can do to avoid them but they don't want to. warfare in a highly dense urban environment with an enemy that's using civilians as shields is going to be destructive and have all sorts of collateral consequences you don't want. that's ultimately on hamas. host: california, joe, good morning. caller: good morning, can you tell me the motto of mossad? host: do you know it? caller: yes i do, it's by way of deception they'll just that we shall create war. it's a commitment as an organization to do false flag. are you familiar with the term false flag? guest: i am. what's your theory? caller: my theory is that the good news is that benjamin netanyahu and mossad led 9/11 and attacked america. host: anything you want to say

to joe? guest: i thought that's where we were headed. host: michigan is next, good morning. caller: good morning. first of all, >> good morning. thank you for joining us today for a discussion on tax policy. i'm the director of the hamilton project. we are delighted to have white house national economic advisor lyle brainard here to discuss the administration's tax policy priorities. we are approaching a crucial time in tax policy. many of the provisions in the tax cut and jobs act are scheduled to expire in 2025, setting the stage for rigorous and consequential debates. today's event is an important part of a series of work and events the hamilton project has undertaken to inform those debates.

if policymakers work to enact new legislation rather than simply letting the 2017 tax cut provisions expire, they have an opportunity to improve the tax code, strengthen economic security and stabilize the fiscal trajectory. if you care about climate change , you should care about tax reform. much of u.s. climate policy currently operates through the tax code. if you care about maintaining american competitiveness, you should care about tax reform. aligning the u.s. tax code with international standards would level the playing field for u.s. multinational corporations. if you care about reducing poverty, you should care about tax reform. strengthening the child tax credit in earned income tax credit would support children, workers and many others. but what values should guide to

tax reform? in the tax proposal, four principles have been offered to guide tax policy choices. they argue that reforms should raise revenue on net to restore financial stability, enhance productivity, progressivity, minimized distortions and inefficiencies which would indeed enhance productivity, tackle global and collective action problems and altogether they offer a menu of policy reforms that would raise $3.5 trillion over the coming decade. that would roughly stabilize the debt to gdp ratio while improving productivity and efficiency of the system. paying for our spending priorities through well-designed tax policy instead of borrowing would increase economic output. it would also help if we improved the sensible mess of

our tax system. but the evidence from modern u.s. fiscal policy shows tax reform would likely only have a small effect on aggregate output in the long term which is to say , the focus on how proposed tax reform will affect gdp is often misplaced. we reviewed eight major tax reform since 1986 and we found no tax reform has appreciably affected the size of the economy in the long-term. a key example is the 2017 tax act. research showed it only had a small effect on the size of the economy seven years later. but it did change the progressivity of the code and it did shift the way we finance federal spending from revenues to borrowing. policymakers should prioritize the consideration of these effects on revenue, behavior and income over a tax reform's

projected impact on aggregate output. today, we continue our tax policy discussion with lael brainard leads the national economic council advising the president on u.s. and global economic policy. she previously served as vice chair of the federal reserve, the under secretary of treasury for international affairs and of course, vice president and director of global economy and development at brookings. we are so glad she can join us today. for those in the room, you can submit questions but writing on an index card and raising it for a staff member to collect. for those of us online, you can tweak us @hamilton project. work with a#tax policy or email must at info at hamilton project.org. iq and i would like to invite lael to the stage. [applause]

ms. brainard: good morning and thank you wendy for that -- terrific introduction. it's great to be here at hamilton. as we all know, following the devastation we saw during the pandemic, we saw major legislation and now we are seeing the best labor market that we have seen as a country in 50 years. we are seeing gains in real purchasing power and wealth for the middle class. but we have a major economic policy that lies ahead, whether to return to the trickle down policies of the past were forge ahead with a different approach, the president's approach to grow the economy from the middle out and the bottom up. the expiration of president trump's 2017 tax package next

