Kind: captions
Language: en
The only thing that's bipartisan is
reckless spending. The Trump
administration is a lot more socialist
than what Mum Donnie is proposing.
Golden share and US steel because Donald
Trump's so good at bankrupting casinos,
he should run a steel company. Budgets
and taxes are a reflection of our
values. And our values right now uh
state the following that we think sweat
is less noble than money. You know, I
don't want to demonize billionaires. I
want Elon Musk to make a trillion
dollars. I want him to be taxed 60 or
70% on it because the bottom line is
it's not going to make him any happier.
I think effectively America's for sale
for rich people. I feel like this is a
literally a clown car running the nation
[music] right now. It's a corrupt crime
family. I think America is already
locked in a cold civil war largely
driven by economics.
>> What happened exactly to our economy
that's made boomers so prosperous while
leaving the young to struggle mightily?
It's a multi-dimensional thing, but at
if you were to try and distill it down
to one thing, it would be that old
people vote and keep voting themselves
more money. I mean, social security,
there's a dogma or that if you would
ever talk about social security in a
negative light that there's something
wrong with you. Most arguably the most
successful social program in history
took seniors from 30% poverty to less
than eight. It's been hugely successful.
The other side of that coin is the
wealthiest generation in the history of
the planet receives 1.2 trillion dollars
each year transferred from working age
people to them every year.
>> Uh 40% of our budget is allocated
towards seniors
and we spend 4 and a.5% on the
Department of Education, 1.4% on SNAP,
40% of which goes to kids. In some kids
don't vote. And whereas previous
generations saw advantage in investing
in education and technologies and
infrastructure that had a longerterm
payoff for young people, those
investments are no longer being made.
But the things we continue to invest in
are things that benefit old people. And
then tax policy.
Two largest tax deductions, capital
gains and mortgage interest. Who owns
homes and stocks? people my age who
rents and makes their money from salary
young people. So in some old people have
figured out a way to transfer more and
more money from young to old. A average
25-year-old is 24% less wealthy than the
25-year-old 40 years ago. The average
70-year-old is 72% wealthier than the
average 72y old was 40 years ago. in
some my generation is not paying it
forward. And
the last example I'll use is co a
million people dying would be bad. But
what would be tragic is if my generation
got less wealthy. So we flushed 7
trillion into the system. 85% of which
was not spent. It was saved. So where
did that go? It went into the stock
market and the housing market. Homes
went from 290 to$420 in two years.
>> Who owns homes? people my age. So, it
was great for the incumbents. When you
bail out the baby boomer owner of a
restaurant, all you're doing is robbing
opportunity from the 25-year-old recent
graduate of a culinary academy who wants
her shot. So, we've interrupted the
natural economic cycle of boom and bust,
which transfers money back from capital
to labor or to young people such that we
could continue to make old people
wealthier and wealthier. And the net
result is for the first time in
America's history, a 30-year-old isn't
doing as well as his or her parents were
at 30.
Okay, that is uh very clear and very
bleak. So, one idea that I have thought
about endlessly, but it's the one thing
that I always hesitate to say out loud,
but it uh it goes along with what you've
just said, which is I believe for the
economy to start moving in the right
direction. We have to let some people
fail. So there has to be uh you're able
to make a series of bad decisions fall
on your face and yeah either your family
picks you up or the church picks you up,
local institution, something but someone
somewhere has to be able to fail
otherwise we hit this really weird
static position where once you get
wealthy you effectively don't fall back
out. Uh and that calcification of the um
class structure basically creates a cast
system and that's where it feels like we
are right now. Am I close to the mark on
that or do you think that's crazy? Yeah,
I I think there's a big overlap with
what I believe and that is before co the
CEOs of the three biggest airlines took
150 million in compensation out and the
way they did that was through stock
appreciation and they kept using all
their capital to buy back shares to take
the stock price up which
disproportionately elevated their
compensation and then when CO happens
the airline industry collapses they turn
into socialists and decide that we're
all in this together and they need a
bailout out. No, those businesses should
have gone chapter 11 and then someone
else and their all of their equity
should have been wiped out and someone
else should have the opportunity to buy
these
um you know, buy these assets for
pennies on the dollar. That's part of
the natural cycle. Uh in capitalism, we
believe in winners and losers. We
believe in winners and losers for middle
class and lower income homes. Pull
yourself up by your bootstraps. But for
wealthy corporations and wealthy people,
we're constantly talking about some form
of bailout or tax policy that shields
them. And it even goes as far as the
legal structure. I believe the top 1%
are now protected by the law but not
bound by it. And the bottom 99% are
bound by the law but not protected by
it. O
>> I I believe this and that is I'm I'm
wealthy and I think with somewhere
between if my son was incarcerated
I believe that somewhere between three
and $10 million with my connections and
my capital for3 to 10 million I could
figure out a way to wiggle myself into a
crypto summit or a fundraiser at Mara
Lago and somehow get a message to the
president that I'm in for $3 million on
a Z-Wing renovation if my Oh, and by the
way, My son, my son deserves a review by
the clemency board for a pardon. I think
effectively America's for sale for rich
people. And whether it's healthcare,
whether it's getting your kid out for
for a pardon, whether it's a bailout for
your company, whether it's government
contracts
uh to your company that are uh not
available to small medium-sized
companies,
America's basically become
when it's capitalism on the way up, but
socialism on the way down, it's
cronyism. So I feel like we've gone full
cronyist. And what that means is
eventually
this is economic history is repeats
itself in America. [clears throat] We've
always tried to exit that path. But
basically what happens is a group of
very talented very lucky people get in
the top 1% and inch by inch they
weaponize government to ensure that they
garner more and more economic power. And
then at some point the bottom 99 goes,
"The fastest way to double my or triple
my wealth would be to kill the top 1% or
to tell them they got 24 hours to pack a
suitcase and get out and nationalize
everything." That's basically the story
of Central America for the last 200
years. And we have done a good job of
trying to stay out of that by
continually redistributing income back
into the middle class. And let me use
the word redistribution.
