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tv   The Kudlow Report  CNBC  July 22, 2013 7:00pm-8:01pm EDT

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tomorrow and hear what his show is saying about hlf. ackman versus icon. i'm jim cramer and i will see you tomorrow. how can we fix detroit? over the last few days, believe it or not, several pundits from the right and the left are joining me in a column i wrote invoking the name of jack kemp. it was kemp who came up with the idea of tax-free enterprise zones to revitalize destroyed urban areas, and it worked in harlem, as you'll see in a moment. why can't it work in the motor city? here's something that's not working. obama care. now the a.p. fact-checking crew has caught president obama in, let's say, some misleading comments about the health care law. and phil michelson is the hero of the golf world after his stunning final round nets him the british open championship,
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but the tax man is not impressed. wait until you hear just how little of his winnings lefty is taking home. all those stories and more coming up on "the kudlow report" beginning right now. >> all right. we do have some breaking news right now. we'll take a look at it, a live look at laguardia airport in new york city. the nose gear of a southwest airlines plane landing at new york's laguardia airport collapsed as the aircraft touched down on the runway. the federal aviation administration says the plane landed safely and made no serious injuries, got no serious injuries have been reported so far, but the airport is now completely closed, and we're going to have more on this story in just a few minutes. again, no injuries reported after the nose gear of a southwest airlines flight collapses at laguardia airport.
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>> first up a federal judge has okayed an expedited hearing for wednesday morning in detroit's bankruptcy case. the city is requesting to put all state lawsuits challenging its bankruptcy filing on hold. cnbc's own scott cohn joins us with all the latest from detroit. good evening, scott. >> reporter: good evening, larry. that federal judge is steven rhodes, newly appointed to handle this bankruptcy case, and he is wasting no time asserting his authority. as you said, he has ordered an expedited hearing set for wednesday morning. that is a hearing that the unions and the pension funds very much wanted to block. that's because they believe that this whole bankruptcy is essentially an end run around the state constitution and a provision in the constitution that protects pension benefits. they believe this is just a way for the monk manager kevin rhodes and the governor rick snyder to cut those pensions.
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a state judge that ruled the bankruptcy unconstitutional has delayed a hearing in that case until next week so clearly now the pro-bankruptcy forces have the upper hand. elsewhere, city fire fighters staged informational pickets, their message, unlike private sector workers or even people who can pay into social security, these city workers have no other safety net. if they don't have their pensions, larry, they have nothing. >> all right. well, when is -- when is the first resolution, do you think, that could possibly happen, scotty? >> well, the experts are saying that this whole process is going to take years. it's enormously complicated. you know, unlike a chapter 11 bankruptcy in a corporation, a city can't liquidate itself, sell off its assets to pay its creditors. the city has to go on, so that alone makes it very, very complicated, but what could happen on wednesday, if judge rhodes decides that he sides with the city, that is, kevyn orr and the pro-bankruptcy
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forces essentially, that the state action should be put on hold. that gets the federal action on track and means that it can get going, but the longer that it's tied up with these other state cases and the more that the unions and so on can -- can try and delay this, they say they are getting their due process, but it could delay the process all the more. >> thanks very much, scott cohn. appreciate it. while detroit may be the largest city to file for bankruptcy it's certainly not alone when it comes to its crushing pension obligations n.detroit 3.5 billion of pension obligations alone. look, to truly revitalize the city, i started a trend last week with my column calling for a jack kemp-style enterprise zone solution for detroit. remember my old friend pushed for this plan in places like chicago, los angeles and new york, and you know what, we're honored to be joined by new york democratic congressman charlie
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rangel and jack kemp's son. jimmy kemp is president of the jack kemp foundation, but i want to begin with my friend charlie rangel. it's great to see you, sir, as always. you were in the thick of the whole issue of empowerment zones or enterprise zones, and you got it going in new york city. in fact, my wife's art studio is right smack up there in east harlem which is buzzing around with costco and target and all the rest of it. charlie, why can't we use this to help revitalize detroit? >> well, i'm so glad that jimmy's there and is making certain that the investment that his dad made in this country, it is still paying off, and it's paying off in my congressional district and districts around the country, but believe me, you can't compare what we had with detroit. first of all, these things on jack's idea and what president clinton signed into law, it