year will put the issue of tax fairness front and center. do we want a tax system that favors the wealthy or the middle class? text fairness is central to the president's approach to building an economy that works for all americans. where growth is broadly shared and everyone has a fair shot. where we reduce fiscal risk and keep our commitments to seniors. this week, the congressional budget office confirmed the full extension of trump's tax package would add nearly 5 trillion to our national debt over the next decade while disproportionately benefiting the ultra-wealthy. it's clear we need to and the 2017 tax breaks for the ultra-wealthy and scale back costly, permanent corporate tax breaks. with the debate that is looming, i thought it would be useful to lay out the clear differences

between the republican plan and a tax code that works for the middle class. republican plan make the tech system more unfair and jeopardize our physical health. how do they do that? they do it by doubling down on the 2017 tax cuts which did not deliver the benefits that were promised. 2017 biggest tax cuts went to the wealthiest americans. those were in the top 1% received tax cuts worth over 50 times those of middle income households. the trickle down never happened. the prior administration promised growth of 4, 5 and maybe even 6% but actually, the economy and investments grew at about the same rate in the two years after the passage of the tax package as the two years prior. the trump administration at the time claimed those tax cuts

would cause household wages to increase by at least $4000 but the congressional research service found no evidence of an increase in wages after thetcta top executive. so their wages rise by their wage increases. the torque -- the corporate tax cuts did see a surgeon stock buybacks that benefited wealthy and foreign investors. the current republican tax plan would continue those tax cuts for the wealthy giving the top 0.1% of households average annual tax cuts of $175,000 each. that's per year. and it would go further. it would cut capital gains taxes that eliminate the estate tax that currently applies only to the wealthiest 0.1%.

it proposes nearly one trillion more in corporate tax cuts including eliminating the inflation reduction act, corporate minimum tax and the stock buybacks tax. as not all -- the proposal to eliminate the investment in the irs that came in the inflation reduction act would add hundreds of millions of dollars to the deficit and make it easier for the wealthiest to evade paying what they owe. meanwhile, republican opposition to implementing the global minimum tax agreement is rewarding corporations that invest abroad rather than america and let's remember, those tax cuts didn't pay for themselves and they won't pay for themselves. tcja has come nowhere near paying for is one point $9 trillion cost. revenues were projected to be over 18% of gdp in 2023 before

the tax cut past but revenues have turned out to be only 16 .5% of gdp which is a shortfall of $400 billion. cbo estimates unpaid for extensions of the tax package would increase primary deficits by over 1% of gdp over the next decade. that is the long-standing magical thinking of trickle down. the bush tax cuts, there extensions on the trunk tax cuts have added $10 trillion to the national debt. that accounts for 90% of the non-emergency increases in the debt to gdp ratio since 2001. there is no reason to believe another round of lopsided tax cuts would turn out any different. it's past time to reject the republican argument that tax cuts should not be offset. republicans will likely respond to fiscal pressures created by

those unpaid for tax cuts by pushing for draconian cuts to social security and medicare. they have already raised taxes for millions of americans by opposing the extension at the end of 2021 of the presidents expansions of the earned income tax credit and child tax credit. they also propose to actually increase taxes on middle-class families by eliminating the president premium tax credit expansion that would raise the cost of health insurance for millions of americans and they would eliminate tax credits worth thousands of dollars for families in need or for solar panels. even now, it appears that senate republican leaders are holding out on helping working families this year so they can set up their agenda for next year to deliver tax breaks for the ultra-wealthy. the president is fighting for a better approach. let me take a short few minutes to describe the five principles

that guide that approach.first, our tech system should be fair, it should reward work or not wealth, it should give tax cuts to working and middle-class families to give them a fair shot while asking the wealthiest households to pay their fair share. the president is committed to ensuring that the over 95% of american households that earn less than $400,000 don't pay any more in taxes. he has stood by that pledge and he will stand by that pledge. he has proposed tax cuts for millions of families to help them invest in their children, make work pay and secure health insurance. it builds on the targeted text cuts in the american rescue plan and inflation reduction act that republicans have fought to eliminate. the expansion of the premium tax credit is made health insurance more affordable for millions of americans purchasing coverage on the aca marketplace. this expansion uplift health