Unless you tax people in the top 10% at
a high rate and shuffle that money back
into forward-leaning investments,
eventually that 1% will garner more and
more of the spoils. And at some point
the bottom 99 do the math and go, "Okay,
there's one guy worth more than, you
know, or 26 families are worth more than
the bottom half." At some point, the
bottom half goes, I know, let's take the
26 families [ __ ] away. So this we have
we have tried to exit this cycle of
economic history, but now it feels like
we're kind of returning to the laws of
history in the jungle. We will return to
the show shortly. [music]
But first, let's talk about why
entrepreneurs waste years learning when
they should be executing. In the age of
AI, you do not need to become an
e-commerce [music] expert. You don't
need to learn copywriting or photography
or even inventory management. You don't
even need to learn international
shipping regulations. You need to level
expertise that already exists. [music]
Shopify's AI does the expert work for
you. No marketing degree is required.
Beyond AI, you get worldclass expertise
built right into the platform. Choose
from hundreds of readytouse templates
that already convert, plus inventory
management, international shipping,
processing, returns, all handled
automatically by systems that process
millions of transactions. Turn your big
business idea into reality with Shopify
on your side. [music]
Sign up for your $1 per month trial and
start selling today at
shopify.com/impact.
And now, let's get back to the show.
Yeah, I try to get people to understand
that money operates according to
something akin to physics. And if you
are uh either doing things like you're
talking about regulatory capture where
you're making it once you get in, then
you're never going to fall in your face
and get bumped back out or you just let
debt run away and people don't pay
attention to what I think is the just
absolute cataclysmic effect of debt. If
I were going to put things down to one
thing that I think has had the biggest
impact, it's that uh debt obviously
forces money printing. Money printing
forces people to try to escape. So they
go into assets, asset prices skyrocket
in addition to the other things that you
were talking about.
>> Um and the only asset that people
understand intuitively is home prices.
And so once home prices become
unavailable and people can't get on the
property ladder, they can't avoid the
impact of inflation. And so you get this
the what you're describing but not quite
saying out loud is these two divergent
economies. And so you've got the people
in the top 1% maybe the top 10% that are
doing great. 2025 has been wonderful to
me as an asset holder. And then you've
got another economy that's just doing
absolutely terrible. Uh and to your
point they they do eventually go oh yeah
uh I can separate you from your head and
uh I can do whatever I want. And so
getting people to understand the reason
that this loops in history is because
humans only behave in a certain number
of ways. Money only behaves in a certain
number of ways. And so you put those
together and you get these moments that
occur over and over and over. So when I
hear you talk, I my impulse is, oh,
let's get back to a noncrony style of
capitalism. But what I see happening
among the group that most in my opinion
needs capitalism, I see a rise of
socialism. So when you look at say mom
Donnie uh and the I I don't know if you
consider that the future of the
Democratic party. I certainly do. But
when you look at that, what what does
that tell you about what's happening
right now?
>> Young people basically are saying
whatever the current system is, it's not
working. And so I'm going to embrace
different systems. And young people who
lean conservative, David from had this
statement that really struck me. He said
that if progressives won't enforce the
border, fascists will. And what I find
is young people are saying, "This isn't
working for me. And I don't want
incremental change. I want chaos and
radical disruption. And if I lean
conservative, I'm willing to take a
strong man and nationalism and start
blaming other people and conflate
masculinity with coarseness and cruelty
or leadership with coarseness and
cruelty. And then if I'm on the left, I
think that it's socialism." And quite
frankly, these words are these words are
perverted. Socialism is the the means of
production is controlled by the state.
Communism is central planning.
Capitalism is meant to say that that the
means of production are controlled by
private sector individuals.
And we all engage in a certain level of
socialism. You know, social security is
socialism. Food stamps are socialism.
It's just where on the scale you want to
be.
Um, so what I think young people forget
is what Margaret Thatcher said that the
problem with socialism is eventually you
run out of other people's money. You do
need incentives that motivate people to
take risks and garner and capitalism is
winners and losers. My father who was a
Scottish immigrant said something when I
was young that I remember. He said
America is a terrible place to be
stupid. What I think he was saying is
America is a terrible space to be
unfortunate and we have voted for that.
