Tv. Cspan, created by Americans Television companies and brought to you as a service your cable or satellite provider. He has run twice for president and has written four books, the most recent reviving america. Steve forbes, the issues you talk about and write about, are they being discussed in this election . Actually not the way they should be. In many ways this is the most content Free Campaign weve had in decades. Take the republican side, most candidates had nice position papers but how many of them lead with issues the way i did with the flat tax. Whatever you think with donald trump, even though i didnt agree with a lot of it, he put it out there and what is amazing, his 16 opponents didnt realize what he was showing them, if you lead with an issue lead like you have conviction and you can get peoples attention. Its amazing. We shouldnt say this on the air but i fantasize that joe stalin back for five minutes could shoot all the Political Consultants because they dont really understand how you get a message across in the way that the American People can grasp and say yes this is the way we should go. Youve been talking about the flak tax for a long time. Your second book was flat tax revolution. What exactly is a flat tax . How would a work question. What it would do is take the current code and get rid of it completely beyond redemption. A couple years ago, they put together after several years of real effort, a bill to try to rationalize the current code. It came in at 997 pages which comes in with all you need to know. They used to say very the tax code but the epa may not a allow it. Throw away the code and put in a single rate. We recommend 17 , generous exemptions for adults and children so nobody gets a tax increase in this. A family of four, your first 52800 of salary is free from federal income tax. No tax on your saving, no death tax because they believe you should be glad to leave the world and the same thing on the corporate side, not the rate to 17 , have a meeting of Capital Expenditures he could literally do your tax return on a few sheets of paper or a few strokes on the computer. Several countries have variations of the flat tax. This works in the real world. How hasnt worked worked in other countries . Its work very well. Not only does it create more growth because you can spend time working on it, but it also works so the tax evasion becomes more difficult. One of the complaints that we have about our system is that not everybody pays taxes. Do you everybody should pay taxes . Well i take a little bit different standard than my colleague. Everybody who works pays taxes. Youd pay taxes for Social Security and medicare, the socalled fica taxes. The government pretends thats not a tax but a contribution for your future retirement but in the real world its attacks. You take a typical american, if he or she is working, yes theyre paying income taxes to the feds one way or another and on the state level, most states have state income is with a very low level threshold. So no one is getting away with not paying taxes. Are you a 1 or. I am in one of the things we get through in the book is money and when you have an un stable currency, we have the 1 versus 99 and 99 and young versus old in public versus private sector and 47 versus the other 53 . All of these divisions. People turn on each other and i dont know why the economy isnt moving. In america, until recently before the stagnation is what was remarkable was how fluid our sick situations were. My father liked to say, in this economy if you think youve arrived, get ready ready to be shown the door. Nothing stays the same. Repealing obama care, replacing the tax code and reforming the fed will respond restore hope and prosperity. In it you write that it has been mistreated time and again with the wrong medicine and it just keeps getting sicker. Six decades of growing government involvement has grossly distorted the health system. It has indeed. We point out in the book, nobody designed the system we have today. By the way, i dont care what political persuasion you are, nobody is happy with the system we have. Medical costs are going up again. When you go to the hospital, the experience leaves them really shaken. They wonder if the specialist talk to each other. Its an unnerving experience. The system grew out of world war ii with wage and price control Company Started to pay inkind benefits and after the war in the 1950s, the irs ruled it could be a Tax Deduction for businesses. This gets to the core of the problem. The problem with healthcare is the lack of free markets. The Real Customers are Health Insurance companies, government and employers. Its not the patients and hospitals know if they hit their revenue by how well they negotiate with Insurance Companies with the government. We said in the book, it sounds frivolous, but we show where the patient lies in the food chain and thats that the crimeas motels in the world wouldnt dare put you in a room with another guest with the curtain between with a sick guest. No one does that. The crimeas hotel in the world would give you a rope that looks like it came out of the Salvation Army dumpster. We need to start to get where the patient is in control and turn what looks like a hopeless liability into something that work. Does the Forbes Company offer insurance to their employees. Absolutely. One of the things we have long before government sanctions is the Health Saving account. We give our people 2000 cash, you are in charge of it. If you have good health and you choose not to spend money, you get to keep it. If you find a generic drugs rate is better than another, you save that money. Thats the kind of thing you need more more our patients in control of the resources. If you moved to another company, that that policy should go with you, what they call portability