insurance coverage to record levels of over 21 million people . the expansion will lapse if there is no action by the fall of 2025. the expansion of the child tax credit cut child poverty and half in 2021 by allowing low income families to access the full credit for the first time despite the documented effectiveness republicans did not extend the expansion costing 3 million children to fall into poverty. restoring the expanded childhood credit would lift those children out of property and cut taxes by never to $2600 for 39 million families and restoring the expansion of the eigc would cut $800 per year. achieving a fair tax system often means we cannot extend expiring trump tax cuts for those with incomes above $400,000 or bring back

deductions and other tax breaks for those households. as the president has said, tax cuts for the wealthy will stay expired on his watch. tax policy in 2025 should raise revenue consistent with the president's strong commitment to fiscal responsibility. we should avoid making the fiscal hole created by republican tax cuts deeper by fully paying for any tax cuts that are extended and we should use the 2025 tax debate as an opportunity to raise revenue overall. the evidence is clear, tax cuts don't pay for themselves. it's past time to reject this argument that tax cuts uniquely shouldn't be offset. since the tcja was enacted, revenue has average 17% of gdp compared to over 19% in the five years leading up to the bush tax cuts. the revenue share is going down at the very time we need revenue

to go up to meet commitments on programs that are the bedrock of financial security for americans. our seniors earned their social security and medicare benefits paycheck by paycheck and as the president has made clear, he rejects republican efforts to cut those benefits or put health and other programs that families count on at risk. corporations that are making record profits should contribute their fair share. doesn't make sense for corporations'share of tax responsibilities to be at multi-decade lows when corporate profits are very high? that question should be at the center of next year's tax debate. recent evidence has shown that targeted investment incentives are more effective in boosting productivity enhancing business investment and the unconditional large tax cuts enacted in 2017. our tax system currently asks

much less of corporations than it used to. in the 1950's, around 70% of our revenue came from labor income and 30% from corporate income. today around 90% come from labor income and under 10% comes from corporate income. that doesn't make any sense. we also ask far less of corporations and other large economies. in 2022, the corporate tax receipts were about 1% of corporate gdp half the average. that's due in part to the trump tax cuts for the lackluster investment response to the trump tax cuts suggest bringing corporate taxation more in line with past u.s. and current international practice and that could raise substantial revenue without hindering growth. the president's budget with scaled-back those corporate tax rate cuts by bringing the corporate tax rate to 28% only halfway back to the previous 35%

rate. it would build on the irs minim tax on billion-dollar corporations by increasing the rate from 15-21% and boost the stock buybacks tax from 1-4% to encourage investors and corporations to invest in their workers and the broader economy rather than payouts. even with those changes, corporate income taxes, the economy would be similar to their levels in the mid to thousands and other countries. taxpayer should pay what they owe and play by the same rules. that seems very straightforward. the irs should have the resources it needs to identify and address tax evasion by wealthy people, complex partnerships and large corporations. also to provide adequate customer service and a smooth tax filing experience to the vast majority of filers who are trying to pay what they owe. they've suffered a decade of severe underfunding and the

current investment in modernizing the irs is already paying off. the irs demonstrated exemplary customer service this tax filing season, successfully highlighted direct file and launch new initiatives aimed at high-end noncompliance. this investment will last without action starting with the irs taxpayer service in 2026. it's really important to protect the irs funding. our tech system should avoid an international race to the bottom . the historic multilateral agreement signed by more than 100 and 30 nations will finally address that race to the bottom on corporate taxes while enabling businesses to compete and allocate capital based on market factors, not tax planning factors. many of the world's largest economies are already implementing this transformational agreement. we need to join them next year. the president's proposal would implement the agreement and opposed a 21% memo tax on the

foreign profits of the big multinationals. just to sum up, as we approach the tax debate next year, the stakes could not be higher for the fairness of our tax system and our nation's fiscal future. we are fighting for a fair tax system that gives the middle class a tax break and raises revenue by asking the ultra-wealthy and large corporations to simply pay their fair share. the contrast with the previous trickle-down approach couldn't be clearer, thank you. [applause] >> so thank you for those remarks. since the expiration of many of the provisions in the 2017 tax cut provides us this opportunity, let's start there with a couple of questions.