We are willing to have a lower safety
net than other countries. I would argue
the safety net is now the ground, a
cement floor in exchange for un
unprecedented
upside. That creates a series of
incentives that have been very
productive for the US economy and
probably resulted in more growth and a
larger tax base to tax from to hopefully
raise the net. But it's the proportion
in the extreme that's gotten out of
control where now people are worth more
than the GDP of Costa Rica and the
safety net is oh your wife has lung
cancer that probably means you're going
bankrupt. The
gag reflex of young people to socialism
is understandable.
Uh it's it's ill advised. Capitalism has
brought more people out of poverty than
anything in history. It's just what you
mean by socialism. I'm for
I mean Mami says I want to raise taxes
on billionaires. I'm actually okay with
that as long as someone shows me that
we're not going to end up with less tax
revenue because billionaires will decide
this is the final straw and they'll move
to Florida or Texas. I get it. You uh
I've lived in the highest tax states in
the world or in the union, California
and New York. And the reason I decided
to live there was it was worth it. At
some point, people decide it's no longer
worth it. Now, I don't know if what he's
proposing
is that final straw. And it doesn't
appear to me that anyone wants to do the
economic analysis. I'm living in London.
They passed something called the nondom
tax reform where basically if you moved
here from Hong Kong, Tony Player passed
a bunch of private property laws that
attracted wealthy people from all over
the world. So, if you were living in
Hong Kong, you got to bring your tax
status, which basically was you paid no
tax. There are a lot of people living in
London paying zero tax. Now they pay
consumption taxes, property taxes, start
businesses, etc. They passed this
non-DOM that said, "No, if if you've
been here a certain amount of time, you
now have to you're benefiting from UK
infrastructure, you have to pay the same
taxes as UK citizens." Philosophically,
that's totally on point for me. I get
it. The problem is in the last 6 months,
10,000 millionaires have left and the
Treasury is going to collect less money
this year than it did last year. Mhm.
>> So there's there's a difference between
and one of the things I don't like about
my party on the far left is they're more
concerned with being right than being
effective. So I get it philosophically
that the wealthy should pay a little
bit. I I get it. I want a more
progressive tax structure, but you know
the top 1% pay 40% of the taxes in New
York. And also it's a bit of a false
argument, Tom, because first off, he's
not going to get it through. He he would
have any tax increase has to go through
the New York state legislature.
He's not going to be able to do it. And
then he goes to rent freeze. Oh, okay.
Great. We need more. I get it. Young
people can't afford to live in the city.
Housing is out of control. Freeze the
rent. Every economic study says the same
thing. When you try and implement rent
control, you discourage construction and
development and rents go up in cost. If
you were serious about lowering costs,
you would figure out a way to raise
revenues through some sort of tax. Maybe
it's on the wealthy, maybe it's on
corporations. And you would create tax
incentive for developers to build more.
And you would have legislation getting
rid of nimiism. And you would unlock the
private sector's building is much better
at building housing than the than I'm
sorry, the private sector is much better
at building housing than the public
sector. When public sector builds
housing, it usually ends up
concentrating poverty and creating
[snorts] a a crimeridden areas. When you
encourage builders to build a lot of
housing, you end up with this is a
supply problem. It's not a demand
problem. We need more houses.
Nationally, I think a decent plan for
the Democrats would have been the one of
the things I really don't like about my
party. They're so fond. I just went to
this Master of the Universe conference
and everyone running for president was
there including the governors of
Pennsylvania and Utah who I think are
great and they just want to cosplay
Obama and talk about all this goddamn
rhetorical flourish. Like all right, at
some point are you going to get to an
actual [ __ ] idea? Here's an idea. 8
million new homes in 10 years. This is
how you're going to do it. Manufactured
homes which cost 50% less and homes on
site. Tax incentives. Anti- nimism laws
like they've done in Austin or
Minneapolis. and we're going to build 8
million new homes in 10 years. That will
materially lower the cost. Maybe
government subsidize mortgages that
bring down the interest. We are going to
try and figure out a way to reduce the
cost of a home such that the average
income household has a shot at it and
then raise minimum wage to 25 bucks an
hour as opposed to freezing rents. It
doesn't work. So anyway, I've gone off
script here. When when America isn't
working for people, they typically don't
want policy or incremental changes, the
the reality of structural change around
affordability is going to take years, if
not decades. You need antitrust. You
need more competition. You need a
massive investment in housing. You need
to ensure that there aren't three
chicken companies controlling the entire
poultry market. You need 10. You need to
break up big tech. You need minimum wage
to go to 25 bucks an hour, which would
hurt the stock prices of McDonald's and
Walmart, and it would be worth it. You
need to put more money in the pockets of
spenders, low and middle inome homes.
You need an actual progressive tax
structure, not the one that's
progressive progressive till the 99th.
And then once you make the jump to light
speed, it crashes
and essentially put more money in the
pockets of young people who spend it.
multiplier effect grows the economy and
massive
um programs that increase this full body
contact violence of competition where
they are forced to offer a competitive
product at a low price. Every year big
tech has increased its margins because
they're monopolies and they're able to
charge higher and higher rents. pharma,
big egg, big big chicken, big beef. All
of these industries are able to rise
their raise their my industry is totally
corrupt. We have essentially a cartel
and we do something. I'm going to go out
really off. You
>> talking about universities?
