affect economy

By JEANNINE AVERSA, AP Economics Writer Jeannine Aversa – Sat Nov 27, 4:21 pm ET

On this, economists agree: Extending tax cuts passed under President George W. Bush for low- and middle-income people would strengthen the weak economy.

The question is what to do about the highest-paid 3 percent of taxpayers. Should Congress let their tax cuts expire at year's end as scheduled? Extend them for only a while? Or make them permanent?

It isn't just a debate over how much money high-income Americans should get to keep. It's about how much their tax cuts might aid the economy. And how much they'll affect the budget deficit years from now.

But first, consider what would happen next year if Congress let the tax cuts for everyone expire as scheduled. According to Moody's Analytics, the deficit would drop to $732 billion. That's well below the $1.3 trillion deficit for the budget year that ended Sept. 30.

At the same time, the economy would suffer, Moody's says: Growth would tail off to just 0.9 percent next year. That's scarcely more than a recessionary pace. And unemployment would average 10.7 percent next year.

That's because higher taxes would leave people with less money to spend. Businesses would be less inclined to hire. Economic growth would slide. Yet if Democrats and Republicans can't reach a deal during the post-election lame-duck session that began this month, taxes will rise across the board in January.

Republicans triumphant in the midterm elections insist that everyone, regardless of income, should continue to enjoy the tax cuts approved during George W. Bush's presidency.

President Barack Obama wants to extend the tax cuts for individuals with taxable incomes below $200,000 a year and couples with incomes below $250,000. Taxable income is a taxpayer's total income minus allowable deductions and exemptions.

Obama has long argued that income above those levels should be taxed at the higher rates that existed before 2001. Yet since his party suffered major losses in the elections, Obama has signaled a willingness to compromise. The White House has indicated he is open to a one- or two-year extension of the tax cuts but opposes a permanent extension for the highest earners.

Here's how analysts think each of the three leading options would affect the economy next year:
OPTION ONE: Let the tax rates for the highest earners rise back to what they were before 2001, when the first round of Bush tax cuts was passed. But extend them permanently for everyone else. This is what Obama favors.

Moody's Analytics says that under this scenario, the economy would grow 2.6 percent in 2011. That's better than the scant 0.9 percent growth envisioned if everyone's tax cuts expired.

Economists note that low- and middle-income people tend to spend more of their take-home pay than the highest-earners do. That's especially true in a tough economy.

Still, unemployment would average 10 percent next year, up from the 9.7 percent estimated for this year. The jobless rate would tick up as growth weakened slightly next year.

This reflects the Republican argument that a tax increase for high-income taxpayers would hurt some small-business owners, making them less inclined to hire.

The budget deficit would fall to $904 billion in 2011, from $1.3 trillion in the just-ended budget year. That would be due to the additional taxes paid by higher-income Americans.
OPTION TWO: Extend the tax cuts for one or two years for the highest earners and permanently for everyone else.

Moody's Analytics estimates this scenario would help the economy more than the first approach. The economy would grow 2.95 percent next year — a 0.4 percentage point improvement over Option One.

Unemployment would average 9.9 percent next year. That would be slightly worse than the 9.7 percent average rate estimated for this year. Stronger growth wouldn't be enough to prevent the unemployment rate from rising as more jobseekers, perhaps feeling better about their prospects, resume their search for work.

Even though no one's taxes would rise in 2011, the budget deficit would drop to $943 billion from $1.3 trillion this year. That's because tax revenue would rise as people spent more and stimulated more economic activity.

The reasoning is that Option Two would deliver a psychological boost: Americans, regardless of income, would know their income taxes wouldn't rise anytime soon. High earners would have more money to spend than under Option One.

Obama and Republicans have signaled their openness to extending the tax cuts for everyone temporarily, perhaps for one or two years. That would force Obama to face the issue again in 2012, when he'll likely seek re-election. Senate Minority Leader Mitch McConnell, R-Ky., says he'll fight to make sure no one, regardless of income, would face a tax increase once any extended tax cuts expire.

Supporters say the economy is too fragile now to boost taxes even on the highest earners and risk causing them to spend less. At the same time, a temporary extension wouldn't necessarily swell the budget deficit over the long run.
OPTION THREE: Make the tax cuts permanent for everyone. This is the plan Republicans favor.

