NOW with Alex Wagner | February 27, 2013
>>> there's one thing that dysfunctional washington seems to agree on, the tax system needs to be fixed. to show how serious they are about reform, house republicans reserved the hr-1 designation to pursue an overhaul aft of the tax code . if you think there are shreds of bipartisanship, think again.
>> i hope we are on the verge of moving tax reform bill to lower rates for all, clean out the loopholes and nonsense that's there.
>> the important part, lower rates. at one point, republicans agreed to generate revenue by eliminating the loopholes, that was before the fiscal cliff deal that saw $600 billion in higher tax rates . since then, the message has been unanimous, close the loopholes.
>> i'm very much in favor of closing loopholes and i want to take the revenue we generate that way and use it to lower marginal tax rates to have a stronger economy.
>> the argument speaks to the dividing line. can america cut its way to a better place or do we need revenue, too. speaker boehner, mitch mcconnell , harry reid and nancy pelosi meet with the president on friday to talk sequester. congressman ellison, we have you with us. immaterial to ask you with so many things we are dealing with at present, the house republicans kicked it up to the senate. the lower chamber says we have done our work. we are on to tax reform . what do house democrats think of that strategy?
>> we are kind of horrified by the idea of already moving to the next thing before we address the sequester. this thing is coming up on friday. my own district, i'll see 23,000 people who no longer have job counseling and placement services. we'll see cuts to police. we'll see cuts to important programs that people need to have the ladder up into the middle class . they have already started switching the subject. the subject they are switching to is disturbing. it's the same theme. they are going to exacerbate it with this proposal, lowering the rates so the people can have -- so that the rich can take more of the money and pay less of their fair share . it's really kind of disturbing. it's really clear what is at work here. they believe the rich don't have enough money and the rest of us have too much.
>> congressman, sometimes i feel like i'm in a strange vacuum that i have access to numbers and data republicans don't have access to.
>> they have it.
>> we were looking at numbers in 2011 . the top .01% made an average of $23 million, the bottom average $30,000. look at the polling on this. 76% of the country thinks we need to reduce the deficit and have a combination of spending cuts and tax increases.
>> why the digging in of heels? especially when you have republican congressmen who are going to feel pain?
>> they are committed to the idea if you give rich people enough money, maybe they will invest in equipment and help the economy. the fact this philosophy failed repeatedly over the course of decades is irrelevant to them. it has the benefit of rewarding rich friends of theirs. i think it's id logical and a practical reality for their donor base and people they are trying to court.
>> may i suggest they get new friends and different numbers. thank you for hanging with us. we appreciate it.
>> thank you, alex.
>> andrew, let's talk about this fiscal sanity piece here.
>> what do you make of the republican efforts, hr-1, the first piece of legislation for the new term? tax reform , the likelihood it's going to go anywhere in this congress.
>> i don't think it's going to go anywhere. stop the conversation. both sides agree we need tax reform . are we trying to lower the rates or is there a meeting somewhere where we can go in the middle? i think the easiest thing to do is effectively raise the effective tax rate . it's the number people should pay attention to. let them lower it taking out loopholes and take out more revenue.
>> what do you do with the revenue?
>> to please both sides, i may get in trouble for this, you can use that revenue to pay down debt and i think you would win with both sides on that issue, as opposed to spending it on social services which still need to be belt with. you are better doing that than whatever revenue for loopholes.
>> wait a second. that's the obama position. it's what obama was trying in the grand bargain a year and a half ago. boehner said he would do something but only through closing loopholes, not messing with rates. obama was doing it as a deficit reduction.
>> i agree.
>> there you are --
>> we are in the same place. i'm in the same place with them. i never said i was in a dichbt place.
>> you can have a conversation with the president but you can't have a conversation with john boehner .
>> that's why i said this is a non-starter.
>> jonathan, you wrote about the republican sequestration plan. the end game here always has been to make sure the wealthy are paying lower taxes. it has nothing to do with anything else.
>> it's been the position since 1990 . they were talking tax reform . it's a hand wavy, vague thing without committing themselves to specific plans that left them open to raising revenues to perform. now we are at the point where the rate question is off the table. now we can really zero in on are you willing to close some of these loopholes enjoyed by taxpayers as part of the deficit reduction in return for cutting social security and medicare. it's the deal on the table. they are saying no. no taxes of any form. they don't make a distinction. they want high income taxpayers to pay less tax.
>> while still cutting intolerance.
>> you could take down the rate, get rid of loopholes and both sides could pretend as if they won.
>> it's not really -- in terms of party politics and how it's working, maggie, it's not great. we have a new wall street journal poll. the republican party thinks they are taking a partisan approach compared to 48% of the democrats. there's got to be an edging toward the middle.
>> we keep saying that. we are four months out from this election and seeing a lather, rinse repeat process. over and other and over i thought there would be a curve after the debt ceiling fight. i think the president is taking more of a hit than he did with the fiscal cliff. i think the republican brand is, i think chuck todd 's words were free fall. it's hard to argument.
>> the president is having a meeting on march 1st to talk about the sequester. i don't know if that wins him points or loses points. at any rate, they are