lot more good for the economy. >> the energy issue is enormous. an enormous flow which would drive down prices to $2.50 a gallon would help us balance the budget and create millions of jobs. >> president obama disagrees. >> you can bet that since it's an election year, they're already dusting off their three-point plan for $2 gas. and i'll save you the suspense. step one is to drill and step two is to drill and then step three is to keep drilling. >> so how much can the president, for that matter congress, really control? stephen moore is an editorial writer for the "wall street journal." stephen, newt gingrich says $2.50 a gallon. president obama laughs it off as insincere election speak. i guess if the president could do that, he might have done it. americans are paying more to fill up their cars and trucks. what part does a president or washington play in the solution? >> well, ali, i know this is going to absolutely shock you, but i agree with newt gingrich on this one. look, i think -- look, in the short term the president can't do much about the price of oil and gas at the pump. you know, this is a result of a lot of the disruptions that are going on in the middle east. but it is also true what newt gingrich and some of the president's critics are saying, that this is a president who's been very hostile to domestic oil and gas development. a good example being the reduction in permits to do offshore drilling. we also saw what happened with the keystone pipeline. if you want to see the chickens come home to roost, that's reflected partly in higher gas prices. of course yesterday when the president gave his talk about high oil and gas prices, he said he wanted to actually increase the tax on the oil and gas companies which is not going to lead to more development. >> but he also said, and we've done the research that show that production has increased under this president. demand for oil in the united states has been flat. so what's the problem? what's the mathematical problem? >> okay. that's a really good point, ali, and it is true that our oil and gas development is way up. way up in the last five years. the issue is, though, that most of those permits were done at the end of the bush administration and the problem that the oil an gas industry have is that actually the obama administration has really put a crimp on this. remember, when barack obama ran for president in 2008, ali, he told us, he said his energy policies would naturally mean that gas prices will be higher, so he's delivered exactly what he promised. >> i'm skeptical that he even has that influence, whether it's down or up. >> okay. >> on gas prices, but it's an interesting discussion. a look back at recent history will show a couple of different approaches by presidents have been tried to curb rising gas prices. president nixon put price controls on gas in the early '70s. that didn't work. the result as you all remember or at least those of you old enough to remember, long lines, closed gas stations because of a lack of supply. recently president george w. bush tried to appeal to the saudis and other large oil producers to increase their output and lower prices in 2008. that didn't work either. the saudis say oil will be $100 a barrel and they'll work hard to keep it there. is it time for americans to accept that there are no short-term solutions to keeping gas prices low? i don't know what the long term holds, but there's nothing we can do about it now? >> there are no short-term solutions, i absolutely agree with you. and i think people get it. people understand that the oil market is an international market. it's a function of international market forces and not something the u.s. president personally controls. having said that, i agree with stephen that right now the key thing which is driving the current spike in gas prices is the standoff with iran. if the president had sort of a magic button that he could press to solve the standoff with iran, then i think we would see gas prices in the very short term fall. that is what is driving the fear in international oil markets right now. >> stephen, let me ask you this, because there's a sense when these things happen, people get irate. gas prices have increased 12 cents a gallon across the board in the last week or so. and then, you know, who we start looking for, right? the spec laters. those are the culprits. i said we don't mind speculators when they drive the prices of our homes up. and i got some excellent responses. people talk about their home as an investment. they want it to appreciate. they don't care if the gas appreciates. are there some speculators and some faces we can be mad at? >> yeah, speculators make decisions about what the future price is going to be of oil, gas, homes or anything. sometimes they make the right speculative decision, sometimes they make the wrong one. i think this is kind of a false way to look at this issue. it is true that in the short term the disruptions in iran and the middle east are the problem. but you know what, let me give you one example. we have been arguing about drilling in alaska for 30 years. and always the argument has been, well, in the short term that's not going to help our oil development and our natural gas. well, look, if we'd done this 30 years ago, we'd have the gas now. here's another interesting point. if we have $4 gasoline, that's all the more reason we should be drilling. it may not drive down the price of gasoline, but every -- this is where i think the riepublicas are right. every single barrel of oil we can drill in the united states, is one less barrel we have to get from countries like venezuela and iran and countries that are hostile to us. so more drilling is just good for the u.s. economy in terms of our balance of trade deficit. >> how about countries like canada? i think stephen really nailed it when you mentioned the keystone pipeline. i think that right now in the white house, that is the decision that they are most ruing. if you want to talk about something that was in the president's control, he made a choice about saying that that pipeline couldn't go ahead, i think that that makes him fair defame for t-- game for the republicans on that issue. they can say it might not affect the price right now but that was an anti-fossil fuel move. >> exactly. >> and on the show we like to think about short