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tv   The Kudlow Report  CNBC  July 10, 2012 7:00pm-8:00pm EDT

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remember, as long as the estimates can't be beaten and numbers have to be slashed, the lesson of cummins, we are not on terra firma. i don't like the industrials, the teches and the financials. that's what i have to say about this earning season. good evening, everyone. i'm larry kudlow.
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mitt romney blasts president obama on a massive tax increase and also calls him an outsourcer in chief, funding green energy companies that make their products in foreign companies. president obama keeps calling his new tax plan a middle plan tax cut. it is not a tax cut. it is a tax status quo for nearly 10 years. the only thing that's going on is a tax hike on successful earnings and small businesses. and you can bet this tax hike will be used for more federal spending. the dow takes another beating closing down 83 points. the king dollar is so strong it reaches a new high against the euro. the house will vote once again to repeal obamacare.
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comes as a new survey shows 83% of doctors are considering quitting over obamacare. but first, mitt romney dubs the president the outsourcer in chief. >> good evening. it was an eventful day out on the campaign trail today. the president for his part taking his campaign to extend the bush tack cut out on the campaign trail, going iowa, stopping in for a little ice cream and a little photo op here. the president making the case that the republicans need to come together with him to make a deal. >> go ahead and do the 98% and we can keep arguing about the 2%. let's agree when we can agree. let's not hold the vast majority of bherns hostage while we debate the merits of another tax cut for the other 2%. >> the chances of such a deal anytime soon, however, are pretty slim.
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mitt romney was campaigning in colorado. for his part, he did not seem to enforce the president at all. take a listen. >> the very idea of raising taxes on small business and job creators at the very time we need more jobs is the sort of thing only an extreme liberal could come up with. >> and larry, there was an interesting moment when mitt romney tried to flip some of the rhetoric that barack obama has been using against him. obama has been hittinging romney as an outsourcer in chief. here's what mitt romney had to say about barack obama arguing that it is the president who's been shipping jobs overseas. take a listen here. >> it is interesting that when it comes to outsourcing that this president has been outsourcing a good deal of american jobs himself. if there's an outsourcing of chief, it's the president of the united states, not the guy running to replace him. >> so larry, an aggressive
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response here from mitt romney on this question of outskoursing and who's to be blamed for it. clearly the romney campaign wants to make sure the romney folks don't define their candidate as somebody who's been responsible for the erosion of middle class jobs in this country. >> while he was defending himself, did former governor romney say anything to defend bane capital and the swiz bampbs account flap? >> not that i heard. most of what they're talking about is if it's a good idea or not to extend the bush tax cuts, as you knee romney wants to extend the bush tax cuts for everybody. there's a real class conflict just buried at the center of this conflict. the battle lines have been
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drawn in this tax showdown. is this a great big tax hike on investors? let's bring in our distinguished guest. chicago booth school of business, former chair council of economic advisers under president obama. good evening, austin. >> also with us, jim demint. mr. defint, if i may begin with you. according to the joint tax committee, 940,000 taxpayers essentially representing small business people will be affected by this tax hike. and according to the brookings institute, the number is actualactual ly 1.25 million will be taxed if their success in small business. how is this going to help the economy? >> well, larry, it won't. mr. goolsby and the president promised by this time our unemployment rate would be 5.6%. obviously they don't know what they're doing when it comes to creating jobs.