By Moody's calculations, the impact on unemployment, growth and the deficit in 2011 would be the same as in Option Two.

Still, renewing the tax cuts across the board would swell the debt over the next decade by nearly $4 trillion, the Congressional Budget Office says. That's even after accounting for the extra revenue that would flow to the government as permanently lower taxes boosted spending and growth.

Besides, many economists say high-income Americans tend to squirrel away most of the tax money they save. A report from the Congressional Budget Office agreed.

Mark Zandi, chief economist at Moody's Analytics, calculated that when higher earners get an extra dollar of after-tax income, they spend just 40 cents of it. Middle-income Americans spend 66 cents. The poor spend almost all of it. Even so, as higher earners chip in and spend, the economy benefits.

Allen Sinai, chief economist at Decision Economics, fears that letting the tax cuts for high-income Americans expire could reduce the flow of money into private equity firms, venture capital and other investments that "grease the wheels of entrepreneurship in the U.S. economy."

Under Sinai's estimates, extending the tax cuts for all would provide the biggest boost to spending and growth. People and businesses would know they could count on the money in the future.

Yet even if the tax cuts were extended for everyone, unemployment would still be expected to rise next year. Economic growth still wouldn't be robust enough to create enough jobs.

Wednesday, November 17, 2010

New deficit plan would cut $6 trillion

By Jeanne Sahadi, senior writer, November 17, 2010: 8:39 AM ET

NEW YORK (CNNMoney.com) -- The country got a little shock therapy last week when the co-chairmen of President Obama's debt commission offered their recommendations for curbing U.S. debt. One of their goals: reduce deficits by $4 trillion over the next decade.

On Wednesday, a leading group of economists, budget experts and former government officials is doing them one better -- offering a plan that would save $6 trillion by 2020.

The Bipartisan Policy Center's Debt Reduction Task Force is led by Republican Pete Domenici, a former senator from New Mexico, and Democrat Alice Rivlin, the founding director of the Congressional Budget Office and a member of the president's debt commission.

In broad strokes, the task force's recommendations echo the proposals from Erskine Bowles and Alan Simpson.

But the panel's report also diverges in some very significant ways from the Bowles-Simpson plan. Most notably it calls for a one-year $650 billion payroll tax holiday as well as a national sales tax that could raise trillions in revenue over 30 years. And it would not formally raise the retirement age for Social Security.

Overall, the Domenici-Rivlin plan would stabilize the amount of accumulated U.S. debt below 60% of GDP by 2020. That's roughly where debt as a percentage of the economy is today.

But barring changes to current policies, the debt is slated to top 87% by 2020 and approach 200% by 2035, according to the Congressional Budget Office.

Between 2012 and 2040, the Domenici-Rivlin plan would generate a staggering $84 trillion in debt-reduction savings, with roughly equal amounts generated from the spending and tax sides of the ledger and the rest coming from savings on interest payments.

Spending: Freezes, cuts
Freeze non-defense defense spending: The Domenici-Rivlin plan would impose a five-year freeze on defense spending, after which the growth rate would be capped at the rate the economy grows.

In addition, the plan recommends that the savings identified by Defense Secretary Robert Gates be used to reduce the deficit rather than be reinvested in defense. Other suggestions include reforming military health care and prioritizing defense investment.

Freeze domestic spending: The plan would impose a four-year freeze, after which the growth rate would be capped at GDP growth. Among the recommended changes to accommodate the freeze: terminate ineffective programs and set priorities for government programs.

Reduce farm program spending:
Among the recommended changes, farm payments to producers making more than $250,000 would be eliminated. (10 ways to cut Uncle Sam's budget)

Taxes:New break, new sales tax
Simpler, reformed tax system: The plan would reduce the current six income tax rates to just two (15% and 27%). It would reduce the corporate tax rate to 27% from 35% today.

It would also simplify the federal tax system so much that nearly 90 million households -- or roughly half of all tax filers -- wouldn't have to file a federal tax return.

The panel would also eliminate most tax credits and deductions, which currently cost federal coffers roughly $1 trillion a year.

