AI May Have Just Broke the Tax System
This week on The Higher Standard, Rajeil was out, Slim was “furloughed,” and Chris and Saied accidentally stumbled into one of the biggest questions nobody in Washington wants to answer: what happens when the government is funded by workers, but the future is built to need fewer of them? Using Chamath’s Joe Rogan appearance as the spark, the guys break down why W-2 income gets treated like an ATM for the federal government while corporations, capital gains, lobbyists, and the ownership class keep playing by a very different rulebook. From AI replacing entry-level white-collar jobs to corporate profits hitting record levels, from broken trust in government spending to the disappearing middle class, this episode connects the dots between taxes, labor, capital, AI, and the uncomfortable reality that the “system” may not be broken at all — it may be working exactly as designed. As always, THS brings the data, the sarcasm, the side quests, and just enough moral outrage to make you want to start a business before your paycheck gets taxed into a hostage situation.
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Chamath Palihapitiya (Joe Rogan Experience via Spotify)
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Transcript
Kick us off.
Speaker A:Yeah.
Speaker B:Welcome back to the number one financial literacy podcast in the world.
Speaker B:This is the higher standard.
Speaker B:Sitting in front of me in the all facts no cap T shirt that you can find@thspod.com is my partner in crime, Christopher Nahibi.
Speaker A:I'm not gonna lie about this, okay.
Speaker A:It's just no shame in it.
Speaker A:This thing has been beaten to.
Speaker A:Okay, it's been beaten up pretty bad between me wearing it and it being like a different color of off black.
Speaker A:It's got holes in it, little holes.
Speaker A:I like to say this is part of our vintage line where I'll be selling on my pre worn material.
Speaker A:But I'm.
Speaker A:I'm really proud of this, this shirt.
Speaker A:Yeah, it's symbolic of how we started and how we got here.
Speaker B:There you go.
Speaker A:Yeah.
Speaker A:And sitting across from me, my partner in time, the quarter zip king, the man, the myth, the legend, the guy who never wears any THS merchant, everybody, just the undergarments.
Speaker B:Sit behind the desk in the production suite is nobody.
Speaker B:Find PG and Slim is been.
Speaker B:He's been furloughed.
Speaker B:Wow.
Speaker B:We furloughed him.
Speaker A:Ironically appropriate for tonight's show, by the way.
Speaker A:Look at you, man.
Speaker A:If I didn't know better, I'd say you've been doing this for years.
Speaker B:Honestly.
Speaker B:It's not that.
Speaker B:Because when you come to the THS pod, you know what you get?
Speaker B:You get unmatched energy, you get amplified focus, you get enhanced concentration and increased productivity.
Speaker A:I'm sorry, everybody said read the gorilla mind can before the show and that's what we got.
Speaker A:Okay, so some pretextual context for.
Speaker B:Pretextual context.
Speaker B:Yeah.
Speaker A:SAT vocabulary for tonight's show that I think is meaningful.
Speaker A:So normally we talk about somewhat current events and I heard a snippet, actually I listened to the whole show, but I heard a small portion of Chamath, whose last name I can never say from the all in podcast, who was on Joe Rogan's podcast.
Speaker A:And I really didn't know why he was in the show.
Speaker A:But this segment, about nine minutes in, we're going to play it here about taxation.
Speaker A:And I really reframed my perspective on what is likely to come and what will and most likely be the first shoe to drop in.
Speaker A:In meaningful change.
Speaker B:Oh.
Speaker A:So I thought that you're saying there will be change this unquestionably, if you follow his logic.
Speaker A:And we're going to prove out some of the math after we play this short three minute clip.
Speaker A:We're going to prove out some of the math of how there is a pretty palpable disconnect here with the data.
Speaker A:And that is going to be enough, I think, to convince most people that this is something to watch out for.
Speaker A:Now, I'm not going to say this is a doomer situation where everything is going to be catastrophic overnight, but I certainly think that the framework is here.
Speaker B:Mm.
Speaker A:In such a way that if AI continues to go down the path that it's going and wages and jobs continue to go on the path that we've evidenced on previous shows, you don't have to buy into the dogma one way or the other.
Speaker A:You just got to say, hey, look, you know, if unemployment continues to creep up a little bit, inflation continues to creep up a little bit, then you've got a problem that needs to be addressed.
Speaker A:And oh, by the way, this will also explain why the economy appears to be so resilient.
Speaker B:So.
Speaker B:So for our listeners out there, and I hope none of them are, because, you know, we've referenced him so many times.
Speaker B:Wise advice or theories from somebody like Chamath worth listening to.
Speaker A:Yeah, He's a surprisingly sharp guy.
Speaker A:A lot of billionaires, you listen to him, you're like, oh, God, that guy's so stupid.
Speaker A:Why don't.
Speaker A:Why don't I have a billion dollars?
Speaker A:He's not one of those guys.
Speaker B:Yeah, yeah, yeah, yeah, yeah.
Speaker B:What is venture capitalist known for?
Speaker B:Early investment in Facebook.
Speaker A:Right.
Speaker A:He went to go work for Zucks when.
Speaker B:Yeah, exactly.
Speaker B:And then I think he ultimately decided to bow out once he started to feel like this thing is going to maybe not be the best ad to society.
Speaker A:Well, there's some varying stories as to whether that was the reason or not, but certainly that was a part of his narrative.
Speaker A:Now he also has kids and he limits their tablet time.
Speaker A:He's got some very strong opinions of how that the impacts on humanity have been felt.
Speaker A:But what's really interesting to me is his take on.
Speaker A:On technology now, given all this.
Speaker A:But he's also got some criticism in his past about SPACs.
Speaker A:He was taking a lot of companies public with the SPAC methodology and it was highly criticized.
Speaker B:He gave a lot of money special purpose, right?
Speaker A:Yeah, yeah.
Speaker A:Basically taking companies public and what I would call a backdoor activity, which is always my favorite type of activity.
Speaker B:Backdoor activities are your favorite activity.
Speaker A:Yeah.
Speaker A:So a lot of the companies went public via SPAC are not what I would call highly desirable.
Speaker A:Yeah, like your THS themed undergarments, not a big seller for us, but they're still out.
Speaker A:You know what I mean?
Speaker B:Yeah, that is the higher standard.
Speaker A:Yeah.
Speaker A:And if you guys want a THS themed thong like Sayed Omar, you can go to thspod.com get all your free merch.
Speaker A:Let's get into the show, kids.
Speaker B:Let's go.
Speaker A:Are you wearing the black thong or the white thong?
Speaker A:The white one's kind of bold.
Speaker C:War should not be fought.
Speaker C:That war should be fought.
Speaker C:All of these things should, while important, distract us from what the core issue is.
Speaker C:And the core issue is that we as a society, I think, are out of balance.
Speaker C:The natural compact between all of us is broken.
Speaker C:And there are some simple ways to fix that compact.
Speaker C:Get people more invested, get people more engaged in the upside.
Speaker C:Have people have a positive, some view of what's happening.
Speaker C:And that isn't happening.
Speaker B:What simple solutions are there to.
Speaker B:To this one very particular issue?
Speaker C:Okay, I'll get your reaction to this.
Speaker C:Let's assume that you still lived in California because I think it tells this example in a more extreme way.
Speaker C:Let's say you make a million bucks a year, which is a lot of money, but it makes the point more cleanly.
Speaker C:You'd Pay, I think, 30% federal tax and you'd pay another 15 or 16% in state tax and Medicare tax and all this tax.
Speaker C:So if you're a wage earner, 50% of all your upside goes to the government.
Speaker C:If you're a capital earner and you make that same million dollars via capital gains, you pay half that tax.
Speaker C:Why did that happen?
Speaker C:That happened because in the 40s and 50s, but really in the 60s and 70s and 80s, what we were trying to do, or what the American government and what Western societies were trying to do was to convince people to invest their money.
Speaker C:Hey Joe, go build that factory, go hire those people, and we're going to incentivize you to do so.
Speaker C:And by doing that, there was this idea that all of those profits that you would get within diffuse trickle down into everybody else.
Speaker C:The workers participated, everybody participated.
Speaker C:But technology allows you to do more with less and less.
Speaker C:So now what happens is the capital owners can accrue infinite almost, it seems like value, and the workers get less and less.
Speaker C:But now if you get less and less and you're taxed more and more as a percentage of what you own, you're going to feel really out of sorts.
Speaker C:You're going to be like, why am I paying 50 cents of every dollar?
Speaker C:And I see these other ways where folks are paying 25 cents on their dollars, but their dollars are compounding way faster and they have Hundreds of billions more of those dollars than I have of my dollars.
Speaker C:If you take that example and you expand it across society, I think people understand that now there's enough information and there's enough people talking about it where it's pretty clear that that's happened.
Speaker C:So the question is, how do you fix it?
Speaker C:I think, like, if you think about AI and if you believe that we're going to get into this world of abundance and we're not working, what does it mean for governments to tax our labor?
Speaker C:There is no labor.
Speaker C:You're not working anymore.
Speaker C:I'm not working.
Speaker C:We're doing things out of leisure.
Speaker C:Why should I pay 50 cents of every dollar?
Speaker C:Why aren't the companies that are going to be making trillions of dollars, why don't they pay more?
Speaker A:So let's.
Speaker A:That's the premise.
Speaker A:I heard that and the light bulb went on for me.
Speaker A:Okay, there's a couple things that we have as a society seen an increasing cadence of.
Speaker A:One is probably most obviously the tax the rich narrative.
Speaker A:And here you have a billionaire on the largest podcast in the world talking about taxing, but not the rich.
Speaker A:He pretty much outlined the real problem that this whole tax the rich narrative has been about.
Speaker A:But he pointed the finger not at the rich, at corporations.
Speaker B:Yeah.
Speaker A:And there was a small kind of nod to AI there, suggesting that this problem gets exasperated in a meaningful way when jobs get harder and harder to find as companies get more and more efficient with AI.
Speaker A:These are all things we've talked about in silos on the show.
Speaker A:But the point of this conversation is to really take those silos and bring them all together.
Speaker B:Yeah, because for me, listening to that, you know, first time, first glance, hearing it, initial thought and reaction is the people in power, the lobbyists who control, you know, what, what gets presented for ultimate change would never let that happen.
Speaker A:That's exactly right.
Speaker A:But the, the problem for that, and we're going to get into this, is kind of the later, I guess, quarter of the show.
Speaker A:There's about 10 sections I want to cover here.
Speaker A:A later quarter of the show.
Speaker A:We're going to talk about who really is making those decisions and why.
Speaker A:And this is not a conspiratorial conversation.
Speaker A:This is not conspiracy laden conversation.
Speaker A:This is truly the way it works, whether you like it or not.
Speaker A:And to give everybody, again, some pretextual positioning here, before I do this, I'm going to use an example.
Speaker A:I'm going to use a couple different examples.
Speaker A:One example is going to be how we vote for president.
Speaker A:And another Example is going to be Bruce Willis.
Speaker A:If that doesn't make any sense to you, it will.
Speaker A:It will.
Speaker A:Okay, so example number one.
Speaker A:The popular vote, as we've covered on the show before, does not decide who's president.
Speaker A:It is what makes us feel engaged.
Speaker A:But there are at least three examples we've covered with historically in the show where the popular vote did not win and the president was elected by the Electoral College.
Speaker A:Electoral college is your senators, your house of Republicans, your representatives that are voting on behalf of the state, your, quote, elected officials.
Speaker A:So if the popular vote in and of itself does not decide who's ultimately president, then really your vote does not matter.
