and more from the postelles, they sound fantasticnd log on to the after the show show and a jam packed show tomorrow. >> bristol palin. >> dennis could ykucinich, more on a swing. >> log on for the after the show show. >> brenda: the president doubling down on tax hikes as he pushes congress to deliver a plan to lift the debt ceiling, but what about the ceiling for unemployment? just this week, companies putting thousands of jobs on the chopping blocks. will these potential tax hikes just further the pain? hi easteveryone, i'm brenda buttner, this is bull and bears, gary b smith, tobin smith, jonas fax ferris, and caroline heldman, welcome, everybody, toby, are you worried. >> sure, i am. look what's happened in every

state that tried to raise marginal tax rates for quote unquote risk. 18 out of 18 times, a it didn't raise taxes, it suppressed the taxes and number two, suppressed gdp of the state and taking the play book where it didn't work in the states, we are trying to do it nationally and grow the pie bigger, that's how you get more tax revenue and we're missing the boat. >> brenda: caroline, are we? >> i think that what toby is referring to at the state level, not the same as the federal level. they're able to coin their own money. but what's happening in terms of president obama wanting to tax the top 2%. under president bush, the slow s job growth, even though he had two tax breaks for the wealthy. we've seen stagnant job growth as well. the relationship between those two is mythical.

trickle down economics doesn't work and i'm glad-- >> trickle down? >> okay, eric, so you put tax hikes on the wealthy, on small business owners and that has no impact on unemployment? >> there you go. and the number that dr. heldman just pointed out the top 2%, guess what they pay 44% of all tax revenue collected, meanwhile 43% don't pay a dime in federal income tax and the number of jobs held back or pulled off the table. mr. obama want today create jobs, should clarify the tax structure, drop the corporate tax rate and as tobin says, when you do that, even he though you drop the rate you grow the economy. when you grow the economy, you grow tax revenue. >> jonas does he have any other choice, but to talk about tax hikes? >> yes, he can talk about spending cuts, but he doesn't want to talk about that as much as the tax hikes. i will say i think economically, either one is done the at a large level. required to get the balanced budget and going to cause job

losses. the states have cut a lot of people in an effort to cut costs and not raise taxes as much as they could have raised them, but at least a higher unemployment rate. i think a blend of both and both, whether you close the gap with higher taxes or cutting spending are going to lead to job losses and that's what's going to happen and spending less taking money out of their pocket one way or the other. >> gary b. tax hikes, higher unemployment or lower? >> absolutely higher brenda, look, we have a very clear example of just one instance. in 1990, there was a-- the government imposed a luxury tax on high end items, luxury as far as yachts and things like that and economic report came out in just the yacht building industry alone, caused a loss of 7600 jobs, that's what you get. you know, you put these higher and higher taxes on the rich, which, as eric pointed out are already paying at least the top 5%, ramp 60% of the taxes

in this country, and the limit's going to break at some point. these people making these money, these millionaires and billionaires who obama keeps want to go demagogue are simply going to stop paying, they're going to stop working, suck in income. hide the income as best they can legally, and there's going be to be job loss as you just saw by my example. >> brenda: caroline, what would you say. >> i would say they're already doing that, wealthy individuals are hiding income and corporations and ge where we are paying them the actual corporate tax rate for large corporations is about under 10% and for medium size and smaller corporation ises about 20%. and that's the actual, using all sorts of loopholes, the actual tax rate. we don't have the onerous tax burden and it highlights incompatibility between capitalism and democrat city. because capitalism allows wealthy individuals to amass wealth and power and then use that power to set up rules that benefit them.