so youre not chained to a company that you want to leave but you cant because you leave the benefits and what i do. We want to have liberation. Patient control, free market and get more effectives safety nets than the crazy system we have today. We do it in food. Government doesnt run agriculture. If it did wed have no more obesity because we dalbey starving. They tried it in russia and china and it didnt work very well. Companies process the food and they sell food everywhere and youve got problem and you have everything from food banks to food stamps and you can deal with it. Why cant we do the same thing to deal with it. In healthcare, have real patient control and a free market and more effective safety net. You will be covered of a catastrophe hits you. Steve forbes, back to reviving america and texas. The last things we need is a bandaid solution. Think of what happened in 1986 after the code was somewhat simplified. Numerous tax shelters were eliminated in the number of brackets was reduced to two. No sooner was the ink dry on that legislation than washington politicians picked up their old habit. There had been more than 15000 changes to the code as they snuck in clauses and amendments to favor companies, industries, and nonprofits. Yes, and that gets to why, hopefully next year we will get some serious tax reform, but thats why you have to have the single rate. In 86 we had two rates. Putting two tax rates together is like putting two rabbits together. They breed and multiply. When you have a single rate, you want to change it and everyone knows theyre going to be affected by it so its a real insurance against what happened 30 years ago when we last tried to simplify the code. By the way, this also shows trying to deal with the reform that we have today, impossible. Again, just throw the thing out. Start all over and by the way, those who worry about them, if theyre going to lose their Charity Deduction and all that sort of thing, do a a variation of what hong kong does give people a choice choice. You can go with the news new system or if you want to stay with the old, go ahead. This way you lower the temperature and you say to people, dont trust me, see, see for yourself which one is better by the way, when we talk about taxes, we get all hung up on gdp and revenues and crossing lines and all that sort of thing, think of it as an opportunity question. Just go back 20 years. The irs estimates we spend 6 billion a a year filling out tax forms, just think over 20 years, tens of billions of hours, trillions of dollars and immense brainpower. Some very bright people are involved in the sink. Imagine if all those resources had gone to new services a new medical devices and how much better we would be. In morality of the current code is what its taking away from us not just the corruption of it but what weve lost because we spent our resources on something thats totally unnecessary. My guess is your taxes are more complicated than most peoples. Have you ever estimated her figured out how much time and money has been spent doing your taxes . Yes, its terrific. Forty years ago i could do my return, back in the 1970s. Ive always had an accountant look over it, but i could send my understand the thing. It soon became impossible. The equations and the things you have to do, 1 8 of this of this and one third of that and then subtract line seven a and go here, by the way, one of the things we point out in the book is that i have a Good Software to help me do it. What we point out, depending on your circumstances, Different Software packages will give you different estimates of what your Tax Liability is. Even day, the gods we worship, the software isnt even getting it right. Nobody can. In 1999, your book, the dirty little secret in washington, what politicians really fear from tax relief and tax simplification is not a loss of revenue. What they really feel is a loss of power. Complexity is power. For example, here in washington, washington, if you are a member of the taxwriting committee and congress, you are stuck for political life. You say i think all have a reception tonight and every lobbyist comes along with the check. Yes i need access and all can tribute your campaign and this way they have power. You have to go with them to try to protect yourself. They always have to come to them. Thats what they like. That means checks. From reviving america, our nation seems mired in a maze that compares the 1970s. Is this uncertain, polarized and economically stagnant america the new normal . No. Some people talk about this new era as if its aliens from space something new forces of history, is absolute nonsense. What were going through today is a result of policy errors. The one thing about errors is that they can be corrected. Obviously a lot of things have to be done but we focused on reforms. Get those right and by golly this economy will come roaring back. Weve been through these before and after the war we put in reforms and we came running back in the 80s and 90s. We can do it again. The third part of your subtitle is reforming the fed. Your friend rand paul discusses it but you right we may be in all of the feds high priest but they can no more gas the need for money than the central planners can run an economy in the days of the soviet. Absolutely. This idea that a handful of people at the fed can determine what Interest Rates are, how banks are banks should be run, what the money supply should be is preposterous. The soviet union fell and we point in the book with the fed has done. First of all it weaken the dollar. This is bipartisan nonsense. Thats why Commodity Prices went up in housing prices went up and lead to the disaster of 2008. Since 2008, the fed has still misbehaved. Take for example this whole thing on zero Interest Rates, should should they raise Interest Rates. Controlling