>> Universities. I'm going through this
right now. Do you have kids, Tom?
>> I do not.
>> Okay. I have a 17-year-old and
18-year-old applying to college. There's
something called early decision. And
what they do is they say if you apply
early decision here we take the
acceptance rates from 8% to 15%. So
there's incentive to go early decision
at the school of your choice and you
sign something saying if I get in all my
applications are automatically withdrawn
from every other school. Okay, fair
trade.
It's so they maintain total pricing
pressure because Syracuse
finds out that they're not going to be
able to fill their class. So they go out
and they start offering financial aid to
people. Hey, hey kid, you got in. If you
pick us, we're going to give you 10, 20,
$30,000 in financial aid next year. And
then the kids who got an early decision,
who committed called and said, we want
this financial aid. And they said,
sorry, you're [ __ ] UNED, you have to
come here. So this is a means of
basically reducing the economic power of
applicants. And also, and you you'll
learn this as if you have kids, every
university happens to raise its prices
almost in near exact lock step. We're
all charging pretty much the same. How
did that happen? Well, we all
communicate with each other. And
wouldn't you know it, when Colombia goes
to 71,300, we go to 71,38.
Do you think that just happened? So it's
all a giant rigged system through
pricing, through financial aid, through
cheap debt, through artificial scarcity,
limiting supply such we can raise prices
faster than inflation such that we can
soak the middle class and transfer money
to corporations and even to my industry
to the faculty and endowments of
universities who whose alumni once they
have degrees love scarcity. Oh my god,
you rejected 90% of the applicants.
Standing ovation, which in my view is
tantamount to the head of a homeless
shelter bragging he or she turned away
nine and 10 applicants last night.
America needs to reject this
exclusionary rejectionist LVMH like
strategy that benefits the incumbents at
the cost of the entrance. But it is it
is a virus that has infected every
component of our society because the
people in charge already have assets. So
they want to see a scarcity mindset
increase the value of their assets and
then they wonder why their daughters are
obese and anxious and single at the age
of 30.
>> Uh yeah well it was a fantastic rant
that I think is really on the mark in
terms of the economics. Okay so looking
at this I think you and I draw every
word out of your mouth is a banger for
me. Uh but we draw I think different
conclusions about what you do next. So
when I hear all of that, I think, okay,
we need to shrink the size of
government. Um, as a history buff,
looking at what America did at its
founding, it was far more like if you
can make it here, you can make it
anywhere because we don't have all the
social safety nets that we have uh
today. Not by a long shot. When you look
at just how much more the government
spends now since COVID than it did in
2019, huge. And so I just go, yeah, I
get the impulse to tax and I don't I am
very much a believer in Ray Dalio's
beautiful deleveraging. So there's going
to absolutely be higher taxes. There's
going to be um wealth redistribution,
but they have to be done so specifically
to understand both the economic and the
psychological impact. That's the part
that I don't think people are talking
about. Ultimately, I think the goal
should be to reduce the size of
government for the reason that you said
when the public sector does things, they
tend to create more problems than they
solve.
So, when I look at this and I see, okay,
you've got the rise of socialism over
here on the left.
>> Um, you've got all kinds of cronyism
going everywhere that's creating all of
these different problems. I don't see
that adding more government is going to
be the solve. It's how do we dissolve
some of these areas that have their
grips on things in a way that does not
benefit the middle class. Um why does
that take seem out of step with the
direction you want to go?
>> I don't think it is. I just think
there's some nuances. There's there's
then overlap where we agree and probably
where we disagree. So when you talk
about government, size of government,
there's two things. There's employment
size of government and then there's
spending. So if you look at state and
local government, I think employment has
actually flatted down over the last 30
or 40 years. So it's not like it's not
like the payroll the pay the payrolls of
state and local government has has
surged. If you look at spending, it's
gone apeshit. And both Democrats and
Republicans, the only thing that's
bipartisan is reckless spending. You
know, it's like, okay, Republicans want
more in defense and and tax cuts, and
Democrats want more social programs. And
they all got together and say, I know,
let's do both. And absolutely hamstring
and inhibit uh future generations with
just unsustainable, irresponsible levels
of debt. Now, the question is, all
right, how do you close the gap? If
we're a household, if US was a
household, it makes 50,000 a year in tax
receipts. It spends 70 and it has
household debt of 370,000 of which when
the parents die after going to Cabo
every weekend on their kids's credit
card, the kid get gets to inherit the
debt. The debt doesn't die with the
parents. And there's a lot of issues
here. One, um Washington is a cross
between the Golden Girls and the land of
the dead. If twothirds of Congress is
going to be dead in 25 years, do they
really care about the deficit or climate
change? Do they do they really want to
build a high-speed train network that
they're going to be in a wheelchair to
cut the ribbon on? So, we need younger
people who think more long term. In
addition, we have an obsession with I
think we should mean test and raise all
roads lead to the same place and that is
entitlements. If you want to have a
serious conversation around reducing
government spending, we can Doge tried
to cut what was it? They went to cut a
trillion dollars. It ends up that almost
everyone they've fired, they've decided
they need to hire back. Like it ends up
that you need people to land your
planes. It ends up that the people
actually, you know, protecting parks
that government I think government is
the most underestimated group of
professionals in history. I I I mean I I
work a lot with government officials.