Speaker A:There's some contention about that positioning.
Speaker A:But I say this because there's a lot of things that we look as institutions that we look as foregone conclusions that are real, that aren't real.
Speaker A:They're there as window dressing.
Speaker A:The other one is a Bruce Willis example, and we're going to come back to these themes as we go through this.
Speaker A:Bruce Willis is an actor, or was an actor, and he's one of my favorite growing up.
Speaker A:Die Hard, the best Christmas movie of all time.
Speaker A:Yep.
Speaker A:Bruce Willis was not the guy who put the money up for the movie, generally speaking.
Speaker A:Generally speaking, he was not the guy who wrote the movie, generally speaking.
Speaker A:He was not the guy who owned the production house.
Speaker A:He was not the guy who did all that.
Speaker A:He was the guy that was picked because America resonated with him.
Speaker A:Okay?
Speaker A:Because he looked like the average man.
Speaker A:And people wanted to go see a movie where the average man who looked probably more like them than Arnold Schwarzenegger, Sylvester Stallone, who could do all these amazing things, could tell a story.
Speaker A:Yes.
Speaker A:And Bruce Willis got a paycheck for telling a story.
Speaker A:Now you go, oh, that's a Bruce Willis movie.
Speaker A:I'm gonna go see Bruce Willis.
Speaker A:But Bruce Willis is not the real one telling the story.
Speaker A:He's just doing what he's told in acting the part so that the story can be as it was pitched to him.
Speaker A:Right, right, right, right.
Speaker A:That is the President of the United States.
Speaker A:Currently, whether you believe it or not, that has always been the President of the United States, whether it's this president or another president.
Speaker B:Right?
Speaker A:Okay.
Speaker A:There's a reason why the president's interim for four years gets a second option for four more years and then can't be in perpetuity.
Speaker A:People who will look back at the formation of the country will say, well, it's because we didn't want a king and a queen.
Speaker A:Well, let's go back.
Speaker A:Taxation was a big part of how the country got to where it's at today.
Speaker B:Oh yeah, yeah, yeah.
Speaker A:And because of that, the monarchy was a big part of the problem leading into the formation of the country.
Speaker A:So we don't want a monarchy, we don't want a visible king and queen, but we still want all the riches of the king and queen.
Speaker A:So we'll make the people feel like they own the country, but we'll still accumulate our wealth as kings and queens of industry.
Speaker A:What you might have to talk about in the 40s was the industrial Revolution.
Speaker A:The Industrial Revolution came about, We've talked about this in the show before.
Speaker A:And what happened is you had one particular individual who went to Europe and saw this caste system of different educational systems brought back the one for the workers here to the United States.
Speaker A:That was not by accident.
Speaker A:And because that one was brought back here, we were training a nation of workers.
Speaker A:And what he references later on in the show is the Carnegie's, the Roosevelts, the Rothschilds.
Speaker A:They wanted, they were brought to the White House and they said, what do you want from your, from your employees?
Speaker A:And they wanted workers that were disciplined, that, you know, stood up and sat down, raised their hand, asked questions and went to school and followed that process.
Speaker A:Right.
Speaker A:But they were giving back to society.
Speaker A:They built these libraries and they didn't, they built these hospitals, but these things weren't built because they were just being generous.
Speaker A:It was their social contract, or so we thought.
Speaker B:Okay.
Speaker A:But we as a society were fooled.
Speaker A:We believe that social contract was in perpetuity.
Speaker A:Oh, if we give these people tax breaks and we give them the employees, we're going to get pensions and taken care of in our older age.
Speaker A:Never at the time do we think about living longer.
Speaker A:Never at the time do we think the generations after them weren't going to abide by the same rules.
Speaker A:And then there's a layer of religion that's built into this which you and I have not spoken about.
Speaker A:But the moral fabric that is every religion.
Speaker A:Be good to your fellow man.
Speaker A:Do unto others as you want them to do unto you.
Speaker A:And we all know that.
Speaker A:I've been to temples and mosques and all the, you know, Christian churches and Catholic churches and I've been to the full gambit.
Speaker A:That principle is overriding in all of them.
Speaker A:These themes are there, right?
Speaker A:These are the overwhelming majority of humans in the world.
Speaker A:I mean there's some Buddhists and stuff like that, but for the most part that's your religious arc.
Speaker A:And because of that we look at religion as binding.
Speaker A:I've got to be a good person in business.
Speaker A:Well, there's a reason why bad people continue to win in business.
Speaker A:There's a reason why the real life story of the bad guy winning happens more often than not in business.
Speaker A:It's the sharks.
Speaker A:We know private equity is malicious and and doing heartless things, but they're rewarded continuously.
Speaker A:We know that that CEO who's ruthless and cutthroat gets farther than that CEO who's caring and thoughtful.
Speaker A:But yet we don't want to acknowledge that the bad guys in business win because that runs afoul of our moral fabric.
Speaker A:But that moral fabric was never meant for them.
Speaker A:It was meant to keep us in line and not to break free of that.
Speaker A:Right?
Speaker A:So now that I'm done off my high horse of preaching, the federal government is funded by people, not corporations.
Speaker A:Okay.
Speaker A: For fiscal year: Speaker A:Of that, individual income taxes were 2.65 trillion and payroll taxes were 1.748 trillion.
Speaker A:Corporate income taxes were only $452 billion dollars.
Speaker B:It's a joke, right?
Speaker A:That means that individual income taxes plus payroll taxes made up roughly 84% of federal revenue.
Speaker A:84% Of it comes from the populace, the people.
Speaker B:Yeah.
Speaker A:While corporate taxes are about 8.5%.
Speaker A:Now, of course, I posted this recently on X and I put it out there because I thought this was a meaningful chart.
Speaker A:Of course, it's brand new.
Speaker B:Straight.
Speaker B:Straight from the higher standard.
Speaker A:Straight from the higher standard.
Speaker A:United States tax revenue by Source.
Speaker A: This uses: Speaker A:The data has actually gotten worse since this time.
Speaker A:Corporate tax is about 8.3% versus individual taxes.
Speaker A:When you add it all together, you get about 84, 85%.
Speaker A:Okay, that's a meaningful increase.
Speaker A:But if you were to isolate just individual taxes, just your W2 wage taxes, it's still about 40% as Chamath referenced in his initial statement.
Speaker A:Right, Just right there.
Speaker A:Not including the other taxes, 40%.
Speaker A:And I'm going to get into how some of these numbers are actually lower than they really are in just a little bit.
Speaker A:So we are the income stream for the government.
Speaker A:When you think about the context of this, I'm going to put it in a classic example.
Speaker A:If you're a nurse and you're making $80,000 a year, and I'm just going to use this 40% number, even though we know the number is much higher, you're getting taxed on a federal level just Federal level, this doesn't include state.
Speaker A:40%, Okay?
Speaker A:You're paying 40% of your income off the top.
Speaker A:Money goes out, you get taxed, then you get the money.
Speaker A:Yep.
Speaker A:Okay, 40%.
Speaker A:But a billionaire or a millionaire who has most of their money in things like corporations and capital gains income and isn't earning it via W2 or dividend income, for example, they're not getting taxed like that, okay?
Speaker A:Their company makes money, they have their expenses that come out from the company, and then they get taxed on the difference.
Speaker A:So the number is very, very different.
Speaker A:But let's just say you're a millionaire and you make millions and millions of dollars.
Speaker A:The millionaire would argue, and we've seen this a long time, and billionaires would argue this as well.
Speaker A:Hey, I pay more in absolute dollars than you do in percentage.
Speaker A:Because even though you're paying 40% of 80,000, I'm paying, you know, 10% of a billion.
Speaker B:Okay?
Speaker A:Right.
Speaker A:So it's not fair to me that I'm funding more than you are, but I'm going to prove out how that's not true and how there's a disconnect in that as well.
Speaker B:Okay?
Speaker A:And this is not to attack the wealthy, the rich.
Speaker A:I don't think the rich here are the problem.
Speaker A:I think capitalism in the corporate structure and the benefits that were given corporations are the problem.
Speaker B:I think Chamat's point was very well taken that, you know, I think when this was initially first laid out, I don't believe that what we're currently experiencing is what, you know, was in mind.
Speaker B:I think it was exactly how he laid it out.
Speaker B:It incentivized people to go out there and build and, you know, gain for the future.
Speaker B:And the thought process was it would trickle down ultimately to everybody, but unfortunately, greed takes over.
Speaker A:It does.
Speaker A:And I don't know that it was ever really intended to trickle down to anybody else.
Speaker A:I think that was just a holding statement that was put in place.
Speaker A:I'll give you a great example of this.
Speaker A:The current administration has said they're going to increase taxes on corporations and that they're going to increase revenue in the United States.
Speaker A:Right.
Speaker A:Well, the natural logical progression would be to go, okay, well, Chris, if last year it was 84% federal revenue from individuals and 8.6% from corporations, it's going to get better next year.
Speaker A:Right?
Speaker B:Right.
Speaker A: Well, the fiscal year: Speaker A:That puts individual plus payroll taxes at around 82% of projected federal revenue, down about 2% while corporate income taxes roughly fall to 7%.
Speaker A:So money is coming from other places, but it isn't materially.
Speaker A:You're changing about 2% for the general populace, but you're also dropping a little over 1% for the wealthy.
Speaker A:That one point, you know, 1% for these corporate taxes and I call them the wealthy in this case, I'm not talking about individuals.
Speaker A:Right.
Speaker A:Corporate taxes going down by 1% is a huge difference than it is by the overall consumer paying less.
Speaker A:Yeah, absolutely.
Speaker A:For you.
Speaker A:For me, that's incrementally nothing.
Speaker A:Right.
Speaker A:For me, those corporations, it's going to.
Speaker B:Be, it's going to be tricky too though, to really gauge the success of this because with what we've been talking about on the show and inflation and all, everything that we're seeing, let's just put 20, 26, for example, right.
Speaker B:You get the energy shock.
Speaker A:Right.
Speaker B:That clearly obviously impacts gas prices.
Speaker B:We know that 60% of Americans are living paycheck to paycheck, right?
Speaker B:Yep.
Speaker A:So 55% of Americans feel like their financial situation is getting worse.
Speaker B:Yep, exactly.
Speaker B:And let's just say, you know, you're spending 25% more on gasoline prices every month now.
Speaker B:That's that money is money that's taken out from you going out and spending and consuming on everything else you're consuming.
Speaker B:So that's less ultimately, less consumer spending, less corporate profits, AKA also less tax dollars.
Speaker A:But why is GDP propped up?
Speaker A:Why does the economy seem so resilient?
Speaker A:Why do the talking heads seem so positive?
Speaker A:Well, Carl Quintanella makes $8 million a year as a talking head on CNBC.
Speaker A:Do you think he is really the voice of the average consumer?
Speaker A:Great dude.
Speaker A:Love him.
Speaker A:Love his take.
Speaker A:Sarah Eisen makes $5 million a year on CNBC.
Speaker B:Yeah.
Speaker A:Do you think they are living the same lifestyle as you and me and everybody else?
Speaker B:No, no, no.
Speaker A:Right.
Speaker A:That's like asking LeBron James how much a Starbucks coffee cost.
Speaker B:Yeah, he's.
Speaker B:But he's very open and honest about everything that I wear was free.
Speaker B:It's been, it's Nike's bought it for me or it's my own brand, my own line.
Speaker B:He's not paying for anything.
Speaker A:And it's strange.
Speaker B:Yeah.
Speaker A:So W2 workers are taxed on income.
Speaker A:Corporations are taxed after the game is played.