the hamilton project had an event last fall where there seemed to be some bipartisan agreement about some good aspects of the 2017 tax act. for example, the higher standard deduction that made the tax code more sensible and a little more efficient. are there things about the 2017 tax act that you like? ms. brainard: i think when we get into that discussion, what's most important is the principal that the tax burden for people who earned under $400,000 should not change. that is the most important piece. there are lots of different ways you can get to that outcome and there are elements of the 2017 tax reforms that we had proposed building on. for instance, we would like to

see a global minimum tax put in place that is consistent with their international obligations. we've suggested doing that at the rate of 21%. of course, we can build on that tax package. there are a variety of other aspects but what is really important is that none of the expiring provisions for the wealthiest americans, those making over 400,000 would be extended. and that we need to pay for extending or holding harmless the tax status of people under $400,000. >> the international provisions were also brought up as some of the things that people were surprised about that they don't hate about the 2017 tax act. you talked about the republicans plans and you talked about the administration priorities.

there are lots of possible outcomes as a compromise between those two if legislation gets passed but there is another possible outcome which is no legislation gets passed and indeed, the expiring provisions expire and we move along with current law. where do you rank that in the list of outcomes? is it better or worse than other out comes? do you think it's better or worse than what the republicans have proposed? ms. brainard: we've taken an approach which to layout very clearly what our principles for that tax base would be to allow some flexibility exactly how those provisions are put together to respect those principles. i have to say that any out come that does not preserve the

current tax breaks for the middle class is one that the president would not be able to accept and seems implausible to me that you would have republicans denying tax breaks for the middle class in order to simply, clearly only extend tax breaks for the ultra-wealthy. while there are loads of possible outcomes here, we are going to continue to really push hard for the outcomes that i discussed which are we need to extend the tax breaks for the middle class earning under $400,000 and we need to raise revenue. that means we have to allow those provisions that favor the ultra-wealthy to expire in order to make sure they pay their fair share of revenue. >> let me press on that a little bit.

when we talk about these sorts of policy outcomes, we are talking about a world where we have a president we don't know what the makeup of the house in the senate will be. are you saying that under that scenario, given the possible outcomes you could have in the senate, you don't see a world where policymakers aren't able to come to a compromise? there were a lot of double negatives in that sentence. ms. brainard: there is loads of different ways the world could evolve between now and next year. what we can do and what the president committed to do is to be very transparent about his position going into this major decision about our fiscal future and the fairness of our tax system. he has been very clear.

he talks about this a lot. he talks about it in the state of the union. for him what's important is honoring his commitment to people who earned below $400,000 in raising revenue to put us as a nation on a solid fiscal trajectory and to make sure we can continue making the necessary investments in honoring our commitment to our seniors and other people we have commitments to. exactly how that shakes out i think is something that makes it hard to speculate at this juncture. those are the critical things that need to happen next year. >> we will move on from the 2017 tax act. what other priorities do you want to put on the table that have nothing to do with what's in the 2017 tax

ms. brainard: as i noted, corporate tax revenues as a share of gdp are simply too low. they are too low for the nation's fiscal health. they are lower than they were in previous dates when corporate profits as a share of gdp were actually lower. it makes no sense. and they are half the share of gdp you see oecd has averaged. obviously it is important. the president has secured some gains on that front. but, critically important, we now know that the massive reduction in the corporate tax rate from 35% to 21% did not yield the promised growth benefits, and there is really no justification for keeping it that level. he has proposed moving it from 21% to 28%. only halfway back. that raises a remarkably large amount of revenue. will over $1 trillion.

we need to do that. the president has secured a corporate minimum tax. we need to increase that further. he put that in the president's budget for 2025. we also have proposed expanding the stock buybacks tax, which he secured in the inflation reduction act. because we have seen a massive amount of activity. -- activity in a very strong economy, in that regard. of course, in addition to implementing the global minimum tax, we believe rationale is incredibly compelling. we would also like to make sure that people who earn over $100 million per year, who currently pay an average of 8% on their income, pay something more on the order of what a schoolteacher for firefighter would pay, pay 25% on their income. that is another really important