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the issue is it's a quarter of america's work force working for those people who are likely to get a pink slip, at least some of them, when the president gives them a new tax bill. so the president is focused on the things that are going to hurt job almost every time he's opening his mouth, he's playing politics to try to distract attention from his impact on our economy. >> austin, you heard what senator demint said. i'll just underscore. >> i heard what you said, too, lar larry. i just don't understand why you would want to tax your successful feel and business people at a time when the economy is sinking. >> look, larry, we've had this discussion before. if you thought cutting high income people's taxes is a great magic elixir, then you have to explain why it didn't work when george bush did it following the reception in 2001 and why it did not destroy the economy when bill clinton raised exactly the taxes by exactly the tax that
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we're talking about in 1993 and all of the the same people said it's going to destroy the economy and destroy job creation. it's ridiculous. it's not the case. trickle down from a very small number from high income people drives the economy in a sustainable way. we learned again and again is what it leads to is bubbles and unsustainable growth. >> when president bush cut taxes, our economy grew for six years. >> that's not the case. >> hang upon please. >> for heaven's sake, even president obama said in 2010 that raising taxes on anyone when the economy is this week is a bad idea. now he's talking out of the other side of his mouth saying we need to raise taxes on those who create jobs today. the top 2% of the americans are
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paying the highest proportion of national taxes of any country in the world. if we want to talk about fairness, we need to look at a simple flat tax rate. republicans want to keep the current tax rates the same until we can replace them with a simple flat rate, with a new president and hopefully a new senate. >> austin, isn't that true that these tax rates now are going to go up. when you include obamacare, plus the increase from the bush tax cuts, that's going to run it up past the clinton taxes. my calculation is you're going to have a 45% income tax rate. you're going to have a 43.ers dividend tax rate and 24% capital gains tax. every single one of those is above what president capitol hill ton had. >> look, rather than bog down in the details is what you're forgetting is all the
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nonmarginal tax cuts on the first $250,000 of income. but the thing to remember is number one, high income people are paying the lowest share of their income in taxes that they have paid in 65 years. if you look at the top 400 earners in the country, the tax rate that they pay as a share of their income has been cut in half over the last 14 years. so there is no evidence that cutting high income people's taxes by trillions of dollars as mitt romney is proposing leads to significant job creation. to refresh senator demint's memory, when george bush came in and cut taxes, the job performance in george bush's first term for the private sector was 1 million fewer jobs key yated than had been created in the private sector under president obama. >> larry, we could only wish
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that we had that economy after bush took office compared to what happened when obama spent $1 trillion, supposedly stimulating our economy. adding more to our debt than any president in history, and he continues to hurt our economy almost every time he opens his mouth. he thinks the private sector is doing well. and now he wants to raise taxes on the people who could create jobs. the president is just confused about good economic policy and about what makes america work. it's time that we give some certainty and predictability to the people who can grow our economy and create jobs. we can do that by keeping tax rates the same until we get a new president who can give us a simple flat rate tax structure that would help us compete in a global economy. >> austin, can i just ask you, why does president obama suggest he's cutting middle class taxes. that's not true. >> when are you talking about,
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larry? >> those middle class tax rates were put in under president bush. they're not changing. there's no reduction in the tax rates for the middle class people. . >> on that specific taxes as you know -- >> i'm just saying, it's not right. it's factual incorrect, h he's not asking them a tax cut. they've been in place since 1993. >> as you know, the budget says all of those tax rates go away. so when the president says h ewants to extend the rates for the middle class, the congressional budget office, forces him to make that as an accounting that he's cutting their taxes because the law says all of those taxes are going back up. so to hold them where they are now is a significant tax cut that the congressional budget office requires you to call a tax cut. >> i don't think most people care about the congressional budget office. >> those are the rules, larry. >> they see their rates are the same and their payroll tax is going to go up.
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and let me go senator demint, ask you this, do you have any doubts, sir, that whatever revenues accrue from the higher tax rates on the upper bracket people and the small business owners, do you have any doubt that those will be spent, that we will have more federal spending from those tax hikes? >> there's no question it's going to be spent. we're not going to reduuse it t reduce our debt. they're not going to feel it until glex year and the year after, but there are about 20 new taxes in obamacare that will increase taxes directly on people or raise the cost on healthcare and other aspects of people's lives. so we are hurting jobs, we're raising taxes on all americans and all the president can talk about is more revenue, when we've increased spending at a rate that's going to bankrupt our country. we've got to cut spending in america. that's the only way to get our economy back on track again.
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>> austin, i'll give you the last word. i know we disagree, but you deserve nothing if not the last word. >> i appreciate that. that's not the way that it happened. president obama cut taxes more for the middle class than new mexico anyone in modern memory. and if you look at spending, the president has been offering a balanced plan, let's cut spending along the lines of bo. even if revenues are the lowest level in 65 years, they won't take a 10 to 1 package. >> i have to leave it there. i'm sorry i have to leave it there, truly. >> me, too. >> but i thank both of our guests. austin ghouls by and senator demint, old friend. coming up on the show, bad signs do send stocks low fer the fourth session, but king dollar is roaring with new strength.
