McDonough Refuses to Say How High a Rate Would Be ‘Fair’ for Rich To Pay

WALLACE: "But, during the Obama years, the top capital gains rate has jumped from 15 percent to 23.8 percent, and he'd now like to raise it to 28 percent. And the top income tax rate has gone from 35 percent to 39.6 percent. Question, what is a top earner's fair share of taxes?"

MCDONOUGH: "You know, it's interesting you point out the capital gains rate that the president wants to make sure that Congress gets agreement to do. That brings it back to where it was under President Reagan, somebody who I think you and many of us in this town believe was a record tax cutter --" [crosstalk]

WALLACE: "The top tax rate was when President Reagan came into office was 70 percent."

MCDONOUGH: "Which was that he was a record tax cutter. So, we're going back to a capital gains rate, 28 percent, that President Reagan had and laid out. Now, let's also ask ourselves a question about this, Chris, which is to say, well, what the president is laying out is trying to close the trust fund loophole, which is to say if you have a trust fund, when you pass, it ought to be treated like any other asset that you have."--[crosstalk]

WALLACE: "But that's -- it's not a trust fund. It isn't -- you know, that's a nice talking point, I'm sure it's been focus grouped, but it isn't what it is. It's what somebody has saved their whole lives, they have invested in something, now, it's a question of whether or not you pay the basis at which they bought it or the point -- the value of it now. It's not a trust fund, sir."

MCDONOUGH: "But, Chris --"

WALLACE: "But let me just ask, if I may --"

MCDONOUGH: "Let's agree to disagree on this."

WALLACE: "If I may, what is the fair share of taxes for a top earner? Is it 30 percent, is it 40 percent? And is there some point -- this is the real question -- is there some point at which raising taxes on people hurts the economy?"

MCDONOUGH: "Two things. What the president is talking about is taking capital gains back to the rate at which President Reagan taxed capital gains, point one. Point two, since the president has taken office, we've gone from 10 percent unemployment to 5.6 percent unemployment. The deficit has been cut by two-thirds --" 

WALLACE: "If labor force participation was what it was back in 2009, it would be 9 percent unemployment."

MCDONOUGH: "We've seen that deficits cut by two-thirds. We see 10 million people with access to health care now. Health care costs growing at slower rate than at any time in 50 years. And we are creating more jobs through oil and gas and clean energy than ever before. So, ask yourself that, Chris, what are the data telling us about what's happening in the economy? The economy is coming back. It's growing. But we are focused on a simple fact: for too many decades with stagnant wages, the middle class has not gotten its fair shot. We're going to make sure that it does. We'll keep pushing this. This we will not trim our sails on."