The greatest myths about taxes within the United States and I’m going to share with you what I believe to be is the number one biggest myth that should insult you as a taxpayer about what you’re being told by your politicians and I’m going to bring this up from a
Very specific experience from having served and currently serving on the finance committee in the Virginia House of delegates so I get to be in the trenches with all of this good work all of that and more coming up on this episode of making the argument last Tuesday we announced that we were
Setting a goal to reach 1 000 subscribers on the making the argument Channel by May 1st we just passed 700 subscribers so thank you to everyone that says subscribed if you haven’t already go to the link in the description of this live stream hit subscribe and join us over there because
In the future that’ll be the only place where we are posting making the argument content all right with you as always myself host of making the Army nickfraid as member of the Virginia House of delegates and a little bit of additional information again I do serve on the house finance committee have served
There for six years now which handles all the tax policy in Virginia so this is going to be an interesting show now I know who to get mad at oh my gosh I do a lot of voting no that’s true all right uh Queen of the bees is not with us
Today she is feeling a little bit under the weather and didn’t want to come and make everybody else sick so we do appreciate that we are sad that she is not here also we have a resident historian and political prognosticator Christian Hines and possessor of 100 plus Internet tabs and possessor of 100
Plus Internet tabs on his computer at all times and then of course we have producer of producers Nicholas Hamilton the good Hamilton the one that doesn’t like Central Banking Nick today is tax day right yeah allegedly allegedly I don’t know there was actually a comment from somebody I
Refuse to acknowledge it at the very start of this live stream there was actually a comment from somebody saying can’t we just identify as having already paid that yeah that’s I’m trying that you should definitely give that a shot um yeah today we’re going to go over
We’re going to go over a number of things um one of the ones I’m really looking forward to which will come at the end is as we talk about all these taxes that you are paying and who’s actually paying the taxes and everything else we are also going to discuss what
The government actually spends your tax dollars on so you’ll be able to effectively analyze whether or not you would like to give them even more money to spend so I’m gonna I’m gonna read off some things at the end and you guys get to guess how much of your tax dollars
Went to that particular government expenditure also if you have questions please let us know within the comments section on YouTube and we’ll be able to incorporate those questions as we discuss all of this today all right so first things first let’s talk a little bit about
You know what you know what are the various categories of Taxation so there’s there’s kind of three broad categories right if you want to go to the tax Foundation website they’ve got it they’ve got a good overview and kind of primers on this and stuff like that
If you really want to learn more but here’s the three main categories you have taxes on what you earn you have taxes on what you buy and you have taxes on what you own now within those three broad categories there is a ton of other taxes like I was
I was looking this up and this this part is a little bit depressing if you go and you just ask what are a list of all the taxes in the United States it’s not like you’re going to get a Wiki page that just says okay here they are here
Because there’s so many and because it varies state to state locality to locality the idea of being able to find all that in one easy to find convenient location is just about impossible but let’s let’s give some some ideas here so taxes on what you earn that’s obvious
Right the most obvious one is the income tax now for everyone that says that tax is the price we pay for civilization I just want to remind everyone that Civilization the United States somehow managed to exist for for well over the first hundred years of our history without a federal
Income tax don’t no don’t you know you you obviously didn’t go to public school because they taught us that it was Mad Max style Anarchy before the the 16th Amendment I mean it it it’s even crazier than that because like income when we think of taxes we think
Of income yeah right but but as you pointed out like in some ways income is only a a relative it’s a huge portion of the pie right but like when you think about everything else that you pay taxes on like here in Virginia for example we
Think of tax season as being uh due in in May a month after the federal taxes but like we have everybody who owns a car pays taxes right we have a a car tax that’s one thing thing that that’s what I mean again when you look at all these
Categories it’s not simple enough to just say oh income tax right even though that’s income tax sales taxes and ones but so the category of what you earn that can be income tax that could be capital gains that can be payroll taxes right anything that is attached to how
Much you earn and what’s important to understand is the United States right we always hear this this line right and this is gonna be one of the myths we talk about you know do the rich pay their fair share and you can you can do man on the street interviews you ask
People to Rich pay their fair share the answer is always no right because if you’re listening to Elizabeth Warren to Bernie Sanders it all seems like well of course they don’t pay anything in taxes um but when you when you look at in the income that’s individual income then you also
Have capital gains capital gains is like if you if you buy a house like if you have a property and then you sell that property and you you make money off of it you now have to pay a tax on the money you made off of that property that
You sold you also have capital gains with respect to selling stocks and things like that now it’s interesting a lot of the times they’ll come and say well the income tax is this but the capital gains is a lower rate and and it’s capital gains primarily affects rich people so why are
They paying a lower rate again it’s it’s like if if I’ve already taxed your income and then you take a portion of that income and you invest it and that investment which I’m we’re all glad you invested right because that creates more jobs more products more
Services and then you say okay I now want to cash out my investment now we tax you again right so we we tax you on the money you use to invest and we tax you again if you were successful and then you have things like payroll taxes
And whatnot a lot of these things go to direct funding of things like Social Security Medicaid Medicare Etc then there’s taxes on what you buy there’s things like the sales tax that’s probably the most obvious it’s the one that most people come into contact with um you also have things like a gross
Receipts tax this is kind of a complicated one but essentially like in Virginia we have taxes that businesses have to pay in certain jurisdictions not everywhere in certain jurisdictions where they have to pay taxes on the capital products that they buy so you’re you’re a company you buy a you know some
Machinery or some equipment because you need it for your business that’s the B poll tax right yeah you have to pay pay attack you have to pay an additional tax on that piece of equipment even if you’re not turning a profit so this is it’s not even a tax on like the
Profits of your company so you’re getting all the busy money you could be losing money and the government is still like we want our cut on this piece of equipment let’s say that you wanted to start like a car mechanic business right you you bought a piece of land you built
A shed there you bring in some equipment you get some tire changing stuff the state not not the state the locality is taxing you this is a question yes the the locality is taxing you before you even flip the sign to open yes so you you’ve said you’ve set up a company
