About homeownership. And by the way, folks, stop scapegoating the rich. A new study shows that when the rich get richer, so does everybody else in society. The economic pie grows larger and we have an expert who can prove it. President obama offered republicans a new economic grand bargain of sorts today, promised to back Corporate Tax reforms in exchange for new spending on jobs and infrastructure programs. Gop leaders say its a nonstarter. Eam eamon joins us now. Good evening. The president went to chattanooga, tennessee, to tour the facility and lay out his ideas on where the United States economy should go in the coming years, and what he said was proposing a grand bargain here in terms of reforming the tax code and increasing spending on Infrastructure Projects that he thinks will stimulate the economy. Heres the president earlier today. Heres the bottom line. Im willing to work with republicans on reforming our Corporate Tax code, as long as we use the money from transitioning to a simpler tax system for a significant investment in creating middle class jobs. Thats the deal. But even before the president spoke in tennessee today, republicans had already dismissed this as not so grand and not so much of a bargain. Heres republican leader mitch mcconnell. Its just a further left version of a widely panned plan he already proposed two years ago. This time, with extra goodies for tax and liberals. The republicans on the hill already say theyre not interested. This puts the president politically in the spot of being the guy who lays out an alternative for what to do with the economy and create jobs. He forces the republicans to be the bad guys rejecting a proposal. Politically, the white house thinks this puts the president in sort of the reachable man position. The guy whos trying to do something. Then he can blame washington gridlock for the problems. Obviously nobody in washington thinks theres all that much going to come out of this particular proposal, but thats the politics of the situation, whether we get any policy out of it remains to be seen. Larry, back to you. All right, many thanks to eamon javers. So look, are we finally seeing a real progrowth Corporate Tax cut from the president . I cant figure it out yet, because this plan is going to raise billions of dollars of revenues to finance the president s spending projects instead of lower and lower tax rate reduction. That troubles me. How are they going to treat Small Business owners . How will they retreat the repatriation of foreign capital . Id like to believe this is supply side progrowth tax reform, but gee, im not so sure. Its so complicated. Weve got to talk about this this evening. We have former romneyryan Campaign Policy adviser lonny chen. And dan clifton, head of policy research at strategus. In the fact sheet, the top tax rate for corporations goes from 35 to 28 . But there are so many exceptions and theres no fleshing out how theyre going to. And i do know that theres so much money left over for spending programs that it doesnt look like a tax cut. Can you just tell me what this is all about . Well, larry, thanks for having me on tonight. I think this is a very confused proposal, as youve said. Its not clear, first of all, that its revenue neutral. It seems like the president is looking to raise revenue here and hes using it for more spending. I think if theres one thing that weve learned over the last few years is that spending doesnt create jobs. Progrowth tax reform and progrowth policies are the things that will create jobs. All right. Let me go to dan clifton. How do you read this . Of course, he says in here and he said in his speech, theres a onetime transition from what we have now to Corporate Tax reform, and the revenues from that onetime transition are going to you know, his favorite list of infrastructure and whatever it is, 45 Manufacturing Institute and wind and solar and all that good stuff. Okay, thats his one time. I dont know what that means. A onetime transition. I have no clue. Youve got to help me on this. Let me explain this to you. To get the corporate rate from 35 to 28, we would need 700 billion of tax revenue over ten years. So the president s saying that he will do that. And then hes going further and saying he wants more money to spend. That means theres probably about a trillion dollars in tax increases offset by 700 billion of tax where are these tax increases coming from . They threw out accelerated depreciation. That can get you about 400 billion dollars over ten years. But heres the kicker, larry. The talk this morning was about possibly being repatriation. By the afternoon, it was a tax on u. S. Multinational foreign profits that are overseas, so its not a repatriation. If you have cash overseas, well apply that tax to you. Its like an alternative minimum tax for international profit. Thats the way i read it. That is totally the way i read it. It is not territorial. Theyre going to penalize the money overseas. And finally, i just want to ask you, in terms of this thing, what about the harry reid argument . I dont know, a couple days ago, harry reid pops up and says oh by the way, democrats want to raise about a trillion dollars because they want to get rid of the sequester. Before we get to mike, they want to raise a trillion dollars of additional taxes on individuals because they dont want this sequester. So it looks like weve got whatever, a net increase of, what did you say . 