Speaker A:Like we've already covered here.
Speaker A:I'm going to cover a little bit of the basics here with some Examples because it's going to set up a little bit later on in the show.
Speaker A:A W2 employee earns wages.
Speaker A:Federal income tax applies to ordinary income and payroll taxes apply directly to wages.
Speaker A: For: Speaker A:Then payroll tax comes on top of that.
Speaker A: % employer up to the: Speaker A:Self employed people effectively pay the full 12.4%.
Speaker A:But that's not true.
Speaker A:If you're self employed, you pay the full 12.4%.
Speaker A:But employers are now passing that along.
Speaker A:So instead of just a 37% tax, if you're making below $184,000 a year, you also have an additional 12.4% tax.
Speaker A:And just in case you're saying, Chris, I don't believe you, or hey, I'm not entirely sure that could be accurate, well, here's a congressional hearing where that question is brought up to the people who actually calculate the tax.
Speaker A:And far be it for me to not have this ready to go.
Speaker D:Is it right that those making under $184,500, their effective payroll tax rate is roughly 12.4%?
Speaker D:That's right.
Speaker D:The statutory rate is 6.2%.
Speaker D:But consensus view is that the employee pays basically the employer cost is passed on to the employee.
Speaker D:And so the employee basically faces a rate of 12.4% for anybody earning 104,500.
Speaker D:What is the effective payroll tax for someone making a million dollars a year?
Speaker D:So they would pay the 12.4% on that first $185,000 roughly, and then would not pay additional tax on the on labor income above that amount.
Speaker D:And so that math would work out to about 2.2%.
Speaker D:Okay, so 12.4% for someone under 184.5.
Speaker D:A millionaire would be about 2.2.
Speaker D:What if you're a billionaire like Trump or Musk, your Social Security tax would be effectively, on my understanding, very, very much smaller.
Speaker D: .: Speaker D:Yes.
Speaker D:That just doesn't make sense to me.
Speaker D:And when the richest people in the country have the smallest effective tax rate, that does not seem to me like a very fair system, especially when we are now six years away from retired workers facing this 24% cut in their Social Security benefits.
Speaker A:So that is not to Take a shot across the bow at the wealthy.
Speaker A:I think it's a great example.
Speaker A:No, no, no, it's not.
Speaker A:The focus here for me is not really the wealthy wage income earners.
Speaker A:It's the corporations are passing along the 6.2%.
Speaker A:Right.
Speaker B:Are.
Speaker B:Are they?
Speaker B:Because they would say, listen, this is the tax code, and we're just following the tax code.
Speaker A:That's right.
Speaker B:So this is 100% right.
Speaker B:Is this really our fault?
Speaker A:Well, see, and here's the problem.
Speaker A:When everybody can be the Spider man pointing at the other Spider man, which Spider man is ultimately responsible for the Spider man things?
Speaker B:All the Spider Man.
Speaker A:Of course.
Speaker B:Yeah.
Speaker A:But unfortunately, all the Spider men can't be charged guilty at the same time.
Speaker A:So you've got to find one scapegoat.
Speaker A:So who's the scapegoat in society?
Speaker A:The superhero named Spider Man.
Speaker B:It's Spirit Airlines.
Speaker A:Not Spirit Airlines.
Speaker B:No.
Speaker A:Okay.
Speaker A:It's the individual.
Speaker A:The individual gets blamed for it.
Speaker A:Well, hey, look, man, you got to pay.
Speaker A:What?
Speaker A:You got to pay.
Speaker A:Tax code, buddy.
Speaker A:What are you so upset about?
Speaker A:Right?
Speaker A:It's just the rules of the game.
Speaker B:It is what it is.
Speaker A:Which I have said before, too, you know, These are the game.
Speaker A:The rules of the game is upset.
Speaker A:Out to play.
Speaker A:I got to play them, by the way.
Speaker B:They're there.
Speaker A:You know, I got to live in the world.
Speaker A:I got Jamie Dimon.
Speaker A:Right.
Speaker A:Very easy to say when you're in his perch.
Speaker A:Yes.
Speaker B:But I mean, systematically.
Speaker B:It does feel like sometimes, for some.
Speaker B:For some people, you know, you lost before you even got started.
Speaker B:There's.
Speaker B:It's.
Speaker B:It's too much of an uphill battle.
Speaker A:Right, right.
Speaker B:And people aren't being taught the financial literacy to get ahead early enough to, you know, take advantage of this tax code.
Speaker A:But that's by design.
Speaker A:It's by design because the tax code works against them.
Speaker A:And to be very colloquial here, a worker gets paid, then gets taxed and then pays rent, food, gas, childcare, car payments, health expenses, life insurance.
Speaker B:No, no, they get taxed, and the money that that's left over, they go and spend and pay more tax, which is.
Speaker A:Got inflation on it as well.
Speaker B:Yes.
Speaker A:Right.
Speaker A:So the things you used to buy for 10, 20%, you're now buying for 25% or 24%, and then you're getting taxed on that as well.
Speaker B:Yeah.
Speaker A:So even though your.
Speaker A:Your inflation goes up, let's just use a number like 10%, your tax rate might be 7%.
Speaker A:So now your tax rate has also gone up.
Speaker A:As well, even though taxes haven't increased per se.
Speaker A:Right.
Speaker A:So it's, it's a, it's a parasitic loop that people are just ignoring that impact.
Speaker A:It disproportionately impacts the middle class in the lower class.
Speaker A:And that's why you're getting a K shaped economy corporation.
Speaker A:Collect revenue, deduct expenses, deducts depreciation deducts interest where allowed, applies credits, structures income, and then pay taxes on what's left.
Speaker A:Okay.
Speaker A:And capital gains are treated better than labor here.
Speaker A:And that's why whenever we show you the charts, which I've shown historically of where the wealthy own their assets, this is why the wealthy own so much stock relative to everybody else.
Speaker A:This is why the wealthy own so many more corporations relative to everybody else.
Speaker A:And the reason why, it's simple, is because they get the benefit of capital deductions or capital gains deductions.
Speaker A:And because of that, they're not taxed the same way.
Speaker A:This is the vehicle which allows them to avoid taxes.
Speaker B:Right.
Speaker B:Just.
Speaker B:Even the, even the short term capital gains is about half of what a wage earner would pay and then anything over a year would be even less than that.
Speaker A:So 20, 26, long term capital gains are generally taxed at 0%, 15% or, or 20%, depending on the income.
Speaker A:For single filers, the 20% capital gains bracket starts above $545,500.
Speaker A:For married couples filing jointly, it starts above 613, 700,000.
Speaker A:So it's even a lower threshold to get there.
Speaker A:Even less money can qualify for even less taxes.
Speaker A:Think that through.
Speaker B:Right, right, right.
Speaker A:And the tax rate here is not 37% to start, it's 0, 15 or 20.
Speaker A:So you're saying we almost 20% off the top in a worst case scenario at a lower $am.
Speaker A:Right.
Speaker A:It's just crazy to me.
Speaker A:This is more of a philosophical issue, but if you earn money by working, we tax it as ordinary income.
Speaker A:But if you earn money because you own an appreciating asset, equity, stock, fund interest, or business interest, the system often gives you lower rates, deferral basis planning, borrowing strategies, and all this flexibility that you just don't get as a W2 wage earner.
Speaker A:Why?
Speaker A:Because by the time you get your check, the money's already gone.
Speaker A:Right, right.
Speaker B:And you know, the, the, the idea or something that I've heard a lot of people start floating around is, well, you know, a house is an appreciating asset, but we get taxed on it annually.
Speaker A:Yep.
Speaker B:I know other, I know other assets that Appreciate annually, but they don't have to get taxed.
Speaker A:That's right.
Speaker A:Companies.
Speaker B:Why is that fair?
Speaker B:But guess what?
Speaker B:Majority of the population, for a long period of time, they weren't investing and holding on to those type of assets.
Speaker B:Who was?
Speaker A:The wealthy.
Speaker B:Pretty convenient.
Speaker A:It is pretty convenient.
Speaker A:And I know it sounds like even more.
Speaker A:But again, we're going back to the wealthy narrative here.
Speaker A:It's easy to blame the wealthy.
Speaker A:The problem is the wealthy are the byproduct of the.
Speaker A:Of the problem.
Speaker A:They're not the problem.
Speaker A: s that they were given in the: Speaker A:The problem is we like to classify people as good and bad.
Speaker A:Right.
Speaker A:Billionaire bad.
Speaker A:Because they're taking advantage of what's there.
Speaker A:No, that's an opportunity they have to take advantage of.
Speaker A:And frankly, if I were in their shoes, I would do the exact same thing.
Speaker A:I would have the sophisticated people telling me that that's the best way to handle my business.
Speaker A:The problem with that, with the logic here, is that these opportunities are there because they are so well paid, because they work for large corporations.
Speaker A:And their job is to lobby.
Speaker A:Their job is to control the narrative.
Speaker A:You know who the real senators and Republicans are in this country?
Speaker A:The CEOs of Apple, the CEOs of Starbucks.
Speaker A:These large company CEOs who control.
Speaker A:They're there not for four years, not for eight years.
Speaker A:They're there until their board says otherwise or they'd resign.
Speaker B:Right, Right.
Speaker A:I. E. Jamie Dimon.
Speaker A:They're the ones whose lobbyist groups are spending money.
Speaker B:Mm.
Speaker A:Talking to the politicians who were there for longer terms, who are ultimately talking to the president who's there for shorter terms.
Speaker A:Yeah.
Speaker B:And they are the ones, too, that are putting plenty of government bonds on their own books.
Speaker A:That's right.
Speaker A:One of the biggest lobbying groups in the country is the national association of Realtors.
Speaker A:Is that insane?
Speaker A:What the shit do you guys got to lobby about?
Speaker A:But they're protecting their workers.
Speaker A:They're protecting their income stream.
Speaker A:Right.
Speaker A:And their lobbying has survived multiple generations of different political parties and different political agendas.
Speaker A:We so easily want to look at the billionaires.
Speaker A:We don't look at the companies that are funding this because they are the biggest benefactors of this even more than the billionaires are.
Speaker B:And they don't ever have to answer to any of these questions.
Speaker A:And of course.
Speaker A:And then nobody.
Speaker B:Nobody even asks them the questions because why would you?
Speaker A:Everybody in government has the billionaire money in their pockets.
Speaker A:Right, Right.
Speaker A:And you look at the billionaire CEOs, but you're not looking at the corporate vehicles behind them.
Speaker A:The boards are making decisions as a fiduciary.
Speaker A:Their fiduciary responsibility is to protect the, the stockholder, the.
Speaker A:The shareholder.
Speaker A:Okay?
Speaker A:That's your, Your duty is to maximize revenue.
Speaker A:So how does that happen?
Speaker A:Well, the next chapter is where this gets really, really ugly.
Speaker A:Okay?
Speaker A:AI makes the labor market tax model unstable.
Speaker A:It just does.
Speaker A:And we're already seeing hints at it, but we didn't know how to explain it.
Speaker A:This is how you explain it.
Speaker B:Okay?
Speaker A:Jamask AI point is a powerful one because AI threatens the tax base itself.
Speaker A:If AI lets companies produce more output with fewer workers, more efficiency.
Speaker A:Efficiency ratios are.
Speaker A:Companies track this, okay?
Speaker A:It's one of those things you track against all companies.
Speaker A:How efficient are they with their overhead?
Speaker B:So less payroll taxes.
Speaker A:Less payroll taxes.
Speaker A:You buy a Mac Mini, and I'm using an example here for 800 bucks, okay?