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puts s s a smile on my face. we're going to get guidance from our market pros. here's a shocker, really, 83% of doctors are thinking of quitting because of obamacare. why? because they won't get paid, too many new patient, and too much government red tape. and that reminds me, folks, please don't forget, free market capitalism is the best path to prosperity. this is the first car that i've been totally in love with in every way, shape, and form. it's my dream vehicle. on a day to day basis, i am not using gas. my round trip is approximately 40 miles to work.
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>> another rock and roll day on wall street. at the close, the dow dropped 84 points, nasdaq down 34 point, s&p 500 slid 11. but here's the real story today. the ultra strong king dollar. let's now turn to our market pros. keith, you're a strong dollar guy, i'm a strong dollar guy. but i want to ask you, in the
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short run, is it too much of a strong dollar? is it a decollationaire dollar? >> yes. in the short run, it's like watching a few good men. people can't handle the truth. as you no, larry, we've been bullish on the dollar since march and bearish on the things that could deflate. but in the end, you've got this thing called earnings season. big thing goings on there. growth continues to slow. margins are at all-time peaks and thirdly and more importantly, earnings expectations are very, very high even for bad companies like alcoa which was a pretty red stock today. >> let me just stay for a dollar for a minute. your cyclical stocks by a deflationary strong dollar,
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they're all getting nailed. they got nailed yesterday, too. and to take what keith said, in the long term, the strong dollar is always good, it seems to me. it's good for the stock market, good for the economy. in the short term, however, art, is it going to do damage to the stock market and the economy? >> it's hard to fight a strong dollar especially if it makes a move. it makes sense to make a strength in the dollar. the three sectors will probably do the worst in terms of the earnings reporting season. they're probably slated of the 10 sectors of the s&p 500 so report the worst second quarter earnings. but you're right, am some point in time, it becomes a significant tail wind, especially when you think about the effect it's had on commodities. you look at the 30% pullback we've seen in the second quarter and energy prices alone. i think it's the net benefit will show up and probably shows up in the second half of this year. >> keith, second half of this
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year, or do we play the dollar now by buying stocks knowing it won't be the bottom in fact stock market? >> in q 3, it will be stocks or stre treasuries. as we go through q-3, there's going to be a lot of constipation here. i just listened to the constipation that is austin gools by view of taxes. if you look at the survey, these things are train wrecks. small businesses are not hiring. jobless claims are rising and you have a very really -- very tough spot in between now and q-4. and i just as soon get out of the way. >> is there a danger -- give you a last shot op this one. is there a danger of a double dip or near double dip recession. how would you handicap it? >> we're at stall speed. gdp 2% or lower is stall speed. the u.s. economy doesn't do have well at stall speed.
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doesn't take much of bump in the road. >> all right, we're going to leave it there. thank you very much. coming up on kudlow, the libor banking scandal hits america's shores now. what did the obama administration know and when did they know it. that plus more top headlines coming up. people have doubts about taking aspirin for pain.
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>> who >> who knew what and when about the libor rates being less than kosher? more on that and all the wraekiwraek i -- breaking headlines. >> bob diamond will give us a deferred bonuses as the bank tries to ease political anger in great britain over the libor scandal. the first class action suit against barclays was filed today in new york and the classic washington question -- what did u.s. policymakers know and when did they know it? that's on the table now. eamon jabbers as the ratest. -- latest. >> you're right. they're going to be asking it on the senate side and the house side. we know on tuesday, ben bernanke will have an opportunity to answer senator questions about that. and tim geithner, who was at the
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new york fed at the time all of this happened will have the opportunity later on in month of july. and take a look at this letter. this is a letter from the house financial services investigative subcommittee to the new york fed asking them to please provide this subcommittee with all transcripts in your possession that relate to communications with barclays, regarding the setting of interbank offered rates from august of '07 to november of 2009. jack jackie, that is a request that could result in the turning over of a ton of documents to investigators here on capitol hill. >> thank you so much for that. meanwhi meanwhile, texas does it again. the top state for business in 2012 in cnbc's annual study. in fact, texas has never done worse than second place. governor rick perry says they're gom coming there because texas is still the land of opportunity. >> you know what else they say? read my lips, no income tax
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rates in the state of texas. anyway, many thanks. programming note for tomorrow. i'm going to be live from washington. very special guest, former federal reserve chairman alan greenspan and house republican majority leader congressman eric cantor. coming up next, tonight's show. remember when president papa bush said read my lips? no new taxes? look where that got him. now, president obama said, obama tax was a mandate, not a new tax. oops. we're reading his lips. is he going to suffer the same fate. it's all up next on "kudlow." ♪