Disincentivize new business is being started it does it does it punishes it means that you need a ton of money to start a business because you got to start paying taxes before you even you even get a customer in the door yeah it’s no it’s it’s it’s horrible it’s
There’s very few states that actually impose this and in Virginia localities have jurisdiction on whether or not they want to impose it or not but they do have the authority to and and it does it’s it’s a tax against capital investment which for anyone paying attention to business capital investment
Is generally pretty important to be able to like actually function now the the other one too with uh taxes on stuff that you buy is tariffs so a tariff is a tax it’s a federal tax on a um on a product that was purchased like they came from
Overseas right so that’s what a tariff is so every time again A lot of times you’ll see politicians talking about how we need to protect American business with higher tariffs what that means is that they’re going to tax American consumers right that’s that’s what that’s going on
So that’s yet again another tax that’s being levied and then finally there’s taxes on your property right most of the things within your your locality come from property taxes so you buy a house you have a piece of property they collect taxes from that in order to pay
For things like schools or education or whatever else that they’ve got to charge but then on top of that too you also have you know so not only have these three broad categories but you have the federal the state and the local level in some cases taxing you along all three of
These categories so it’s not like okay the fed’s got the income tax and then the the localities got the property tax and the state’s got this no no all of them are taxing you usually along these three categories and so you are just getting repeatedly taxed and taxed and
Taxed with everything that you do so what do you have to say Nick when the response from somebody could be okay fair enough Nick you know you have all these taxes you have all these regressive taxes like you know we have grocery taxes we have the B poll tax on
Machineries so let’s just get rid of those and make the evil greedy rich people pay their fair share because they’re clearly you know it’s the poor working man that that is is forking over all the money and by the way poor working men are forking over a ton of
Money let’s just get oh yeah that’s clear but but the response from from certain politicians on the left Elizabeth Warren being probably one of the most prominent ones is well yeah we have a very regressive tax system and the rich simply are not paying their fair share we need to raise taxes on
Them sure so so the the first thing that we have to look at when we’re analyzing this right so the the comment that usually comes from like an Elizabeth Warren is going to be something like oh you know General Dynamics didn’t pay any corporate income taxes last year but
They made profits of you know however many billion or whatnot and and a lot of times what they’re conflating here is individuals versus companies or company or corporate entities so the the first the first myth that we got to kind of throw out here is this idea that an entity pays a tax
Taxes are always and at all times ultimately paid for by individuals that’s who that’s even a corporate tax yes and here’s why if I tax your corporation’s profits all right where would those profits have gone had I not taxed them well they could have gone to investment they could have gone to
Salaries they could have gone do bonuses they could have gone to infrastructure they could have gone to more product at the end of the day it’s an individual that’s always affected by that tax so when when a politician says corporate taxes that sounds fine because it doesn’t sound like you’re targeting a
Particular person you’re just targeting a business entity and after all they’ve got enough money anyways right no you have to remember that a corporation right the sign on the building the LLC the the documentation sitting somewhere that forms a legal entity it is not looking to get rich right it’s the
People within that entity that are providing the products providing the services doing the work and getting the money so anytime the government taxes it right that’s affecting an individual and it’s not just affecting the board members I see what you’re I see what you’re saying no matter what the the
Corporation let’s say let’s say that we didn’t have a corporate tax at all that would be extra money that then Coca-Cola or Walmart would be spending on hiring more employees or shareholders or or share BuyBacks which is a way to transfer money to shareholders individuals of some form right and but
Then the response from the left would be yeah but we have these taxes because we you know if we didn’t then the rich wouldn’t be paying their fair share and that’s where the money is so here’s here’s the well the thing is is the money is the money doesn’t sit in a
Corporation and definitely the money sits in a corporation to be spent on things again can be spent on infrastructure can be spent on capital projects can be spent on salaries can be spent on bonuses it can be spent all this stuff unless the government takes
It so it’s it’s almost a form of double taxation because I’m still taxing all the members who work within that Corporation and then here’s the real question because the the income tax is the one that is is one of the like sales tax is probably the least avoidable right but
Then you have income tax so let’s just say something real quick yeah it sounds like to me if I’m trying to start a business and be a productive member of society the Bernie Sanders and Elizabeth Warren might be one of my worst enemies well they’re definitely not all that
Friendly toward you they kind of see you as a cash cow and not only that but they see you as kind of a mean greedy Cash Cow because oh look you have all this wealth in fact there was a comment Elizabeth Warren made in one of her speeches that I thought was really
Insightful you didn’t build that into her it wasn’t the you didn’t build that here’s what she said she goes okay you built a company and and that company made a a huge profit good for you but the rest of us paid the taxes for those roads for your product tomorrow
The rest of us paid the taxes for the police to keep it safe the rest of us paid for the schools in order to give you an educated Workforce here’s the problem with that mentality whenever she says that what does she mean the rest of us
No all of us paid the taxes on the road all of us paid the taxes on the schools all of us paid the taxes for the police force the difference was you know that that was an old speech because she wouldn’t have included the police force
Now but the the all of us paid for those taxes and all of us theoretically could have said and I want to set up a business along that road protected by those police educating in order to get this product to Market I think that’s the way wait but somebody
Did right and let me ask you something are the people that are shopping that business they feel ripped off are there are the are the kids that graduated high school or college that now have a job are are they the ones that have been put out by this right no nobody has
Everyone’s made better by this person engaging in in Commerce not to mention the fact that not only did that person who started the business pay the same taxes they paid more right because they didn’t just pay their individual income taxes like everybody else they had to pay all
Kinds of taxes on top of that because they were running a business so for Elizabeth Warren to say that either demonstrates gross ignorance for how taxes are collected and spent or she’s lying in order to try to whip people up into this frenzy that yeah every business owner owes me something and
We’re going to learn in just a few minutes why that is such a dishonest statement so here we go let’s let’s go into let’s go into federal income taxes because federal income taxes makes up I think it’s something over 40 percent of the total take by the federal government
Right so it is the single largest source of revenue from for for the federal government is federal income taxes now when they go and they ask people do the rich pay their fair share the response is almost absolutely not they don’t pay anything or they don’t pay it’s the Working Man That Pays