term, medium term and long-term things so i think that's a valid discussion. in the immediate term, however, these rising gas prices, we have talked for several weeks on this show, we have talked about this economy that's not just showing green shoots, it's planting roots as being a recovering economy and we've talked about the things that could have offset it. this wasn't one we talked about. we were not expecting this to happen. stephen, are you concerned that this increase in gas prices could actually slow things down? >> yeah, i do, i am concerned. you know, it's interesting, i gave a talk recently to some restaurant owners, people that own companies like denny's and applebee's, and they said every time gas goes up 10 or 15 cents a gallon, they see that in the sales of their stores next week because so many americans are living paycheck to paycheck. if it costs $10 more to fill up your tank, that's $10 less they spend on other places in the economy. let's not forget one other thing. we haven't mentioned maybe the most important factor of all in terms of high gas prices and that is the fed policy of a very loose monetary policy, a low dollar, which means that gas costs more. >> right -- you're right -- >> that's a big issue. >> except that's not actually happening at the moment because the dollar hasn't actually weakened. >> exactly. you can be worried, stephen, about the fed policy, but it is definitely not connected with the price of oil right now. it's iran. it's driven by the fact that already the tensions with iran are high and ali has spoken about speculators. there is reason to worry that that conflict could escalate and that could have huge repercussions on the oil market. >> i agree but all commodity prices are going up. gold prices, precious metals and oil and gas. by the way, there's a political element to this too. if you're barack obama, you have to be very worried about it. jimmy carter lost the election in part because of high gasoline prices in 1980. >> oh, i think we are all -- we all realize that there is nothing more powerful than the price of gas. you look at it every day. everybody knows what they pay for it. it could be a bigger political weapon or ace in the hole than any of us think. stephen, always a pleasure to see you. coming up next, mention corporate america these days and many americans will get pretty fired up. now president obama wants to make a major change to the way corporations pay taxes. is his solution the right one? will it be enough to silence the critics? we'll tackle it all next on "your money." 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[ baby crying ] ♪ what started as a whisper ♪ every day, millions of people choose to do the right thing. ♪ slowly turned to a scream ♪ there's an insurance company that does that, too. liberty mutual insurance. responsibility. what's your policy? ♪ amen, omen over a million people have discovered how easy it is to use legalzoom for important legal documents. so start your business, protect your family, launch your dreams. at legalzoom.com, we put the law on your side. it is the issue that gets so many americans fired up, taxes and the issue of paying a fair share. president obama's new plan is all about corporate tax reform, and he promises a solution for a system he calls, quote, outdated, unfair and inefficient. the president claims his tax plan will reward companies that create jobs in america. but can a tax code really be used to create jobs? well, a lot to get to, so let's take a look at the plan. the president wants to reduce the corporate tax rate to 28% from 35%. manufacturers, by the way, would get an even lower rate than that. the corporate tax rate one of the highest in the world at 35%. now, they say they can pay for the plan by eliminating dozens of loopholes that many businesses currently use to pay a rate that is far lower than 35%. but a number of analysts are skeptical that this can be done without adding to the deficit. now, the administration also proposes a new minimum tax rate on foreign profits of u.s. multi national companies in an attempt to discourage those companies from moving jobs and money abroad. whether it is president obama's plan or another, it is vital that we understand what corporate tax reform will mean to the u.s. economy, and specifically to job creation. i've got a panel here who will help you understand exactly what's at stake. jean is a senior writer at c nervous system n -- cnn money. christine romans, the host of cnn's "your bottom line." christine, let's start with you. i want to start with jobs. one of the president's stated jobs in corporate tax reform. most people don't care how big it is and how complicated it is, we have accountants for this, but he wants it to help create jobs. give me the link there. >> the interesting thing is the republicans say the tax code is preventing the creation of jobs and the president says fixing the tax code will help create jobs. they disagree on how to do it. that's what's interesting. i mean everyone agrees that the corporate tax rate should be lower. the advertised 35% rate is onerous. but the fact of the matter is a very complicated tax code and very crack attorneys and lawyers are able to lower the tax burden for companies. and in fact according to the congressional budget office, last year american companies paid 12.1% of their profit in taxes, the lowest in 40 years. so they're not among the highest if you look at that single statistic. >> harvard business school conducted this remarkable study of u.s. competitiveness. what they did is surveyed 10,000 of their alumni, business leaders from around the world. let me show you what they came up with. this pie chart here illustrates the idea of what comes in the way of creating jobs in the united states. what did those 10,000 respondents say? as you can see, the tax code came in third behind regulation and talent, specifically the respondents cited not only the high corporate tax rate, which we're talking about, but also the sheer complexity and uncertainty of the u.s. tax code. this is where steven comes in. when these respondents were asked for suggestions on how to improve the tax code, the answer could be summed up in one word, simplify. steven, we -- i don't do my own tax returns. i understand that it's complex and it's never occurred to me that it needs to be simple enough for me