On tax reform:

“Everyone that’s talking about finding ways to increase revenue that are fair – right now the debate is a binary debate on whether we ought to – or ought not raise the highest bracket. There is no doubt that the top 10% are shouldering about 70% of the income tax burden, which is very high, so when we talk about broadening the base, broadening it out – you want to have more people do it. By the way, my days at the Treasury, we came up with some really good proposals on tax reform that we were not able to do because they were so politically difficult. We go around the world, advising other countries to broaden their base because it’s smart economically.”

On “the politics of broadening the base”:

“When you talk about broadening the base and closed loopholes – it sounds so good. You get almost universal support for that idea – but what broadening the base really means, by definition, is that you’re going to have some people who are not paying taxes, paying taxes and most of those people are in the lower and middle classes.”

On going over the “fiscal cliff”:

“No question on these very, very difficult issues going on that the only way to get real reform is through crisis environment, and you hate to bring on a crisis. I do fear that if we do go down that route – we’re so close to a recessionary environment, right now that that could tip us into a recession. I don’t wish that on the country, would rather see us have a real discussion on what is smart tax reform and how does that align with our spending goals.”

On the creating a new tax code:

“We’re going to have look at another form of taxation, maybe consumption, I don’t know that politically we can a tax reform that doesn’t have progressivity to it, so we would have to find some ways to progressivity to it – but we definitely need more people paying taxes…We do also have to think about the growth element and getting people back to work as well.”