tv Wall Street Week FOX Business November 11, 2017 3:00am-3:31am EST
thanks so much for watching "strange inheritance." and remember -- you can't take it with you. [ singing continues ] happy birthday ma renal corps. good night from new york. >> announcer: the new "wall street week." maria: welcome to "wall street week," the program that analyzes the week that was and helps position you for the week ahead. coming up in just a few moments. my exclusive and market-moving interview with steven mnuchin. but first a look at the headlines. senate republicans unveiled their tax reform plan just days after house republicans released theirs. the senate bill fully free peels the say the and local tax.
it retains the death tax but increases the exclusions. the house has four rates keeping the tax rate at the top at 39.6%. the house plan has a bubble rate that would have some paying 45.6% of taxes on some income. income above $1 million. both bills reduce corporate tax rate to 20%. the plan's passage hit late in the week. the dow and the s & f ended lower at the ends of the week. apple has a market value of $900 billion. president trump this asia. the president started in japan
before moving on to south korea. the president spoke highly of the chinese government but was direct about the future of trade in our nation. president trump: right now unfortunately it is a very one-side and unfair one. but, but, i don't blame china. after all, who can blame a country for being able to take advantage of another country for the benefit of its citizens. but in actuality, i do blame past administrations for allowing this out-of-control trade deficit to take place and to grow. maria: the time-warner deal could be? jeopardy. reports are the justice department want part of time-warner sold off. if. they are refusing to sell entities like at&t and cnn.
we have no idea whether this deal with close over the short term. tax reform dominated the conversations. specifically the senate's proposal to delay the corporate tax rate of 20% by one year. i had the opportunity to speak to steve mnuchin about that. >> the president would like this to go into effect right away. i think the sooner we get this, the 20% rate, the better it is for the economy. but the house and senate are having to look at how we pay for all of this, including a major focus of the president is middle income tax cuts. so these are things that are still being discussed. obviously right away is better than a year, but a year is better than a longer phase-in time. maria: would that impact
business if it's a year phase-in. maybe that year people can plan what's could tomorrow in 2019. this is a real improvement if it's one year. >> what are the incentives if there is a year phasen-in? if we have the automatic expensing. that will be a huge incentive for businesses to invest right away. i'm confident wherever we get on it. the most of important thing is we ends up with a competitive tax system. we have one of the highest tax rates in the world with tax on worldwide income. we have this crazy concept of deferral. if you leave your profits offshore you don't pay taxes. it's no surprise we have a trillion dollars offshore. we convert from a worldwide to a territorial system.
maria: there was upset about the house's bubble rate. people say that means some people, many people are getting a tax increase out of this plan. >> for this group in new york and i heard this from plenty of people, including the president, he will have a tax increase. so for people who make over a million dollars in the high tax states, there will be a tax increase. the bubble rate is a technicality we are trying to work through. but the president's focus is this is on a middle income tax cut. this is about businesses being competitive. people in this room will benefit from the business tax. but this is not about tax cuts for the rich. maria: you bring up new york. and the elimination of the deduction. the state and local income deduction. people in this room are saying, new york is a donor state.
they pay $48 million more than they get back. why are you raising taxes by eliminating this deductionen a donor state that is paying more than it should any way. >> that's a good question, maria. i just came back from california where there were very similar comments. so first let me comment on the concept of a donor state. we have a tax system where the rich people pay higher tax rates and a majority of the taxes collected from high earners. so to the extent a state has more wealthy people which new york and california does, there is a lot more tax revenues coming from the state. i don't think it's a question of being a donor state. fundamentally we believe the federal government should get out of the business of subsidizing state taxes and that's the reason to do it. we are getting rid of the amt. for a lot of people in new york
they pay the amt. and we have run a lot of numbers. we are sensitive to people who make $200,000 to $300,000 that they will get a thanks cut in new york. this is focused on the american worker who has had no wage increases for the last 8 years. maria: the corporate move from 35% to 20% is something you believe will move the needle on economic growth. why do you any that will particularr dictate behavior on the part of managers and ceos that they will take that extra savings and create jobs. maybe they will just take that money and buyback stock. >> i had the opportunity to travel on the campaign with the president and met with hundreds if not thousands of business people.
big business, small business. the two things we heard on the campaign were regulations and taxes. and the president is 100% convinced, as am i, if we give u.s. business a fair level playing field that we can compete better than anybody on the world. when you have a tax system that incentivizes moving jobs offshore. that's not consistent with what we want to do. this is about bringing jobs back here and making this competitive. on the campaign the president wanted to have a 15% rate. we started at 15%, the president got comfortable 20% was the right balance. but we are sticking with the 20%. that's critical. maria: the 20% rate is critical, even if it's a year later. >> we would rather it's sooner but we'll work with the house and senate on the rollout of
that. maria: are you expecting any democrats to vote yes on the tax bill? and do you have the votes to get this passed? >> the answer is i think we'll have democrats. the president invited democrats to come for his speeches. we have had democrats on air force one. we have had them come join the president. we had discussions with democrats. i just got off the phone on the way here. we hope there is democratic support. on the biz side and the -- on the business side is' not a republican versus democrat issue. it's something both parties understand. maria: the other night we saw victories almost across the board for democrats whether it be new jersey or virginia or new york city. republicans are saying tax reform is more critical than ever before or else we'll lose the 2018 mid-terms next year.