what we need to get-- >> caroline, caroline. >> wait, wait, let me go to candidates hold on, let me dp to eric. >> and the response now, caroline. saying 10% for small business and 20%, the number is 23% for multinationals, so therefore if that were the case, which it's not. then obama would be happy to say how about 20 or 22% corporate income tax across the board, close the loopholes and everyone would be on board. >> i would love to do that, i just don't trust major corporations to not hire droves of attorneys. >> can we trust obama. >> to exploit loopholes as they've done in the past. >> brenda: but toby, this is not really hitting the larger corporations. we're talking, when you tax the rich, you are taxing business owners. >> well, let's change the phrase a little bit. when you tax risk takers. remember, it's risk taking in this capitalist society that caroline evidently doesn't

believe in. that risk taking is what creates innovation, innovation creates growth, new jobs, prosperity, higher incomes. risk takers, in this country we've got fire starters and fire builders. fire starters are the risk takers who build stuff and a whole group of people who work for risk takers. when you tax risk takers, you attack jobs, an unarguable fact. >> brenda: i want to hear what jonas has to say. >> i think that it's going to drag the economy, but don't see how it stops you from taking risk. new york and connecticut raising taxes and the real estate markets are hot compared fot rest of the country. job markets are pretty good compared to the rest of the country. you can handle a little of this and can't go bananas and close the deficits on the rich. you can learn what some of the states should do, cutting spending and raising taxes and so far it's working. >> brenda: gary b, is it?

>> well, you know, well-- i'll try to come back, i want to go back to a point that caroline made. she implied there. and i'm not just picking on caroline, but really shall the president, it's implied that the millionaires and billionaires who he says are really not shouldering their fair share and i guess i keep coming back to it, how much are the top 1%, the top 5% supposed to contribute at some point. it gets down to fairness and i'm all for the rich contributing more than their fair share, i think it's there and at that point ap as for corporations, we have about, what the first or second highest corporate rate in the world. so, i just, i don't get the push for more and more, more when you've got almost 50% of the the country paying nothing in federal income taxes. >> well, that does cause outsourcing as well when you have such a high corporate tax rate. companies go outside the country. >> it does, brenda, but the

other piece we're missing here, a huge amount of growth between '02 '07 and 30% of that growth was a mirage, from mortgages, refinancing and second home loans and et cetera. that's not available anymore, the good news is what we replace that, with risk taking businesses we are he going to build an economy that's stable, but in the meantime, trying to make up for a five year binge on credit by racing taxes on people is the actual worse thing you would do. >> but, eric, do we need some tax hikes? >> no, no, we don't need any. we actually need to lower taxes because that stimulates growth. >> and i have to point something out. jonas says we can't cut spending because that would create higher unemployment among federal workers? you know what, great, fantastic, get rid of them we don't need them anyway, this is a mentality that's going to drive us further and further into debt. we don't need people who are sucking off the pile, we need people adding to it. >> brenda: i'm sorry, that's got to be the last word for this. does it for the trading pit.

just days away from a house vote that could increase the debt ceiling with dollar for dollar spending cuts. in 20 minutes cavuto on business gang breaks down the bold plan they say may be america's last chance to get spending under control, but up here first. food prices still rising and now more companies are warning the sticker shock is here to stay. how bad will it get? and why is government playing the threat. the

>> with more business news, i'm jamie colby, more fallout in the news of the world's phone hacking investigation. dow jones chief executive hinton stepping down after becoming a target of the criticism. the publisher of the wall street journal once served as the chairman of the british u.k. parent and comes hours after chief executive brooks announced her resignation. allegations he emerged that

reporters of the news of the world hacked into private cell phone accounts for story and rupert murdoch issued a statement running in britain's national newspapers, apologizing for serious wrongdoing and british police say they've arrested at least seven people in the phone hacking investigation and recovered a list of 3700 names of potential victims. news the world shut its doors last week, owned by newscorp, the parent company of fox news. i'm jamie colby, more developments as they happen. now back to bulls and bears only here on the fox news chann channel. >> brenda: consumers feeling down, with prisses on almost everything going up. general mills the late he is to warn of price spikesen it's not just food. cars, clothes, health care, you name it, all up last month. eric, how bad is it going to get? >> going to get a lot worse, brenda. only three ways out of it. if you print money you can do qe3 or whatever to pay some of the debt. prices go up because you

