U of S Economics Prof Ed Scahill

Newsmaker Interviews
Tuesday, December 5th

University of Scranton Economics Professor Ed Scahill with Sue Henry on the economy

00:16:23

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Last week we did. Read a letter from economists from across the country. About their support regarding tax reform. I read that list and I found an individual who is so local professor. Adds gay health from the University of Scranton his name is on the list. And he's agreed to do show today good morning thanks to do and that I do know. What's going on up there strands of anything dead well and I am open to good exam week. Moved so I would say had a bad first student spent it's there at the end will be shown. Yeah they that they at least they get that satisfaction that there is an ending. And they don't have to continue to. I was thinking more about me and I'm often. Well there's that as well so. When you put your name on a letter like this is of economists from across the country. In supports and grabbed the attacks reform bill why do you do some like that that. Well. It's not gonna solve all of our fiscal problems to be sure. But if you if you looked at that letter and I know you did you know death the corporate tax rate is the highest. But any industrialized country that 35%. Hands down to just gives corporations the reason to move their operations elsewhere. And hire a lot of accountants and lawyers trying to get that texts. But liability down. Since it's so high so. I'm hoping that works. Certainly if you think there are corporations want to make the most profit. They should do produce more to earn more profit when their tax rate goes down so. I'm keeping my fingers crossed but to tell you the truth. I I think I'm more concerned with us tax simplification. And so there was gonna territory. Turn down some numbers on here ever chip pay. Taxpayers spend 54 hours filling out their federal tax forms. That's about over eight billion hours total. And if you if you evaluated the monetary value of people's time. The dollar value would be greater than the GDP of Kenya I mean that's just crazy. And in addition to cutting the corporate tax rate among the other many provisions and some of them won't change. That it just got voted to to cut a conference committee so they'll do some more Wheeling and dealing before the final bill. Comes out of congress. And. Do you believe that this ad bit with two point do you believe. That what is happening right now. We will make the process of more streamline and in a lot of us just go only to an accountant and that cost money. Yeah you have the time and I love Americans are terrified by taxis and I know I am because. I won I think the iris might come after me I am scared. So is this oh ways and means to make it more simplified I mean do you see well happening you well blunt. And I was gonna mention has to do with doubling in the standard deduction. And this year it's 6364. Single taxpayer. So that'll doubled to over 121000 dollars to a few deductions they're going to be less and they can just take the standard deduction I thought they kind of missed an opportunity. Just felt taps tax simplification because it is so some of the news report it's congressmen are showing the full card race until they can tell your taxes and just send them. That if that works to help pay higher taxes from pot just. If it's that simple you know his man come on here's the standard deduction and Millen and I think that's a great selling point. Bush I hope we get that close to that but I'm old enough not to be very cynical about anything. The federal government pros is to do. So what you're saying just so I have clarity on this because I'm terrible at taxes is that in the future if the deduction is so high. I might not have to hire an accountant and itemize and worry and that's frugal. Yes you know well. Hey that is is selling a child is pretty good right yeah. Higher Ed as we mentioned that might ask you scream yeah I am Ed in higher that's right you put the ad in higher rat edgy and tell your students up by the way. Know you show it on he will do that you can do that. There's less ultimately of this mine my email or they have my email address but one of my pass through deceit Kahn had. Talk that if you wanna use my could go. Education economic education series can. Very good Ed let me ask a question about. The ongoing debate over. Some of the deductions what which might go way. And they seem to be troubling to young people who carried the burden of student loans and I saw a story yesterday where does so many over 80% sept most. Colleges and universities students go out of that college or university in they have. Debt what about taking a wave. That say interest deduction. For student loans are you saying that they need raising of this other. The doubling of this other saying will negate. Well occurred in effect one person is concerned about that was my younger son Steve but some over Thanksgiving that's the first thing he complained about. And that's you know I was so as what can somebody else and TV last week and you know this could be the next. Bubble crisis because the default rate on student loan losses. Disturbingly high. And if students can't deduct interest on them I am worried about that. So you know I'm hoping that if they do double standard deduction that all it will help. Okay and what about to of them the mortgage deduction and and some of the things that property taxes and and local taxes what you said before does that still apply that. Maybe you won't need those deductions anywhere else. That's that's going to be the be I think the state and local productions. For the so called high tax states. And Boston have. The senators and and represented Democrats is going to be kind of messy. And the effect can take something else that that I find disturbing. This is true about the Affordable Care Act was passed 200% with Democrats. The opposition to that is on a percent Republicans minute something fundamentally disturbing. When you can have at least some people from the other parties that can work together to try to do something for the country. That's close to something they can beat somebody over the head in the next election. That's I I don't see that would be coming to an end I think both parties are gonna have a real crisis. Well in the next couple years in terms of what direction they don't win it looks like. The Democrats are moving further left Republicans are going very Coakley to the right now to a compromise there. Now this is a new way to. Quote unquote read and I I'm really comfortable with that either it doesn't seem like there's consensus on how much of anything. Well on the scary a little bit OK yes. Because they did a hallmark. And I knew Medicare and Social Security had funding problems so just read this. The board of trustees for Social Security Medicare estimated that trust on the pace Medicare's hospital expenses will run out of money. And Tony Tony night. I used to think that with fairways that's getting more closer so security's projected to be so open only until 2034. And we've known about this thing for these problems for a long time. Nobody says anything about it because now the Israel tough choices and those people who had come up with ideas some might be plausible again there from one party in the other part of an attack imports. Yeah and I can't have this fear that the only way they're gonna deal with this problem is gonna get close and you have to do something it's a pleasure fall off a cliff. Well the thing is that whenever there is a suggestion. At of any kind of reform of either one of these programs. There's a lot of wailing and gnashing teeth and and put on