one. important revenue-razor. very important to tax fairness. every resident with a lot of people i talked to. ms. edelberg: indeed. one of the things you talked about was, in the list of prior -- republican priorities is the republicans' desire to repeal some of the subsidies in the inflation reduction act. subsidies that are particularly important for the administration's efforts to fight climate change. so, even in absence of their passing legislation, which is a pretty high hurdle these days, one can imagine if we have a republican administration, some significant changes in the way the ira, and maybe other recent

pieces of legislation are implement to. is that on your mind? -- implemented. is that on your mind? are there protections you can put in place to prevent significant changes in implementation that under the president's priorities? ms. brainard: the inflation reduction act clean energy tax credits are the law of the land. under any scenario i would expect a lot to be implemented faithfully. we have seen as of the end of this month 21 of the 24 tax credits, all of the ones that are operative -- there are a few that will not be operative until next year. but all of the ones that are operative have been promulgated by the treasury and irs. those are now in place and people are already implementing. we have nearly $200 billion worth of investments associated

with the clean energy provisions of the inflation reduction act. there are already people hard at work building plants and being employed at plants, whether it be at batteries, solar, wind, evs. we have had americans take advantage of the ev tax credit. we have 60,000 tax filers who have filed to put dissipate -- sorry, taxpayers who have filed to participate in either transferability or direct pay for 60,000 clean energy projects that are registered. it was a lot of forward momentum there, and so i would anticipate that under any circumstances the law will be faithfully and permitted. ms. edelberg: so this is not on your list of concerns? you think the way the ira has been implemented basically

insulated from a future administration that is less committed to the priorities in the ira? ms. brainard: "this is now the tax code. these rules are complex. they take a very long time to write. and they take a very long time to amend. they require public comment. and they require a lot of hard work on the part of staff at the irs to undertake those kinds of activities. and i will say that the investor community, the business community, the labor community, they are going to strongly advocate for these projects, this employment, these transformative projects that are in communities all around the country and don't forget the analysis that has been done suggests these projects are

disproportionately in republican districts. and although many of the republican members oppose the inflation reduction act, they are now loudly cheering on the investments in their districts. so, there is a lot of momentum and excitement behind the factories and the transformation of the grid that is going on all over the country. ms. edelberg: let me remind everybody that you can get cards when you came in, if you have questions you want me to ask. raise your card and a staff member will pick them up. for those of you online, feel free to email if you have questions. so, it sounds like the biden tax plan has two priorities that are in some ways in competition with each other. one is raising revenues to improve the fiscal trajectory. and another is to raise revenues

in order to finance the president's priorities. either through lowering taxes or presumably funding spending priorities. am i right in thinking there is a trade-off between these two things? and if i am, how do you think about that trade-off? ms. brainard: let me start by resting on one point he just made, which is a really important one. the president has put forward the puzzles to pay for the middle-class tax cuts that he is committed to. so, we believe that you need to raise revenue in order to offset tax cuts. the republicans will not even a knowledge that in civil, and that is one of the interesting things about the tax package that is not moving forward right now that would benefit working families, that would provide tax credits for housing that is currently not moving forward in the senate. because it actually pays for itself.

that is a really important priority, a really important distinction, and i think we should hold republicans accountable for paying for any tax cuts that they propose. and in terms of the importance of doing both, i think it is absolutely essential that we show how we are going to pay for the investments in the nation's future, in particular for child tax credits. and it is very important that we are able to show how we will pay for honoring commitments that have been made over generations. so, those two things, we don't see those in conflict with each other. we just think it is a -- it is good budgeting to both be clear about which tax cuts need to be preserved or expanded and then the revenues. i just laid out for you a long list of where we think there is room to raise revenues in a way

that is efficient and is consistent with ongoing growth in the economy. ms. edelberg: so, there is likely to be in a second biden administration two robust debates. one obviously the tax debate. we cannot get away from that one. but presumably, looking at the president's budget, there will also be a debate about future spending priorities. and then the president's budget, those are obviously laid out, quite reasonably so, as a collection of policies that work together physically. but my guess is that these debates, as they happen over the next years, will happen sequentially. that first we will have the tax debate, and then we will have a spending debate. maybe you disagree. if that is right, should i think about the spending priorities

being constrained by whatever it is that the effective compromise, you know, that has generated in terms of revenues that give the president some leeway to fund his spending priorities? ms. brainard: i think we try to work holistically. we try to be transparent about that they might cost and we try to be transparent about where we see the potential areas of revenue that advance the principle of asking those who have an abundance to pay their fair share. corporations who are making record profits to pay their fair share. so, we tried to think about those things. you are certainly right that the way these decisions could be made, there is a whole host of different sequences that one could imagine. we are going to try to bring a holistic set of principles. in fact, we talk about those in the budget, to those debates.