Pays it all right so let’s let’s look at this half of taxpayers pay 97 of all income taxes so what they do in order to get this numbers they break down the whole population by quintiles right so that’s five categories you got the bottom 20 you got the next level up from
That middle 20 higher 20 and then the top 20. okay now what they what they typically do here just to kind of illustrate this point is they’ll look at the top one percent as well but here’s what you need to understand about this if you fall in
The top half percent or the top half of the population 129 million households or something like that income earners right yeah if you fall in the top half of income earners you pay 97 of all federal income the current median household income is just over 70 000 so
If your household income is over 70 000 you are in the 97 you’re in the bro you’re in the group of people that pay 97 of all taxes now here’s what’s interesting go ahead and go to this next um this next one here so this is what we mean now when we say
Top one percent because this is one of the other so the the one of the myths here right is this idea that the rich don’t pay their fair share all right well what you need to understand there’s a top 50 of the country paying 97 of all
The taxes which means the bottom 50 percent is paying almost nothing in federal income taxes now we’re going to get to another myth associated with this in just a second right but they’re paying almost nothing like up front Okay now when the second question people ask is like well what do
You think is the top 10 percent people use oh the millionaires millionaires are the top ten percent um guys if you make a hundred and fifty two thousand dollars a year you’re on the top ten percent so the top one percent of income earners in the United States this is by this is
Tax year 2020. make 548 000 a year so when Elizabeth Warren says the rest of us paid for these roads that’s actually maybe not true so it it’s the the problem is is that it’s incomplete and it’s misleading all of us pay taxes for these things but the percentage of taxes that you
Actually pay like your contribution to that that road is minuscule next to somebody else okay that next to somebody that’s making more money it’s it’s minuscule it’s finite in fact as we’re going to kind of demonstrate in some cases it might even be zero the
Example that I like to bring up on this is when she’s talking about corporations and especially companies that manufacture products and services um they pay more in fuel for their trucks yes they pay more taxes on those vehicles and so in in my mind it’s that these corporations are actually paying a
Higher tax for sales for all of that anyway so it some of this depends on how that so there’s there’s something called user fees right and user fees are actually probably the fairest form of Taxation but what’s interesting is people like Bernie Sanders AOC Elizabeth Warren they all call them regressive
Taxes now why do they call them regressive well because poor people have to pay them too what do they call a progressive tax they call it progressive tax where the wealthy not only pay more they pay a higher percentage of their wealth so that’s what they call Progressive versus regressive now again
These these terms I I think are a little bit misleading when when we say when we use the word Fair we generally think that we all contribute in in accordance with what we take not even what we earn we contribute in accordance with what we
Take if if the three of us went out to dinner right now and we decided to split the check but I ordered Lobster and you ordered a salad and Christian had water none of us would think oh that that’s a fair distribution of the of the bill that
We’re going to split it three ways evenly but if I paid for mine you paid for yours and you paid for yours we’d all say oh yeah that’s fair because you paid in proportion to what you consumed not what you had not even what our incomes were when we walked in right and
In fact if restaurants organize themselves the way that the government taxes us we wouldn’t go to those restaurants there would be no restaurants in America oh because you’d go in there and it’s like well I’m gonna have to pay based off of what somebody else orders happen to make more let me
Rephrase that it’s not that there would be no restaurants in America it’s that nobody would go in groups everybody would just eat individually yeah um so so here’s what the the point I wanted to get across on this was the the top one percent is not what people
Oftentimes imagine it is right if you make 548 000 a year you’re you are making good money but the other thing to take into consideration not if you’re living in San Francisco that’s actually not a lot living in some parts of the country that’s that’s nowhere near I mean if you’re living if
You’re making 548 000 a year living in New York you still got a good life but you ain’t living in a mansion I mean you’re you’re living you’re living in a 1500 square foot apartment there was actually um some some news articles that came out I don’t have them pulled up but there
Were some news articles that came out over the past couple weeks that that made the case that somebody making three hundred thousand dollars in San Jose or New York City San Jose is Silicon Valley right 300 000 in San Jose or New York City is the equivalent of a hundred
Thousand dollars in Houston yeah and when you take all federal taxes state taxes local taxes and then the general cost of living into account it is it is the equivalent so when you look at this something like two like I have a cousin for example that works for Microsoft and
He makes about 200 000 a year he has arguably a well lower quality of life than somebody that’s making 70 or 80 000 living in in rural Tennessee um because of the immense cost of living that comes plus the tax burden that comes from living in San Jose
Um so the these tables don’t even take into account the the relative cost of living differences in certain parts of the country but what I find so so incredible is that like you said that you know with if you’re in the the top 50 which is not a huge number right just
Just in the in half of the population you’re effectively paying almost a hundred percent of all federal taxes well federal income tax federal income taxes that is I mean that just completely destroys the myth that the rich don’t pay their fair share first off it’s not even the rich the middle
Class well it’s also paying more than their fair share the other yes they are and the other thing that’s important to remember here is that if we if we look at this graph here one of the things that’s important is that some people say oh okay well
Sure the the the top 10 percent um you know maybe they pay a lot more in taxes but it’s because they control the wealth and they don’t actually pay the the percentage um based off of the wealth they actually control within the country it’s like well okay there’s two problems with that
Reasoning the first problem is is how did they get that wealth in the first place if they got the wealth because a lot of times these conversations start with this idea that there’s wealth and then it’s all a question of how do we distribute it how do we split up no what
What there were was resources and time and talent and effort and work and then wealth was created as a result of doing that and the people that are really good at creating that wealth especially in our sort of market system where the only way that they could or typically the way
That they get wealthy is by providing you the customer something you want why would you want to punish that or demonize that you want them to continue to do that they’re using scarce resources effectively but so right off the bat there’s there’s kind of a tone problem with talking about it that way
It’s not an accurate reflection of what’s going on right resources are just there until a human mind comes in and actually makes them you know a valuable product but then if you actually look at it so the top one percent the gross the adjusted gross income share so like what
Do they own of the economy 22 now some people look at them like well that’s horrible all right well I don’t know what you think would be more appropriate would it be more appropriate it was 50 say one percent yeah what is it but there’s share of federal personal income tax is 42.
