 So they have floated the idea of what's called what they're calling a billionaires tax now This is a bizarre Tax, it's a kind of a tax that no country in the western world is ever as far as I know no country in the world is ever Put the tax like this together It's it's a it's a really It's a real piece of work. It's a it's a particularly disgusting tax It's economically unbelievably destructive. It's a tax Motivated by envy and nothing else Nobody even in Sweden Denmark the so-called redistributive Countries of Europe or France for example would think of a tanks like this, you know the idea is To tax anybody who has wealth over a billion dollars over a billion dollars on the capital gains on the capital gains but We already tax capital gains We tax today capital gains when it is realized That is let's say I buy a stock of ten dollars and a year later I got really lucky and I sell it for twenty dollars the ten dollars That I made That gets taxed But let's say I bought a stock for ten dollars. I Sell it the next year for well, I sell it. I sell half of it Next year for twenty dollars, right? I only pay the capital gains taxes on the one on the part that I sold Half of it is what's called unrealized I've made money on that investment, but I haven't realized it. I haven't sold it. I haven't cashed out Take Elon Musk for example Elon Musk founded Tesla. He still owns. I don't know. Let's say 25% of Tesla Tesla is worth. I don't know last I saw just around numbers up a trillion dollars Elon Musk because he owns 25% of Tesla is worth 25 billion dollars But Elon Musk has not sold. Let's assume Elon Musk has not sold any shares of Tesla So he hasn't paid any taxes Remember on on this 250 billion dollars remember that He didn't buy the shares His basis of the shares is very very low because he got them when the company was founded for the most part So he has a capital gains of 250 billion dollars But it's not gonna pay any taxes on them until he starts selling the shares Until he starts divesting them selling them and this is why people complain about billionaires Did they have so much wealth? But they pay so little taxes because they don't pay taxes on that wealth and if the wealth grows But they're not realizing it. They're not selling that stock They don't pay taxes on And that pisses off a lot of people So what this bill would have done is basically placed at about 25% tax on unrealized capital gains so for example What they would have done with alone musk is they would have said, okay, you got in at zero It's now worth 250 billion. We're gonna tax your 250 billion at 25% Suddenly alone musk is gonna have a tax bill of 70 plus billion dollars Actually the actual math turns out that alone musk under the proposal that the Democrats have would have had to pay 50 billion dollars in taxes In one year in the first year of this bill and then afterwards only the incremental increase taxes on that 50 billion dollars in taxes Now notice it would have been a tax that only 700 Americans would have paid Not every year just the first year and then every year it would have been determined by how much Tesla stock would go up The more it went up the more it paid but in the first year you'd have to pay 50 billion now know that if you're the Walton's Sam Walton's children and You've inherited stock in Walmart With billions and billions of dollars and Walmart stock has not done that well since you inherited it and Maybe you've already sold some of it off and you've diversified in its in real estate and it's in all kinds of other projects And it's on all the other places Notice that you would actually pay very little money even though You're a billionaire, but you would have very little unrealized capital gains. So this is particularly gonna hurt the new voriche It's particularly gonna hurt The owner entrepreneur who's built his company up and is now worth more than a billion dollars It's particularly gonna hurt entrepreneurs Successful entrepreneurs Now, how is a lawnmower's gonna get 50 billion dollars to pay the tax? He doesn't have 50 billion lying around Well, he's gonna have to sell his shares His ownership in Tesla will go down significantly Which is not good for anybody. It's not good for corporate governance It's not good for Tesla. It's not good for a lawnmower's and the government's gonna take it And instead of 50 billion dollars being in a sense in Tesla And think of the price pressure when you're trying to sell 25% of the stock in a company what that would do to the price And now the government has it to waste on its social programs. I Mean talk about highway robbery Talk about highway robbery For 700 people I mean, I don't know how this is Institutional, I don't know how this is not discriminatory Disgusting abusive Makes no economic sense. It's completely destructive economically Every dollar you take out of a billionaire's pocket is a dollar. That's not invested It's a dollar. That's not used for productive means. It's a dollar that now in a sense is working to slow economic growth not to expand it. It's It's not clear what happens. What happens in a year where the stock market goes down What happens if because maybe because Elon Musk sells 50 billion dollars of Tesla stock what happens if Tesla stock goes down 50% Where the government refunds Elon Musk's money, it's not clear. We haven't seen the final proposal yet What happens if other billionaires when the stock market goes down they paid you by the way Jeff Bezos another one of these evil billionaires, right We'll have to pay forty four billion dollars forty four billion dollars in taxes talk about Confiscation a confiscatory tax rate It's it's absurd and insane You can't tax what has not been realized. I mean you can and they are and they want to Anyway, this was on the table every economist. I know Wrote about how ridiculous this is how pathetic it is. I mean everybody every good economist. I know People who pretend to be economists. I'm sure Richard Wolff thought this was fantastic So did I don't know about Paul Krugman? Paul Krugman hard to tell what he would have thought of this The whole thing was just Insanity now You have to give some of the senators and house members credit some Democrats