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means that the city, state and the federal government put in and show a plan, an investment plan as to what you intend to do. what the city intends to do, what the state intends to do and what the federal government, one-third and any political subdivision can cancel out the other two. what is happening in detroit is too much has happened too soon and there's no anchors there for an empowerment zone. the whole concept of an empowerment zone is to target areas where you have the talent but you don't have the investment. >> right. >> and you get the tax incentives not only for capital investment, but you also give it to the schools. you train the youngsters and you make certain that you have the health facilities there. you bring in the culture. we received $100 million from the federal government, but we have raised through leverage $1
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billion. >> right. that's the key point. that is so important right there. you just said it. jimmy kemp, i want to bring you in. look, there should be a federal, state and local plan to deal with this, but there's got to be a group of low tax rate investment incentives, jimmy kemp, to stop people -- you know, there's still 700,000 people in detroit. you don't want all of them to leave. it's possible with the right set of incentives, a lot of people come back into detroit. the land and thouses are cheap but the taxes are astronomically high. >> we've got to make detroit great again and the key to that is the free enterprise system that actually works. we've got to empower people economically and not have politicians and bureaucracy control the economic power, not
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only in a specific city like detroit but throughout the country, but specifically in detroit certainly enterprise zones as they were originally conceived by sir jeffrey he in england and brought to my dad in the states and congressman rangel's friend jimmy garcia, they are not a panacea. what works is people getting back to work and taking the creative ideas that we've developed, and you've got people, entrepreneurs who are already going into detroit. you've seen dan gilbert invest in detroit despite the high tax burdens. >> right. >> but we need entrepreneurs to be incentivized to go back to detroit and enterprise zone is a great way to -- before we have total tax reform, and enterprise zone is a great way to do it in the short term. >> actually, charlie, i'm such a hawk on this. would i make all of detroit a
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tax-free enterprise zone >> you bet your life. >> that makes a heck of a lot of sense. >> in some sense that's what they need to do, and in some sense, charlie, what i'm really groping for here, look, we know there's going to be fiscal austerity now, okay. the gig is up. we know the pensions and the health care plans and we understand that, all right? that has to happen, but what i'm trying to say is that should not be the only thing that's happening. the austerity rout should be combined with an economic growth route. that's the kind of planning you were talking about before. i don't care, federal, state and local is fine. somebody's got to step in the breech and say that, detroit must grow, and let's create incentives to grow. just slamming the budget down is not going to be sufficient, charlie rangel, and, again, i go to -- look at new york. it worked in new york in a whole bunch of places, particularly in congressional district. >> you're 100% right. if the federal government, local and state got together with the private sector and the private sector was told that they would
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get incentives and they would be able to get tax breaks but they have to have a plan, a program and get the commitments from the city of detroit as well as from michigan, i mean, yes, then the federal government could come in, but just as an aside, you passed over these pension and health benefits for a lot of sick old folks, and if we can respond to national crisis and to fiscal crisis, i don't think the federal government can walk away from people. it's not just the pain but the impact that it will have on the economy. >> i understand that. >> it's going to be terrible. >> that's another reason -- i can't -- i can't solve everything tonight. >> no, no. >> i just want to go through. i want the viewers to hear this. you have the upper manhattan empowerment zone. that was one of the first six empowerment zones that was established, and you put that legislation through in 1994. look at your own district in east harlem. the east river plaza mall, the east river plaza mall, which is
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target and costco and a whole bunch of restaurants and other stores, that -- right again right where my wife's art studio is, that's the kind of thing you've got to do, and if people would come and take a look at that thing which is thriving and creating a couple thousand jobs, you could see a model that could be used in detroit and other cities around the country. charlie, i'm looking for a model here, and it's the kemp/rangel/garcia, we need a model of leadership. >> you're right, you're right, and the economic corridor from river to river has been rejuvenated and we haven't asked the government for any more money. we've made the money by servicing the loans and giving out the grants from there. you're right. if the three bodies in the private sector could come together and like you said everybody see what the problem is and see how we can resolve it, just the whole idea of an