Interest Rates is like price control. There deforming the market. They will set the money they will lend the banks at but in terms of trying to set the price of borrowing and lending for the rest of the economy, its like the soviet union. It has distorted the market. For example bonds, i dont know whether they know they did this but they created the credit market today where the favoritism goes to bonds. Corporate bonds and government bonds. Usually Big Companies and governments issue bonds. What has happened is if you look at the credit or where credit has gone since 2008 since the fed started this nonsense, the Small Businesses, new businesses, households, its killing the creation of new businesses. Killing the expansion of Small Businesses which is a key reason why for the first time in memory Small Businesses are being created in the numbers weve traditionally have since 2009. We know Small Businesses, new businesses, where the innovation comes from a word job creation comes from. That is brandnew. Its against what one of the great strengths of this country, the ability to always come up with new and greater companies, back in the 70s whoever heard of microsoft or fedex or apple. Little companies become the biggies today. Thats the slow rot and people cant put their fingers on it. Arent low Interest Rate politically popular . As homeowners we love it. Yes, the Old Soviet Union who said the health care is free but you cant get any. The low rates today, yes they favor that, but how much real homebuilding has been done. It was better in 2009. I would hope so. But in times of terms of the need of this economy, its still not where it should be. You want to move from here to texas or organ, or whatever, can i get a mortgage there . And the person wants to buy my house here get a mortgage . Its very uncertain. The rates are low but theyve deformed the market. Its like having a rentcontrolled apartment. Theres not any upkeep but in terms of creating new apartments, new housing, new businesses it doesnt work. The government has grown 37 in credit. Credit to corporations has grown 32 . Credit to Small Businesses and households, only 6 . Devastated figures when compared to the past. Thats one reason why our labor market is so bad. Even putting aside how many people dropped out, people are not getting the jobs they should we saw a lousy job report last month which was bad enough when they call the Establishment Survey where they go to existing companies but then they did the Household Survey which is better over time at picking up new businesses that are rising up that havent come on the governments radar yet. Across the board were still stuck in second gear. Maybe we raised our average from 180 220 but its not going to win the world series. Steve forbes, i saw staff at 90 Million People are not in the u. S. Job market. Yes, that came out with the labor market report. You see it in what they call the Labor Force Participation rate. Thats the lowest its been since the 1970s. Were going back to the dinosaur age and not because people have suddenly dropped out because they dont want to work anymore, its its because they dont have the opportunity. How capitalism will save us, Alan Greenspans greenspans policy undermine free market. They would not have succumbed to the temp tatian to believe that a Government Agency the fed could finetune the american and global economy. A handful of people in washington can determine what the price of money should be, how the economy should grow and they treat the economy as if it was a machine. The economy is 320 million individuals. Its what all 320 million of us do. We are not a machine. It affects the economy in different ways. The chinese are still grappling with trying to be with the old and with the new to get their economy modernized and yet the fed thinks it can guide the economy by manipulating Interest Rates they can determine what the right prices and what the economy should do and it just is scandalous. Just one little thing, janet yellen who heads the fed today says, and so to her colleagues, we need 2 inflation. Thats a way of saying prices should go up 2 per year. On a a family making 50000 which is the Median Income in this country, that translates to 1000 per year. How in the world is raising the cost of living for a family 1000 a year stimulate the economy . I havent figured it out and i dont think they have or else weve wouldve had a better economy. With this 70 shouldve taught us us is when you dont have a sound currency, when you dont have a currency that is a stable value, you are going to be, its like a watch that cant tell time. Whether the dollars week are strong, its like having a watch that is too fast or too slow and neither one is going to help you very much. What we shouldve learned from from the 70s is that stability is better than instability. A watch that can tell time is better than one that cant but that lesson is just lost on people. Are you a deficit hawk . You to be very careful of that. There some who say we dont like deficit, they love spending which means they want to raise taxes. Freeman, years ago, famously said he would rather have a government with the budget of 1 trillion that was in serious deficit in a government that spent 2 trillion with the budget balance. Whether you borrow the money or tax the money or try to print the money, one way way or the other, youre taking real resources. One of the points we make in this book is that money is not wealth. Its a claim. You go to a restaurant and you check your coat and you get a piece of plastic or a piece of paper, its worthless in and of itself. Its a claim on the coat. Money is a claim on product and services. It has no Intrinsic Value. Its based on trust. When you start mucking around with the ability of what that piece of paper can buy, again, think of the clock.