Speaker A:Versus paying somebody salary for $80,000 a year, an analyst for $60,000 a year.
Speaker A:You've now become a much more efficient company.
Speaker A:And efficiency ratios are also a byproduct of revenue.
Speaker A:Right?
Speaker A:So if your revenue stays the same or goes up and your expenses go down, you're more efficient.
Speaker A:If your revenue goes up and your expenses go down, you're even that much more efficient.
Speaker B:Exactly.
Speaker A:So because of this, you as a CEO have a fiduciary responsibility.
Speaker A:And you as a board have a fiduciary responsibility to ensure that those numbers improve over time.
Speaker A:Right.
Speaker B:To at least explore it.
Speaker B:That's right.
Speaker B:You have to.
Speaker A:Right.
Speaker A:The human capital portion is not your prerogative.
Speaker A:Your prerogative is returning maximized shareholder value back.
Speaker A:Okay?
Speaker A:And that's where this gets disconnected.
Speaker A:Companies will take that path because they're allowed to, because it's their job.
Speaker B:But do you, do you feel like it's very short sighted?
Speaker A:Yeah, of course.
Speaker A:I mean, I'm.
Speaker A:I'm a human first person, I guess, if you want to call it that.
Speaker A:I don't even know if that's a.
Speaker A:It sounds like dystopian.
Speaker A:Right?
Speaker A:I'm a human.
Speaker A:I don't believe in these AI, But.
Speaker A:No, just.
Speaker A:But it sounds dystopian.
Speaker A:It does.
Speaker B:Right.
Speaker B:But it feels like.
Speaker B:It feels like if everybody were to do this, we're being very reckless because it could be the very thing that crashes down the entire system.
Speaker A:Well, I think that's what got the warehouse, the White House up in arms.
Speaker A:It's a warehouse.
Speaker A:Go get the money.
Speaker A:This is why Anthropic So I don't know if you've been watching the Elon Musk trial with, with Sam Altman in Open AI.
Speaker A:No, I haven't, bro.
Speaker A:Some of these text messages when Sam Altman was being kicked out of the company between him and an insider in the boardroom was wild.
Speaker A:It looks like a bunch of high school teens going like, what's going on in there?
Speaker A:Oh, I mean, it's a strange dialogue and it's all in like, text message.
Speaker A:Right.
Speaker A:And then at the same time, you're like, okay.
Speaker A:They basically said they don't trust him with AGI, which means they know something we don't about where AGI is.
Speaker A:Artificial general intelligence is on the spectrum.
Speaker B:And he's.
Speaker B:And the only thing he's done is portray himself as being the most trustworthy guy.
Speaker B:Because didn't he like, split his board into two types, two types of individuals, One that were very much like pro pushing AI, and the others that let's.
Speaker B:Let's get regulation behind it.
Speaker A:Well, the board clearly didn't trust him in part because of that.
Speaker A:And he also has like an agenda that he's pushing with Microsoft, and Microsoft CEO SA is part of this conversation.
Speaker A:And it's very, very bizarre.
Speaker A:I recommend anybody check the text messages that are out there.
Speaker A:There's public that came out in the trial, but you can tell where Elon Musk, as much as it's easy to criticize him as a billionaire, I think he's probably the most real person in the room, believe that or not.
Speaker A:I mean, it's difficult to think that he's suing for money here.
Speaker A:I think he's suing for, like, morality.
Speaker A:Oh, like, why else would you do this?
Speaker B:Right?
Speaker A:Like, I don't think he ca.
Speaker A:He's the richest person in the world.
Speaker A:Right.
Speaker A:He's not suing open AI because he wants to get richer.
Speaker B:Okay.
Speaker A:You know what I mean?
Speaker B:Yeah.
Speaker A:At some point in time, you're like, you know what?
Speaker A:I got enough.
Speaker A:He's got IPOs on the horizon.
Speaker A:I mean, okay, this is a moral fight for him.
Speaker A:Again, I'm not justifying.
Speaker A:I'm just saying that there's clearly more to it.
Speaker A:But let's run down this.
Speaker A:If AI lets companies produce more output with fewer workers, then less economic value shows up as wages and more shows up as corporate profit, equity value, productivity in capital appreciation, which we know as capital goes up, companies makes more, but they pay less taxes as a result of that.
Speaker A:So they just make more and more money.
Speaker A:Meanwhile, the workers are struggling, right?
Speaker A:That's great for the owners, it's great for the shareholders.
Speaker A:It's great for the market.
Speaker A:It's why you're seeing this resilient optimism in the stock market.
Speaker A:Okay.
Speaker A:Because that is the trend you're seeing.
Speaker A:Companies are now, right now, are making more money than ever on average.
Speaker A:Okay.
Speaker A:Earnings are higher than ever now.
Speaker A:Okay.
Speaker A:They're going to continue to push those earnings as high as they can, if they can.
Speaker A:That's just their jobs as board members, as CEOs, executives.
Speaker A:Right.
Speaker A:It's a problem for the government.
Speaker A:Funded by payroll and wage income, though.
Speaker A:This comes back to bite the government in the ass.
Speaker B:Yeah, absolutely.
Speaker A:Your number one source of revenue is getting pushed out of the system When Elon Musk and everybody talks about universal basic income.
Speaker A:We're going to pay everybody money, first of all.
Speaker A:That sounds very socialism, like, to me.
Speaker A:Yeah, right.
Speaker A:Like we all get the same amount of money.
Speaker A:We're all getting bread from the same store.
Speaker A:Right.
Speaker A:Like, so we're, we're all getting the same paycheck.
Speaker B:We're all.
Speaker B:Yeah, we're all gonna live the same lifestyle.
Speaker A:That's socialism.
Speaker A:Right?
Speaker B:Yeah.
Speaker A:Okay.
Speaker A:But whatever.
Speaker A:Let's just, let's just roll with that for a little bit and just say, okay, we have more time for leisure, which we all know that's bullshit.
Speaker A:Yeah.
Speaker B:Who's going to be able to afford anything?
Speaker A:And Chamath goes in there like, you know, if we all have more time for leisure, more time for activities, maybe we'll spend more time reading.
Speaker A:Get the fuck out of here.
Speaker A:Ain't nobody going to read a book.
Speaker A:That's not the way it works.
Speaker A:And I apologize for being crass, but I'm just saying, like, that's just not.
Speaker B:How we work right now.
Speaker B:When people have free time, what are they doing?
Speaker A:Well, we went and we're idiots.
Speaker A:As society, we follow the natural native prerogative of, of human evolution with technology.
Speaker A:And no one stopped to go, is this a bad idea?
Speaker B:Yeah.
Speaker A:And let me explain it to you, okay?
Speaker A:Internet gets created.
Speaker A:Oh, shit.
Speaker A:Now there's all this stuff's online.
Speaker A:I don't have to go read a book anymore.
Speaker A:I don't have to do, like, everything's now accessible, right?
Speaker A:More and more stuff get online.
Speaker A:More and more accessible.
Speaker A:So what do you want?
Speaker A:If you're an online website that's static, you want attention?
Speaker A:Yeah.
Speaker A:How do you get attention?
Speaker A:You get more people to go to your site.
Speaker B:Sensationalism, right?
Speaker A:Well, I mean, at the beginning, it wasn't sensationalism.
Speaker A:It was just you get more traffic there, right?
Speaker B:No, wasn't.
Speaker B:It wasn't.
Speaker B:The industry that led the way was pornography.
Speaker A:Well, pornography leads away in a lot of technologies.
Speaker A:It's how you got VHS.
Speaker A:It's how you got some of the 4K footage you got.
Speaker A:It's how you got some virtual reality stuff that was going on here.
Speaker A:It's how you got some of these helmets.
Speaker A:Yeah.
Speaker A:I mean, some of the robotics, I mean, I don't want to get into it, but I've seen some.
Speaker A:Some stuff there.
Speaker A:And I say this.
Speaker A:I know it sounds like our usual perverted tone, but I.
Speaker A:It's not the.
Speaker B:It's always like the guinea pig into any industry, right?
Speaker A:The carnal desires of humanity, for reasons that are just wildly obvious, because we're just animals, seem to lead the way in our evolutionary processes.
Speaker A:Right.
Speaker A:And this is weird because we're also seeing lower testosterone and lower, lower fertility rates in the country.
Speaker A:We're seeing less people procreating.
Speaker A:We're seeing a lot of gender fluidity that we didn't see before, which may or may not be biological or chemical in response to the toxins that we're seeing.
Speaker A:Who knows?
Speaker A:I mean, I'm not the camp, but I'm saying, like, you're seeing these responses, but carnal desires to lead the way.
Speaker A:Yeah, but then Google came about and it was all backlink driven, right?
Speaker A:So if there's five links about Saeed and there's 20 links about Chris, well, Chris is clearly more popular than Saeed because of all the backlinks.
Speaker A:This is how you got all these backlinks.
Speaker A:Fast forward to AI and the Internet and it's.
Speaker A:Our attention spans are now so short we can't even focus right.
Speaker A:For a long time.
Speaker A:We made this podcast and I was like, okay, great, we're making this long form content.
Speaker A:Why isn't we looking at it?
Speaker A:But we're getting thousands of people listening to short form content and I'm like, I'm an idiot.
Speaker A:Yeah, we don't make a podcast anybody listens to anymore.
Speaker A:You want to know?
Speaker A:I can prove this out.
Speaker A:Ask somebody.
Speaker A:The last podcast they listen to, they're going to tell you.
Speaker A:Then ask them if they actually watch the podcast or watched a clip from the podcast.
Speaker B:Yeah, yeah, yeah, yeah, yeah.
Speaker A:Nine times out of ten is they watch the clip from the podcast.
Speaker B:Yeah, that's true.
Speaker B:I mean, I'm guilty of that myself.
Speaker A:Oh, me too.
Speaker A:Yeah, I do it too.
Speaker A:And I'm like, I'm an idiot.
Speaker A:Right?
Speaker A:So one of the things from a numerical Standpoint from our show that I don't really share is we've made a pivot to an audio like podcast into a media company about two years ago.
Speaker A:Right.
Speaker A:And that it kind of is grown.
Speaker A:So not only do we produce live content three times a week, we produce educational content, we produce short form format, we produce long form, long form content.
Speaker A:We produce the YouTube channel, we do video on, on, on Spotify now on Apple.
Speaker A:Next week should be the first episode on Apple.
Speaker A:It's in video by the way.
Speaker A:So this episode.
Speaker A:Hey, everybody.
Speaker B:Hey.
Speaker A:But all these formats to produce content.
Speaker A:Our audio streaming numbers have dropped down.
Speaker A:And for a long time I was discouraged.
Speaker A:I was like, damn, bro.
Speaker A:But then I look at the short form content and there's hundreds of thousands of views across multiple platforms.
Speaker A:Yeah.
Speaker A:You realize the short channel, which is just my personal channel, gets like 9.4 million views in the last year.
Speaker B:That's a lot that tells you right there how people are consuming.
Speaker A:Mostly hating on you, by the way.
Speaker A:You don't ever go to that channel.
Speaker A:But it's mostly natural.
Speaker A:Who is this chubby bastard that looks just like Chris?
Speaker B:The before picture before tried.
Speaker A:Do yourself a favor, do not go, go look at the old content.
Speaker A:Do not do it.
Speaker A:We were both me more than you overweight like it was.
Speaker B:I feel like I was thinner back then and now it's getting.
Speaker B:Now it's going the opposite way.
Speaker A:It's a good.
Speaker A:You look good.