These are the brightest people I've ever
met making $180,000. It could be working
at Meta at a million, but instead decide
to focus on cyber security defense for
our nation. So I think generally
speaking Americans don't have an
appreciation for how talented our
government is until we put village
idiots in charge as we're doing right
now. Two, it's not the tax tax rates,
it's a tax code. And that is
there's $760 billion a year that is owed
but not collected. And the biggest tax
cut in history wasn't capital gains or
the tax cut of 2017. It was neutering
the IRS. Because as someone who has a
very complicated tax uh filing, I can
tell you that the general incentives are
don't don't hide capital. Don't do
anything illegal, but be as aggressive
as possible because they don't have the
staffing to come after you and audit
you. They do have the staffing to audit
someone making $60,000 a year. Their
audit can be done by AI and it's pretty
it's pretty straightforward when they're
lying. But if you're somebody who has
limited partnerships, properties all
over the world, different sources of
income, different shell companies, they
do not have when you neuter the budget
of the IRS, the people the manpower to
come after you. $760 billion a year in
uncollected taxes that are owed. I'm not
talking about intimidating people. I'm
talking about the taxes that are owed
and need to be collected. Two, all roads
lead to the same place, and that is
healthcare. We pay $13,000 a year per
capita for health care. The rest of the
G7 pay 6,500 in exchange for paying
double. We die sooner. We're more obese.
We're more anxious. If you're in the top
10%, you have the best healthcare in the
world. If you're in the bottom 90, it
means if your wife is diagnosed with
lung cancer, it also probably means
you're going bankrupt. 40% of US
households have medical debt. I believe
that we need to take Medicare, which
actually people are pretty satisfied
with, and delivers at a decently
economic basis, a pretty ine pretty
efficient basis, lower it by two years a
year for 10 years till it's 45 and up,
which is about 3/4 of all health care
because 55 cents, 45 cents on the dollar
of health insurance goes to profits and
administration. And we need to get that
$13,000 down to 10,000, then down to 9,
and then ideally with our scale and our
innovation back to where the other G6
nations are. If we can produce every
single product for the same or less
money than the other G6, why are not we
producing healthcare at the same rate?
If you take 350 million people times
$6,500 per capita in savings over the
next 10 or 20 years, which America
doesn't like to think because we only
get reelected every 24 months, boom, you
have your $2 trillion in savings. We
need the tax code to be enforced and we
need to really go after healthare and we
need to stop transferring money from
young to old. We're obsessed with tax
codes. We're obsessed with demonizing
billionaires. You know, Bernie Sanders
and Elizabeth Warren want to lambass
billionaires. They're each worth tens of
millions of dollars. I get it. The tax
code should have an alternative minimum
tax on anyone making over $10 million.
But that's not the problem. The problem
is enforcing the tax code and attacking
healthcare. if we get really serious
about fiscal responsibility. But the
notion that we continue to pay seven we
continue to spend $7 trillion a year on
5 trillion in receipts is so morally
bankrupt. I'm in the club doing
champagne and cocaine and the closest my
kids get is they get to throw their
credit card in so I can swipe it again
so I can now do Rails Academy. What is
going on here is entirely morally
corrupt and my generation needs to pay
more taxes. I'm not saying, you know, I
don't want to demonize billionaires. I
want Elon Musk to make a trillion
dollars. I want him to be taxed 60 or
70% on it because the bottom line is
it's not going to make him any happier
if he makes 800 billion versus 400
billion. I want the estate tax exemption
lowered from 30 million to 1 million. If
your kid inherits 7 million versus 9
million, no, happier. And my
understanding is once you're dead, you
don't really sense whether you're
happier or not happier. There are common
sense solves to our fiscal problems. We
just have DC that has been washed over
by money. There's regulatory capture and
we have old people voting themselves
more money who don't want to think long
term about the fiscal health of future
generations. We'll get right back to the
show in a second, but first let's talk
about what's hiding in your closet. Most
guys [music] own 30 shirts, but rotate
through the same five. That's certainly
familiar. The reason [music] is very
simple. Only five actually fit right and
feel good. The rest are just taking
[music] up space. That's the problem
that True Classic solved. Premium fit
and feel without the premium [music]
price tag. Tailored where it matters,
relaxed where you need it. Fabric that
actually feels good. This is why 5
million people have already bought 25
million shirts. When it comes to holiday
shopping, the best gifts are the ones
people are actually going to use,
[music]
not the stuff that ends up in the back
of the closet collecting dust. True
Classic becomes part of that rotation,
the shirts people reach for over and
over again. Even better, True Classic
now makes clothing for the entire
family. Head to trueclassic.com/impact
[music]
and give something people will actually
wear. And now, let's get back to the
show. Again, a lot of things that I
think are really on the money. I'm going
to ultra simplify that. Tell me if you
think that this captures the sense of
it. So, uh, you got to get serious about
talking about the spending problem.