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>> welcome back to "the kudlow report." 83% of doctors said they thought of quitting because of obama care. they say they won't get paid
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because of is obamacare. they say there will be a 90,000 doctor shortage by 2020. incredible. is there any wonder whoo i the most successful americans are fleeing the country? monica crowley says one who saw what taxes would do for her millions fled. like the broiling temperatures outside, the presidential election quickly heating up. new numbers show middle class voters think if you tax the rich, they are next. here now is ace pollster scott rasmussen. all right, scott,er first of all, what do the polling numbers show on the obama tax plan? do people want to extend the bush tax cuts or not? >> people overall want to extend the bush tax cuts. no doubt about that. people think if you cut taxes it's good for the km i, if you
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raise taxes it's bad for the economy. do you want to is raise them just for people makingless than $250,000 a year. tret my much a toss-up. if you're trying to raise taxes, that's about as good ground you're going to find. >> do middle class people fear if the rich, so-called rich, get taxed that they, the middle class, are next to get taxed? >> absolutely. in fact, that's the reason, generic idea of taxing the wealthy sounds good, and because most think the wealthy pay a smaller share of their income than the middle class. but if you say do you want a candidate who favors tax hikes for the rich they get skiddish. they're not sure what a candidate will classify as rich. and when you look at state,
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local, federal, income taxes, everything, nobody, not even the wealthiest person should pay more than 30% of their income in taxes. >> wow, 30%. >> all right, final one, scott. putting taxes aside, don't the majority of people want to cut spending instead? >> two out of three say that's the best thing the federal government can do to help the economy. they view the government as a burden on the economics. >> we bring in mark lamont hill. he's host of "our world" with black enterprise and columbia university professor. and monica crowley, former policy assistant to president nixon and the author of the book
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"what the bleep just happened." you are on "the new york times" best seller list, also on kudlow radio, which was totally cool. >> like papa bush, obama moved his lips on taxes. bush said no new taxes. obama said obama care is not going to be new taxes. the supreme court says it is. cadel says he has a tax problem and he has a trust republican and that's where the republican romneys should go. what do you think of that hypothesis? >> i agree completely. it dovetails with the state of the economy right now. all of this deals with how people feel about their own personal financial situation and the broader economics of the country. look, americans know he can't continue to print money to pay for all of these things he has going, including obama care.
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he's going to have to raising thats. while he continues to pound millionaires and billionaires, i want to raise the tax rates on the upper percentage, the top marginal rate, those making over $250,000, i think what most americans understand is that regular americans are his targets. he knows that -- >> they're next. they tee next. that's what the polling data shows. they're next. >> obama is not interested on bill gates' money. he knows the really big money is in the middle class and they're coming for them next. >> i disagree with everything monica just said. although i do think the book the awesome. the economy is struggling. we haven't produced jobs at the rate we would like to. i think he's very fortunate that romney is his opponent. if he had a strong opponent, he might be in a heap of trouble. it's apples and oranges to compare what's happening under
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george w.h. bush and now. >> there's a tax question and a trust question. >> but it's not. >> i acknowledge that governor romney has not exploited that to its fullest. but it may be coming. doesn't ka del have a point? >> come on now. the american people are smarter than what you're saying. there's a difference in saying i'm not going to raise taxes and raise taxes. and saying i'm not going to raise taxes and have the supreme court come out and make an analysis of the very same thing. >> look, president obama and the democrats who passed obl bamacare to begin with. there's a reason why they invested the internal revenue service. there are 21 additional taxes going to be born by the bulk of them for the middle class. so look, middle class americans know that despite all of obama's rhetoric about protecting the
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middle class, every single thing he's done economically has been designed to gut the middle class and turn them to dependents on federal government. >> how does extending the bush tax cuts -- >> he says he wants 20 keep the tax rates for one more year. we're relitigating it every year. the idea h he's only going to go one more year and then he's going to raise rates on the middle class. >> he hasn't said he's going to raise rates on the middle class. >> he said extend them for one more year. then after that, those rates are going up. >> he didn't say they're going up. i don't buy that assumption. >> it's an interesting debate, he has never specified what happens after the year and what happens to the temporary payroll tax cut, which i thought was a lousy idea because it gutted the social security fund, but whatever.