But its plan preserves some key tax breaks, such as those for mortgage interest and charitable contributions, which would be converted to tax credits. The conversion will benefit more taxpayers but would represent a smaller tax break for many who currently take the deductions.

New sales tax: One proposal from the panel sure to draw fire is the "Debt Reduction Sales Tax" -- which is a form of a value-added tax or VAT.

The tax would be phased in, starting at 3% in 2012 and increasing to 6.5% in 2013. It would raise revenue to help reduce deficits. One aim of delaying its start is to spur economic recovery by encouraging people to buy more to avoid the tax coming in 2012.

For simplicity's sake, the tax would be broad and exempt very few purchases. But consumers -- particularly low-income households -- would get tax rebates to compensate them for taxes they pay on essential items like food and medicine.

The sales tax is estimated to raise a net of $150 billion in new revenue in 2015 after accounting for the rebates. From 2012 to 2040, it would raise an estimated $9.3 trillion in net revenue.

Payroll tax holiday: To help create jobs, the panel believes a year-long payroll tax holiday for employers and their workers in 2011 "will immediately add money to employee paychecks while incentivizing companies to hire new workers."

The panel estimates this $650 billion tax cut could create between 2.5 million and 7 million jobs.

The trust funds of Social Security and Medicare, which are normally supported by the payroll tax, would instead be reimbursed from general revenues in 2011. In reality that means the government would have to borrow the money to make the trust funds whole.

Social Security: Solvent for the long run

Payroll tax revenue increase: The Rivlin-Domenici proposal would over nearly 40 years raise the amount of wages subject to payroll taxes (currently $106,800). In their plan, 90 percent of all wages earned in the country would eventually be subject to the payroll tax.

Incentive to work longer: Technically the Rivlin-Domenici panel doesn't raise the official early or full retirement ages for Social Security benefits. But as time goes on, benefits would be reduced for those who retire at 62 to account for increasing longevity.

Include more workers in the system: Newly hired state and local government workers would be required to pay into the system by 2020.

Change cost-of-living adjustments: Retiree benefits would still be adjusted for inflation, but the plan calls for a new formula that offers what some say is a more accurate reading of inflation. In any case, it's a less generous formula than the current one in use.

Adjust benefits for high- and low-income workers: The growth rate in benefits for the top 25% of beneficiaries would be slowed; while the plan would increase the minimum benefit for long-time lower-wage workers.

Sunday, November 14, 2010

Blowing up the tax code

By Jeanne Sahadi, senior writerNovember 12, 2010: 7:57 AM ET
NEW YORK (CNNMoney.com) -- So much to love. So much to hate.

That's what everyone will find in the tax reform proposals laid out this week by the co-chairmen of President Obama's fiscal commission.

And that may also be the best indication that Erskine Bowles and Alan Simpson got something right.

The truth is, there's no escaping the need to make serious tradeoffs on taxes if the goal is to create a tax code that supports economic growth, provides enough revenue to fund everything Americans want their government to do, and achieves real deficit reduction when paired with spending cuts. (10 biggest cuts the co-chairmen recommend)

Of course, politicians aren't yet willing to acknowledge those tradeoffs. Most Republicans still cleave publicly to the idea that taxes are the devil's spawn and must be beaten back. And most Democrats think that only the wealthiest should ever have to pay more in taxes.

That doesn't mean there isn't something for them to like in the Bowles-Simpson proposal.

For one thing, the co-chairmen propose simplifying the tax code, while lowering rates. They would also eliminate the Alternative Minimum Tax (a.k.a. the crazy-making-calculate-your-taxes-twice-to-see-if-you-owe-more tax).

Think you're smart about the deficit? Try this
In exchange, their proposal calls for a reduction -- or the complete elimination -- of the hundreds of tax deductions, credits and exemptions in the code.

Tax breaks reduce the amount of revenue the government takes in by more than $1 trillion a year, much of which comes from just a few of the biggest and most popular ones like the mortgage interest deduction.

Many experts regard tax breaks as a stealth form of spending. That's because the lost revenue doesn't appear anywhere on the federal budget. And once a break is passed into law, it's rare that anybody reviews its effectiveness.

"They're unsustainable. They have no oversight. And they really cost this country a bundle," Simpson told CNN.

