Here, at last, is Part 3 of my October 16 interview with former eBay CEO Meg Whitman, who is running for the GOP gubernatorial nomination against Insur5ance Commissioner Steve Poizner and former congressman Tom Campbell.

In this last segment, she discusses her views on rebuilding the California Republican Party; we revisit the topic of public employee union and whether she'd fire them if they called a strike; and we touch on the philosphy of taxation -- specifically, the principel of progressive taxation.

I had several more questions to pose, but by the time all was said and done, I had slightly more than 20 minutes to interview her (although the campagn has promised a second interveiw soon, so stay tuned):

Here's Part 1 (environmentalism, public employee unions and TABOR) and Part 2 (taxes, regulations and the economy).

And now for Part 3:

Cunningham: In a perfect world, you could come in and make some decrees and make a change, but the reality is you’ve got to work with a legislature that is by any measure pretty left-wing and not in sync with your view of the state of things. So how do you go about, as governor, not only just working with them legislatively but trying to elect a legislature that’s more in sync with your pro-business viewpoints?

Whitman: I think we have to rebuild the California Republican Party. You know we’re down to 31 percent of registered voters now, 14 points below the Democrats. And so you probably know that I actually helped fund a pretty significant voter registration initiative that’s going to be administered by Team Cal and the CRP. And this is important because we are losing share at an alarming rate. I mean, if we get much below 30 percent, 28, 29 percent, it’s actually almost mathematically impossible to win elections statewide so we’ve got to bring back the Republican party.

I also think we have to make more groups of people feel welcome in this party. Women would be one. Women have left the party in pretty significant rates. We have to get 18 to 29 year olds back. So this is a little fact that I was surprised by – 78 percent of 18 to 29 year olds in California voted for Barack Obama.

Cunningham: Why do you think that is? My daughters are probably exceptions. One tells me about her friends her support Obama –

Whitman: Yeah. You might not let them come over!

Cunningham: I don’t think they have any idea why they support him. She tells me what they tell her and it’s like there’s no grasp of reality –

Whitman: Listen, he was a gifted communicator who talked about things that people wanted to hear and it was a moment in time. There are more pundits than I – better-schooled pundits than I that have spent hours on this but my view is right time, right place, right message, just right point in history.

Cunningham: What draws them – how do you build up the party more? What principles do you advance? What banners are you going to fly that people want to follow the standard rather than, ‘We’ll do a better job making the government run than the Democrats’?

Whitman: So here’s the three banners that I want to fly, and you know what they are, right? We actually have to build a new California because California is the shadow of what it was 30 years ago. And it’s interesting. When you talk to people about what a new California means to them, the older Californians say, “It was the California I grew up in where the schools were strong and taxes were low and the state actually had its act together”. Young people say, “We want plentiful jobs, we want great schools, we want bold and courageous leadership.”, and they also know that technology can change everything.

So what I want to do is go out and talk about these three things that I talk about every day, which is jobs, cutting government spending and fixing education. And we have to do a better job as Republicans owning education. And we should own education because we are actually not beholden to the unions, and education is a universal issue.

So I’ve now been out with quite a few 18 to 29 year olds and timing in life is everything. But the backdrop of this unemployment is really scaring these kids. If you are in college, you’re terribly worried about what you are going to do when you get out. Your 21-year-old is probably a little concerned. Half my son’s graduating class did not get a job and so they’re all moving home. And they’re underemployed – they’re not full – they’re not working 40 hours. It’s tough. So jobs for the college kids is incredibly important and jobs, for either your first job, whether it’s a white collar job or a blue collar job, you’re worried that you were the last hired and you’re going to be the first fired. And so jobs are actually a uniting principle right now and this is something Republicans have to own.

We have to do a better job of explaining why we, as a party, can create more jobs, better jobs that get the economy going, than the Democrats. And then when you have a robust economy and you have some capacity to invest, then you can decide what you’d like to invest in. Would you like to invest in ports or schools or a waterway or whatever? But we have to do a better job of that.

And I will tell you the other thing is I never thought government spending would actually ring as true to voters when I’m out on the stump because it’s hard to explain government spending. At the beginning of the year, people were saying, “Yeah, everyone says that. You can’t do it”. Because of what’s going on in Washington, people are getting pretty hepped up about this. They understand that you just cannot spend more than you take in and they’re really concerned about what’s going on at a national level.

So, in a funny way, this may be a time where we as Republicans can own government spending in a way that we never could before and I’m going to try because we have to get people focused on this.

Cunningham: Now speaking of the unions. Say you’re governor and some of the unions have threatened to go on strike. If you had the power as governor, if they went – say they went on strike and you had the power as governor to fire them, would you fire them?