So they’re they’re paying almost double over the wealth that they actually possess now you go down to the bottom 50 they’re gross they’re just a gross share of income is ten percent the bottom 50 percent now people get hung up on the whole idea of like the top one percent
Have 22 percent of the wealth and the bottom 50 have 10 percent of the wealth oh my gosh okay but what’s their share of the federal income tax paid it’s almost nothing it’s almost nothing it’s two and and again so so right off the bat the myth there’s a couple of
Different myths that we’ve just destroyed here one is when they talk about the one percent we’re talking about billionaires no we’re not in fact when we’re talking about the one percent if if you’re you know making that kind of money in New York City you’re comfortable but you ain’t living in a
Mansion you don’t got a yacht right that ain’t that that is not a thing so that’s the first one is that the one percent isn’t what a lot of times people think it is the second one is is that well even if they do pay more like even if we
Get them to concede that yes they are paying the majority of the taxes that’s only fair because they’re paying the taxes and proportion of the amount of wealth they control no they’re not they’re paying up and above well over so so the idea the myth here
And as you can see this this kind of goes top one percent and uh you know pay almost twice in taxes based off of the wealth they actually control top five percent not quite twice per twice but it’s it’s up there um it’s really once you start to get it
Out of the top 25 percent the top 50 percent now you’re talking a lot closer margin between the amount of wealth that they control versus the percentage that they pay in taxes and then once you get to the bottom 50 it’s it’s a complete yeah it’s a complete I’m not
Understanding the difference between the Top fifty percent bottom 50 and the difference in those numbers what do you mean the difference so so what Nick is trying to say is that the amount of wealth that you control versus the amount of taxes that you pay that ratio is extremely lopsided in different
Ways on both extreme ends of the spectrum whereas when you get into the middle around the top 50 the median it’s almost about equal but it what what he what this is indicating is that we have an extremely progressive tax system okay so this actually completely destroys the
Myth that the rich don’t pay their fair share in taxes they’re they’re paying just the top one percent alone is paying over 40 percent of all federal income taxes one percent of the population paying over 40 percent of all federal income tax none of us are in the top one
Percent right and I so so you know I I think Nick feel free to correct me obviously I I think that what you’re trying to get across is that when you just dig into the numbers none of this is partisan spin or anything this is all publicly available information well and
When you just dig into the numbers it’s obvious that that the the the lines that people like like Bernie Sanders and Elizabeth Warren parrot are complete falsehoods it’s it’s not even like oh well it’s just about how you look at the information no it’s a complete lie yeah
No it it is and we saw this with some other organizations that came out with data too that were pushing this narrative and and the thing is is that it’s not that the I mean again if you’re upper middle class you’re also paying a lot in taxes
Um and so the important thing is the reason why because it’s easy for someone to look at this and say oh oh I guess oh the poor rich people I guess they don’t get an extra yacht that’s not what we’re talking about if if you want to tax wealthier people
At a higher rate okay I I would I’m going to question whether or not I think that’s a good move but you don’t get to say I’m going to tax them at a higher rate because they’re not paying anything when they’re paying most of it you’re not going to tell me that
Somebody making 150 000 a year needs to get taxed at an even higher rate because they’re not paying their fair share when it’s clear that they’re they’re paying like all the share all the share federal income taxes being paid by these by this group of people
And you want to pretend that they’re not doing anything so you can whip people up into a political frenzy in order to tax them more that’s that’s intellectually you know it’s a lie and and morally and morally it causes real problems because the more Progressive your tax system
Gets the more you create a scenario and by the way both Republicans and Democrats have been guilty of this I’m not like but the more Progressive Progressive your system gets you also get to a point where one half of the population is paying the taxes and the other half is just receiving benefits
And in a political structure where you select your leaders according to democratic processes what happens when you get to 51 percent of the population paying zero taxes but getting benefits what is their incentive to to tell the government hey chill out a little bit what’s there inside that’s dangerous so
Here we’re gonna we’re gonna be I think that we’re gonna get to that later in this episode actually about those implications I actually have a question yeah um from uh uh I’m not gonna I’m not gonna call him a troll but a a left-wing
Guy in the um in one of our chats that I think is is just a great segue into the next segment that I know that we want to get into in this episode he says both corporations and individuals need to pay more in taxes the top tax rate used to
Be 90 now it’s 36 ridiculous stop believing this ignorance okay what are your responses look at that the country was more prosperous in the 1950s and we had a top marginal tax bracket of 90 percent okay well let’s analyze that go ahead and bring up you know this is
Because we have the article ready to go and it’s not like we had this question ahead of time we just knew it would come up for for the audience that’s tuning in live and for those that are going to be watching um or listening later after
We’re we’re done live that was not a paid actor no paid actor there for that all right so here we go we got this article from learn liberty.org and it’s uh the the section that we’re looking at is the myth of tacking the taxing the rich in the 1950s
Because this is such a common misconception that you know the 50s were just this wonderful time of Economic Development within the United States and everybody had a job and they could live off of a single income and and the the top marginal tax break was 90 so so
Clearly that’s the reason why we were wealthy right is because we were taxi rich people at 90 okay let me read that let me read this extra the 1950s that was the great okay now you may be thinking but wait a minute the 1950s was the greatest economic era
Ever that’s when everybody had a job those jobs were for life people got to live in Suburbia and go on vacation and do all sorts of amazing things it was post-war Prosperity right actually all of those things are myths in the 1950s the United States suffered four
Recessions one starting in 1949 then in 1953 then in 1957 and then coming out of the 50s and 1960. four recessions in 11 years the rate of structural unemployment kept going up all the way to eight percent in the severe recession of 1957 and 1958. the bottom line is the same people on
The left that talk about us you know conservatives glorifying the 50s because you know Mom stayed at home and Dad worked on the whole deal then want to come back and say oh but it was it was great for tax purposes because look how great the economy was
Well no four recessions in 11 years is is not a good measurement by any stretch of the imagination now here’s what you do need here’s what you do need to do to compare it like why do people have this image of the 1950s well one family structure was reasonably strong but can
We also talk about what was going on right before the 1950s the worst economic downturn in U.S history combined by the bloodiest war in world history and then he went into the 50s so you went from you went from like FDR screwed this up so bad that we’re
Actually burning you know produce and killing livestock at the same time that Americans are going hungry then we go into a massive World War where we sustained 400 000 you know Americans killed in combat then you go into the 1950s and two things are taking place during that time one we’re no longer
Involved in a major land War except for the early part of the 50s during the Korean War you got the cold war going on but by the same token United States the United States was the only country didn’t have their industry completely destroyed during World War II so International
Competition was nowhere near what it would become later on and going into the 60s 70s 80s Etc so essentially you have this perfect storm where the the United States is the only major industrial power that didn’t just have their entire industrial base obliterated around this time period we were briefly
A majority of the world a majority of the world’s GDP yeah one country which is insane to think about it we were not a majority of the population so so it’s important to understand that there was there was a there was a number of factors that were impacting what was
Going on at the time but the problem was is that Eisenhower kept a lot of these marginal tax rates very high so what did a what did a 90 marginal tax rate look like in the US well one the the tax code at that time I think was something like