in the house said we can't vote for this This is insane. It probably can't pass constitutional muster as if they care and and This is just stupid policy And they basically vetoed it Mansion Mnuchin in in in the Senate said no and now it's off the table. So the Democrats have back to square one They have lots of ideas of spending money. Yeah, you'll see loves it, of course There are lots of ideas about spending money, but they promised and some of them want to fulfill that promise surprisingly enough they promised To also raise taxes to make it quote revenue neutral and they can't figure that one out So the latest proposal latest proposal is I'm just giving you a heads up warning To tax the increase to have a 3% surcharge an extra tax of 3% on Anybody earning more than 10 million dollars So instead of a billionaire tax, this is now a millionaire tax It's only 3% so it's significantly lower than what it was before While this is horrible It's probably significantly less damaging economically and certainly less stupid economically still evil and nasty and confiscatory and You know loading up the rich, you know to pay for programs to the middle class It's not even you can't even use the altruism game here of oh, it's about the poor No, it this is these are all Programs that are meant to help the middle class. So let's screw people who are incredibly successful in order to hand out Free primary school education to a bunch of parents Elderly care, you know, all kinds of stuff like that at the margins increasing all the social programs in every direction and of course one thing, you know By the way, this is true of the of the capital gains tax the unrealized capital gains the idea was You know, it was a billionaire tax, but what happens to all billionaire taxes. Do you remember the Alternative minimum tax I forget when it was passed was passed a long long time ago And the alternative minimum tax was supposed to we're supposed to make sure that some of the richest Americans Small number in the thousands of Rich families who weren't paying taxes because they found all kinds of loopholes the alternative minimum taxes away To to get them to pay at least some kind of minimum and it was just a few hundred families today, I Think almost half of taxpayers pay the alternative minimum tax. It's in in snares everybody You know the income tax when it was passed in 1914 Constitutional amendment and Congress passed the first tax was very low and only seven percent of Americans paid income tax That was 1914 went to two years as President Wilson prepared us to go into the dumbest war ever World War one It was expanded to include almost all Americans So never believe that attacks will stay a billionaire tax then it becomes a what about the guy who makes 900 million Well, and if he's get taxed what about the one who makes 500 million was worth 500 million And hey, what about the hundred million guy and look, why don't we just tax the whole one percent? What about the top ten percent and soon the middle class of paying taxes and unrealized capital gains? Every tax proposed where they said oh no only the rich will pay There's always been expanded and the definition of rich has always been expanded So let me just say how thankful I am To senator cinnamon sentiment senator mansion Um, how thankful I am to the centrist Democrats in the house than a lot of them, but the ones who are For stopping these insane proposal. Yeah, this is Ron Wydans Wydans white. I don't know how you pronounce it the head of the finance committee in the senate's proposal He's a he's the senator Thankful to all the senators democrats as they may be who have resisted this insanity um It's nice to see that the democratic party is not a monolith Of nutty progressives. This is still bad, but at least not a monolith of nutty progressives um Episodes flat tax already you're not going to get a flat tax. There's no nobody is incentivized to provide a flat tax note the republicans Stop talking about flat tax that trump was never for a flat tax Republicans are not for it Never happy So happy to see Proposal after proposal after proposal defeated It'll be great if Biden's agenda gets killed by the infighting within the democratic party Just like repealing obamacare was killed by the infighting within the republican party and the lack of leadership from the white house It would be good to see The democrats following suit and and as i've told you many many times my favorite Balance of power In washington is is gridlock And one of the great tragedies of the republican of trump was that he managed to lose the republicans the senate Which i thought was pretty safe for republicans Luckily, we still have mansion who's kind of a half republican and and cinema who's Somewhat leans on economic issues in the right direction This is all good. Uh, you know the real enemy is government spending So, uh, what i'd really like to see defeated is any spending plan that the government proposes I think something will pass. I think democrats will coalesce around some smaller bill And they will get a pass by the end of the year They have to do something next year is is is midterms Nothing happens in congress during midterms because everybody's afraid So everybody sticks the status quo. So anything democrats want to pass is now If you have any influence in democratic senators or house members encourage them not to pass anything this year But I think they will it'll just be a smaller Less effectual bill with smaller less effectual taxes less damaging taxes All of that is for the better as compared to the alternative Of course, none of this would be on the table none of it If a publicans hadn't lost the house In 2018 and hadn't lost the senate in 2020 So you can thank republicans for being stupid enough Uh and pathetic enough and incompetent enough to lose both the house and the senate and the white house, of course uh in a span of 40 of Two years two years Thank you for listening or watching the iran brook show If you'd like to support the show We make it as easy as possible for you to trade with me. You get value from listening. You get value from watching Show your appreciation. 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