Speaker A:You look good.
Speaker A:So anyway, I say all this because I think that there's.
Speaker A:There's a real material problem coming here.
Speaker A:The ownership data makes this even sharper.
Speaker A: ,: Speaker A:The top 10% together own roughly 87% of the corporate equities market.
Speaker A:The stock market.
Speaker A:87% Owned by the top 10%.
Speaker B:Top 10.
Speaker B:Think about that.
Speaker A:Yeah.
Speaker A:Which means they are the ones getting the benefit of this tax difference.
Speaker A:Which somebody listening is going to go, oh duh, man, I knew we were rich for getting taxed less than everybody else was.
Speaker A:It's the corporations though.
Speaker A:Why are we allowing the corporations to do this to the work?
Speaker A:Why did we allow pensions to go away?
Speaker A:Why did we allow 401k?
Speaker A:First of all, let's call, let's call 401k what it is.
Speaker A:It's bullshit.
Speaker A:I can't manage my own 401k.
Speaker B:Right, right.
Speaker A:Like I'VE got to go into an institutional 401k.
Speaker A:Who does that serve?
Speaker A:Does that serve the institutional investors, the RAs, the wealth advisors, or does that serve me right?
Speaker A:That doesn't make any sense.
Speaker B:It provides them more predictability.
Speaker A:And Social Security.
Speaker A:Why can't I manage my own Social Security?
Speaker B:Right.
Speaker A:I got to give it to you to get 24% less next year based on your own financial shortcomings.
Speaker A:And let's be honest, why am I trusting the government with managing my money for, for retirement and for future, like, money, pay me back.
Speaker A:Why?
Speaker A:You guys have proven you can't manage money.
Speaker B:Yeah.
Speaker B:We already know this is running dry in about what you say, 12 years.
Speaker A:Yeah.
Speaker A:I mean, it's just, it's like I'm looking like, is everybody in the room, like, insane.
Speaker B:Yeah.
Speaker B:And no one's doing nothing about it.
Speaker A:So when AI increases the value of companies, the gains do not flow evenly through society because the disposition of these assets through society is very weighted towards the wealthy.
Speaker A:Right.
Speaker A:They flow disproportionately to the people who own the equity.
Speaker A:And at the same time, corporate profits remain enormous.
Speaker A:Fred.
Speaker A: of: Speaker A:Corporate profits, $3.792 trillion.
Speaker A:Why don't we tax that 40% and see what happens, huh?
Speaker A:Hey, guys, I found a way to get us $1 trillion of extra income.
Speaker B:You're welcome.
Speaker A:We go tax Apple.
Speaker A:How do you like it?
Speaker A:We're not giving you a sticker anymore, motherfucker.
Speaker A:How you feel about that?
Speaker B:I don't believe.
Speaker B:Yeah, I just don't.
Speaker B:I just believe that there's too much money behind the lobbyists for any of this to ever get changed.
Speaker A:That's probably true.
Speaker A:And I'm not picking on Apple.
Speaker A:I love Apple and I love their products and I'm not, I'm not judging them.
Speaker A:But at the same time, you know this.
Speaker A:We have allowed corporations to do what corporations should do.
Speaker A:This.
Speaker B:But this just goes back to again, another, another time, another situation where, you know, we've trusted that the institutions in the system would, would take care of us for, you know, everything that we've done.
Speaker B:Just trusting the system for what it is.
Speaker B:And it's not.
Speaker A:It's not.
Speaker A:And, and the system was never designed for AI.
Speaker A:So the job loss conversation is usually framed emotionally.
Speaker A:Will AI take my job?
Speaker A:Am I going to lose my job?
Speaker A:Stuff like that.
Speaker A:Right.
Speaker A:But the More structured question really is the one that we're kind of proposing tonight.
Speaker A:And that's if AI reduces the need for labor, how does labor funded government survive?
Speaker B:And I think corporations are going to have to pay tax for each.
Speaker B:I mean Mac Mini, but obviously they're not going to have Mac Minis, but each AI model.
Speaker A:Right.
Speaker A:Okay, well, I got some forecasts for you ready.
Speaker A:Okay.
Speaker B:All right.
Speaker A:World Economic Forum is in the house, by the way.
Speaker B:Wow.
Speaker A:We didn't get invited to Davos again.
Speaker B:These guys, they just don't respect.
Speaker A:No respect for no respect.
Speaker A:I'm having our AI agent like mass spam.
Speaker A:World Economic Forum.
Speaker B:Maybe Kevin Warsh would appreciate our value.
Speaker A:There was an article that came out today on CNBC talking about what's the guy from the last episode we listened to.
Speaker A:Got three, three names like you three.
Speaker B:Three first names.
Speaker A:The guy called the 87 crash.
Speaker A:Damn it.
Speaker A:I can't remember his name.
Speaker A:Okay, anyway, the episode he was interviewed and he was like, yeah, I think Warshire is going to raise rates, not cut rates.
Speaker A:And I'm sitting here going like, oh my God, this conversation is already lighting up.
Speaker B:Yeah, yeah, exactly.
Speaker A:Even the new guy's like, no, I'm going to increase rates.
Speaker A:Right.
Speaker A:I know, crazy.
Speaker A:There are different forecasts, okay.
Speaker A: The World Economic Forum's: Speaker A:That number is interesting for a net gain of 78 million jobs globally.
Speaker A:That is the optimistic transition story.
Speaker A:But AI executives are warning about real displacement.
Speaker A:Anthropic CEO, the guy in charge of one of the largest technology vehicles for this, not the World Economic Forum.
Speaker A:Right.
Speaker A:Okay.
Speaker A:The guy who's in charge of the second largest and arguably the best technology behind this currently.
Speaker A:Right.
Speaker A: Dario Amodi told Axios in: Speaker A:Mind you, that's.
Speaker B:And that's not concerning to anybody, mind you.
Speaker A:This guy's model mythos was so friggin bad, right?
Speaker A:And scary.
Speaker A:I shouldn't say bad.
Speaker A:So badass.
Speaker B:Okay.
Speaker A:That the White House is like, hey, bring his ass here, we got to talk to him.
Speaker A:Yeah.
Speaker A:They, they found security risks in day one.
Speaker A:Security like flaws that that were had gone unfound for 20 plus years.
Speaker A:So much.
Speaker A:So this is so concerning to the White House.
Speaker A:The White House is now saying we should probably be reviewing these models before they get released now.
Speaker A:Yeah, yeah.
Speaker B:Yeah, yeah, yeah.
Speaker B:That's how you know it's a problem.
Speaker B:But so potentially 90 million jobs being replaced in 170 million added, you said.
Speaker B:I mean just because that that equals out to more jobs in the market does not mean that it will be paying enough to cover those same jobs.
Speaker A:Well, that's the part that nobody's really addressing here is that doesn't mean that the wages keep up.
Speaker A:Right, right.
Speaker B:Like that.
Speaker A:Hey man, would you.
Speaker A:Your job is to push this button on this bot.
Speaker B:Right.
Speaker B:Just monitor this AI bot, make sure it's doing its thing.
Speaker B:Like I feel like that that person's not getting paid the same.
Speaker A:Yeah.
Speaker A:It's going to be a different parameter.
Speaker A:Again, nobody has those prerogative numbers here, but they're important.
Speaker A:So government trust obviously is a problem.
Speaker A:Okay.
Speaker A:And this goes back to Reagan's era.
Speaker A:And I don't want to say that the government can't be trusted, but I'm going to say the government can't be trusted.
Speaker B:Yeah, yeah.
Speaker A:Reagan's pushback in the clip that was with Chamath, ok. Reagan were in the room, he essentially says even if Chamath is right, that corporations should Rogan's pushback and I keep saying Reagan, even if corporations should pay more, why trust the government with more money when the government already waste misallocates and launders money through the broken systems?
Speaker A:Then this argument unfortunately has data behind it.
Speaker A:So the argument here that Rogan made, which is really astute, was, okay, let's just say we solve the problem.
Speaker A:We tax corporations or we tax billionaires.
Speaker A:What makes you think that the corrupt corporate, the corrupt government spending actually sees that going to better care of life for all of us in society?
Speaker B:Right.
Speaker B:That's, that's been Rogan's play on everything.
Speaker B:If every time that, you know, more tax gets proposed is like you couldn't manage it before, what makes me think you're going to be able to manage it now?
Speaker B:And right.
Speaker A:So but here's what I would say to that, my counterpoint to that.
Speaker A:Okay, this is just me spitballing with you, me, Rogan and Chmath in a room.
Speaker B:All right.
Speaker B:Spitballing.
Speaker A:Yeah.
Speaker A:That shouldn't be the all.
Speaker A:We should be the all out podcast.
Speaker B:Oh, we go all out.
Speaker A:Yeah.
Speaker A:You, me, Rogan and Chamath.
Speaker A:What do we do that you want to call Jimmy?
Speaker B:I'm okay.
Speaker B:I'm okay with being slim behind them.
Speaker A:Behind the desk anyway.
Speaker A:So here's the thing, is that I agree that I'm not saying that government can be trusted with this.
Speaker A:But here's what you do, right?
Speaker A:If wages are going to change, I can give everybody In America a 37% salary increase right now.
Speaker B:Okay.
Speaker A:I cannot change the paradigm at all for corporations on that side of things.
Speaker A:What I'll say is, corporations, you now pay 37% for each worker, and you're not allowed to pass it on to the worker.
Speaker A:And you worker, you don't get taxed 37%.
Speaker B:Yeah.
Speaker B:Guess what's going to happen in wages?
Speaker B:You ain't getting your pay bumps anymore.
Speaker A:Okay, so that's a problem.
Speaker A:I get it.
Speaker B:That's a big problem.
Speaker A:Right.
Speaker A:At the same time.
Speaker B:And what does that do to the market?
Speaker A:The national debt?
Speaker A:There's a lot of bad things.
Speaker A:The national debt goes up and up and up.
Speaker A:So at some point in time, you have to.
Speaker A:The only solution for this, whether Rogan wants to admit it or not, is you got to tax corporations.
Speaker A:If you don't tax corporations more, you can't squeeze any more money out of workers that the blood's already out of that turnip.
Speaker B:Yeah.
Speaker A:Right.
Speaker A:You're gonna have to do it anyway.
Speaker A:Right.
Speaker A:So sooner or later, we're getting to this crossroad, and I think we're already there, frankly.
Speaker A:You can't have the market doing what it's doing.
Speaker A:Right.
Speaker A:While everybody else, 55% of society, feels a different way.
Speaker B:Yeah.
Speaker A:You can't have billionaires and everybody else.
Speaker A:You just can't.
Speaker A:If you don't have a middle class or a.
Speaker B:Not until.
Speaker B:Not until the system breaks.
Speaker B:Because right now, it.
Speaker B:From this.
Speaker B:This is.
Speaker B:This is how I see it.
Speaker B:And Rogan's point is well taken.
Speaker B:I floated the idea before, and you.
Speaker B:You weren't riding with me on it when I was like, look, if I lie to my kid, and then I know the government's lying to me.
Speaker A:Right.
Speaker B:But you're like, I don't lie to my kid.
Speaker B:I'm like, okay, fine.
Speaker B:Corporations and CEOs at companies, though, are not always the most transparent with their staff.
Speaker A:Oh, yeah, I could.
Speaker A:Tom Schaer straight up lied.
Speaker B:Wow.
Speaker A:Lied to me over and over again.
Speaker A:You don't have to comment on that.
Speaker A:I don't want you to comment on that.
Speaker A:I want everybody to listen to send this clip to him.