Still, as the co-chairmen know all too well, removing them will elicit all sorts of "shrieking," as the ever-tart-tongued Simpson has put it many times. Tax breaks are enjoyed by many powerful special interests -- to say nothing of many Americans.

Fewer breaks = lower rates
Bowles and Simpson offer two options that slash tax breaks. And by doing so, they can lower income tax rates.

In their "zero plan" option, breaks are eliminated altogether. Under that scenario, individual income tax rates -- which they reduce from six brackets to three -- can fall substantially.

For instance, the lowest two rates (10% and 15%) could fall to 8%. The middle two rates (25% and 28%) could drop to 14%. And the top two rates (33% and 35%) could drop to 23%.

The corporate rate, meanwhile, could drop to 26% from 35%, to make it more attractive for companies to invest in the United States.

On the other hand, of course, lawmakers could choose to retain tax breaks. But the fewer they prune, the less rates can be lowered.

The second option from Simpson and Bowles, building on a bipartisan proposal in Congress, would reduce the mortgage interest deduction. The tax break would apply only to the first $500,000 of a loan on one's primary residence, about half of what counts today.

The second option would also repeal the state and local tax deduction and various other itemized deductions.

Individual tax rates under that plan would be 15%, 25% and 35%.

Another big proposed change under both reform plans would affect investment income. Capital gains and dividends, which are currently taxed at 15%, would be taxed as ordinary income -- that is, at higher rates.

More revenue on tap
The Simpson-Bowles tax reform options would raise an estimated $80 billion in additional revenue in 2015 and $160 billion by 2020. Their plan overall would cap federal revenue at 21% of GDP.

Who exactly will be paying in all that extra revenue? A specific break-out by income groups is still in the works.

It is likely that more people would end up with higher -- rather than lower -- tax bills, a commission staffer said. But he also noted that the revised tax code would probably be more progressive.

No one will like paying more, of course. But the staffer said the comparison shouldn't be to what someone is paying today but rather to what that person is likely to pay in the future if no changes to the tax code or to the federal balance sheet are made.

Translation: Taxes are going up one way or the other. The question is will those higher taxes be levied in a system that is widely considered to be outdated, overly complex and highly inefficient, or in a system that is simpler and smarter?

Thursday, November 11, 2010

Tax-Unfriendly States For Retirees


In this article, Kiplinger lists the following states as tax-unfriendly to retirees:
  1. California
  2. Rhode Island
  3. New Jersey
  4. Vermont
  5. Iowa
  6. Nebraska
  7. Wisconsin
  8. Oregon
  9. Indiana
  10. North Dakota

Wednesday, November 10, 2010

Report from bipartisn deficit reduction commission

Report from the Bipartisan leaders of President Barack Obama's deficit commission Read the entire article if you're interested in this topic. I have only reproduced a couple of excerpts below. Even with the historic tsunami on November 2nd, politicians still want to do business as usual. Sad.


The plan would gradually increase the retirement age for full Social Security benefits — to 69 by 2075 — and current recipients would receive smaller-than-anticipated annual increases. Equally controversial, it would eliminate the current tax deduction that homeowners receive for the interest they pay on their mortgages.

The government reported separately Wednesday that the deficit for last month alone was $140.4 billion — and that was 20 percent lower than a year earlier. The red ink for all of the past fiscal year was $1.29 trillion, second highest on record, and this year is headed for the third straight total above $1 trillion.

Current deficits require the government to borrow 37 cents out of every dollar it spends.

Still, the plan was rejected as "simply unacceptable" by House Speaker Nancy Pelosi, D-Calif., a top Obama ally.

Lawmakers Promise to Patch AMT

Washington, D.C. (November 9, 2010)
By WebCPA Staff

A bipartisan group of key congressional committee chairmen pledged to patch the alternative minimum tax this year and wrote to IRS Commissioner Doug Shulman telling him to plan for AMT relief.

Congress tends to temporarily fix the AMT each year to prevent it from ensnaring another 20 million or more taxpayers. But the infighting in Congress and crowded legislative calendar have prevented Congress from patching the AMT until the lame duck session.