11 000 pages long and like page one talked about the the structure of the tax page two talked about you know who is responsible for paying what based off of your income bracket and then Paige and then all the other Pages were exceptions to the rule so nobody was
Effectively paying that because what it meant was is that in 1950 if you made two hundred thousand dollars a year anything you made over 200 000 got taxed in a 90 rate so here’s the question why would you work harder why would you invest more why would you create more
Business why would you why would you do any of that stuff because the moment you get over two hundred thousand dollars every dollar you make after two hundred thousand ninety cents of it goes to the government oh except for people like media Moguls and Hollywood that gave themselves special exceptions that were
Written into legislation I was gonna say almost nobody actually paid that 90 rate so here we go taking advantage of a complicated tax code I’m gonna read a little bit more of this article so there wasn’t significant economic growth in the 1950s it only averaged 2.5 percent during the presidency of Eisenhower and
The tax code spawned inequality that is even unheard of today how so well when you have a marginal rate of the income tax that is 91 to have an exception from that income tax is very valuable if you were able to get a statute written into
The tax code that says you don’t have to pay that 91 percent and your high income you you could either pay nothing or pay much lower rate that exemption is very valuable the tax code in the 1950s was 11 000 Pages here we go the first two
Pages of the tax code were very simple things the opening line of the tax code said that income tax is taxable from any and all sources derived okay if you make income it’s taxable and then the second two pages of the tax code with a list of
The rates the dates blah blah blah and then the next eleven thousand Pages after those first two were exceptions to those statements they were pet statutes that were written into law by congress with the behest of lobbyists that said this income is not subject to Taxation
And always in almost every case it had to do with the income of the Rich and then he gives some examples um but the interesting part about this is that they keep looking back at the 1950s as hey we were we were wealthy at this time because we taxed the rich more
When in reality if you look at what was actually going on economic development stagnated below what it actually could have been because we had an enormous economic advantage of that time combined with the fact that it was the richest cronyus that actually were able to write except options to their their income or
The mechanisms in which they got paid in order to avoid taxation that’s cronyism is what that is big time like I I’m not sitting here like yay for the when I mean I think what all of us at this table want is that to the extent that
We’re going to have to pay taxes I I want it to be low I want it to be you know fair in the sense that you’re not punishing me for success or rewarding me for failure so that that’s the answer to that question is that one the 1950s was not
The economic Boon that you think it was based off of the standards that were going out of time two the tax code didn’t do what you think it did you know and three the other thing that I would also mention here is the 1950s we actually were still on the gold
Standard or some version of the gold standard so the federal government’s not being destroyed by inflation by inflation to the degree that it is now so I I’ve got another question from the audience that is is somewhat related to this this and I’ve heard this missed so often with like the 1950s
Um was there any form of like like double taxation because one of the questions that are versus today because like one of the questions that we got from the audience was can you explain double Taxation and in your opinion are we currently being double taxed yes if
Yes what can we do about that so no you’re absolutely being double taxed when you think about it in in these terms it kind of depends on where you are within the economy so if you’re let’s just say you you show up you work
At a you work at a job you were getting taxed on your income you’re also getting the payroll payroll tax right that’s going to Social Security you’re also getting FICA taxes which are going to you know or other texts which are going like Medicaid Medicare um then when you spend that dollar right
So you’ve paid all the taxes just to get the dollar now you go out and you spend the dollar well it gets taxed again on the sales tax right you bought your home you own the home well you’re getting taxed again on the property tax for actually owning
The home in some states you get taxed on a car that you buy and some you go out to dinner okay well like in Virginia you you went out to dinner downtown oh okay now you’re getting the meals tax okay and you decide to take your you
Decided to take your spouse out for a special getaway oh well now you’re getting the transit occupancy tax within the hotel on top of the sales tax that you’re already paying for also using the hotel so you didn’t even mention investing right leading into capital gains and taxes on dividends because the
Dollar this is something that I learned myself this year is is that that you know the dollar that you’re getting paid first off it’s getting taxed and then you take that dollar and then you you invest in the stock market and then it appreciates and then you take it out and
Then you get taxed again and by the way we’re going to get into a wealth tax which is effectively a tax on on on on on unrealized gains which would completely destroy the economy we’re going to get into that later in this episode but that’s one thing and then there’s
Finally dividend taxes which even if you don’t pull it out if you just get paid by let’s say that you you bought a share of Microsoft and they pay a dividend you get taxed on that as well from the money that you invested that you were previously taxed on so it’s not even
Double taxation it’s more like triple and in some cases quadruple taxation and that’s that’s the important thing to understand is that you are getting taxed multiple times in multiple different ways some ways you’re not even aware of because we’ve just gotten so used to handing over the money and realizing
That the rate we’re going to pay for the hotel room or the meal or the toy or the whatever it is it’s going to be higher than advertised because of all the additional taxes but one thing that’s interesting every once in a while take a look because some receipts will actually
List out all the additional taxes that you’re paying my accountant asked me why I didn’t do quarterly payments for my taxes yeah I told them that I like to feel the pain all at once so that I so that so that I can just really grasp the
The situation yeah you know this is why there’s a common proposal that conservatives have that I would support in a heartbeat to move tax day to the day before election oh yeah I think it’s a great idea but I think it is a phenomenal idea but Nick it hasn’t just
Been folks like Bernie Sanders or Elizabeth Warren that have helped initiate all of these taxes yeah what role of Republicans played in so Republicans whenever they try to reduce taxes there’s this feeling like so it and here’s here’s one of the things we get I’m going to give a specific example
Of this this will actually lead to one of what I think is the most insulting myth before you get to that I’ve got one more question for this this segment okay so well I know I was going to let you finish but I just wanted to let you know
That there’s one more I don’t want to get on the whole other stuff okay I’ll ask it right now and it’s a good story so um I I had a question and and the reason I wanted to bring it up in this segment is because it’s obvious that the tax
Code in the 1950s was extremely Progressive so much so that it actually hurt economic growth and it created a bunch of cronyism because people were were lobbying for carve outs yeah well I had um there was one audience member that asked could you explain the difference between a flat
Tax which is obviously not what they had yeah and a fair tax yes and I I actually I’ve heard these I know what a flat tax is but I actually I don’t think I actually know what it is that question come from Caleb I I believe it did it I
Didn’t copy the name so there’s there’s kind of three there’s three tax structures that they get spoken about a lot right the one we have is Progressive which means you don’t just get taxed more if you if you make more you get taxed at a higher percentage
Right that’s a progressive tax like your tax burden goes up significantly and by percentage for once you go into higher brackets a a flat tax the rich still pay more because ten percent on ten thousand dollars is a lot less than ten percent on a million dollars right right so
That’s a flat tax a flat tax just says the percentage is this I don’t care how much you make a fair tax is more like a a it’s described as kind of like a national sales tax now what’s interesting is that even with that in that system of Taxation the wealthy pay
A much higher tax because not because they’re taxed differently because I’m not even being taxed at the same percentage the reason why we call it fair is because I’m not taxing you because you make more right and the other two the progressive I’m not only taxing you because you make more but I’m
