Special Guests: Elaine Kamarck - Rate Coalition Co-Chair

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Don't attack profit.

Profit, by the way, it was allows businesses to hire people and grow. Free enterprise is under attack from the right and from the left. We've got to stop it and stand up for American freedom everywhere we see it.

(END VIDEO CLIP)

NEIL CAVUTO, HOST: Mitt Romney in South Carolina, making his pitch to make America profitable. My next guest says if we want to grow, high taxes have to go. That is why she's leading a group of major American companies demanding an overhaul of the tax code, period.

Elaine --

(CROSS TALK)

CAVUTO: Kamarck -- I'm sorry, Elaine -- of the Rate Coalition, joins me right now. What do you want to see? When you say overhaul, it isn't even an issue of whether you find taxes too high or not. It is just too complicated.

ELAINE KAMARCK, RATE COALITION CHAIR: It's too complicated and it's too high. On April the first, the United -- when Japan is scheduled to lower its corporate tax rate, the United States is going to have the highest corporate tax rate in the world.

Our competitors in the OECD have a corporate tax rate of around 25 percent. Guess what ours is? Thirty five percent.

CAVUTO: You always see the argument, but very few pay at that rate.

If you're a genie, you don't pay anything in all.

KAMARCK: Here's what happens, is that there is this massive set of loopholes in the tax code. So all the corporations say, OK, we have to get our tax rate down, so let's do this and do this and do this, to qualify for the loopholes. They are distorting America's business decision.

That is why these 25 companies that make up the Rate Coalition, big companies, Boeing, CBS, big companies in America -- they've said, look, we're going to put our loopholes on the table in order to get a lower tax rate.

CAVUTO: So they do want a lower tax rate?

KAMARCK: They absolutely want a lower -- they'd like a tax rate that is in keeping with their competitors in the rest of the advanced world.

CAVUTO: you know in Washington -- I had an interview with a former Clinton administration official. Were you --.

KAMARCK: I did reinventing government in the Clinton White House.

CAVUTO: Good luck reinventing this. But my argument has been that a lot of people have tried this. But the Washington argument for being against this is, its get nervous because it has got to be revenue neutral.

We can't risk, all of a sudden, even short-term losing a lot of money.

How do you address that?

KAMARCK: Well, 25 years ago, a Republican president, Reagan, and a Democratic speaker of the House, Tip O'Neill, they did a tax deal. And the tax deal was exactly this combination of things, a lower rate, a broader base. That is sort of the essence --

CAVUTO: And taking away a lot of the tax breaks and all, the right offs for credit card interests and all. I remember that day was a horrible day for me because I couldn't write off my Visa and Mastercard. But we need to do something like that?

KAMARCK: We need to do something like that. We need a deal. You know, Senator Wyden had a really good line a couple days ago. He said, you know, nobody ever believes tax reform will happen until 15 minutes before it happens. That's why the way -- that's what happens. That's why these big companies have banded together to -- and that's why --

CAVUTO: But not everyone can pay less, right? So everyone is for it until they crunch the numbers, or their accounting people crunch the numbers, and they say, well, I'm going to pay more. I'm still going to deal with the complicated tax code, and the write-offs and allowances, and the thousands of pages of gobbledygook I have to go through, to justify it.

KAMARCK: Well, except that I think a lot of companies -- first of all, they don't like the distortion in their business decision making. And secondly, remember that there is a huge administrative cost to accessing all of those loopholes and all of those write-offs.

In fact, I joke sometimes that the tax VPs the companies that are in the coalition are actually doing a really selfless thing. They may be putting themselves out of a job. Because there's huge tax department that are doing just this in these big companies.

CAVUTO: Another reason not to get anything done. They're going to realize, wait a minute, I'm not --

KAMARCK: Not going to have a job. but they have actually said we want a lower rate, and we are willing to, you know, put things on the table that might need to be on the table for this lower rate.

CAVUTO: Another guest who makes way, way, way too much sense. Again, Elaine, you're going nowhere. Seriously, very good ideas. Excellent ideas.

KAMARCK: As something, by the way, that actually could happen, even in this polarized environment.

CAVUTO: I think the two parties agree what a mess it is. We will see if they get together on it.

Thank you, Elaine.

KAMARCK: You're welcome. Thank you.

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