Speaker A:That dude's a liar.
Speaker B:I didn't expect that.
Speaker B:Okay.
Speaker A:Yeah.
Speaker A:He lied to me multiple times.
Speaker A:And we can have that conversation anytime he wants to on this show in front of a camera.
Speaker B:Right.
Speaker A:And we can debate it.
Speaker B:Right.
Speaker B:So.
Speaker B:But.
Speaker B:And many CEOs across the nation aren't transparent with their staff.
Speaker B:Right.
Speaker B:I feel like the government would be the same exact way.
Speaker B:I feel like, I feel like DJT is the CEO of the nation.
Speaker B:I don't feel like he's being very transparent.
Speaker A:Yeah, but you have to understand too, just like other people that I've mentioned on the show before, historically, like five seconds ago, they're not always the ones who were driving the train.
Speaker A:So as much as I am critical, I will say that the board of directors is in charge of the strategy.
Speaker B:Absolutely right.
Speaker A:So in this case, he's being.
Speaker B:They're being paid to not be transparent to, hey, it's your job to make sure nobody freaks out and you keep everything status quo.
Speaker A:Right.
Speaker A:But the real question here is for the President, United States, is who is his board?
Speaker A:Is it the Senate and the House?
Speaker A:It's.
Speaker B:I mean, that they're that are supposed to be providing the checks and balances.
Speaker A:Or is it the one putting the monies into the infrastructure?
Speaker A:And I'll give you a different example of this.
Speaker A:Right.
Speaker A:If private equity funds a company and they put in millions and millions of dollars.
Speaker B:Yes.
Speaker A:Should private equities, fresh capital infusion into a company, give them more of a say in what ultimately happens in that company?
Speaker B:I think what it comes down to, how much of the capital do I own now?
Speaker A:The morally appropriate answer is the board represents the shareholders.
Speaker A:The Senate and the House represents us.
Speaker A:The individuals in our desires, wants and needs should come first.
Speaker A:But we know that isn't the way it works in practice.
Speaker A:You put your money up.
Speaker A:I'm going to listen to what you said because you came in and backed me and because you're a big money person.
Speaker A:I'm a human.
Speaker A:You're a human.
Speaker A:I want you to back me in.
Speaker B:The future, of course, because there will be a life after this.
Speaker A:So board members tend to kowtow.
Speaker A:Politicians tend to kowtow.
Speaker A:They tend to roll over and say, rub my belly, whatever you want.
Speaker A:Because I want to be your friend.
Speaker A:Because when this is all done, I want you to hook me up.
Speaker B:It's so gross.
Speaker A:It's gross.
Speaker A:But that's unfortunate the way all of these businesses work.
Speaker A:That's why you see so many of these relationships.
Speaker A:And I'm using bunny ears for those of you who can't see me on the road.
Speaker A:Few and fewer of you, by the way, because, you know, audio streaming hours are going down.
Speaker A:But yeah, you're seeing this, this behavior come over and over and over again.
Speaker A:I think at some point in time, you're just going to have to tax corporations.
Speaker A:Not because anything's changed from the political zeitgeist, but because the government can't have the national debt.
Speaker A:They can't believe the consumer any more than they already have.
Speaker A:It's going to have to come from the companies.
Speaker B:Yes.
Speaker A:And at some point in time that we can look at the stock market all you want, but companies can't be at an all time high where the government's at.
Speaker A:An all time debt like that.
Speaker A:That doesn't make sense.
Speaker A:The regulatory body, the government that oversees everybody is bleeding out money.
Speaker B:Yeah.
Speaker A:But everybody else making money that they're overseeing is at an all time high.
Speaker B:Yeah.
Speaker B:So Chamath's point is well taken.
Speaker B:Society as a whole, we're.
Speaker B:We're lost.
Speaker B:Right.
Speaker B:We're incentivizing the wrong things.
Speaker B:Right.
Speaker B:And we.
Speaker B:And it would be virtually impossible to get everybody on the same page.
Speaker B:But you would need to begin rewarding companies and believing in companies that support their staff.
Speaker A:But just in case you wanted to know how bad this gets at the government level, let's just go through some numbers because I have them.
Speaker A: roper payments in fiscal year: Speaker A:Sheesh.
Speaker A: Since fiscal year: Speaker A: I'm sorry, fiscal year: Speaker B:By the way, can we do a little sidebar?
Speaker A:We, we don't always do that at.
Speaker B:The 52 minute mark.
Speaker B:I've had the benefit of not needing after school child care for a long portion of time.
Speaker B:But I got a bone to pick with after school.
Speaker A:Wildly expensive.
Speaker A:And why is it so hard to get in?
Speaker B:Okay, okay.
Speaker B:Wildly expensive.
Speaker B:I, I understand.
Speaker B:Right.
Speaker B:At least at our school it's like 300 bucks a kid.
Speaker B:Right.
Speaker B:For five days a week.
Speaker A:That's expensive.
Speaker B:It's wild.
Speaker B:Yeah.
Speaker B:But let's just say.
Speaker B:Okay, put that aside.
Speaker B:How is there not a spot open for every kid?
Speaker B:Yeah.
Speaker B:If somebody needs it, we gotta, you know, And I get it.
Speaker B:It's not through the school.
Speaker B:It's like a third party company that gets approved by the school.
Speaker A:But it's like a business.
Speaker A:Like it's in the business, man.
Speaker B:And I'm like, so everybody.
Speaker B:So you like in order to have kids you need to have help?
Speaker A:Yeah.
Speaker A:Well, not only that, but it's, it's so.
Speaker A:My wife and I don't have any help.
Speaker B:Yeah.
Speaker A:We had nobody in the family's world.
Speaker A:Right.
Speaker A:Right.
Speaker A:And for us, like, I don't.
Speaker A:She's a nurse.
Speaker A:She loved working as a nurse.
Speaker B:Yeah.
Speaker A:She.
Speaker A:I.
Speaker A:We can't.
Speaker A:I don't have anybody.
Speaker B:It doesn't make sense financially.
Speaker B:Right.
Speaker B:Like, it, like the trade off is like.
Speaker B:It's like nothing.
Speaker A:She was making 80 to 100 grand a year right.
Speaker A:After taxes.
Speaker A:Right?
Speaker B:Yeah.
Speaker A:She's getting taxed because we're in the highest tax bracket.
Speaker B:Right.
Speaker A:She's getting her ass taxed more than ever because of our marital status, taxes.
Speaker A:And then the worst part is, is, like, you start looking at the cost of child care and after school and you start saying yourself, okay, so we're not really saving that much.
Speaker B:Yeah, right, exactly.
Speaker A:So it doesn't make any sense.
Speaker B:Right.
Speaker B:And then the.
Speaker B:The extra money that you would have been getting.
Speaker A:Right.
Speaker B:It's like, okay, would you pay that to, like, have yourself just be there with your own kid?
Speaker A:Right.
Speaker B:It makes all the sense.
Speaker B:But I'm like, man.
Speaker B:And there's like a wait list, which is just ridiculous.
Speaker B:Like, you know that it.
Speaker B:Just say that it's closed.
Speaker B:Like, there's no I'm.
Speaker B:You're never gonna make that wait list.
Speaker A:Never gonna make.
Speaker B:Yeah.
Speaker B:So it's very, very frustrating and aggravating.
Speaker A:Oh, it's.
Speaker A:It's a true time.
Speaker A:And it's.
Speaker A:It's.
Speaker A:There's.
Speaker A:Especially in a world where we know that more and more households have two working.
Speaker B:I had a job.
Speaker B:I had a job offer that I had to pass on because they said five days a week in office.
Speaker B:And I'm like, I. I understand that.
Speaker B:I got nobody to help my kids, so I have to pass on the offer.
Speaker B:Nothing we could do.
Speaker A:Sorry.
Speaker B:You know, you're like, so what's the system?
Speaker B:The system's not protecting me.
Speaker A:Right.
Speaker B:And it's like, you gotta.
Speaker B:You got people out here that are willing to put in the work.
Speaker A:Yeah.
Speaker B:You know, and it's like, there's nothing you can do.
Speaker A:Yeah.
Speaker B:So it's.
Speaker B:It's very aggravating.
Speaker A:I don't.
Speaker A:I don't disagree.
Speaker A:Anything you said.
Speaker A:I know it's a problem.
Speaker A:I don't have a solution for that one any more than I have a solution for what we're talking about tonight.
Speaker A:Well, I got a couple solutions for one tonight.
Speaker A:So maybe your problem is unsolved.
Speaker A:Tbd.
Speaker B:Tbd.
Speaker A:GAO also notes that actual amounts may be higher than numbers I gave you because not all programs report complete estimates.
Speaker A:Not all programs of the government report, complete estimates.
Speaker B:What isn't?
Speaker B:Oh, oh, like you mean like just like the jobs reports.
Speaker A:Yeah.
Speaker A:The IRS tax gap is another piece.
Speaker A: gross tax gap for the year of: Speaker B:Yeah.
Speaker A:So not only we have a tax problem, we got a trust problem here.
Speaker B:Yeah.
Speaker B:And look, it's funny, I get it.
Speaker B:A company like Spirit airlines goes down, 17,000 employees now unemployed.
Speaker B:Right.
Speaker B:This doesn't take into account all the third party vendors that worked with Spirit Airlines that are going to have their profits be affected by this.
Speaker B:Right.
Speaker B:So you and you and you go into the next Fed meeting and you're going to hear the unemployment rates at 4.3%.
Speaker B:It's at 4.4% and nobody's concerned.
Speaker B:We talked about the challenger report recently, just from two years ago for the, you know, looking at, you know, the jobs that were lost for the month, 1% was accounted for being because of AI.
Speaker B:It's now at 25.
Speaker B:We're still not talking about AI losing jobs and we're talking about how it's, it's created, it hasn't, it hasn't began to create jobs yet.
Speaker A:I feel like I'm living in a real life, like skit.
Speaker B:Like I feel like I'm looking at the train crash happening in real time.
Speaker B:I'm like, are we not watching the same channel?
Speaker A:I'm just waiting for Dave Chappelle to come out with a cigarette like, you.
Speaker B:Know what I mean?
Speaker A:Like we're getting to the point of ridiculous now where it's, I'm like, so let me give you the corruption cycle.
Speaker A:Okay?
Speaker B:Yeah.
Speaker A:Workers and small businesses fund the government through income and payroll taxes.
Speaker A:Okay.
Speaker A:We know that government spending flows into agencies, contracts, grants, tax credit, subsidies and procurement and all the other bs.
Speaker A:Corporations and wealthy interests lobby to shape those rules because they have a natural inclination to try to see if they can curve the results in their favor.
Speaker A:Politicians become dependent on donor networks, dark money and industry access.
Speaker A:And I'm going to use those words very fluffily and on purpose.
Speaker A:Former staffers and officials move into lobbying.
Speaker A:Hey, remember when you come to me.
Speaker B:Yeah.
Speaker A:Now I can go to people for you because I know people.
Speaker A:Right.
Speaker B:I've been doing this a long time.
Speaker A:Or they go work for companies themselves.
Speaker B:Yeah.
Speaker A:Public sees the outcomes and concludes the system is rigged.
Speaker A:Well, it's not rigged, it's just paid for.
Speaker A:Right.
Speaker A:Trust collapses.
Speaker B:Rigged against the Bottom man.
Speaker A:Yeah.
Speaker A:Trust collapses.
Speaker A:The answer from government is usually we just need more money, guys.
Speaker A:Well, where are you gonna get the money from now?