Up in your percentage flat tax I’m still taxing you as you make more money right I’m texting you more even though you don’t necessarily pull out more the fair tax basically says okay if you go and you buy something you’re going to pay whatever the tax is
On that well if you’re a wealthy person you’re probably going to buy more than a poor person oh yeah so is your business is your corporation is your share of what you’re going to pay in overall tax is probably going to be higher yes now here’s the other reason
Why it’s called fair and this is important it’s not just called Fair because it doesn’t punish you for success and that’s an important thing to understand here about all those incentive structures that are being created to the extent because you you’ll have like if you’re if you’re a Libertarian
You’re like hey taxation is theft you’re using coercion I didn’t sign the social con you know the contract level you know whatever it is like I understand that philosophical argument I really do but to the extent that you’re going to pay taxes the question is is okay what
Are you paying taxes for all right well the government right now if you talk to like Adam Smith who’s dead so if you’re talking to him Kudos but if you talk to Adam Smith Adam Smith said that basically the government’s there to provide for internal security external uh you know security for maternal
Threats security from external threats and to some degree infrastructure so you have a criminal justice system you have a military and you have roads right that’s what Adam Smith thought were were easy now you can debate some of that but that was the the basic concept
So if you’re if you’re doing a sales tax the idea is is the reason why it’s fair is because the mechanisms which allow for a Marketplace to flourish rely on things like communication and security well okay well what contributes to communication security well the the argument from the government perspective is
Roads railroads waterways ports these all facilitate trade and movement and commerce and then a legal system which will protect you both your physical property and will actually provide for a peaceful way to adjudicate differences so that if if you know you steal from me my response isn’t to go to your home and
And like with a gun and get it back right we there’s a there’s a mechanism where not necessarily peaceful but an ordered mechanism uh that actually if only the IRS would you know not come to our door and not sit down so the idea is let me just finish this
Off right so because I want to answer the question I keep getting told I interrupt myself so the idea is is that all right if I got in my car I drove my road to use a store because those services are being provided by the government then it makes sense for me to
Pay a tax on this exchange because that is that is the most directly related the the tax now is being assessed at the point where it’s most directly related to the government services that I enjoyed in order to get it that’s the argument yeah yeah okay okay not saying
I agree with all aspects no no I’m I’m following I’ve got some other questions but I I I want us to to move to the next segment because I know that we were already at the end can I make a quick comment on the fair tax I believe that
The fair tax is the most moral system of Taxation because it does not require coercion well it does all taxes require coercion okay great point but I also get to make the choice yes whether I am going to participate in that coercion the fair tax is the only system where theoretically you could
Live in a world where you where you paid no taxes which is to say that once I purchased my property once I have if I set up my Homestead and I’m completely self-sufficient I don’t pay taxes and I genuinely own the things that I have and
Now trade only takes and I can still barter and things like that but the moment I’m I’m actually using making use of the services that certain Services the government has provided in order to um increase my ability to engage in Commerce now there’s a fee that’s paid
Before that so user fees I think are the fairest form but again they’re also the kind that the left will describe as regressive and the only you got to keep this in mind the only reason why they describe it is regressive is because everyone has to pay it
But but again the way that we describe fairness in every other financial transaction is I’m responsible for pain for what I consume right a user fee is paying for when you can sue in every area of the marketplace that is how things operate Yes except the government
Except when the government says we must take your money to spend it on whatever which we’re going to get to in just a moment all right okay so I I gotta get to this story all right go go go ahead and say it so we got another
Article I want to bring up here uh I think it’s the go to the summary one uh the No No back over one more over there we go that one okay that one keep it right there so we’re having an argument on is this in the legislature yes lowering the tax
Burden uh in Virginia cutting taxes and we were being told as we’re always told whenever we want to cut taxes this is a tax cut for the rich not a tax cut for the people that need it most now keep in mind the lowest tax bracket in Virginia is like eighteen thousand
Dollars where you’re paying some almost everybody so everybody in Virginia is paying some form of of state income tax provided you haven’t almost everybody in Virginia is paying the top income yeah yeah in taxes which is that’s a five percent two percent like the tax cut was gonna was gonna positively impact 82
Percent because we were lowering taxes so the response from our colleagues on the left was this is a tax cut for the rich we’re like all right so 82 of the population of Virginia is Rich now is that what you really and then it was well they don’t need the tax cut first
Of all I always find that kind of insulting how do you know what somebody else needs and not to mention when when you’re talking about somebody else’s property right like they worked they earned this you’re taking it from them they’re saying I would like to have a small
Percentage of that back and they’re asking the representatives to do that and the politicians like you don’t need it uh pardon me first of all it doesn’t matter if I need it or not it’s mine you took it I want to keep more of it right
In fact maybe I wouldn’t need so much help from my politician if you weren’t taking so much from me in the first place but what they did is they got up and they showed their cute little graphs right here’s my cute little graph which shows
That if you lower this tax most of the money is going to go to people making whatever seventy thousand dollars and above okay logically this makes sense because if you’re paying almost nothing in taxes how can I give you back money you didn’t pay right like please please grasp this
Because this is this is essential I can’t give a tax cut to someone who isn’t paying taxes or who is not paying much in taxes if you paid a hundred dollars in taxes and you got five dollars back it’s because you didn’t pay that much in taxes if you paid fifty thousand dollars
And you got five thousand back yes this person got five thousand this person got five and you could argue that well this person could use the five thousand dollars more yes but this is a tax cut not government spending this is a tax cut not redistribution of wealth
So if you’re telling me that we need to cut taxes for people that are not paying the tax you are cutting that isn’t a tax cut it’s more government spending it’s more redistricted more redistribution it’s more redistribution that is the first thing to understand now that that’ll get us into eventually
Myth three right because there’s people on the left that that openly say well yeah and and the entire reason we have the tax code the way that it is is because we want this more Equitable redistribution of wealth yeah but but here’s here’s the part that’s in here’s the part that is
So dishonest so let me go through this argument we’ve already established that’s not a tax cut that’s government spending at that point I can’t cut your taxes if you’re not paying them what they are doing is they’re getting up there with their chart and they’re showing oh my gosh how
Unfair is this that this person is getting taxed you know you’re cutting taxes for all these people but this person gets more back than this person yeah and this person really needs it so what we should do is cut their taxes even more when you look at this I have this up
Again this comes from taxfoundation.org and this is the part that I think is is really important to understand the way that this works is it’s not just that you have your income all right if you’re on the bottom 50 percent you are paying less in taxes than you’re actually getting an overall benefits
Repeat that one more time if you’re in the bottom 50 in most cases you are getting more in government benefits than you’re actually paying in taxes this could be everything from things like EBT cards this could be like subsidized housing this could be subsidized day care this could be free
And reduced uh lunches for kids at school this could be um a free medical service like there’s all these various things that you are getting access to and that costs more than what you’re actually paying that’s called a redistribution that’s a transfer payment a transfer payment is where you make it
I take it and I give it to this person over here because they have less why is it named transfer payment because I’m transferring it from you to you okay that’s that was pretty straightforward it’s just for you to you when I take that money from you