Spending problem is entirely
entitlements. Uh, then you've got to
find an efficient way to get more tax
revenue um by taxing the wealthy. I
don't I didn't hear anything of what you
just said about going in a Nordic style
where we just tax the hell out of
everybody. Um, is that one two punch?
Obviously a gross oversimplification,
but it'll give us a jumping off point.
>> I I think Yeah, I think that's strong.
And just some nuance around the
taxation.
I bet you're where you live in LA.
>> Yeah. I'm going to assume you make a
very good living. You know who gets most
screwed in our tax code? We like the
populist argument of the the poor paying
too much in taxes, the middle class, and
the rich aren't paying any taxes.
[ __ ] The rich are paying a
disproportionate. The top 10% pay 80% of
federal income taxes. The people who get
most screwed in our tax system are what
I call the workh horses. I don't know
much about you, but I'm going to I'm
going to stereotype you as being in the
workhorse. A workhorse,
uh, a couple played by the rules, got
great certification, work their asses
off. Mom's a baller at a law firm. She
makes $1.2 million as a partner. Dad is
a podcaster making 600 grand a year.
They make $1.8 million. They live in a
blue state, which is probably where you
need to live to have these types of
professions, this type of income. they
are probably paying 50% in tax rates.
Now, if dad starts a podcast network and
pours all of his money and can afford to
reinvest in the company and then he
incorporates the company and it gets
bought by Sirius or Wondery or Time
Warner and he gets a $30 million cash
hit, his tax rate drops dramatically.
Right? So the workh horses, the people
making hundreds of thousands pay too
much taxes. When I was when I was in my
30s and 40s making hundreds of thousands
of dollars, I was paying 30 something
40ome% tax rate. Now that I'm making
millions, some years tens of millions,
my tax rate and the fact that I'm mobile
now because I have the money and I
relocated to Florida, my tax rate has
plummeted to kind of the high teens.
That makes no sense. So when people hear
the rich are not paying their fair
share, no actually the rich are probably
paying more than their fair share if we
enforce the tax code, it's the super
rich that are getting away with murder.
We've decided if you get the gold medal,
you get the bronze and the silver. The
26 wealthiest families in America pay an
average tax rate of 6% a year.
Corporations are paying their lowest tax
rate since 1939,
right? And it's not made them any more
productive. So I think there's common
sense strategies. Let's go back to the
tax error of that great socialist Ronald
Reagan. Have the same tax rate on
current income as capital gains. Take
corporate tax rates back up AMT of say
40% if you make more than a h 100red
million in profits. If you're making
more than $10 million in current income,
uh alternative minimum tax of 40%, the
tax code's gone from 400 pages to 4,000.
Those incremental 3600 pages are
basically that screw the middle class.
There are so many goodies for people in
my income class. I start a company, I
sell it. Somebody called 1202. First 10
million is taxfree. What does that make
any sense? Oh, but we need productive
people to start businesses. I've started
nine businesses. If you held a gun to my
head, I couldn't tell you what the taxes
were when I started the business. That's
not where you started business because
of tax advantages. But oh, we want VCs
and institutional investors to get this
giant loophole where if I invest two or
$3 million in one of my startups and it
sells first 20 or 30 million, 10 times
the basis or is it know it's 10 times
the basis or now it's 15 million are
totally tax-free. What you want in an
increase in taxes is the least taxing
taxes possible.
And there's a lot. One of my
intellectual role models, an Israeli
American psychologist named Daniel
Conaman, ton of studies on happiness.
Money can't buy you happiness. [ __ ]
Absolutely correlation between money and
happiness. Middle- inome people happier
than lower. Upper income happier than
middle. But once you hit a certain
income level, no incremental happiness.
Billionaires are no happier than
millionaires. There's a myth that
they're less happy. That's not true
either. Once you get above a certain
number, no incremental happiness. Which
says to me we should have an alternative
minimum tax of 40 or 50% on anyone say
over $10 million. Corporations
>> can pay a higher tax rate. Now we
haven't seen a burst in productivity. We
have seen an increase in stock prices
because of more earnings which again
accredes to wait for it the top 10% who
own 80% of stocks. So, one, uh,
alternative minimum tax above a big
number, and two, lower the we're about
to see a transfer of wealth of 120 120
trillion, I think, in the next 30 years
of wealth. Lower the state exemption
from 30 million to 1 million. If your
kids inherit 7 million instead of 9, not
going to change their life or their
happiness. And as far as I know, you're
going to be dead, so you're not going to
care. But the notion that we build need
to build dynastic wealth with out of
control tax exemptions and estate tax
that's anti-American. We're not supposed
to be dynasties here. So alternative
minimum tax for corporations and
exceptionally wealthy people. Reduce
reduce the um estate tax exemption from
30 million to 1 million and means and
age gate. Raise the age on social
security and means test social security.
And also above a certain point, you pay
for your own health care. Full stop. And
that turns those people into consumers
who actually say, "How much is this MRI
costing?" And they shop around. I think
all of these things are common sense
solutions to bring fiscal sanity back
into the system.