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middle class people could be in for a tax wall lon on all of that last year. >> if you mean some metaphysical possibility, absolutely it could happen. >> everyone's payroll tax goes up for obamatax care. >> one thing at a time. first, the reason he's done it year by year is because it's good politics. even bush did it for a set period of time. we still have to think of the congress. it wouldn't be good for congress to raise the marginal tax rate. i just don't think it's going to happen. >> the broader question is where's the presidential leadership here .we have not had a budget in the last three years because the democrats refuse to do a budget. the president's budgets have been so expensive they can't even pass his own party. they've been et voed down
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unanimously by most democrats. you can not continue to run the greatest nation on the face of the earth by relitigating policies and continue these resolutions. that's not what america is about. for the last 3 1/2 points, his so-called leadership has been a disaster. >> we were doing so well for, like, 10 seconds. i think the president's leadership has been lacking in a certain way. i would like to see an actual budget. but that dog and pony show isn't just coming from the left. it's coming from the right. they spend a lot of energy proposing bills that they know aren't going to pass. >> i've been through this tax and budget debate. if harry reid has a vote on the obah. ma tax plans which raises the top rates and leaves the middle rates alone. there's going to be an amendment. and that could continue all of the bush tax cuts. they might lose on the amendment with the democratic revolt. what's your take on that?
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will democrats go off the tax cliff or go against obama. >> you think they're going to vote for higher taxes? i mean right this summer. if read allows a vote on an obama kax plan, there can be an attempt to that vote. i ask you, might that amendment backfire on obama as democrats desert him in troves? >> totally. when the obama care was raging and looking like it was coming up for a vote, you had moderate democrats, like blanch lincoln go to the white house and beg the president, let's not do it this way. let's do it piecemeal. get republican buy-in. let's get the public buy-in. he refused to do it. you're dealing with a total ideologue here. >> monica. >> now democrats realize it's every man for themselves. if
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this comes out, they're going to desert him like crazy. >> i think there are a handful of democrats who have always been willing to abandon president obama. i don't think the president is an ideologue. he recognizes that republicans are not trying to move policies forward. they have an agenda of stopping obama. >> if they go for tack hikes in this election year, it's toast. i think it's going to backfire on the president. appreciate it. monica crowley is going to come back later about fleeing the country and high taxes. but up next, 83% of doctors say they want to quit because of obama care. imagine the disaster that could occur throughout the country. and tomorrow, house republicans attempt to pull the plug on obama care for the 31st time. democratic congressman peter welch of vermont square off wf
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>> check this out. a new poll, 83% of doctors have considered quitting the profession because of obama care. tomorrow, house republicans are going to try for the 31st time to get this law repealed. here now, the vice chair of the house republican conference. welcome to both of you. peter quewelch, i just want to k to you. this is incredible. 83% of doctors, they're thinking about quitting because they think they won't get paid under obamacare. what's your response to that? not getting paid under obamacare. >> you used the right word, larry, incredible.
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the american medical association supports obamacare. this group thinks illegal imglants spread leprosy. they're against vaccinating things for kids like polio. so this is just a totally bogus report. it serves the interest of folks who want to repeal, as you say, for the 31st time, the health care bill. rather, by the way, than come up with an alternative, something that is going to help folks get access to preventive care. >> many doctors are upset that they're not longer adequately getting paid for services. do you think it's a crack pot group and a crack pot idea that 80% of the doctors will walk out? >> well, i've talked to another doctors to know they're quite concerned and they recognize the
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health care decisions belong in the hands of patients and doctors, not the federal goth. obamacare is a government approach to one of the most personal aspects of our lives. we need to protect that doctor/patient relationship. i also talked to doctors who don't even encourage their own children to go into the health care profession because they don't like the direction that it is taking. they're not encouraging others to go into the profession. >> by the way, insurance companies where they were talking premium dollar, they had to give that back, and that
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resulted in lower premiums for the businesses that paid for the individuals that paid it. so there's a lot of hassles in health care, kathy is absolutely right about that. >> i might suggest it's medicare and the government programs that are driving a lot of these decisions. it's medicare reimbursements now that are making it difficult for doctors pencil out. try to find a doctor in eastern washington and anywhere in america who will take a new patient on medicare. they promised under medicare, medicaid or under tricare. the federal government made all the proms but they don't reimpurse the doctors for the actual cost of delivering those services. >> a lot of truth on what you say on that. the question i have is whether we've got to move away with this fee for service system. whether it's medicare, private
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pay and try to go into accountable care organizations where instead of rewarding every service that anybody can think of to do, and you do too many services because that's what's encouraged. you try to reward doctors and hospitals for performance. >> we see about 50% of those in america get their health care through one of these government run health programs. and yet -- and actually, medicare denies more and these other government programs deny more than the private health insurance companies. last week, i was hearing from many that were saying medicare is deeming more and more services, health care services as not medically necessary. >> i have to leave it there. i'm sorry. we need a longer time.