again, i think what is very important is to not have a debate on the one hand about tax cuts where we sort of have a republican assertion that they pay for themselves, so we don't need to pay for them by raising revenue elsewhere him and then an investment and spending debate where it is somehow suggested that a different principle should apply. we think you need a consistent principle across those debates. ms. edelberg: i have a question for you about the role of tax experts. and we have a bunch of people here in the room, and i know we have hundreds of people listening online. and i know from the list that many of them have a lot of expertise in tax. what guidance can you be giving us and them about how we can be helpful? which is to say, where is more

analysis needed? where would our expertise be a useful input into the debate to make sure that we don't lose this opportunity? ms. brainard: yeah, so i think the biden administration really relies heavily on independent expertise. very heavily. the tax experts have an incredibly important role to play. certainly the cbo and jct, those are institutionalized places we look to, but it is often true that there are a number of think tanks and policy research centers, university policy research centers. [laughter] that we think are extremely important to our debate. you are an example of what you bring to the debate. it is really trying to take something that is incredibly

complicated, intentionally sometimes complicated, and try to clarify, what is at stake? distribution is critically important in all tax discussions. so, the statistics about who actually got the benefit from the 2017 tax cuts that i cited earlier, those are really important for the public to understand and to have independent experts doing that analysis and explaining, if you think that these benefits are going to help you, you know, who earn $300,000 a year, let me tell you who is actually going to get the tax cuts -- tax-cut benefits here. that is important, but similarly you do on growth of facts employment fx. distribution effects. all those things should go into our views about how to assess

these tax policies. and those are also important to the debate about saying, well, these tax cuts, for instance the massive amount of revenue that was given up from corporations, rigorous assessments to show whether or not they had an effect on growth, employment, wages, those are the investments i look to to say, actually, no, they didn't. that is why if we were to raise corporate tax rate from 21 to 28, as the president has proposed, we are unlikely to see the kinds of growth effects that republicans asserted at the time they put it in place, just as an example. ms. edelberg: and certainly any positive effects from lowering tax rates, which certainly there are a few lower tax rates, have to be weighed against the negative effects of financing or spending by borrowing. ms. brainard: i think, you know,

you have contributed to this literature. the child tax credit. a child tax credit, outside independent analysis is pretty impressive about the effects their, in terms of that money being used to invest in children . and also to enable lower income parents to be dissipate in the labor force. so, a double positive. ms. edelberg: i want to give you an opportunity to talk more about irs funding. on this stage i asked natasha staring, who has been a huge proponent of effectively funding the irs, and how that money not only creates a more useful, user-friendly, and efficient irs, but also helps the irs have the abilities that they need in order to effectively collect revenue. so, i want to give you an opportunity. i essentially ask her the same question, which i would like to ask you. is it a good idea to give the irs more money?

ms. brainard: look, i think you have to ask that question against the background of a decade of underfunding. the irs has been dramatically underfunded and has been, as a result, unable to do the kind of work that is necessary to fulfill its responsibilities under the law. with the funding that was provided to the irs in the inflation reduction act -- i always find this hard to say -- we have already seen some really positive effects. so, we also know that the tax service funding has led to large drops in wait times this year. just for your typical tax filer who does not try to evade paying their taxes, better customer service, we now have a direct file. more than 140 thousand people, i think, have taken advantage of