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empowerment zone and empowerment city, anybody with any great ideas, that's the place that we should go. >> i mean, you can have -- you said it before. i've got to get out. you said it before. look, between the tax incentives, between the assistance, between the tax abatements on the religion estate, you can lever up, you said $1 billion, $900 something billion. >> exactly. >> in this east river plaza thing. in a place like detroit you can lever up many billions of dollars. jimmy kemp, i'll give you the last word. entrepreneurs will flock to it. you've got smart people in detroit and right around detroit. you've got medical complexes and science complexes. you can rebuild that place. it's a different idea, technology, for example. it's different than the old car manufacturing business, but people have to be willing to get their hands on these incentives. last word, jimmy kemp. >> i would just say that it's a shame that after 50 years of government trying to build
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detroit into a model city which started in 1961, that this is where we are. it's not free enterprise ideas that have put into place, and detroit is a model for the country, larry, you know this. we've got to have growth policies around the country, and we shouldn't need enterprise zones. we should have a tax system, and we need tax reform that simplifies the tax code because it's too hard to do business everywhere in the country, and we need to learn our lessons from detroit. >> i'll tell you, some of those states are doing that right now, some of the states are doing that. i wouldn't even go into neighborhoods. would i make detroit a tax-free enterprise zone and then work through it the way charlie rangel and others have, bobby garcia, a name from the past. anyway, it can be done. >> and it can be done by both parties. >> great point, jimmy. it's not a republican idea. it's not a democratic idea. it's an american economic
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opportunity idea. that's the way you have to approach this thing. that's the beauty of it. i met charlie rangel through jack kemp, that was the best part and it was a long time ago. >> got a whole lot. we can rebuild detroit. it's crumbled but we can rebuild a great city with new incentives and new ideas. >> i've got to go. >> you're both great. >> jimmy jack kemp, thank you very much. congressman charlie rangel, as always, sir, wonderful to see you. now, folks, the s.e.c. fires a shot in its obsessive hunt for steven cohen. who better to ask about this about how it's going to end than former s.e.c. chairman harvey pitt. he's about to join us, and later in the show, are you as confused as we were last week when president obama said this? >> last year millions of americans opened letters from their insurance companies, but instead of the usual dread that comes from getting a bill they were pleasantly surprised with a check.
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in 2012, 13 million rebates went out in all 50 states. >> all right. well, it ain't exactly true. the a.p. fact checkers took a closer look at president obama's claims, and we will tell you what they found out, and i'll say once more, folks, don't forget. free market capitalism, it's the best path to prosperity in this case. it's tax-free enterprise zones for detroit and chicago and philadelphia and buffalo and maybe coast to coast to get america back on its feet. i'm kudlow. we'll be right back. ♪ [ lighter flicking ] [ male announcer ] you've reached the age where giving up isn't who you are. ♪ this is the age of knowing how to make things happen.
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. u.s. securities regulators voted unanimously to file civil charges against billionaire hedge fund holder steve cohen last week, but the s.e.c. falls short of what it hoped for. who better to ask than former s.e.c. chairman harvey pitt. he's now ceo of colorama partners llc. i don't understand this friday night and still don't get this. they dropped this charge, quote, unquote, failure to supervise, okay, not securities fraud, not insider trading, failure to supervise. this is on a 100-degree evening
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on a friday night in july. it just sounds like either they are pursuing moby dick, the white whale, or else they have got something else up their sleeve. >> well, i think it's fairly simple. he was in the middle of these trades. he got e-mails, according to reports i've read, and they were suspicious, but he raised absolutely no questions. why claim that he was guilty of insider trading when he's guilty perhaps of a much more serious concern, namely a failure to supervise the people who very well likely may have engaged in insider trading. >> a lot of people say that there were a lot of compliance issues. look, i have no skin in this game. i don't even know mr. cohen, to tell you the truth. sounded like the s.e.c. didn't get near what it wanted to get.