Senate Finance Committee Chairman Max Baucus, D-Mont., and House Ways and Means Committee Chairman Sander Levin, D-Mich., along with Finance Ranking Member Chuck Grassley, R-Iowa, and Ways and Means Ranking Member Dave Camp R-Mich., pledged Tuesday to “do everything possible” to enact 2010 AMT relief to ensure tax certainty for 21 million taxpayers. The bipartisan tax policy leaders wrote to Shulman stating the agency should “take all steps necessary to plan for changes” to present law so that, in the aggregate, not one additional taxpayer faces higher taxes in 2010 due to the AMT.

“As the leaders of the Congressional tax-writing committees, we want to assure you that Congress is working on legislative relief,” they wrote. “We will work to craft the AMT provision so that, in the aggregate, not one additional taxpayer faces higher taxes in 2010 due to the onerous AMT. Such legislation will allow the personal credits against the AMT and the exemption amounts for 2010 to be set at $47,450 for individuals and $72,450 for married taxpayers filing jointly.”

They added that they planned to enact AMT relief legislation in a form mutually agreeable to Congress and the President.

Sunday, November 7, 2010

Is Big Government Stifling the American Spirit?

Just watched this interesting debate on Bloomberg. You can watch the entire debate at http://www.bloomberg.com/video/64218982/


Intelligence Squared U.S. Audience Says Yes

NEW YORK--(BUSINESS WIRE)-- Intelligence Squared U.S. (IQ2US), the Oxford-style debate series, an initiative of The Rosenkranz Foundation, hosted a debate last night that took on the timely issue of the proper role of government in a free and democratic society. Four experienced economists and former policy makers debated the motion, Big Government is Stifling the American Spirit at NYU’s Skirball Center for the Performing Arts. Though the final results were close, the side arguing for the motion moved a large percentage of the audience and they were victorious.

At the beginning of the evening, prior to the arguments for and against, 29% of the audience was in favor of the motion, 44 % were against it and 27% were undecided. After the debate, the side arguing for the motion carried the day and ended up with 49% of the vote, 43% were against the motion and 8% remained undecided.

The evening’s winning team argued for the motion and included Phil Gramm, the former Texas senator and vice chairman at UBS Investment Bank, and Arthur Laffer, chairman of Laffer Associates and former Reagan economic advisor known as the “father of supply-side economics.”

Laura Tyson, professor at the Haas School of Business at the University of California Berkeley and a member of President Obama’s Economic Recovery Advisory Board, and Nouriel Roubini, NYU Stern Business School professor and chairman of Roubini Global Economics argued against the motion.

Among the debate’s highlights:

“To me the American spirit is a belief that based on your own merit, based on your own hard work, no matter who your daddy was or who he wasn't, or who your mama was, that people are going to judge you on your ability, and that you have it within your power to succeed. Now, obviously it's better to be ---- it's better to be clever, and pretty, and rich. But being plain, and ordinary, and poor, those things are not insurmountable obstacles in America. And it's that belief of what we can do, but you can't have unlimited government and unlimited opportunity. You have to make a choice.” – Phil Gramm

“You will see that education…higher education, investments in technology, the things that build America's innovative spirit; these are big parts of what the federal government should and does do. You love social networking? Trace it back to DARPA. You love the latest biotech drug? Trace it back to the National Institute of Health. You like traveling on jet aircraft? Trace it back to the Department of Defense. There are many ways in which the U.S. government has spent over many years to build education infrastructure and technology which play into the spirit of America.” – Laura Tyson

“…if you tax people who work and you pay people who don't, do I need to say the next sentence to you? Help me; if you tax rich people, and you give the money to poor people, you're going to get lots and lots of poor people and no rich people. The dream in America has always been to make the poor rich, not to make the rich …poor.” – Arthur Laffer

"…if the American spirit is stifled today, it is because this is not a mental recession, this is a real recession, this is the worst recession we have had since the Great Depression with the unemployment rate now at 17 percent. We have nine million people out of work that have lost their jobs, and unless we address this problem, we're not going to resolve this mental, and physical, and economic, and financial depression." – Nouriel Roubini

John Donvan, correspondent for ABC News Nightline, is moderator of Intelligence Squared U.S. debates. Dana Wolfe is the executive producer.

To view transcripts and videos, download audio or video clips or learn more about Intelligence Squared U.S. please visit: http://www.intelligencesquaredus.org