it, and customer service on that is extremely high. that is important, but it is also important because some people, wealthy people in certain types of entities and certain types of entities are able to take advantage of the enormity -- enormously complex tax code to avoid paying what they are. you need the technology and personnel in order to have resources to make sure that people are paying what they owe. and they are too the irs has already put out a report showing hundreds of millions of dollars of additional tax filings this year. so, we think this is an investment. it is a smart investment and it makes up for past underfunding. ms. edelberg: i have an interesting question from the audience. and i will read it as it is written, but then offer my own thoughts as to how to defend the question. should corporations not claim ira incentives in order to ensure they pay their fair

share? there is some interesting questions there about, we offer subsidies to corporations to nudge them to do things that we think have a payoff in either a social sense or an economic sense. but also there is a question as to, like, should we just be -- it is a silly question, so i am putting up the strawman to let you knock it down. which is, should, you know, fair-minded people who actually believe in a better, more progressive tax system, should we be asking them to pay more in taxes? ms. brainard: we think we should be asking corporations overall to pay more in taxes. that is why we proposed increasing the corporate rate to

28%. we put in place a corporate minimum of stock buybacks. those are basic principles of fairness and the amount of revenue that needs to be raised. i think of the inflation reduction act tax credits as providing the necessary market signal for necessary investments in our clean energy future. and i say it because the current market signals, in the absence of that, do not take into account the broader benefit to society of making this transition and going down the cost curve on new technologies. as well as some of the established technologies that are available to transition to the clean energy future. i think of those as enabling the kinds of investments in capital markets that otherwise might not meet that investment hurdle in

the absence of those, but that the return to our society overall is greater than private return. and that is where the tax code is helping to offset that discrepancy. i put them in somewhat a different category. ms. edelberg: but sometimes when somebody like warren buffet says, it is absurd i pay less in taxes than my secretary, and sometimes the, i think, poorly thought out response is, mr. warren buffett, you should pay more in taxes and that will solve our problems. i don't know. ms. brainard: the questionnaire is, should we rely on publicly-minded people to simply pay more than they are -- more than they owe? we think that when people who earn over $100 million on average pay 8% of their income in taxes, whereas people who are

squarely in the middle class are, you know, like teachers and firefighters, paying a great year more of that, actually need to just ask the billionaires, the multimillionaires to pay a higher rate of taxes in the tax code. that is the only way, i think, you're going to get broad, necessary amount of revenue we need as a society. ms. edelberg: excellent. so, before we get to -- i'm coming back to the 2017 tax act. before we get to the date when these provisions expire, we are very likely going to have a debt ceiling debate. what role does that play in this debate? is it -- i don't know. i guess, i mean i'm trying not

to just ask the question of, is the debt ceiling the dumbest thing or just a dumb thing? i'm trying to ask a more substantive question, which is, some people have said the debt ceiling is actually a useful opportunity to talk about compromises around the tax system. do you think this debt ceiling debate offers an opportunity to start the more substantive debate, or is it just bad? ms. brainard: i have been in this administration, and the obama administration, around these moments of the debt limit coming into focus. i have found those moments to be completely unproductive. part of the reason they are unproductive is the debt limit is entirely redundant to the budgeting process we already have in place. part of the reason it is worse

than redundant is because we don't have, on the republican side of the aisle, basically will not talk about including revenue in that broader discussion. so how can you really talk about solving the nation's future, physical trajectory, -- physical trajectory, unless you look at expenditures and revenues in a sort of equivalent manner? so, i do not find it to be productive. the president has been very clear about that. but, of course, you know, we will continue to bring our principles to the tax debate, which is going to be very important here, because the expiration of the 2017 trump tax cuts, as well as all of the fiscal discussions, which will also be very important, and we try to be transparent in our budget proposal that the president put forward as to how

we think those different aspects of our fiscal health should be addressed. ms. edelberg: we have another question from the audience. i think this was actually sent in by somebody online. about tax preparation services and the exorbitant fees paid by tax preparation services. and, you know, it has been a priority of lots of tax experts for a long time, in a lot of administrations to improve tax preparation services that are provided, particularly to low income people. and you talk a little bit about that and where that is in the list of priorities? ms. brainard: i would say we had a remarkably positive experience this year with direct file. the irs put a great tool out into the public arena. people with relatively simple