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sounded like the justice department which has been pursuing cohen for a long time has never got what it wanted to get are and that's a clear cut insider trading charge. i mean, harvey, the issue i'm asking you is there an element of government overreach here, or have they got something up their sleeve that's going to come down the road? >> well, i think there's not any government overreach. the s.e.c. has made it plain, i think commissioner dan gallagher a year ago said that the commission was going to focus more on failure to supervise. this gets steve cohen where he lives because if these charges are proved, he's out of business, and that is a very serious consequence for him, so i think that they have pursued this in a way that doesn't necessitate them proving that he knew they had material non-public information. it's just that he should have asked questions and prevented the trades until he investigated
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them. >> well, basically this -- all right. you're sort of implying that failure to supervise is a very broad-based charge that gives the s.e.c. a lot more running room. other people would say, you know, it's just kind of a nothing charge and that they didn't get what they wanted. that's -- the issue here in part is can a government agency come in and rip apart a hedge fund or another business? a lot of money involved, a lot of time involved. just seems like this thing has been going on forever, harvey, with no results. >> there have been apparently years of investigations, but if you look at what's going on right now, he's got two traders, two portfolio managers who have been indicted for insider trading, and indied by the same u.s. attorney that's gotten about 79 either guilty pleas or convictions. those are serious consequences,
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and the question the s.e.c. has to ask is what was the senior management doing when these people were engaging in the acts that caused them to be indicted? >> all right. well, of course, mr. particular rah did say to the cnbc conference no one is too big to fail. i don't know the inside facts to this case. do you believe that steve cohen will continue to fight? i mean, these things are very expensive and he's a very wealthy guy. do you think he'll continue to fight, or do you think he's looking to make a settlement? >> i think he has to fight if he believes there's no possibility of a settlement, but if he wants to get back to business, he's going to have to settle. he cannot run the risk of litigating in an administrative forum, losing and then discovering that he's out of business, and the longer the case hangs on, the more billions of dollars will flee his hedge
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funds. >> all right. we're going to leave it there. harvey pitt, appreciate your point of view. now, folks, seema mody is going to get us updated on this incident at laguardia airport in new york, a southwest airlines flight suffered a mishad after land the latest. have you heard, britain has a new heir to the throne. that's right. finally, finally. lefty is right. not only is british open champion phil mickelson a great golfer, turns out he's super accurate when it comes to statementing his enormous tax burden. we're going to explain why mickelson puts a lot of the so-called tax experts to shame and why michelson needs some supply side tax reform himself.
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from the plane? yeah, i can manage my policy, get roadside assistance, pretty much access geico 24/7. sounds a little too good to be true sir. i'll believe that when pigs fly. ok, did she seriously just say that? geico. just a click away with our free mobile app. peace of mind is important when so we provide it services you bucan rely on. with centurylink as your trusted it partner, you'll experience reliable uptime for the network and services you depend on. multi-layered security solutions keep your information safe, and secure. and responsive dedicated support meets your needs, and eases your mind. centurylink. your link to what's next. help the gulf when we made recover and learn the gulf, bp from what happened so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do.
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we've added cutting-edge technology, like a new deepwater well cap and a state-of-the-art monitoring center, where experts watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. our commitment has never been stronger. the big news everyone was talking about today, the royal baby was born. first up we've got to get you updated on the situation at laguardia airport. cnbc's own seema mody joins us now with those stories and more. good evening, seema. >> good evening, larry, that's right. we're continuing to monitor the situation involving a southwest jet at laguardia airport. the nose gear of a southwest airlines plane collapsed as the aircraft touched down on the runway. the federal aviation administration says the plane landed safely and no serious injuries have been reported.
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149 passengers on board. you can see in the shot from twitter, user matthew freedman, the passengers being evacuated via the plane chout and autes a runways remain closed at this time. no serious injuries reported after the nose gear of a southwest flight collapses at laguardia. kate middleton gave birth to a baby boy earlier this afternoon. the official notice was posted on the gates outside buckhingha. it said her royal highness and baby are doing well. don't know the baby's name. expect that in a couple of days. the child is third in line to the throne after his father and his grandfather prince charles. netflix reported section quarter profits that beat expectations. however, wall street was hoping for a big jump in subscriber growth. netflix adding 630,000 new subscribers during the quarter.
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now eyes turn to a. the street is expecting a 21% drop in earnings due to rising competition in the smartphone market from the likes of samsung. analysts will be looking to ceo tim cook for any hints on apple strategy and in the wearable tech space. we heard from google, microsoft, intel, all companies reporting disappointing earnings last week. we'll have to see what happens with apple tomorrow. >> just switching gears. >> what's this royal kid going to be called? >> i don't know. but i was looking on twitter, and some people are betting on alexander. >> we'll have to see. >> many thanks. appreciate it, as always. last week when president obama said n? >> in state like california, oregon, washington, new competition, new choices, market forces, are pushing costs down. >> well, yeah, but is it all really true? the a.p. fact-checking crew took
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a closer look and the president's other claims, and the white house may not like what they found. that's up next on "the kudlow report." [ male announcer ] come to the golden opportunity sales event to experience the precision handling of the lexus performance vehicles, including the gs and all-new is. ♪ this is the pursuit of pection.