devalue the dollar. if you borrow from china to put in the other pocket. prices go up. if you tax people more, prices are going to go up because people have to figure out a way they're going to be chasing after the same amount of goods and pay more for it. any which you slice this, there's only way to bring prices down. honestly, if government has to become smaller and cut spending. >> brenda: caroline, the government says that basically prices are going to start shrinking, do you believe that. >> i think specifically brenda, you're referring to the bumper crop of corn in just about every food product we consume and it's a fact that we have a bumper crop so prices should be be coming down, but it's interesting, you brought up general mills, they're anticipating about a 10% increase in their costs as they did this past year, but they saw a 51% increase in profits so what we really see are major corporations taking advantage of minor increases to exploit consumers. >> brenda: gary b, a lot of companies have not been passing on their price hikes to consumers, maybe now is the

time, huh? >> welcome, first of all, i'm not sure they can, brenda, because you know, we have a lot more options than we did five, ten, certainly 20 years ago. i mean, you can always, you know, go from the general mills brands down to the safeway brands and now, even safeway has a brand below their store brand, but you know, on a bigger level, i agree with everything eric said except really the premise, and agree with the governments who stop printing money. what we disagree with and as we always do is the actual numbers. you said all of those things, housing, gasoline, food, have gone up. they did go up, but food, at its lowest increase of the year and this is just from the most recent cpr report, housing, for example, is only up year to year, a little over 1%, so, the inflation overall at about 3.6% is mild, in fact, it's been that way. >> gare, gary. >> for the last few months.

that cpi is as accurate as casey anthony's-- >> and we can rely on anecdotalal and you can disagree with the number, this is the baseline i'm using and you can use the anecdote and make up any number you want. >> brenda: toby, make up anything you want. >> there's inflation and then there's government interference. the number at that got me this week was that for the first time ever in life, we used more corn to create ethanol than we did to feed food. and if the ethanol mandates that our governments put in the system is a perfect example how prices are going up because there's not enough corn to feed everybody because we've mandate this had crazy scheme of you, know, ethanol. we have a situation now we'll probably get some price lessing, about a six month lag in food and corn, but to eric's point as long as the dollar is worth less and makes it more expensive to buy and trade in commodities we'll

have high commodity prices because the dollar is out of value. >> brenda: jonas. >> first of all, my car is hungry, too. it's not going to get much worse, because contrary to what we heard, when they raise taxes, going to happen and or cut spending, they're going lower because when the government takes your money, you're not going to buy more of the products you'll buy less of them. >> never in my life of economics, if prices are going to go up when we raise taxes, the crazyiest notion i've heard. >> can we talk about the reason why so much corn is used in ethanol right now? because the ethanol subsidy at risk or is being pulled and every ethanol producer and their brother is producing as much ethanol as they can. >> brenda: it's not just corn that we're talking about. >> it's all products. >> brenda: products are going up. caroline, that hits the people that you claim that you care about the most and that the

obama administration cares about the most. those with less discretionary income, the low to middle class. is that not a worry? >> of course it's a worry. and i would actually pars them apart and say housing is going up, slowly and it should be because the market is stabilizing, hopefully. food prices are going up, i believe, partially because of the costs going up and price gouging. oil, it's just a fact. exxon is making 5 million dollars an hour, that's the most profitable company, i mean, their price gouging and-- >> the profit margin. >> brenda: they'll talk about profit margins later. i'm sorry we've got to go, guys. no deal, no checks. the president's social security threat, if he doesn't get his debt deal, is not sitting well with critics, is it time to put fact over fear? our money guys with the proof, the checks will be in the mail. [ male announcer ] introducing the ultimate business phone --