And I give it to this person over here that is not reflected on their income oh so here is the most insulting portion of this is that my colleague was standing up there on the floor talking about we need to help out this person by cutting their taxes because look their
Income is only at this much and so they feel this they feel this tax more than the wealthy person over here but when she’s showing their income she’s not showing all of the additional money that was given to them by the people that have been taxed
So their income jumps up sometimes by a third or more because of those transfer payments and yet when the government calculates this data and when politicians use this data they don’t include that in the income of the people that are receiving it so you are paying a portion of their income
Which doesn’t get recorded so even if you pay a higher so let’s say they win the argument they win we lower the taxes for everybody but their taxes lower even more plus they get more redistribution payments it doesn’t actually show up in their overall income that they’ve received so they can come
Back the next year with the exact same chart and say you’re still not paying your fair share how intellectually dishonest is it to say that the only way that we’re going to help the poor is if we take from you and give it to them and then what I take
From you and I give it to them you get no credit for it in the way that I tabulate the data so that they can keep coming back and making the same argument year after year after year and you’re sitting there left wondering like wait a second I am paying
All my taxes I’m doing all this stuff like why isn’t it working it’s because they want the problem more than they want the actual solution here and it’s a lot harder to convince you to pay more taxes to help the poor if you get to come back and start asking
Really serious and probing questions about how that money is being spent so just keep that in mind it’s it’s not just that it’s a lie in the sense that I can’t cut taxes for somebody that’s not paying taxes right that should that’s the most obvious response it’s that even
When I do pay the additional taxes and even when they do give them to the person that they claim needs it more they don’t come back later and say okay now we’re going to include this in their income so that we can show how they’ve been brought up as a result of you
Paying more taxes nope they keep that low and then they tell you you’re you’re greedy and mean because you want to keep more of what you earn so politicians tell us that they want to help the poor but they don’t feel that they’re doing enough so instead of making a better
Case for why uh the rich should be taxed more or whatever it might be they then go behind our backs and don’t give us all the data so that they can help the poor more is that would you say that’s accurate the I I would say that I think
It’s questionable and this is when we’ll get we’ll get to this next point I would say it’s questionable that it’s about helping the poor oh really now now again do I believe do I believe that every Progressive out there that advocates for this sort of tax policies
Doesn’t want to help the poor no I believe that a lot of them genuinely do the problem that I have is that if you genuinely believe that this is the solution to helping the poor then why aren’t you advertising how great all of your programs have worked why are
You arguing about how oh this is wonderful look at all the success we’ve had no instead it’s every year they come back and say we need more money we need more fun why wouldn’t you at least go back to these people that are paying all of the taxes in order to make your
System make your programs function why wouldn’t you ever come back and be like hey we just want to let you know these programs have worked so well and we want to thank you for all those contributions that you’ve made to make these programs possible there’s a reason that you’ll never hear a socialists
Compliment Chick-fil-A’s drive through no no but let me but let me ask you this if you’re someone that is absolutely in a poverty trap and right now with a lot of these government programs that’s exactly what they are they’re trapped because we punish you the moment you work your way out of them
You are an incredibly loyal a voter that believes their housing their health care their education their food their CL like everything is absolutely dependent upon these government programs that their representative helps control is that a person that’s showing up that’s free to vote otherwise technically yes legally yes
But if you’re living in that kind of fear that my gosh if I lose this program I don’t know what’s going to happen to me well then that is a very very dependent this is why the Democrats Coalition has become a top bottom Coalition it used to be
Decades ago that both parties basically had an equal distribution of everybody across all income brackets um and and that Republicans were were labeled the party of the rich because they had slightly more richer um uh constituencies than Democrats but that’s not really the case at all anymore Democrats are now it’s almost
Like a feudal structure right where it’s like the Democrat Party base consists of ultra wealthy progressives which I believe we might get into um later in this episode and then those that are are requiring transfer payments in order to to sustain their standard of living and both of those groups are very
Very loyal to the Democratic party whereas the middle and both the lower middle and the upper middle tends to be more Republican but one question that I’ve got well let me let me read because I actually I wanted to put okay okay here’s the key findings when you
Actually look at this America’s lowest income families receive five dollars and 28 cents worth of government spending for every one dollar they pay in total taxes yeah so that’s the transfer payment that’s a transfer payment so what you need to understand is that for every for every one dollar they’re quote
Paying in taxes they’re getting 5.28 back in transfer payments oh wow yeah middle income families receive 1.48 cents in total spending for every tax on so even middle income in in many cases are receiving more than they’re actually paying into the total taxes and then America’s highest income families receive 25 cents in
Spending for every dollar paid in taxes so so 75 cents of what they’ve done is just gone and 25 comes back as a group The Bottom 60 of American families receive more back in total government spending than they pay in total taxes so over half of the American population
Is basically getting indirectly paid by the federal government yes how is that sustainable well it’s it’s not uh this is the short answer and then so yeah that’s an important thing and then government tax and spending policies combined to redistribute more than 2 trillion from the top 40 percent of
Families and again top 40 percent you’re making like just you’re making right around a hundred thousand dollars or more to the bottom sixty percent two trillion dollars so when Elizabeth Warren or Bernie Sanders or AOC talk about how this is all about the rich getting richer and the poor being left in the
Dirt and everything two trillion dollars gets redistributed regularly from the 40 top 40 to the bottom 60 percent now if you want to argue that it should be three trillion dollars go ahead and make that argument but don’t you dare don’t you dare tell people that we’re
Not doing anything or we don’t care because I’ll say right now I’m out of the top one percent I’m not in the top five percent and I’m a little bit tired of being told every time the government wants more of my money that if I don’t want to give it
To them you’re greedy especially when statistics have shown over and over and over and over again the conservatives are far more likely to give a higher percentage of their income to charitable giving than progressives it was Thomas Soul who I believe once said something along the
Lines of why is it greed to wish to keep what you have already earned and yet it’s exalted as as Noble and virtuous to covet what someone else has earned oh and then not only coveted but actually go out and find politicians who will coercively take it from them and then
Punish you know again it’s Thomas also said that you know when a thief steals from you they don’t go back and and insist that you thank them for it right but when the government does it we’re all being told that we should not only should we feel grateful that they
Did it that we should feel bad that they didn’t take more and then and then we rename roads and bridges and post offices after those politicians when they retire from office but um I I there’s a couple more points that I know that you wanted to bring up in this
Episode and there’s also some questions that the audience as well so questions um I’ve got a question that I think could actually lead into your third myth that you um that you’ve outlined for us which is about taxing for for um you know redistributing wealth in order to
Create a more Equitable Society yeah so this is actually somewhat of a difficult question um somebody asked my question is corporations like Walmart often pay an unlivable wage to their full-time employees make products overseas and then pay minimal taxes how should we handle taxes for them that’s it that’s a