700 billion in corporate revenues and a trillion dollars in individual revenues . These are not fax refotax refore are not tax cuts. Clearly, the reason why democrats need revenue is because sequestration needs to be replaced. Tomorrow were going to get the gdp report, Government Spending as a percentage of gdp has come down significantly. Theyre going to blame the sequester and this positions the president to say the republicans are for austerity and hurting gdp growth. Mark my words, thats going to be the debate tomorrow morning. Mike, what is your take . Are you for Corporate Tax reform at all . As i remember, you want to raise taxes on corporations, dont you . I wish this was a big Corporate Tax increase, but unfortunately, its not. Its revenue neutral in the long run. Youre right that it would generate some revenue in the short run, but its not through a kind of runtime tax. Its because when you transition from some of these tax rates that we have now and away from those, they will generate a onetime windfall at the front. Use that money and invest in things that we need to invest in, rebuilding bridges and roads. I wouldnt mind seeing more revenue coming in from the corporate sector but that doesnt seem to be in the cards right now and its not what the president proposed and its really not appropriate to say that this is a big tax increase when it just absolutely is not. I cant just figure it out. Do you believe the 28 marginal rate . Thats in the president s talking point. Hes got a fact sheet. He does mention 28 . The current rate is 38 . Id like it to go to 25 or 20. Hell, id like to abolish the Corporate Tax altogether, to be honest with you. But the point im asking, is it reliable . Is the 28 a real number after this transition and spending and all the rigamarole . I think it could be. The question is going to be how is the base going to be broadened . Where is the pain going to be to get to that 28 . I think thats the question. Even at 28 , were still left with one of the higher Corporate Tax rates in the industrialized world. And as you said, weve got to get lower, probably closer to 20 or 25. Ultimately, im not sure that this is a real proposal for tax reform. Thats something that bipartisan negotiators have been working on. Is the president interested in individual tax reform. Weve got to have reform of both if were going to grow this economy. Thats a very important point. Because the treatment of Small Business owners, the tax treatment of Small Business owners, they could be left to 39. 6 while companies could be down to 28 . You know as well as i do, and weve had this debate before, there are almost no actual Small Business owners who make that kind of money to be in the top bracket. I mean, i dont want to go back through this, but you know theres only about 2 of all Small Businesses that 45 is a red herring. Yeah, but its a rich red herring because they make about 45 of the income, michael. They are its 2 of the Small Businesses. Youre trying to use Small Businesses as a way to cut tax rates for very wealthy people. And i think we had that debate over and over again and im pretty sure which side won that one. I think it worked out great. By the way, we got a cornell professor in the next segment whos going to tell you just how well those top marginal tax rates were. Tell that to george bush. Let me go back to the bush tax cuts had their place. The president made it clear that he does not want the sequester. He also made it clear they dont want the budget caps either, going back to 2011. And therefore, theyve got to fill in that gap with some kind of if they got it, which they wont. If they did get the end of the sequester, thats another revenue increase. So how do the politics of this policy play out . Well, its very interesting. Were creating 200,000 jobs a month while were cutting Government Spending. I think on friday, youll hear that we can cut spending and continue to grow this economy. That being said, look what the president wants to spend money on. He wants to spend money on highways. We looked at his highway proposal, spent about 10 billion a year. You have one project in this country that will be 9 billion of new investments. On the private side of the economy, requires no taxpayer dollars. Thats the Keystone Pipeline and he seems to be rejecting that today. So there are other ways that we can get that infrastructure funding, particularly since we have all this energy out there. And we can cut taxes. This is the best of both worlds. Do you think that were going to have to repair our roads and bridges at some point . Do you think were going to have to at some point decide that well have to compete with china on infrastructure and 21st century infrastructure . Lets look at the facts here. In 2009, we did a massive stimulus. We spent 7 billion to turn the economy around. On road paving. We turned the economy around. Im not going to argue with you about the effectiveness of the 2009 stimulus. But we paved roads. Are we going to create productivity for u. S. Workers or pave roads . Hang on, michael. Youre still in a 2 economy. Still the slowest recovery since world war ii. Absolutely. You start cutting spending. You cant have it both ways, though, larry. I want to go back to dans earlier point with the cpo. Obama today says that they have to get rid of the meat cleaver sequester, because the cbo says it will lose 750,000 jobs this year. Now, the year is half over. Were going to get july on friday. Were averaging 200,000 increase in jobs. So can we say now that the cbo is wrong . Can we say now that the sequester and actually budget cutting may have freed up and liberated the private economy and lowered the governments budget burden and that therefore its something of a tax cut and we should keep the sequester . Can we begin to say that the cbo is wrong and lower spending is progrowth . Well, absolutely, larry. And let me tell you this, that weve created 5 trillion of wealth this year. That is offsetting any drag that youre getting from a 45 billion of cuts and sequester this fiscal year. So the economy is dynamic. The second point that ill make on this, larry, is really the fact that some of these models prove to be wrong on the way in, and now on the way out. They projected the stimulus would create all these jobs. Theyre projecting that theyre going to lose all these jobs, theyre not. The dynamic of the american economy. I love how in one breath, you decry the 2 