Speaker A:Yeah, we have a debt problem.
Speaker A:There's only two ways this works out.
Speaker A:Either we make more money as a country, which tariffs may not have worked.
Speaker B:We make more money as a country.
Speaker B:Okay.
Speaker A:Okay.
Speaker A:You can cut expenses.
Speaker A:I don't know how you're gonna do that.
Speaker B:Oh, where are you gonna do that?
Speaker A:Yeah.
Speaker B:From where?
Speaker A:Doge didn't really work out.
Speaker A:No.
Speaker A:Or you can raise more money.
Speaker B:Oh, so we're selling off Florida, is that we're saying, hey, you guys can.
Speaker B:Company can come in and buy Florida.
Speaker B:We'll just give it to you.
Speaker A:I feel like Alaska and Hawaii are more appropriate.
Speaker B:Hawaii?
Speaker B:Nah, that's ours, bro.
Speaker A:Come on.
Speaker A:I'm just saying they're.
Speaker A:They're a little disconnected to us.
Speaker A:Hey, Japan, this is in your neighborhood.
Speaker A:You know what I mean?
Speaker A:You want Guam?
Speaker A:We'll throw it in as a discount.
Speaker B:Just 39 trillion.
Speaker A:That's it.
Speaker B:That's all we're asking for.
Speaker A:Whatever.
Speaker A:You know what?
Speaker A:Just pay the bill.
Speaker A:That's all you got to do.
Speaker A:So there's a big disconnect here.
Speaker A:I want to get into a couple more things.
Speaker A:I'll make them real quick.
Speaker A:CEOs run the government.
Speaker A:The defensible version of this is I would not say that CEOs literally run the government per se, but obviously they're lobbying groups vis a vis their corporate vehicles, have a lot of influence.
Speaker A:We turn to people like Chamath, who's a billionaire, to ask his opinion on things because he's financially successful.
Speaker A:So you want his opinion.
Speaker A:And frankly, to his credit, he called out a lot of bad stuff that was happening.
Speaker A:The formal government is elected.
Speaker A:Right.
Speaker A:But the operating government is negotiated by capital.
Speaker B:But you don't feel like it's a little disingenuous like for Chamath to come on Rogan and say, like he knows this is.
Speaker B:That he's asking society to solve a problem that's impossible to solve.
Speaker B:Right.
Speaker B:There's.
Speaker B:There's too much that everyday Americans, working Americans have to worry about day to day to day to also invest in coming up with a solution to.
Speaker B:I don't want to call it revolt, you know, but to come together and get bills across and presented and get.
Speaker B:Elect the right officials because, well, the.
Speaker A:Problem is you can't elect enough officials.
Speaker A:There's still.
Speaker A:Right.
Speaker A:Let me give you some numbers, okay?
Speaker A:Just.
Speaker A:Just to run through this pragmatically, corporations and wealthy interests spend Billions on lobbying and political influence.
Speaker A:That doesn't go to one person, it goes to many people.
Speaker A:Right.
Speaker A:The revolving door is real here.
Speaker A:I think it was Legistorm or something.
Speaker A:I found a website that reported that 866 members of Congress and congressional staffers moved to K Street when.
Speaker A: Which is Washington, D.C. in: Speaker A:Where did the money come from?
Speaker A:Yeah, how y' all afford some of the most expensive real estate in the country?
Speaker A:Third, ownership is concentrated.
Speaker A:If the top 1% owns half the equities and policies boost asset values, then policies not neutral, it disproportionately benefits the people who own the assets.
Speaker B:Yeah, that's true.
Speaker A:Right.
Speaker A:So if you're a CEO and you're lobbying on behalf of your company, it also, you have that waterfall, that golden parachute, all that stock, it benefits you too, to benefit them, because you are a shareholder.
Speaker A:And we already know that the majority of the shareholders, 87%, are the top 10% of the country.
Speaker A:So if you go out as a CEO or you have a lobbying group go out for you as Apple or Google and lobby your political interest because it's going to lower your tax rate or benefit you in some way, shape or form, because that's all lobbying does, you go out and get this.
Speaker A:Successful.
Speaker A:Great.
Speaker A:Successful.
Speaker A:Oh, my God, Amazing.
Speaker A:For the company.
Speaker A:The company, the shareholders, everybody.
Speaker A:Great.
Speaker A:Well, the shareholders are likely the 87% owners of your shareholders are the 10% wealthy.
Speaker A:10% Of the wealthiest people in the world.
Speaker B:Yeah.
Speaker A:Right.
Speaker A:So it's like this is why this cycle is parasitic.
Speaker A:You know, this is why it keeps happening.
Speaker A:This is why everybody turns the eye the other way.
Speaker A:And what all the politicians want to do, they want to take the money to be in that top 10%.
Speaker B:Of course.
Speaker A:Right.
Speaker A:So you, you have this like, false narrative.
Speaker B:Don't hate the player, hate the game.
Speaker A:And I'm going to use this as an example.
Speaker A:Right?
Speaker A:Like Charlize Theron, Robert De Niro, Seth Rogen, Al Pacino.
Speaker A:What do they all have in common?
Speaker A:Actors and actresses, Hollywood, they didn't graduate high school.
Speaker A:Very common.
Speaker A:We think that education equals success, that college equals success.
Speaker A:It doesn't.
Speaker A:Right.
Speaker A:But yet you've seen Charlize theron, Robert Downey Jr. Actually, Robert Downey Jr.
Speaker A:In that club too.
Speaker A:He didn't graduate high school either.
Speaker A:He was on.
Speaker A:Yeah.
Speaker B:No way.
Speaker A:Yeah.
Speaker A:Robert Downey Jr.
Speaker A:Didn't graduate high school.
Speaker B:Come on, pull this up.
Speaker A:Yeah, sure.
Speaker A:I got to see this.
Speaker A:I don't know why I have this list in my head, but I have.
Speaker B:This is.
Speaker B:Yeah, this is a wild.
Speaker B:This.
Speaker A:Did Robert Downey Jr. Go to jail?
Speaker A:No.
Speaker B:Graduate high school.
Speaker A:There you go.
Speaker B:Let's see.
Speaker A:Number one studio.
Speaker A:It's the number one question.
Speaker A:No.
Speaker A:Damn, I'm good.
Speaker B:Did not graduate high.
Speaker B:He dropped out.
Speaker A:Yeah.
Speaker A: Santa Monica High School,: Speaker A:The one that surprised me the most, Seth Rogen didn't graduate high school.
Speaker B:This doesn't make any sense to me.
Speaker A:You didn't know this dude.
Speaker A:A lot of the actors that you take.
Speaker A:Here's the crazy part.
Speaker A:You, like, start thinking about this and you go like, wait a minute.
Speaker A:I like.
Speaker A:I listen to these people.
Speaker A:Yeah.
Speaker A:Like, why do people seek out their opinions?
Speaker B:Doesn't make you feel like they're plants.
Speaker A:No, I'm not saying Robert Downey Jr. Is not a smart guy.
Speaker A:He's a very smart guy.
Speaker A:He's articulate.
Speaker A:I think he's got, you know, his demons like everybody else does, but I don't think he's any less intelligent at all.
Speaker A:Because he didn't go to high school.
Speaker B:No, no, no.
Speaker B:But I.
Speaker B:This is just like.
Speaker A:You want to go to this?
Speaker B:Yeah.
Speaker A:Watch this.
Speaker A:This is a trip.
Speaker B:You out.
Speaker A:Seth Rogen.
Speaker A:No, Seth Rogen did not graduate from high school.
Speaker A:He dropped out of Point Gray Secondary School in Vancouver, Canada, age of 16 to move to Los Angeles and work on television show Freaks and Geeks.
Speaker B:Google Hollywood stars that did not graduate high school.
Speaker A:Okay, sure.
Speaker B:There you go.
Speaker B:Let's see this.
Speaker B:Many prominent Hollywood stars did not graduate from high school, leaving early.
Speaker B:Famous examples include Jim Carrey, Robert Downey Jr. Johnny Depp, Jennifer Lawrence.
Speaker A:If you got that at 14.
Speaker B:Ryan Gosling.
Speaker A:Lawrence didn't even finish middle school.
Speaker B:Middle school, but Ryan Gosling was all he was.
Speaker B:He was like in the, like the makeup.
Speaker B:So he was already like in the system.
Speaker B:Yeah.
Speaker A:Hillary Swank, Tom Cruise, Nicholas Cage, Emma Stone, Robert De Niro, Al Pacino, Cameron Diaz, Mark Wahlberg, Marilyn Monroe, Rihanna, Eminem, Walt Disney, Katy Perry, Elton John, Bro.
Speaker B:This is.
Speaker A:These are some of the most successful actors in the world.
Speaker A:Musicians in the world.
Speaker B:I'm sorry, I put my tinfoil hat on.
Speaker A:I've.
Speaker B:I look at them all as plants.
Speaker B:You're all, you're all planted.
Speaker B:Somebody came to you and was like, listen, do this.
Speaker B:You have a nice, successful career.
Speaker B:Jim Carrey, I know he was homeless though, right?
Speaker A:Jim Carrey has a rough history, dude.
Speaker B:Yeah.
Speaker A:He's had people around him die.
Speaker A:He got blamed for stuff.
Speaker B:Seems like such an interesting guy.
Speaker A:I don't know.
Speaker B:Hillary Swank.
Speaker B:Yeah.
Speaker A:Dropped out of School 16 to focus on acting.
Speaker A:I wish I had that kind of conviction.
Speaker B:I would have never guessed Jennifer Lawrence, Hillary Swanker, Emma Stone, any of them.
Speaker B:That, that, that kind of, that's surprising.
Speaker B:I'm like, I'm stunned.
Speaker A:Are you really?
Speaker B:Yeah.
Speaker B:I had no idea.
Speaker A:I thought Robert De Niro and, and some of those would, you know, would probably.
Speaker A:I mean, there's a lot of people here.
Speaker A:Let's see.
Speaker A:Tom Cruise.
Speaker A:Yeah, I knew that.
Speaker A:Robert De Niro, Al Pacino.
Speaker A:I thought those two had dropped out at 16 years old.
Speaker A:Both of them.
Speaker A:Robert De Niro, Al Pacino, study acting.
Speaker B:Kim G. Has left high school to pursue a modeling career.
Speaker A:I mean, she didn't have a bad career, you know.
Speaker A:All right.
Speaker B:She did all right.
Speaker B:Wow.
Speaker A:Well, let's get into some final points to drive.
Speaker B:Please, please stay in school, kids.
Speaker A:Yeah.
Speaker A:Corporate tax reality.
Speaker A:The statutory rate is not the real rate.
Speaker A:The US statutory federal corporate rate is 21% reduced by.
Speaker A: % in the: Speaker A:But the statutory rate is the only, is only the sticker price.
Speaker A:The real tax system includes deductions, credits, accelerated depreciation, international structuring, loss carry forwards and so on and so forth.
Speaker A:ITEP website, another.
Speaker A:There's so many damn acronyms.
Speaker B:Right, right.
Speaker A: April: Speaker A:ITEP says that the 21 statutory rate those companies would have owed about $22.1 billion, but instead received about 4.7 billion in rebates.
Speaker B:So for the, so for the listeners out there, this feels like, honestly when I'm hearing this, it's like this is an uphill battle.
Speaker B:These are the rules of the game.
Speaker B:It's.
Speaker B:I'm way better off learning the rules of the game and trying my best to get in.
Speaker B:We've talked about on the show investing more.
Speaker A:I got more baby.
Speaker B:Investing.