Whitman: I think it depends on the circumstance, right? So this most recent walkout out of the DMV I think was a grave mistake on the part of the unions. People should be happy to have a job right now, whether it’s a government job or a private sector job. I wouldn’t be pushing that envelope right now if I were the unions because there’s – how many people didn’t show up for work? Several hundred, right? Five hundred and some odd? By the way, I think there are 500 people who would be right behind them for those jobs.

Cunningham: Well, that’s kind of my point. If it got to that point, would you do a Ronald Reagan with the air traffic controllers or Margaret Thatcher – I mean, the turning point of her prime ministership was when she faced down the coal miners and it was like –

Whitman: My inclination is yes, but you have to be part of the history to get to that point. It’s easy for me to sit on the sideline and go, “Yes, I would do this”. But until you are part of how you got to this situation, I think it’s hard to sort of come in from left field and say yes. I would want to avoid that if we could and I think that is clearly communicating what you will and will not put up with. So you can’t surprise people by this. I don’t think you – if you’re going to threaten, you have to follow through, And so I would like to have not gotten to that point that you described. But if you get to that point and you’ve been really clear, “If you do not show up for work, here are the consequences, here’s the legal backdrop.”, and you have clearly signaled that and it’s not a surprise, then I think it’s the right thing to do. But you have to lay the groundwork. You’ve got to lay the pipe. You can’t just sort of pop out of the closet and go –

Cunningham: That’s good. I asked your opponent that question and I didn’t get a direct answer so I appreciate –

Communications Director Tucker Bounds: You guys, she’s got another event.

Whitman: Are you running out of time? Okay.

Bounds: We’ve got a couple minutes, though, because of the – but you know, one more question. I’m sorry about that.

Cunningham: Okay. That’s all right. I wanted to ask you another question that I asked Steve Poizner and I want to get your response is that on the principle of progressive taxation, do you agree or disagree with the principle of that the more a person makes the more they ought to pay?

Whitman: On a percentage basis or an absolute basis?

Cunningham: Yeah, well just as a – like we have in California, we have a very progressive income tax –

Whitman: Yes, where there’s ten and a half percent.

Cunningham: And as soon as you make more, you pay more, as opposed to everybody paying a fixed percentage.

Whitman: My view is that taxes are too high across the board in California and so what is happening, of course, is you’ve got these 144,000 people who account for 25 percent of the revenues of the state. We can’t actually afford any of these people to walk out of the state because they walk with a huge number. So I actually think progressivity may be all right. It is too high because it comes back to my competition point. We are outclassed. People are leaving for Nevada all the time. I have a lot of friends who actually have moved to Nevada who live here for five months and 29 days.

Cunningham: Sure, there’s a lot of that in Orange County.

Whitman: And this is dumb. This is a dumb economic decision for the State of California. So I do think that actually people who have done well should contribute but I would start by saying we have too high a tax rate across the board here in California.

Cunningham: So I guess that begs the question of what is the limit? When you concede the principle that the government has the right to take more of your money if you make more, at what point –

Whitman: Yeah. Well, I don’t know the answer to that. I think what history would suggest that the lower the overall tax rates and the lower the marginal tax rate at every income level the healthier the economy is. And that when you get to 50 percent, 60 percent, 70 percent, you can actually see the slowdown in economic activity.

So my view is what you want to do is you want to walk that back and at the same time you’ve got to be managing the cost structure of the government. I mean, what has happened here is there has been a disconnect between the managing of the cost structure of the government and the taxation and what you’ve got to do is you’ve got to create some capacity to invest. And you know that I’ve called for a $15 billion cost reduction out of the government. I know that money is there.

And then what we should decide is okay, probably the highest and best use of that is to reduce taxes because then that will create more economic activity, which will allow us to create more capacity to invest which will then allow us to invest in things like an infrastructure, which actually is good for business. You can’t ever walk away from public safety. That’s good for business. So my view is you have to link these two.

And I don’t know what the ultimate marginal tax rate should be for state income tax in California. It has to be lower than it is today because we are absolutely driving out the people who are creating businesses. We are driving out the inspired individuals who are creating wealth in this state. And without employers there are no employees and that’s a pretty important thing to remember. You know who said that? A Democratic governor of Maine –

Cunningham: Really? Who was that?

Whitman: – like two months ago. Whoever the Democratic governor of Maine is. I forget his name. But I almost – I was reading the newspaper. I almost fell out of my chair because I was like, “I thought they had a Democratic governor”. Then I read it said, “Oh”.

Cunningham: There’s some of them that make sense, like the governor of Tennessee.

Whitman: Well you know what happened, of course, is Maine has to compete with Vermont and New Hampshire. Vermont and New Hampshire have no state income tax and so companies are moving from Maine to Vermont and his ‘A ha’ was without employers there are no employees.

Cunningham: Well, very good. I have more questions but we’ll have to do it next time we get together.