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welcome back to "the kudlow report." i'm larry kudlow. in this half hour gold is back over $1,300 an ounce after a
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very strong rally today. what does that really tell us about the stock market and the fed? meanwhile, phil michelson may have won the british open in dramatic fashion, but the tax man is taking most of his winnings. you may be shocked to find out just how much. first up, remember last week when the president said this? >> last year millions of americans opened letters from their insurance companies, but instead of the usual dread that comes from getting a bill, they were pleasantly surprised with a check. in 2012, 13 million rebates went out in all 50 states. >> all right. so the associated press checked the facts on the president's speech and found that those statements don't quite add up. turns out almost all those rebates went only to the employers, not the employees. so we bring in igor volsky and sally pipes, president and ceo
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of the pacific research institute. you know, igor, he doesn't have to do this. i mean there, may be a million reasons to support or argue about obama care. we may get to 800,000 of them tonight, but he doesn't have to do this, and it's so easy to know people did not get rebates. the rebates went to the businesses. why does he do this? he just puts himself in jeopardy. >> larry, the businesses roll it over to the employee. i get my health insurance through my employer. i got a check for the rebate. it's rolled over, but the bottom line is because of the law, health care plans now -- >> you don't get a check from the business. >> i did. >> i should have brought it with me. >> i wish you had. >> larry, but i did. i did get a check, because, look, now insurers are providing services more efficiently. they have to take your premium dollars and spend it on health care rather than administrative costs, and that's the bottom line. that's the savings obama is talking about. >> i don't agree with that, but let me bring in sally pipes. what's your reaction?
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>> i thought it was amazing, because under the medical loss ratio in the small group market, employers have to pay out 80% of the money they bring in in premiums, pay it out in claims, and i think, you know, the rest -- the administrative, they can cover administrative costs and profits in that 20%. i think that this is going to crowd insurers out of market, and we're certainly seeing in california three of the biggies aren't even going into the covered california exchange so i think it's -- it's a very -- it's a very bad thing, these rebates, and they are for the employer, not the employee. >> it's for the employer to keep costs down and to give it -- pass it on then to the employee, but you're seeing a good story in new york. you're seeing that market finally open up. you're seeing 17 new insurers now providing coverage, and that's all because of the health care law. >> that brings me right to the second point. hang on a second. let's look at another one of the president's claims. >> in states like california, oregon, washington, new
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competition, new choices, market forces, are pushing costs down. >> all right. well, again, on closer examination, it turns out premiums actually are going up for middle income california residents. now, you didn't get to new york, as igor said, but sally pipes, when you look at this thing, california middle class premiums, covered california, covered california. >> that's the exchange. >> the group running this thing and they have done the research. they are saying middle class premiums in california are going up 30%. lower income premiums are going down but not the middle class. i think the president has to own up to that. >> i think he absolutely does. a 40-year-old male in california who today has a blue shield plan is paying about $94 a month. under cover california he's going to be paying $234 a month, and larry, only have access to 36% of the docs on the blue shield plan that he had under the original.
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costs are not only going up in california, in indiana, in rhode island and maryland, so, you know, i think -- i think this is very important. i think the american people are going to be absolutely shocked when they find out how many employers are going to push their employees out into the exchanges. >> just to go back to the other states, igor. look, according to published accounts, including the associated press, independent analysts, the only people who looked at this, they looked at oregon and they looked at washington, and these independent analysts say that the individual market is going to have premium hikes of 66% and 80%. now, those are huge. that's the individual market, and premiums are skyrocketing. >> well, let's break this up. so you bring up oregon. what we saw in oregon are insurers came forward and gave their estimates for what it's going to cost to buy coverage in the exchange. then one of the insurers say that the competitors were offering lower rates and then pulled back and is now probably going to offer lower rates. you talk about this kind of competition all the time.