Speaker B:Investing is really the key here.
Speaker A:Right.
Speaker B:For me, something that I wish I personally could go back and do is not be so house poor.
Speaker B:Right.
Speaker B:A lot of a huge chunk of our income for a long portion of time made up of like our what had to go in toward the house.
Speaker A:Yeah, but you couldn't have predicted that.
Speaker A:I could have predicted you couldn't Predict.
Speaker A:So the stock market has wildly outperformed the real estate market.
Speaker A:And for a long time that was not the narrative because it wasn't the case.
Speaker A:Right.
Speaker A:I got a chart that we showed in the last show for.
Speaker A:I can bring it up again, but I'll pass on that.
Speaker A:One of the things that really bothers me is what happened during the Industrial Revolution.
Speaker A:And I'm going to reference this again.
Speaker A:Chath.
Speaker A:Reference it a little bit.
Speaker A:But Chath references Carnegie, Rockefeller, Jay Gould and JP Morgan as the old industrial class.
Speaker A:He didn't say they were saints at all.
Speaker A:As a matter of fact, his point was that earlier capitalists left visible civic infrastructures.
Speaker A:Libraries, universities, hospitals, museums, research institutions, public buildings.
Speaker A:Carnegie is probably the easiest example here.
Speaker A:Right.
Speaker A:National Park Services.
Speaker A: Carnegie donated and paid for: Speaker A:More than $40 million donated for that purpose.
Speaker A:But, you know, this is a way to try to whitewash your name over history and time.
Speaker A:Carnegie's reputation was also stained by the homestead strike, where labor conflict exposed the brutal brutality behind the fortune.
Speaker A:That tension, essentially, and actually made him the point.
Speaker A:The point.
Speaker A:Even better.
Speaker A:Even the old industrialists who crushed labor understood they needed a public legitimacy.
Speaker A:They needed the image.
Speaker B:Yeah.
Speaker A:Of being a good person.
Speaker A:So they, they bought it.
Speaker A:Rockefeller is another example.
Speaker A:Rockefeller's philanthropic legacy helped build the University of Chicago, Rockefeller Institute for Medical Research, the General Education Board, and eventually the Rockefeller foundation, which became one of the most influential philanthropic institutes in the world.
Speaker A:For the Rothchilds, the name gets dragged into conspiracy territory pretty fast.
Speaker A:But let's be specific here.
Speaker A:The Edmund Day Rothchild foundation points to major philanthropic commitments in education, culture, health, science and public institutions, including support connected to a bunch of people.
Speaker A:The long story short here is, number one, they bought reputational love.
Speaker A:Number two, they were giving back in the 40s.
Speaker A:Right, right.
Speaker B:Think about.
Speaker B:Yeah, what, think about that time period, what, what you're just stepping out of.
Speaker A:Right, right.
Speaker A:They're, they're, they're stepping into enriching, but they're doing it.
Speaker A:They're getting tax benefits of this as well.
Speaker A:They made so much money, they needed those tax benefits.
Speaker B:Yes.
Speaker A:They bought legitimacy.
Speaker A:It bought them a legacy.
Speaker A:Right.
Speaker A:Where is that today?
Speaker A:Yeah, where is Apple building a national park for us?
Speaker A:Is there a library of, of Tim Cook?
Speaker A:You know, I'm just, I'm not knocking him, but I'm just saying, like, where, where the corporations get back?
Speaker A:I mean, these corporations are owned by individuals back then, and now we have these public markets okay, we, all these public markets.
Speaker A:Well, where is, where's the public benefit?
Speaker A:I don't get a pension, right?
Speaker A:Like, am I, am I getting the Mall of America or something?
Speaker A:I'm like, what am I getting here?
Speaker A:You know, so in the modern contrast, of course, is where the civic monuments, there's no.
Speaker A:We don't care about innovation.
Speaker A:You know, you making chat bots if you're anthropic.
Speaker A:We care about how does this enrich our lives.
Speaker A:Right.
Speaker A:And I would argue that that is also part of this conversation.
Speaker A:The lack of human enrichment is becoming palpable, and because of that, we're being degraded.
Speaker A:So I look at all this stuff and I say to myself that there is a material and real reason that people feel the way that they do versus what they're seeing from talking heads on cnbc.
Speaker A:The number one contrasting point is, Chris, you say all this stuff in the show, but you don't have any pushback as to how to improve things.
Speaker A:Well, it's your point.
Speaker A:Buy stock.
Speaker B:Yeah.
Speaker A:You have to buy your share of what will inevitably the rise these companies.
Speaker A:Number two, start a business.
Speaker A:Start a business that makes money.
Speaker A:Start slow, start over time, start something.
Speaker A:Because the only way that you can ignore the benefit of the wealthy is by using the same taxes that they do.
Speaker A:And that is.
Speaker A:That comes from starting a business.
Speaker A:Right.
Speaker A:Even if you make, and I'll use in the round numbers here, you make $100,000 as a W2 wager in the state of California, 37% comes off top.
Speaker A:It's called 40%.
Speaker A:You've got 60 grand, got state taxes, call it 12%, which is probably low.
Speaker A:Right.
Speaker A:So you got even less than that.
Speaker A:So you're probably going to take home.
Speaker A:Let's just call it a little more than half.
Speaker A:Right?
Speaker A:These numbers are very rounded, by the way.
Speaker A:You have a business, on the other hand, let's say you make a hundred thousand dollars in your business, you're going to take home considerably more money of that.
Speaker A:So if you can make the same amount of money you're making now, whatever job you're making, W2 from a business, do that.
Speaker A:Run them both together as long as you can, work nights, work weekends, run the business while you're, you know, working your W2 wages, fine.
Speaker A:And at some point, when you're ready to transition and push the envelope in the business.
Speaker A:Push the envelope in the business.
Speaker A:Yeah.
Speaker A:That's the American dream now.
Speaker A:That's the goal.
Speaker A:That's what we got to do.
Speaker B:And if, if you see if I've learned Anything from any of those actors.
Speaker B:The key is to start young, do it young.
Speaker A:Well, young just gives you the opportunity to make.
Speaker A:Take more risk.
Speaker A:That's it.
Speaker B:That's it.
Speaker B:That's what I'm saying.
Speaker A:Nothing magical there, right?
Speaker B:Yeah, exactly.
Speaker A:I beat you up a lot today, context wise.
Speaker A:Okay.
Speaker B:You hanging in?
Speaker B:That was.
Speaker B:That was.
Speaker B:Felt like we got beat up a little bit.
Speaker B:It feels like.
Speaker A:Had to stay hydrated tonight.
Speaker B:Yeah.
Speaker B:A no win situation.
Speaker A:It's not a no win situation.
Speaker A:I think that.
Speaker A:I think what it is, is it's an early call for awareness.
Speaker A:You know, one of the things that I think a lot of people are going to do is going to get discouraged in the coming months and weeks and years.
Speaker A:And I don't.
Speaker A:I don't want to be that person.
Speaker A:I don't want to be discouraging.
Speaker A:What I want is, I want people to be aware of these things are real, to validate people's feelings, to show them that this is not something that's going to change overnight.
Speaker A:It's bigger than you and me and everybody else.
Speaker A:The only way to win this game is to play it by the rules.
Speaker A:Jamie Dimon was not wrong.
Speaker A:You got to live in the world you got.
Speaker A:But what we don't see is the world we got includes another avenue that other people are taking advantage of.
Speaker A:We just feel that it's so unattainable.
Speaker A:I'll use myself as an example.
Speaker A:Okay.
Speaker A:I know that I harbor a lot of animosity towards some of the old colleagues and work, but I'm actually happy.
Speaker A:Okay.
Speaker A:I don't like what happened to a lot of good people in the company, but I'm happy.
Speaker A:I have tried to build things and failed at building things throughout my career way more times than I've been successful.
Speaker A:And ironically, the biggest success I've had is in building things for other people.
Speaker A:With the podcast is not where I want it to be.
Speaker A:With my real estate portfolio, it's doing okay.
Speaker A:It does well, doesn't do terrible.
Speaker A:It's cash flow positive.
Speaker A:You know, those are all good things, but it's not where I want it to be.
Speaker A:But the way I look at it is I keep trying in every Avenue Black Crown Alpha thing that we were working on, the prediction markets, the statistical probability isn't there.
Speaker A:It's not where I want it to be.
Speaker A:So I pivoted to looking at options and looked at the equities markets, you know, and the geopolitical conflicts get in the way.
Speaker A:I've got some other business stuff that I'll talk about later on.
Speaker B:Fortunate, right.
Speaker B:The geopolitical conflicts get in the way for a lot of things and a lot of people.
Speaker A:What I, what I like to tell people is just because you start a candle business or you start, you know, a vintage jewelry business and it doesn't work out right away, optimize, tweak, adjust, try to find a way to get that thing going.
Speaker A:Don't give up on those dreams.
Speaker A:These actors who dropped out of high school at 16, they didn't give up.
Speaker A:Yeah, it was hard, I guarantee you.
Speaker A:You know, but they got to where they are because they were persistent.
Speaker A:And yes, they dropped out at a time where they had the opportunity to be persistent.
Speaker A:They didn't have the responsibilities.
Speaker A:I get that.
Speaker A:But you can still take the same risks with, without taking the same downside risk.
Speaker A:If you start a job on the side that doesn't conflict with your job, that you're able to carry both.
Speaker A:And I know for a lot of people that means sacrificing time.
Speaker A:I get it.
Speaker A:I get it.
Speaker A:Right.
Speaker A:But you need to do it.
Speaker A:You need to do it because that's unfortunately the only way to hedge your bets against the future.
Speaker B:Yeah.
Speaker A:So find a way to make income outside of your W2 job.
Speaker A:A wiser man than me, Hugo once told me that my wealth would not be created from the money that I earned from my job.
Speaker A:It would be created from the investment decisions that I made outside of my job.
Speaker A:I think he's right.
Speaker A:I think he's absolutely right.
Speaker A:And I think that that's the disconnect most people have mostly will want more money.
Speaker A:What they don't realize is you're going to make more money when you use the money you have outside of your job.
Speaker B:So yeah, man.
Speaker B:Amen, brother.
Speaker B:If you like what you saw on Apple, Spotify,.
Speaker A:He's like, end this please.
Speaker B:If you like what you saw on Apple or Spotify or YouTube, please make sure you hit that like button, ring that notification bell, do all the moist goody good stuff.
Speaker B:Leave us an honest five star review.
Speaker B:We will read it on the show.
Speaker B:We did receive an email from one of the listeners.
Speaker B:That was not a review, just a little bit of feedback.
Speaker A:Yeah, I thought it was great feedback.
Speaker B:Yeah.
Speaker A:Although he probably isn't gonna like the show a lot.
Speaker A:But no, it was great feedback and I, and I really do.
Speaker A:If you ever want to email the show, medianpodcast.com Full disclosure, it goes to our agentic AI first and then it comes to me.
Speaker A:But I generally respond to those pretty quickly.
Speaker B:Yeah.
Speaker B:So thank you, everybody, for listening.
Speaker B:If you like the show, a big thank you and a way you could show thank you is to send this episode out to a friend, family member, fellow colleague, fellow investor.
Speaker B:And we appreciate y' all levels of low tonight.
Speaker A:Boss.
Speaker B:No, man, it's the gorilla mine.
Speaker B:It's calming me down.
Speaker B:It's got me.
Speaker B:Has given me elevated mental clarity.
Speaker A:I apologize, Derek, for more plates, more dates.
Speaker B:All right, good night, everybody.
Speaker A:By.