tax returns were able to use it. and able to complete their tax returns in a record short amount of time. customer service experience was very positive and mostly we were getting questions from many parts of the country when -- country, when will that be available to me, and can you expand this service? so, our general sense is that it should not be costly. it should not cost you $400 to file your taxes. and direct file tool enables you to do that without paying those kinds of fees. and over time i expect it to be more broadly available to more taxpayers. i think that is a very positive development, and particularly for low income people. ms. edelberg: such low hanging fruit. so, now after thinking about

issues that come up on the calendar, after 2025, some years after, we will get to the point where it is projected that the trust funds for social security and other trust funds will run dry, which is to say, right now the social security system is paying benefits partly by dipping into its trust fund, because the revenues coming in are not enough to pay the benefits right now, and at a certain point in the 20 30's there will not be any more money in that account, and under current law the social security system will be constrained to only pay benefits based on the revenues coming in on any given day. thinking about this, one is, people who are scheduled to --

in their lives think they are going to be able to receive social security benefits in the 20 30's should be worried about this. on the flipside is that some people expressed optimism that this will be a really good opportunity for us to fix the social security system. so, where do you see this debate? ms. brainard: i think the contrast here is very important. the republican study committee has put out a plan that would essentially cut social security benefits by about 13% by extending the retirement age. that is their solution. we should cut american social security benefits. the president believes that americans who are coming to retirement age have paid into their social security every month for their working lifetimes, and that we should honor those commitments. two, he puts some principles out in the budget which essentially say, we should protect social security benefits and we should

do that by raising revenue. we should do that by asking people over $400,000 to pay a greater share into social security. as you know, there is a maximum. as a result, people who earn below that maximum are paying a much greater share of their income than people who earn more than $400,000. so, there is lots of different ways of thinking about exactly how you do that, but i think the experts that have looked at this will confirm that you can greatly extend the solvency of the social security trust fund by simply asking people over $400,000 to pay their fair share. ms. edelberg: do you see those issues coming up in the 2025 tax debate? or do you see those issues being put off until we are closer to insolvency? ms. brainard: so, i don't know exactly what the sequence of discussions will be, but this is

a central issue. and we believe it is extremely important to tackle it. both for our nation's fiscal future health, but also to make sure we have the revenues we need to honor our commitments to our seniors. so, we would like to have this debate. it is one of the very important debates about fairness, about protecting social security, which is the president's approach, or cutting it, which has been the public and study committee's approach. of course, we believe there is a way to expand and honor those commitments simply by asking the ultra-wealthy to pay their fair share. ms. edelberg: i have been involved in conversations where people have said, this is silly, we are clearly going to pay the benefits out of general revenues. like, the way we are clearly

going to solve this problem is to get rid of the trust fund altogether. and congress will pass legislation to pay the benefits out of general revenues, and that will be, you know, they will do that six months before the deadline. how does that strike -- i don't know. thoughts? ms. brainard: so, anyway you cut debt, we need to raise revenue, and it is just the right thing to do, the fair thing to do to ask large corporations and the altar wealthy, who are doing very well, to pay their fair share in order to be able to honor those commitments, in order to be able to put our nation on a solid fiscal trajectory. so, exactly what the mechanism is, that is going to be debated. but what is clear is that we need to ask ultra-wealthy people

and corporations to pay their fair share. ms. edelberg: i would like to end on a question about how optimistic you are. so, everybody talks about -- we have talked about, you know, in so many conversations on this stage about how polarized the current environment is, how difficult it is to get things done in washington these days. are you optimistic about congress being able to use this opportunity to improve tax policy? ms. brainard: i believe these are completely solvable problems. i think the president is taking a commonsense, fair approach that focuses on giving middle-class people a fair shot, asking the most fortunate to pay their fair share. i think there is a very common sense approach to solving these important problems, and there is

simply no excuse for not doing so. ms. edelberg: thank you, lael brainard. please join me in thinking -- thinking lael for being here. [applause] >> today the affordable housing conference of montgomery county, maryland holds its 33rd annu housing summit. u.s. representatives jamie raskin and gle iy are expected to join housing secretary adrian tomlin in discussing iueimpacting the development of affordable housing. watch livet 1:10 p.m. on c-span, c-span now, or online at c-span.org.

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