surely have to clip from the wheelchair and you know we know that are not. That's the perfect reference you know you make up of reasonable suggestion that maybe it's a bit of it may and its or. But the other party just so great we got an expanded and have a goes flying off cliff. But you know its interest in and I know on this for a long time because you have been teaching for a long time almost thirty years here and about eleven years and other places so an old. But the perception among young people in the that's been true for at least twenty years is that they don't think so security is gonna help. And Tom my parents' generation of course they'll fight like act. If you even mention. Maybe who had to raise the retirement age may we and increase those good Texas. And there up in arms about it. If they're there with a chance and they may still be for reform because younger people are more willing to accept reforms that that might. Mean less coverage for them in the future but. I.s in only can hope. I'm not I'm not optimistic. Let's go back to the have the ending of the mandate for the east CA because there's a lot of discussion about what that possibly can mean on one and I didn't think it was terribly fair that you could force people to buy a product but on the other hand. Now that this is all these certain mechanisms have been set up our our people truly. Going to get harmed if certain people say hey. Need to buy insurance anymore therefore I'm young and healthy and I'm not by saying it will just throw this into an economic calamity the way well I yeah. I do not know I mean we we've always said and should people be eight CA in part was designed to make sure when he coverage that's noble and I think most people think that's. Reasonable but if you look at the cost of the insurance that young people would have to buy. That's kind of high ain't they look at these so called tax or fine. For now payment insurance okay well voluntarily decide not to get insurance. If that mandate goes away then people let. Young people that choose not to buy insurance do so because they don't wanna buy it. Now okay they are uninsured but sound like you're taking something away from. I think their concern as well this whole health care proposal or act. Was designed to have younger healthier people subsidizing older sicker people. So the premiums are are gonna be adjusted in such ways that that young people are gonna pay. The higher court and that's Reagan and there's death spiral because people don't go along when kind of mainstream in the senate were it will first have to go up the and okay well you gonna have to get into it too otherwise we'll fine you community which you know estate just to. When this act with first being debated this at less than do that. The less we have bipartisan support for this system just gonna affect Democrats or Republicans and effectively put. Let's sit down and hammer that out in the very least. If somebody. Could criticize in the future that I have to defender so no Republican has to dependent prop up this thing. You're absolutely right and then with the tax thing if it goes Kerr fleet week no debt crap we'll have to defend. Of low right. Well they have to defend. The affordable care to an extent depending on the pastor and if you noticed a lot of Democrats are blaming trump. Protect in this program down it's terrible it's close C. We had a repealing place as well the reason it's it's it's you know. Turning debt this year are worse this year because of all this bad talk compliment coming from Metallica. And a disk that's. I like them to do something for the country you know you should be willing to lose it chops and now. It's that this fishy don't have a right to be a senator or president or member of the house representatives. Sometimes have to make tough decisions and tough votes until people knocked. This is what I think is best for the country long term so many people want but to your right and in it's the next elections wanna make sure people vote in the next election. In terms of that the reconciliation process that is now under way between the house and the senate that word do you think this will go and what do you think is best for the people of the country in terms of what they see from this plan and other corporate. Tax it it it makes people divided because they think. It's another kiss to the rich but it in terms of. Well you know I decided that has a lot of concepts which cancer. But I did my homework so. And I mean I knew there was a guy named John Steele Courtney is kind of an economic historian through an inventory on the Wall Street Journal furious gonna fountain. Who has just get rid of it. Just get rid of the corporate income tax. That people are taxed already this shareholders are taxed. And then the corporation's tax. To detects twice nightly just get rid of the corporate income tax it taxes zero when that it won't happen. It's politically possible. Well then people on the receive dividends are just gonna pay on the dividends that you can make that tax that they. Ordinary. Rate on I think cup. We can just attacked for it. But it introduces so many different distortions. And there's there's a bias. Towards corporations incurring debt because they can. To duck status of expense that's close to having. That is and the shareholders at and Terry I think or intentions. In terms of what a come on a commitment to many I I don't know. But the Republicans have gone too far in the rest too much they're gonna have a bill. That's gonna there's no question. Then maybe he'll take a week maybe take two weeks and and wanted to be they will have a bill that will be fine but it. But they perished there surely gonna keep. The corporate tax rated either you know term term mentioned 22 or anointed that. Because it seemed as though they came to agreement on 20%. And that the only. Question between the house in the furnace with a be effective maturity or have to but. And then you know in terms of the income tax rates. I don't know how much they're very limited trained and now. If you want another statistic statistic that sentiment homer. I tell your very your very goods well I don't. The sound like a dope you know tips that you can get this Ph.D. in economics and yes my question on hourly now on. That's make me sound too good okay in the Pacific and find that there. 60%. Of federal income tax return and Arafat are filed by those that are in less than 50000 votes of most of the tax returns to try and figure that. Are going to be enough filed by people making 50000 mile and a half the total tax revenue that we disconnect group this 7%. So they they file tax they paid task but not much those earning 200000 and above. 56%. All humble individual tax revenue. Wow so if you say well we want to be feared to those people paying most of the attacks we ought to be putting. Tax across the borrower is or heaven forbid. The lower tax applies primarily to those making over 21000 that's gonna fly. So I think. Upper income people are gonna have to bite the bullet if only because. A lot of those people have a big chunk. Deductions when it comes to state won't call is that states. That's stationed bill. Professor Ed ski hill from the University of Scranton thank you for taking the time to be on the show today for doing your homework. For speaking to us during the day you have rough finals week up there well. I don't know I have known camps today sounds so this is a good data calming. I appreciate talking to you. So much fun I'd like to have you on again in the future cure anytime just thought you know so cool thanks and we appreciate it and Merry Christmas Merry Christmas too as well.
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