growth weve had and in the next breath, you say its helping grow the economy. We would have 750,000 more jobs this year if it werent for sequester. The sequester cuts went into place, the budget cuts and the sequester cuts just went into place. Thats not true at all. Its not true at all. T the sequester started in 2013. Wed probably have a better economy. The cutting started in 2011. Look at the united kingdom. They started cutting spending and their economy has been flat. Its been flat for the last three years. Anyway, ive got to get out of here. Thank you, gentlemen. Im not sure were any further along on tax reform than we were at the start of the segment, but im sure we will learn more as the days pass. Now, next subject. Who says we cant have more people getting rich in america . President obama and the income inequality crowd seems to think rich people make everybody else poor. That is balderdash. Were about to bring in an Ivy League Professor no less who says when the rich get richer, so does everyone else. And later on, our buddy ryan surhan from milliondollar listing is going to join us live to talk about declining homeownership in america. Is it such a bad thing after all . And dont forget, folks. Free market capitalism is the best path to prosperity. I want to cee loer Corporate Tax rates. Absolutely. I want to see it made permanent. But i dont want more spending. Im kudlow. Well be right back. [ male announcer ] come to the lexus golden opportunity sales event and choose from one of five lexus hybrids thats right for you, including the lexus es and ct hybrids. This is the pursuit of perfection. Ive been saying it for years. When you expand fracking in the u. S. , not only do you unleash a huge economic boom, you lower our dependence on foreign oil, too. Lets go over to sima for more on this. The prince is worried about just that, he says increased production would hurt saudi arabias economy. Right now, saudi arabia is pumping at less than full capacity. And it does rely on oil for nearly all of its economic budgets. Hes right. Hes deadright. Hes got problems. They dont own the World Oil Market anymore. And to see how this will impact the u. S. Oil market, he doesnt invest in any stocks here, including citigroup, apple, time warner cable. So it will be interesting to see what happens. You think he might pull out . Who knows . Well see what kind of impact. Hes better off buying American Companies than saudi oil. Think about that. All right. Well leave it there. Now, folks, you hear it all the time. The rich are getting richer and therefore the poor are getting poorer. But it is not true. A new study focused on 30 years before the 2007 recession shows that while the rich were indeed getting richer, so was everybody else. All right, were going to do this as a phoner. Joining us on the phone now is richard burkhowser. Welcome. Im sorry we have to do it by phone. Next time on tv. Just tell me, for 30 years, youre arguing yeah, the rich got richer, but so did all the middle class people and the working class people and the lower class people. Now, why doesnt anybody get that . The reason is that most of the work has been by people who have looked at taxbased data. The main people of the government. And what theyre focusing on is Market Income from wages and dividends and those sorts of things. Theres no question that Market Income has become more unequal. When you look only at that, the bottom 20 of the populations income fell by 33 , so the poor got poorer, the middle class only increased by 2. 2 . So it appears the rich got richer, the poor got poorer and the middle class are stagnant. But that is not let me just ask you. I have your op ed piece. We have a chart on the screen. Youre saying look, youve got to use all these Social Security benefits and year end income tax credit, health benefits, medicare, medicaid. Youve got to also account for the fact that a lot of unmarry d ed singles live together in the same household. In other words, their measurements are wrong and when those measurements are corrected, you get an entirely different picture. Thats exactly right. And what we see is that certainly that money doesnt come from no place. The government gets its money by taxing Market Income and prov e providing the people with less Market Income. So once you take that major redistribution into account, then the bottom 20 falling by 33 since 1979, they actually increase by 31 . The middle class, instead of stagnating, they increase by 34 . Its seasonally true that the top income groups increase by 54 . But that growth that occurred in the market is what allowed both the rich to become richer and the middle class to become better off. I mean, can one say under this long period where the top marginal tax rate was basically reduced, basically reduced. That in effect the very rich helped finance the economic and income improvement of everybody else . Can you say that . Yeah. I dont think theres any question about that. They show a dramatic increase in top incomes, but its because there was a dramatic increase in the Economic Growth. When the economy is growing, everybodys better off. And the key to Economic Growth is, of course, that you keep tax rates low. So why is everybody scapegoating the rich . You hear it from certain president s, out on the campaign trail talking about inequality. The way to solve inequality is to raise taxes on the rich. Your data says that is exactly the wrong policy. I think whats going on is its a simple story that tries to have a scapegoat. So certainly since the great recession, things have gotten worse. They havent gotten rich because the rich are taking advantage of the poor and the middle class. The rich, the middle class, and the poor have all been hit by this recession. What we need is Economic Growth, and the way to do that is to have policies that focus on Economic Growth and redistribution. All right, amen. Free market capitalism on the supply side.