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>> tomorrow night, the kudlow report is going to be from washington. up next this evening, high taxes driving another high profile american with political connections out of the country. is this just the tip of the iceberg? monica crowley is coming back after the break. ♪ ♪ ♪ [ male announcer ] what's the point of an epa estimated 42 miles per gallon if the miles aren't interesting? the lexus ct hybrid. this is the pursuit of perfection.
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welcome back to "the kudlow report." another high profile american is renouncing american citizenship. this time as a way around the irs. nbc's andrea mitchell has the story of denise rich, song writer, friend of bill and very wealthy citizen of austria. >> she's a fixture at the grammy, nominated three times among ores for writing "don't waste your time" for aretha franklin and mary j.blige. she's worked with everyone from amanda cole to mandy moore. political superstars flock to her fund raisers for cancer research, honoring her daughter gabrielle who died of leukemia. >> we know this saxophone has your name on it. >> oh, wow. >> denise rich contributed to the political campaigns.
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and bill clinton caused a political storm by pardoning her former husband, marc rich who fled prosecution for tax fraud in 1983. denise rich has lived a jet set life. as matt saw firsthand on her yacht at cannes two years ago. >> i'm on a 150-foot yacht called the lady joy and it's owned by new york philanthropist denise rich. >> but now she's put her new york apartment on the market for $65 million. 20 rooms with view and what a view. wraparound balconies overlooking central park. rich is among 1,800 americans last year who renounced their citizenship. a spokesman for rich says in order to be closer to her long time life partner as well as your family and loved ones, she made the decision to become solely an austrian citizen. new york senator chuck schumer sees a tax dodge. >> you certainly don't need to renounce your citizenship to be
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closer to your family. we all know the reason she's doing this and it's to avoid paying taxes. i found the people who renounce their american citizenship despicable. >> others say let them go and focus on broader tax reform. >> we're going to have wealthy people leaving the country because they don't want to pay taxes. don't let the door hit you on the way out. >> many thanks to andrea mitchell. should we be trying to reform our tax code to keep our successful and business people here instead of pushing them away from america.
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>> this is a logical rul, this is human behavior. >> ewe stud bied policy, has senator schumer ever helped to keep successful people anywhere in america? has he ever met a tax rate he ever lowered? ever? >> she's not the only one. there's so many oerrs include savryn. there are a in um ber of people saying i'm done with being an american because tax rates are so high. california and new york, high network individuals, they're fleeing those places going to texas and florida, places that have no income taxes. >> once again, one of the best
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interest rates in the country. doesn't it piss you off when people leaves like that? i mean, it annoys me. >> yeah, it does. i'm totally with you on that.. >> i'm buying the supply side argument. >> as an american patriot, it annoys me. and those people should stay and fight what you're talking about. tax reform. get all the bush tax rates made permanent. if we stood here and fought for pro growth economic policies then all of these americans could stay. >> all that money she gave bill clinton, she ought to transfer it to chuck schumer and maybe he would lower marginal tax rate to promote growth. >> it points to a real serious schism in the democrat party. i do talk about this in the book. >> cut the capital gains tax to his credit. >> and cut spending to his
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credit. >> and welfare reform. >> right. and reined in government. >> no moderate democrats left. >> not in obama's america. taken over by the kooks. read the book. >> anyway, that's it for tonight's show. monica crowley, thank you. i'll be live from washington. special guest, house republican majority leader eric cantor, alan greenspan. as always, thanks for watching. my volt is the best vehicle i've ever driven.
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