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that's point number one. point number two, we're forgetting that this law is going to have tax credits that in the first year the congressional budget office estimates 7 million new people in the exchanges, 6 million of that 7 million are going to have affordability credits meaning they are going to see huge savings compared to what they are paying now, and the benefit itself is just going to be a lot more comprehensive. they are going to have coverage when they need it, not just the skimpy plans that are now on the individual market. >> oh, okay, but there's also risk to that scenario because a lot more people may be dumped into these exchanges. >> you've got to -- >> the exchanges themselves have not been put together yet and may not get the younger people. >> you've got to get young people so that's all very speculative. sally pipes, i want to raise another point, this is coming back to this business about rebates. what the president and his group doesn't talk about is the across-the-board tax increases that are going to accompany obama care if it goes through.
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for example, let's take insurance. 2% to 3% sales tax going to be on most of the individual insurance plans, higher taxes on drugs, medical devices, health providers, investors have a 3.8% hike in the capital gains tax and the dividends tax, the payroll tax is going up almost 1%. i mean, that's not lower costs, that's higher costs. that's not pro-growth, that's anti-growth. >> and we're seeing already in the employer market, a number of employers, larry, particularly those in the service sector. 50 employees makes a full-time employee, 30 hours a week considered full-time. we're going to see a lot of people pushed out of their employer coverage, and they will be having to go into the exchanges because they are not meeting -- the players will cut their hours from fewer than 30 down to probably 27, 28, and so people are going to be really shocked. i think the american people are going to be up in arms. >> larry, i would say you're paying a tax now on the uninsur uninsured.
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folks going to the emergency rooms and expensive care to treat them, that's the tax now. obama care is going to turn that around because people are going to -- you're saving money in the long run. >> igor, the real cost of the uninsured is under medicare and medicaid, the low reimbursement rates. it's not the uninshourd. it's a small part and people need to know that government reimbursement rates to doctors and hospitals, 20% below what they are going to get for a private patient. >> not going to solve it all. a bunch of taxes will come. >> $1 trillion. >> got to weigh it with the tax from not having an efficient health system. >> very inopportune time. we'll see if this thing gets off the ground. i have my doubts. sally pipes, good to see you and igor volsky. >> the real act today on the market not in stocks but in gold. what's that means? we'll debate that next coming up on "the kudlow report."
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welcome back to "the kudlow report. i'm larry kudlow. stocks closed higher to start the week on wall street as the s&p 500 and the small cap russell 2,000 index both closed at all new record highs. also, gold had its best day in
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over a year rallying over 3%. i don't know about this gold thing, folks. keep your eyes oh. i don't like it at all. let's welcome in karen fishman and ken pulte. what's going on? >> i never liked the gold trade. if there's deflation in the world, gold will go up. how can that possibly be so the flip side is, you know, if the momentum is began and everybody wants out. the world didn't end and inflation didn't materialize, probably headed for $1,000. everybody wants to get out before the world doesn't end. >> i don't get it. >> i don't either. >> kenny, one whack.
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sometimes gold is a signal of inflation. if people think the fed is not going to take steps to reduce their bond purchases they are wrong, they are wrong. when, i'm not smart enough to show and if gold is signalling thatted a infinitum, that's wrong. >> at some point they are going to pear back closer certainly than further away, but i think when we saw gold had that capitulation back in june it was when everybody was talking about coming off the table. no fear of that. >> they couldn't get out fast enough. you have this dead cat pounce.
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they took it back and it's got a back in. are you a seller? >> i think you have to be a seller. >> karen, let me ask you something though which i think is more germane, oil. did fall today. it's over $106. what's it doing up there. we're producing more oil than ever before? >> i don't know. if you look at other commodities and look at copper which dr. copper, i'm sure you've heard the frase, oil hasn't continued to straight line up. you hear middle east tension. i don't know why it's here. more strength in the economy, i don't know. growth outlook stuck in neutral, the "wall street journal" headline to karen's point.
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do you agree or are we heading to a much bigger growth story? >> i think that's a story that's still six to eight months out. i think we're stuck in neutral at the moment and part of the reason oil is trading where it is, the geopolitical tensions around the middle east and i do think it's forecasting better times ahead. it's painful at the moment because the price of gas at the pump has gone up. >> 30 seconds. >> i wouldn't get exciting about that. >> is cold going to move higher? >> you think oil is going to move higher? i would short oil. if the usa is reporting mediocre economic growth for now the futuristic stuff will be in the future but right now it's very mediocre. europe worse than mediocre. rest of world, smaller countries, emerging markets. i don't see a big push for oil.