>> Okay. So, I certainly have an allergic
reaction to the idea of um taxing more.
you've said a lot of very true and very
uh valuable things about I did a whole
deep dive on who actually pays taxes in
America. You've covered it very well. Um
so you have the wealthy paying a very
disproportionate amount. Um there is a
psychological impact though when you
start. So I uh in my best years am north
of 50% in my tax bracket. Yep. Uh it
there's something about that
psychologically that is very difficult
to swallow. Um and if and I think you
said something about I know you've said
this before. I don't I can't remember if
you said it today or not, but the idea
that if I knew that the money was being
spent efficiently, I would have a lot
less problem being taxed. Like if I'm
living somewhere and I feel like, oh,
it's worth it. My tax dollars are being
used incredibly well. This is wonderful.
Um yeah, you have a much easier time
stroking the check. But when and this is
me mapping my own beliefs not trying to
put these words in your mouth but when I
look at the the
making a distinction between number of
people working in the government and the
amount that they spend to me does not
change the dynamic of the more money
that they have and are spending we're
getting a worse and worse result. So
perfectly willing to buy that the people
in the government are amazing, but
there's something about the way that the
policies are enacted that end up not um
yielding the result that we would see
from that fish competition that you
talked about in the private market. So
that's my bias. So I'm I am opposed to
raising taxes long-term
unless we can see that the government
itself can become efficient. For me, I
will peg that at the ability to balance
the budget.
>> And the one immutable truth that you put
your finger on is that both the
Republicans and the Democrats are just
hellbent to spend, spend, spend because
in a popul well, in any moment that's
how you get elected, but it gets way
worse in a populist moment. So, what do
you see as the mechanism that pulls us
back out of this? Because I don't see
the government getting any more
efficient. There is a psychological
break that people will have. So the more
they raise taxes, people are going to
move even if they have to leave America.
I think that there is a point where the
taxes become so ownorous that people
will move. And so when I look out at it
and and hopefully you can back me off of
this black pill ledge here. When I look
out at it, I'm like, "Oh, the only thing
that's going to make us actually change
the direction, which again I peg is a
debt and deficit problem. The only thing
that will move us off of that that I
believe is the thing that's hollowing
out the middle class is to have so much
pain
>> that we will finally be forced to
backtrack.
>> Do you see any other way other than
economic collapse, a true hot civil war,
revolution, something like that that
will actually begin moving us in the
other direction?
>> So, a lot there. So, so first off, um I
think my t not this year, but last year
my tax rate was 17%. Yours was 52. Does
that seem fair to you?
>> Um it it depends. It No, we'll take the
short answer.
>> I made, you know,
I'm always accused of bragging about my
wealth and it's true because I'm
insecure, but I my guess is I I don't
know what you made. I I made an
exceptional amount of money last year.
My tax rate was 17%. It sounds like
yours was 52. Tell me how that's in any
way far.
>> Well, the quick breakdown would be the
year that I made the most money, my tax
rate was much lower and uh I am
perfectly willing to make the exchange
for long-term capital gains. So, capital
gains not being a tax, um, I certainly
do not know the tax as well as I know
some other basic economic principles,
but I will say that when I was building
the company and taking insane risks with
my entire livelihood, everything that we
owned, uh, that felt like a good, okay,
well, if I can get it across the finish
line, at least I'm not going to be
paying that same 50 plus% tax rate. that
would have been a bitter pill to swallow
when you risk so much. Um, so yeah,
anyway, to me there is nuance there
where I've lived both. I've had a much
lower tax rate. I don't know if I've
ever been in the teens, but I've
certainly been in the 20s. Um, and I was
like, cool. Yes, this was worth all the
sacrifice, all the risk. On a more
mainstream year where I'm just making,
by average person standards, I'm making
a ton of money. Um, I accept that I'm
going to be paying ordinary income and
it is what it is. I would just so
budgets and taxes are a reflection of
our values and our values right now uh
state the following that we think sweat
is less noble than money that when money
makes money when when you make money
from buying a house selling stocks that
that money is more noble and we should
tax at a lower rate than when someone
shows up to a car wash or someone works
really hard as a podcaster. I think we
should go back to Reagan. I think there
should be one tax rate. And I think if
you enforced the tax code and didn't
have all of these loopholes, right, buy
a plane, you get to write it all off in
the first year. You don't even have to
capitalize. When you buy office
furniture for your podcast studio, you
have to capitalize and expense it over
seven years. But someone who buys a
Gulfream gets to write off the entire
thing in year one. That to me is nothing
but capture by the wealthiest.1%.
So, I would like I think you could lower
taxes as long as everyone paid them and
you got rid of all these loopholes.