to understand because if it were, it wouldn't be much of a code. is that the answer? is complexity the problem? is uncertainty the problem? are loopholes the problem? what's the problem? >> yes, yes and yes. it is complex. as you know i've been very fortunate to travel and work in europe and asia and the united states. there is no doubt as i operated in those different jurisdictions that the you have has one of the most complex tax codes in all major industrialized countries and one of the highest rates, as christine pointed out. the average industrialized country rate is 25% versus our 35%. complexity adds an additional level of concern for businesses. and then there's this uncertainty piece. there's a lot of components within our tax code that are not permanent. so businesses are never quite sure whether they're going to get those deductions or not. that leads them to being cautious about investing and, therefore, ultimately creating job opportunities. >> so in an economy like this where we've been talking for months now about how it feels like it's getting stronger, it's getting better. a business leader might say this is a great time to build a factory or start a new product line. you're saying the uncertainty about what might happen, particularly out of washington? >> when i travel and talk to many -- many of our clients are dynamic, middle market type companies in the united states. it's the uncertainty that's causing them to hold paback on investments. one of the big uncertainties is the tax code. >> jean, let's talk about this. you point out the last time the united states embarked on tax reform was 1988? >> '86. >> 25 years ago. the clock actually starts for tax reform today and it's vital that we do something about this. what's your take on the discussion? >> well, you know in, 1986 that's when they passed tax reform. but they actually started the process a few years before that. they dedicated groups at the treasury to come up with different proposals for lawmakers to consider. we haven't done that, so we're not going to see any tax reform this year. we may see a lot of conversations about it. treasury secretary geithner said i'm going t talk with the top tax writers in the house and senate and get this ball rolling. the ball could be rolling for a few years. some people don't expect they'll be reformed before 2014. >> stephen, let me ask you this. why is the tax code so complicated? you led the company's practice in china, you've been in other places. can tax reform be efficient? can it even be pro growth tax code without it being as complicated as the u.s. tax code is? >> absolutely. obviously i spent a lot of time in hong kong, as you know, and they have a very simple tax system. i think it's certainly very proactive in helping businesses with the certainty issue and also their ability to invest and create jobs. what is the challenge for us in the united states and frankly has been the politicalization of our tax code and that gets to the loopholes and deductions issue which the administration is trying to address. >> some of these loopholes and deductions are good things. some of these things you put in there because you want to incentivize a company to buy that extra real estate for a factory. >> or research and development. >> research and development or maybe that's the thing that will tip them over the edge to invest in a new facility. but i think when you're talking about the certainty of that, a lot of these things are temporary, so you don't know if they're going to be able to do it again. it's so -- three different companies in three different industries could have completely different tax landscapes. it's very, very difficult. >> jean. >> temporary is a very funny word because the r & d credit has been on the books for 30 years but they just keep renewing it over and over and over again. it's a waste of time and energy because everybody wants to keep it. >> but there's a particular conservative critique that says whether you make potato chips or microchips, the government shouldn't tax you differently. >> right. >> we to use the tax code to influence behavior -- >> individual companies. >> is that sound? >> i think maybe up to a point it is. i would ask someone smarter than me that question. but i do think you could still favor some behaviors that you think is good for the country, good for the economy without the tax code we've got. >> is the way the u.s. does it the right approach? >> i think what the u.s. needs to do is focus on global competitiveness with their tax code. and today we don't have a tax code that is globally competitive. it needs to be simpler. we need to reduce the corporate tax rate. we have a business community -- we did a recent survey of financial executives, not surprisingly, 87% thought the corporate tax rate was too high. 70% thought it should be at 25% or lower to make us more competitive globally. >> but at 25%, a lot of companies would have to pay higher taxes. you have to broaden out the base of companies paying taxes, wouldn't you? >> if you want to pay for it, you have to take away all the tax breaks. >> i would say there are two issues here. there's the political issue, which is the revenue balancing, the revenue equation and then the business issue. frankly, the businesses say let the politicians sort out how to deal with the revenue shall you. we want to be competitive. right now we are not competitive globally and we believe we need these changes in order for that to occur. >> and ultimately that global competitiveness will create jobs because we're competing on a global stage. stephen, great to have you here. come and visit us whenever you're in town. it's a little snowy in chicago this weekend. >> you're in the right place. >> remember you can catch christine's show at 9:30 a.m. on saturdays and jean, always a pleasure to see you. thank you very much. what's the cause of growing inequality in this country? you heard the arguments that the source of the problem is economic. but could it actually be a matter of morals? plus meet the man who i believe is one of the smartest in the world. where does he go for the next great idea? i'll explain coming up on "your money." we had to create it. introducing the 2013 lexus gs, with leading-edge safety technology, like available blind spot monitor... 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