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>> that's another commodity play. >> not in the last week or so. >> you should see the commodity prices stabilize and start to move lower. is oil telling you there's geopolitical tensions, that there's growth in the world, there's growth in the u.s. economy. you could take any one of those. >> what about japan, karen finerman? >> it's one of your faves because of the policy experiment. >> abe won, won big in both houses. >> right. >> he's got the whip hand, and i think he'll cut corporate tax rates. >> we should. >> he will. easy money and lower tax rates in japan, that is really bullish. >> absolutely. >> do you think that there's any hope that if they do it that we
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might do something to be competitive as well. >> not with the currency. one of the best pro-growth things. i'd love to see it, but the point is do you buy the japanese stocks. >> i think you be careful. i think you do have to be bullish on japan so i do think -- you have to be very specific. you don't buy is broadly. >> look at the sectors that you want. abe will be in and out for a solid three years and won that coalition so if he moves forward with the economic reforms and he'll have support to do it. >> easy money and low tax rates. >> if you're going to buy you've got to hedge your currencies. >> the dollar/yen is going to 125. always assumed that.
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>> there's the next push. i think that's really great. that kind of liquidity and action is good for the whole world economy and all the stock markets. they are providing all the liquidity that europe is providing but isn't. >> i think there's a defactor tightening that happened when the fed went through its whole rigamarole. >> it's been great for the s&p, up 19%. from an article today. broad bull market. i want to ask you what this means, transport is up. cyclicals up, a pretty broad-based rally. does this mean it continues? >> i think all of the factors that made this rally are still there, so could it bounce around and head down? yes, but i think there is going to be continued growth in the u.s. even though it's at a slower pace.
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we've got a lot of good things going on in that we've seen payrolls start to increase, not enough and natural gas could potentially be transformative as an industry and creating jobs so those are good thick. >> when do we hit dow 20,000? >> i've got to get out of here. kenny polcari, thank you. >> lefty is right. phil mickelson's amazing final round gave him the british open crown but how much of his money is going to the tax man? >> mixelson, a great colfer, now he needs supply-side tax-cutting reform. anyway, stay with kudlow. we'll tell you the details. ♪
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and phil mickelson with a sunday to remember. at the open championship. >> all right. that was phil michelson wing the british open in dramatic fashion, a huge rin for him but not a big financial windfall. there's a guy who needs supply side tax reform. here's why.
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take a look at this. the prize is 2 president 1 million. scottish taxes take 44% right off the top. michelson does get a credit for that on his u.s. tax form and california where he lives and pay taxes has no exemption so he owes another 13.3% and is left with $842,000, keeps 39% and the tax man gets 61% and that's after expenses for his caddy and michelson may only keep 30 cents on the dollar. this is unbelievable. numbers coming in a guest column for "forbes" and why he talk about leaving to escape the high taxes. >> joining us is michael zany who covers this beat.
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>> what's the name of your show? >> "forbes sports money." >> once you pay off the caddy, michelson may have only taken 30%. less than that because the uk is going to take a bite out of his endorsement income. >> does california take a byte out of his endorsement i can. seen a lot of the athletes head to florida. no state income tax. >> nevada, texas, no income tax. >> dwight howard, did he go from l.a. to texas because of the zero tax rate? not the only reason. he's getting about $30 million
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less with houston and could actually earn more in houston so it makes a lot of sense. you believe, i believe that after tax incentives matter, okay, if you keep more of what you earn you get rewarded. what's a guy like michelson do, down to. >> 30% take home day. that's one of the appeals there and look at soundtrack poor usain bolt. they put in place the tax rate. >> michelson has raised this before. very sorry he raised it several months last winter after winning a tournament and everyone yelled at him and pulled back, and i'm sorry because he could have
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taught everybody. maybe his career will not be as intense now. >> it was a little complicated because he was thinking of being a minority investor in the san diego a dras. maybe he'll come on the show and talk with me. thanks, as always. that's it for this evening's show. thanks for watching, folks. we'll do some more supply side pro-market free enterprise zones in detroit tomorrow evening. i'm kudlow. i would say my car. probably the car. cause as you get older you start breaking down. i love my car. i want to take care of it. i have a bad wheel - i must say. my car is running quite well. keep your car healthy with the works. $29.95 or less after $10 mail-in rebate at your participating ford dealer. so you gotta take care of yourself? yes you do. you gotta take care of your baby? oh yeah! it's delicious.
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