That's why I like the AMT going
>> going after specific loopholes. There's
too many. There are more lobbyists,
full-time lobbyists working for Amazon
full-time living in DC than there are
sitting US senators. And whoever raises
the most money 93% of the time wins the
election. So the game is rigged for
whoever is willing to throw most money
to maintain their their their private
equity tax loophole where for some
reason private equity investments are
taxed at long-term capital gains even
though it's just a commission. If I sell
a Subaru as a car salesman, the
commission is taxed at a higher rate
than if I find an investment and use
other people's capital to make the
investment and I get a commission as a
private equity general partner and then
for some reason I get long-term capital
gains on that. That is a loophole
sponsored by the lobbyists hired in
Washington by the private equity
industry and then they get Kristen
Cinema to basically hold up the
infrastructure bill unless they strip
that, you know, maintain that tax. So,
I'm for I think you could lower taxes
and I don't see any reason why capital
gains taxes should be lowered are more
honorable than the money that sweat
makes. I want people to work. I'm
worried about young men not feeling the
incentive to actually
work. the the notion of state that's
federal. I actually believe federal
taxes for the most part are a pretty
good deal. Uh I do believe we're
spending too much money on our seniors,
which is again the third rail. I'm a
terrible person. This is the wealthiest
generation in history. Nana and pop, if
you can't upgrade from Carnival to
Crystal Cruises, I'm okay with that. I
don't see why young people are
continuing to transfer money this much
money to old people. Do we eliminate
social security? No. But if there you
and I should not get social security. I
it just I I don't I don't see any reason
why we should get it. So go after
entitlements
uh lower taxes but enforce them. And
then with respect to states, I like
competition. I like the idea that at
some point Tom may say, "You know what?
I've had it. I'm moving to Texas and I'm
going to build my podcast studio in
Austin. And the fact that most states
have to balance their budget, they're
enforced. They there's a certain level
of fiscal responsibility enforced on
them. They can't rack up enormous
deficits,
uh, at least not directly. And they can
piece out. I left New York. Now, the
reason I left New York was cuz my kid
didn't get into preschool, but at some
point I might have left because of the
taxes. I think it's good that states
compete with one another.
>> Yeah, agreed. Uh so I think some of this
gets solved. I think you're right. I
think we should I think governments
should be forced to compete and you know
offer a good service. I come at
government from a little bit of a
different place than you because I got a
I live I grew up in California. I grew
up in Los Angeles where you are now. I
got assisted lunch. I got PEL grants. I
got into UCLA because it had a 74%
admissions rate because the government
spent a lot of money. Edmund Pat Brown
spent a ton of money of taxpayer monies
on building a lot of seats in this
amazing institution called the
University of California. So I feel a
certain gratitude and affinity and feel
like I've gotten a great deal from the
federal government. I think some states
I think California is you know I think
it's good that Texas is saying to
Californians come here you don't have to
pay any state tax because I think it
forces the governor and the people there
to take on unions take on out of control
spending. I think at some point if
enough people leave New York, they're
going to figure out a way not to spend a
billion dollars a mile. Do you we spend
seven times more per mile on subways in
New York than they spend in Paris, which
isn't known as a very efficient economy.
So there is I think competition is a is
an answer. And I think I I would like to
think that before we get to the
revolution part of the program, they
voters will get their heads out of their
asses and maybe vote for some people
that are honest with them and say,
"Folks, do we need to raise taxes or
lower government spending?" The answer
is yes. And I'm not going to give you
quick solutions here. I'm not going to
try and buy your votes. I'm going to
have to means test and raise the age or
eligibility for Social Security. I'm
going to nationalize health care, which
every the healthcare industrial complex
is going to spend billions of dollars
trying to convince you I'm a pedophile
or addicting diet diet pills to try and
make sure I don't get into Washington.
But at some point, I'd like to think the
voters are ready for an adult
conversation and say, "Okay, I am down
with figuring out a way. We can't just
pay off the deficit. We got to go back
to a smaller deficit, lower it, have a
few surplus years such that the economy
continues to grow and at some point
instead of it being 150% of our GDP, it
goes down to 70 or 80, which is
sustainable. I'd like to think at some
point the populace and voters are ready
for an adult conversation and we'll
we'll vote those leaders in. Hasn't
happened yet, but we used to vote those
people in in the ' 50s, '60s7. Bill
Clinton had a budget surplus. you know,
the voters that voted him in. I think
there's still some of those out there.
You know, a lot of Republicans had not a
lot, but a few had budget deficits uh
surpluses post World War II. Does it
have to get to a point where I mean, you
you could argue that when farmers are
lining up at food banks who 80% of whom
voted for Trump, they're probably going
to vote differently in the next
election. So, I don't know. You know,
I'd like to think that the democracy,
our democracy works pretty well. The
problem with our democracy is the pendul
like they say it's visually impossible
to see a pendulum at the exact bottom.
Like you can never actually frame it at
its exact bottom.
American politics seem incapable because
of gerrymandering to ever be at a center
point. It's either rent control and tax
the rich and UBI or it's it's cut it's
cut taxes and spend more and have
massive deficits.
And I I don't even know how you describe
the Trump administration is a lot more
socialist than what mom Donnie is
proposing. Socialism is the means of
control is controlled by the state.
golden share in US Steel because Donald
Trump's so good at bankrupting casinos
he should run a steel company. Taking an
investment in Intel, which will favor
that one chip company over others.
Deciding who should get to own Tik Tok
and doing it out to his Republican
friends. That is pure unadulterated
socialism.
So, you know, look who asked for this?
Voters asked for this.
Politicians are always afraid to say,
"Get your head out of your ass. You
voted for this." Oh, maybe you thought
you were voting for, you know, racism,
not tariffs, farmers. But this is what
you got. The Dian democracy is working.
Are you ready for an adult conversation?
[snorts]
>> Okay. I think uh ready for the adult
conversation is a little optimistic of
you, but let us say t