how did you feel when you saw the victories? >> i separate the issues. i don't feel any differently before to after the election. tax reform is critical for the economy. it's something president trump campaigned on. it's something the market expects. it's critical. the i think the republicans understand that and hopefully we'll get democrats to understand that as well. maria: what about that carried interest loophole? will it survive in we'll be will it survive in we'll be
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maria: welcome back. we continue with treasury secretary steven mnuchin. a point of contention is the so-called carried interest deduction it allows some in the financial service industry to be taxed at much lower rates on their income. the senate plan seems to keep that loophole. a lot of people the last several years looked at carried interest and said this is not fair. where a hedge fund manager or real estate person can look at their revenue and treat -- and treat ordinary income as if it were capital gains. will there be changes on carried interest? >> i'm sure there is nobody in this room that cares about this topic. this is a highly interesting
issue to a small part of the population. the president said on the campaign that he wanted to change the rules for hedge funds and carried interest. the house proposed going to a three-year holding program. when you look at carried interest, 2/3 of this is in real estate. only a third is in private equity, venture capital. a lot of this is small developments. but it's a big step in the right direction. bar were retalked about the gses like fannie mae and freddie mac where they took money from those companies and used it for other things. is that true? >>it is. i have been involved in the housing market for 30 years and specifically involved with understanding fannie mae and
freddie mac. i have a lot of experience in this. as i said when i was confirmed. i'm determined that we have housing reform and we come up with a permanent solution for fannie and freddie so they are not in the current form which is effectively owned by the government having a massive line of credit with the treasury and the treasury being compensated through dividends. we need to fix the housing system. that's something i'll be working on next year. we are going to look at fha and jenny mae. maria: people are wondering why these companies are paying dividends. is that appropriate? have you considered stopping the dividends? >> i have not considered that.
there have been discussions about the dividends. i told the director that we expect -- the treasury expects to get the dividends and expects to be compensated. the taxpayers have a large exposure. these companies couldn't exist without that and that's why we are being paid the dividends. we want a permanent solution. we are not look at keeping these the way they are for the next 8 years the way the obama administration did and use the money as you said for other things. maria: we should expected change in that. >> that's something i expect we'll be doing on a bipartisan basis. there is a lot of interests on both sides. we had a bunch of preliminary conversations. that will be a big focus of mine for next year. maria: reaction now from a top ceo coming after this. stay with us.
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maria: we just heard from secretary mnuchin and his plan for tax reform. real estate giant don peebles, ceo and you found irv peebles corporation. what's your take on what we have heard so far. >> the impact for new york is going to be catastrophic. it will lead to a mass exodus of high income earners. especially entrepreneurs and business owners who can relocate. the local pressure on taxes. the mayor is calling for an increase in taxes on millionaires, and a mansion tax increase. that will be hard on real
estate. maria: new york just voted for that for another four years. do they know there is a mansion tax coming? >> i think they either stayed home or they voted more nicole. maria: an exodus out of new york, why? >> no deduct built of state income taxes. new york is one of the top three highest tax states in the country. when you add the new york city tax implications it can be as high as 17%. it's a pill people will have difficulty swallowing. maria: people will say my tax rate is 53% or more. >> i had lunch with someone paying 57% the other day. unincorporated business tax. >> why stay in new york and pay
57% when you can go to florida and pay? >> zero. on top of that, there is a balance. historically people make the decision that one this is a great city full of entrepreneurship and is business friendly, and a high quality of life. but as the environment has changed where the quality of life is diminishing. people i think will say watch that. >> i think it real estate in new york is at a breaking point. prices have gone very high. now there is a big pullback. there is a lot of new inventory on the market. at the low tend which unfortunately which is $2 million and down. those are doing well. it's that space in the middle. this is the first time in my career where i have not seen a direct correlation between the
stock market and the new york real tells statehousing market. when the stock market rises so does demands for real estate. maria: do you think real estate prices go down? >> i think the psychology of the buyers change. there is a new demographic. millennials and generation xers look at real estate differently than my generation does. now with the experience of what happened in 2008 and 2011, these buyers are reluctant to buy and they want more mobility. maria: anything else strike but this tax van in. >> the idea that we are treating corporations, large corporations differently than we would treat entrepreneurs and small business owners is a bit unfair. i think there should be a direct
correlation. if you have reduce corporate tax rate to 20, clearly there is no room to raise the top rate. we want our money to not go into the government, but go back into our economy. that's an unfair approach. and they are eliminating the historic tax credit. if they eliminate the historic tax credit program, it's challenging for real estate in more mature markets especially on the northeast quarter. taking that away will create problems. maria: don't go anywhere, more "wall street week" after this. building a website in under an hour is easy with gocentral...
your money it's a big week for data. as we hear from the producer price index. the redbook report is out on retail sales. and the producer price index. we'll find out how the manufacturing industry is doing when we get the numbers from the empire state manufacturing. and housing construction. then we have earnings. home depot, and cisco systems will report. later none the week, huge for retail, walmart, best buy, target, they will all report on their latest quarterly numbers. coming up next week on "wall street week." we'll talk with robert kaplan.
have a great rest of the week everybody. i will see you again next time. thanks for watching. [♪] >> i'm bob massi. for 35 years, i've been practicing law and living in las vegas, ground zero for the american real-estate crisis. but it wasn't just vegas that was hit hard. lives were destroyed from coast to coast as the economy tanked. now it's a different story. the american dream is back, and nowhere is that more clear than the grand canyon state of arizona. so we headed from the strip to the desert to show you how to explore the new landscape and live the american dream. i'm gonna help real people who are facing some major problems, explain the bold plans that are changing how americans live, and take you behind the gates of properties you have to see to believe. at the end of the show,