Return to Transcripts main page
American Morning
Minding Your Business: Andy Serwer Serves Up Your Economic Stimulus
Aired January 08, 2003 - 07:46 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: Now that President Bush's economic plan is out, who would save money under the plan and how much? Let's ask Andy Serwer. He's the guy.
ANDY SERWER, "FORTUNE" MAGAZINE: Good morning, Paula.
ZAHN: How are you?
SERWER: I'm fine. We are still sorting out the president's plan. That was the big news yesterday when he unveiled his economic package. Of course, most of it was leaked out in the days before. The big action on Wall Street was on Monday when the real details of the plan were leaked out.
Yesterday, kind of a mixed bag on Wall Street. You can see there, the Dow was down almost 33 points, the Nasdaq, on the other hand, up 10 points, as we continue to digest the plan.
I want to talk a little bit this morning about how you would fare under the current proposal that the president has on the table. Let's talk a little about, first of all, if you're single and no kids -- very interesting stuff here. We have some concrete numbers as far as how much you would save. There you go -- $60,000 a year if you earned, you'd save $345. That's this year. And you see if you go up to those lucky enough to earn 500,000 a year, you'd save almost $10,000.
Let's go to the second screen. This is married with two kids. Now, you can see there, someone who makes $60,000 a year, a family, you're savings almost triple to $900. You really go up, whereas the people making $500,000, the benefit does not go up that much.
That, the Republicans say, speaks to a fairness issue, because it shows that people with kids would save more. The Democrats point out that not only do the rich get more in absolute terms on a relative basis, on a percentage basis, it goes up for the wealthy. The president counters, saying we're not going to penalize people for being successful in this country, and back and forth and back and forth, and there's going to be a lot of hashing out here, Paula.
ZAHN: Well, what are the good, honest numbers on that? Because the Republicans argue that the rich people do pay the majority of taxes in the country. And you were mentioning the other day that there are, what, 37 million Americans who don't pay any taxes at all.
SERWER: Right. Well, I just think if it comes down to a philosophical question, I mean, what do you believe? What do you think? Do you think people who pay a large proportion of taxes in this country should get a bigger break or not? It really comes down to your philosophical underpinnings, I think.
ZAHN: We wouldn't mind you firing off some e-mails to us on that subject. A final question to you.
SERWER: Yes.
ZAHN: Senator Jon Corzine, a man who knows an awful lot about the way the markets operate...
SERWER: Right.
ZAHN: ... had some interesting thoughts on the impact of this thing down the road.
SERWER: Yes, he really did. And you know, he is this Democratic senator from New Jersey, a liberal Democrat, but he was also the CEO of Goldman Sachs, so he knows a little bit about this subject. One observation he made that I thought was very interesting yesterday, he talked about the law of unintended consequences. He said, no matter what happens here, there will be implications that we don't even understand now. It will change the way Wall Street works, and more importantly, it will change the way Americans look at investing and save. Why buy municipal bonds if they lose their tax advantages? Why buy 401(k)s if they lose their tax advantages? And why buy growth stocks and tech stocks if capital gains aren't as beneficial as dividends?
ZAHN: I want you to come back and make a point about 401(k)s, though, because you think there might be a residual benefit to those folks...
SERWER: Right.
ZAHN: ... now that we're getting rid of the tax, because it might encourage corporations to pay out more dividends.
SERWER: Pay more dividends. Oracle yesterday coming out and saying they might pay a dividend, a company that never did. So, back and forth and back and forth, and we'll be following it.
ZAHN: Thank you, Andy.
SERWER: OK.
ZAHN: You're going to keep our heads spinning.
SERWER: Yes.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
Stimulus>
Aired January 8, 2003 - 07:46 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: Now that President Bush's economic plan is out, who would save money under the plan and how much? Let's ask Andy Serwer. He's the guy.
ANDY SERWER, "FORTUNE" MAGAZINE: Good morning, Paula.
ZAHN: How are you?
SERWER: I'm fine. We are still sorting out the president's plan. That was the big news yesterday when he unveiled his economic package. Of course, most of it was leaked out in the days before. The big action on Wall Street was on Monday when the real details of the plan were leaked out.
Yesterday, kind of a mixed bag on Wall Street. You can see there, the Dow was down almost 33 points, the Nasdaq, on the other hand, up 10 points, as we continue to digest the plan.
I want to talk a little bit this morning about how you would fare under the current proposal that the president has on the table. Let's talk a little about, first of all, if you're single and no kids -- very interesting stuff here. We have some concrete numbers as far as how much you would save. There you go -- $60,000 a year if you earned, you'd save $345. That's this year. And you see if you go up to those lucky enough to earn 500,000 a year, you'd save almost $10,000.
Let's go to the second screen. This is married with two kids. Now, you can see there, someone who makes $60,000 a year, a family, you're savings almost triple to $900. You really go up, whereas the people making $500,000, the benefit does not go up that much.
That, the Republicans say, speaks to a fairness issue, because it shows that people with kids would save more. The Democrats point out that not only do the rich get more in absolute terms on a relative basis, on a percentage basis, it goes up for the wealthy. The president counters, saying we're not going to penalize people for being successful in this country, and back and forth and back and forth, and there's going to be a lot of hashing out here, Paula.
ZAHN: Well, what are the good, honest numbers on that? Because the Republicans argue that the rich people do pay the majority of taxes in the country. And you were mentioning the other day that there are, what, 37 million Americans who don't pay any taxes at all.
SERWER: Right. Well, I just think if it comes down to a philosophical question, I mean, what do you believe? What do you think? Do you think people who pay a large proportion of taxes in this country should get a bigger break or not? It really comes down to your philosophical underpinnings, I think.
ZAHN: We wouldn't mind you firing off some e-mails to us on that subject. A final question to you.
SERWER: Yes.
ZAHN: Senator Jon Corzine, a man who knows an awful lot about the way the markets operate...
SERWER: Right.
ZAHN: ... had some interesting thoughts on the impact of this thing down the road.
SERWER: Yes, he really did. And you know, he is this Democratic senator from New Jersey, a liberal Democrat, but he was also the CEO of Goldman Sachs, so he knows a little bit about this subject. One observation he made that I thought was very interesting yesterday, he talked about the law of unintended consequences. He said, no matter what happens here, there will be implications that we don't even understand now. It will change the way Wall Street works, and more importantly, it will change the way Americans look at investing and save. Why buy municipal bonds if they lose their tax advantages? Why buy 401(k)s if they lose their tax advantages? And why buy growth stocks and tech stocks if capital gains aren't as beneficial as dividends?
ZAHN: I want you to come back and make a point about 401(k)s, though, because you think there might be a residual benefit to those folks...
SERWER: Right.
ZAHN: ... now that we're getting rid of the tax, because it might encourage corporations to pay out more dividends.
SERWER: Pay more dividends. Oracle yesterday coming out and saying they might pay a dividend, a company that never did. So, back and forth and back and forth, and we'll be following it.
ZAHN: Thank you, Andy.
SERWER: OK.
ZAHN: You're going to keep our heads spinning.
SERWER: Yes.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
Stimulus>