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>> coming up, washington fear mongering gone wild. playing money games with threats over social security checks, but we're here with a lesson for la

>> outrage growing over what critics call the fear mongering. the president says if he doesn't get a debt deal by august 2nd, those social security checks might not be in the mail come august 3rd. gary b. separate the fact from gear here. >> exactly, brenda, i'd never call the president of the united states is liar, but let's check the facts to see what makes sense. we take in, as a government, 200 billion dollars a month. social security is about 50 billion dollars that we spend. the interest on the debt is about 29 billion, medicare and medicaid, another 50 billion. throw in what we spend on the military, as far as you know,

paychecks, veterans affairs, about another 6 billion. brenda, that leaves 39 billion. those are the facts. i have trouble figuring out where president obama's coming from. >> brenda: but, jonas, there's so much to be paid for. it would be political suicide not to pay social security checks. so, think it would happen? >> yeah, because our -- that's look, first of all, it's the number one cost. the only thing we can't not pay is the interest. that's what you can't touch. everything else is up for grabs. it's the number one thing to spend money on. to avoid the number one cost to debt is silly. probably cut back a little. and this is the program that needs trimming to balance the budget. it's not coming out of the nasa budget. we already closed that. >> brenda: you know what? i don't know if you can run for office, jonas, probably a compliment. eric, any chance seniors won't get their checks. >> no chance. whatever happens august 2nd of

next year, here is why, there's 2.6 trillion dollars in the social security trust fund. that's supposed to be there. if obama raided the fund not our fault it's got to come from someone else, these people should be paid second right after the military and the rest and the debt and the rest is up for grabs. >> brenda: caroline, what's going to happen to the checks? are they in the mail or not? >> well, i think that it is an overstatement to say it couldn't happen because what we're talking about is a 44% cut, if we don't raise the ceiling. it's a 44% cut in remaining programs and that could include social security and medicare and i'm sure the president is it specifically focusing on that. but what's more likely is that unemployment will get cut. housing will get cut. food stamps will get cut and those who need it the most will see their programs-- >> i can't believe i'm saying it, i'm so fed up with it, cut it. give people the sense, the viceral sense what it is to be spending, having 40% of our spending coming from real

money and borrowing 60% of it. cut it, let the chips fall where they may and-- >> it will be interesting to see the toby smith, jonas max ferris, because there's no way you guys are ever going to get elected. >> and skeletons, okay-- (laughter) >> all right. all right. thanks so much, guys, and thanks to caroline for joining us in the middle this have debt mess, lawmakers pushing to ban styrofoam from congressional cafeterias. i kid you not. the name to bring down and push up your profits. mine was earned over the south pacific in 1943. vietnam, 1967. i got mine in iraq, 2003. u.s.a.a. autonsurance is often handed down from generation to generation, because it offers a superior level of protection and because u.s.a.a.'s commitment to serve the military, veterans, and their families is without equal.

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. >> neil: predictions, gary b. >> brenda it's been a stinker this summer, hasn't it within, as far as the heat. it's terrible and i think that people are going to be drinking more and more beer. i love sam. boston brewing, i think it's

up 30%. >> brenda: who else do we go to for beer, but to bey. >> i think it's a great prediction and that's why i made it a year ago. >> brenda: oh, there we go. pat yourself on the the back. toby, your prediction. >> and that flying car i like that flying car thing, reminds me of the carmageddon in l.a. i want to see that, i want to see spirit airlines, however, be the someone that makes the new ipo, lost cost fairier and if people want to fly. >> brenda: jonas, do you like spirit. >> i've flown that airline, so, no. >> brenda: your prediction, jonas? >> worried about the government not paying you back? what's the next safest kind of bond to own? municipal bonds by the states. municipal bond etf, mub. up 10% with dividends in a year. >> 10%, wow? it's bond, man-- >> eric. >> another lamo, you know chicken you know what, jonas, fought to get the styrofoam i