Somewhat difficult question because sure on one hand the left has a reason to be upset at this but you also on the right you have a lot of people on the right that rail against corporations that ship jobs overseas and so so you kind of have a politician can easily get elected the
Way that I can see it is that a politician can easily get elected by by kind of whipping the populist frenzy yeah and and then directing it at these corporations that are taking our money shipping jobs overseas and they’re not paying any taxes that’s not fair we need
A more Equitable tax system in order to tax the rich or tax the corporations like like what’s your response to that so it’s it’s a great question and a lot of people do look at that and see like there’s just seems something fishy about that how is it that Walmart’s not paying
Anything in taxable first of all they are paying taxes right but the other thing to keep in mind here is that let’s say that Walmart the corporation was paying zero taxes can I just say something right now you know what my response to that would be
Good agreed it would be good I would say good and here’s why because Walmart is a legal entity it doesn’t want the legal entity of Walmart doesn’t want any money you know who wants money the people that work at Walmart the people on the board of directors at Walmart the shareholders of
Walmart they’re the ones that want the money and the thing is is that all of those people are already getting taxed for their income for their sales for their property for their capital gains for their debt they’re all getting taxed already all of them all of the wealth that Walmart generates by employing
People by selling products by you know all of it they’re getting taxed on all of it why do you want to tax them again as a corporate entity why that doesn’t make any sense whatsoever so that’s the first thing to understand is that we need to get past the
Narrative that politicians are trying to condition us to believe which is if a company makes money and it’s in the company account we need to tax that on top of all the other things that we’ve already taxed associated with that company we don’t need one more tax on
Productivity because that’s what this is we’re taxing productivity you did a good job you made money well we want some we already got some we want more that doesn’t make sense I mean there’s no moral obligation uh in my mind for the corporate entity to pay more taxes when
All the people that work for the corporate entity are already paying all of these taxes second question they get products overseas okay this this is a this is a larger trade argument but here’s what I would say the idea behind being frustrated about products being created overseas and
Being sold in the United States is that if they weren’t being created overseas then they would be created in the United States and wouldn’t that create more jobs and wouldn’t that create more wealth and prosperity my answer to that is no not necessarily and and the reason why is because of
Things like competitive Advantage like so for instance let’s let’s bring that logic all the way back to a local version of this do you do you shop in American companies that work outside of your county or work outside of your state or work out well gosh why do you do that
Don’t don’t you love your locality more than you love Chicago or or even better you mean you mean you allow someone else to don’t you love your family do you realize that if you didn’t do shopping with anybody else your family would have full-time jobs for the rest of their life growing their
Own food and making their own clothes no trade okay I’ll let you finish yeah let me let me answer the question trade is good for us we voluntarily engage in trade the reason why Walmart is buying those products is because their customers want them Walmart didn’t decide one day oh I
Know yeah let’s do this Walmart said if I can sell you this and you buy it and the price is cheaper then you’re gonna shop with me and the reason why you’re gonna shop with me is because you don’t want to pay a dollar extra for a hammer
That isn’t necessarily better because of the location in which it was built most people don’t or a lot of people especially poor people they can’t afford to make that kind of decision like have I purchased things that were a little bit more expensive because I really liked the business owner I was doing
Business with or I liked the local shop or I like the atmos yes because I can afford to but there were other times in my life where when that product was a dollar or more I couldn’t get it but I could get it at Walmart yeah so
Was that so were we were we punishing the poor by creating where they can get greater access to goods and services at lower prices I think did your mic did your mic get oh yeah that’s what happened I um well Nick works on while Nick works
On fixing his mic I have a point that I want to bring up of where um where Nick was going with this it you know a way to fix this would be let’s go back to this thing that existed in Europe between the uh Fifth and 15th centuries called the
Feudalism where you lived at home and you knitted your own clothes and you made your own tools and you constructed your own home and you made your own wagon and people look at that like well that’s I’m not talking about this I’m just well well no you are that’s that’s
The important thing to recognize about this trade is trade whether or not it’s trade with my neighbor trade with the local business owner trade with the company across the state or trade with the company across the ocean the question is this was the trade voluntary now for instance if you’re allowing
Slave labor to build your iPhone okay now we’re talking about something that’s that there’s a moral yeah right but but if somebody is if somebody is willing to produce a product at a at a cheaper rate because within their economy that they’re at they can afford to do it and
That’s that makes sense for them okay well then I don’t mind buying it at that cheaper rate not to mention the fact that do we really want to tell American do we really want to tell American students in an incredibly expensive educational system that we want you to be competitive
With people that are living in another country with a literacy rate of less than 30 percent we we want you to be competitive with them in the same jobs no oh my gosh we live in an advanced industrial high-tech economy we want our students and kids to recognize that their lifelong ambition
Probably should not be engaging in an industry where they can be out competed by by someone that can’t read or write in a foreign country that doesn’t make any sense allow for competitive advantage to work the way it’s supposed to work I don’t hire my doctor to fix my
Car right I don’t hire I don’t I don’t hire someone uh in New York to do a job where I can’t pay them to to afford to live in New York right we engage we all engage in in um competitive Advantage with everything that we do right the reason why I don’t
Grow my own well I don’t grow a lot of my own food I’m sorry but the reason why I don’t make my own clothes is because my time is so much more valuable spent doing the things that I’m good at in order to make money so that I
Can pay somebody else to make my clothes yeah right and so and that’s that’s the beauty of that’s the core emphasis of how capitalism works yeah I’ve got one more question that is an app well wait I haven’t finished this one because there’s there’s three components to this
There was the there was the should they be paying more on corporate taxes um why are they doing this and then the third one is is they’re paying they’re not paying their people livable wages yeah this gets into the whole equitability yeah this is the part so there’s two things here
I hate the term livable wage only because I don’t know what it really means right a level of a wage I guess means that you can pay for basic food clothing housing um you know within the geographical area that you live in but the thing is is
That a job doesn’t exist to provide you with a livable wage jobs exist because somebody created a an Enterprise where they needed something done that they couldn’t do themselves or it didn’t make sense for them to do it and so what they do is they say okay I
Have this job maybe it’s super complex and it’s in high demand and there’s low Supply they’re going to be forced to pay you a lot of money they’re going to be forced to because if they need you to do it and they can’t find they’re going to
Have to pay you a lot of money then there’s other jobs where it’s like this is not this is not a difficult job it’s not very complex and there’s a ton of people that can do it I’m not going to pay that person the same amount of money because if I do
Then I have to raise the prices on all of the products and now you’re coming in to buy my product and you’re like whoa what why am I spending more on this where I can get it cheaper over here well it’s because I’m paying I’m paying
For a task I’m paying way more for a task than I should okay it doesn’t make sense so it’s important to understand that no company on the planet has an obligation to pay you a quote livable wage that doesn’t make any sense when you think about it what they have an
Obligation to do is be honest about the work that you’re supposed to do for them and the price that they’re willing to pay for that work and then you get to decide whether or not you’re willing to do it now if you don’t like it or or if
It’s very low then you’re going to say okay you know what maybe I need this money right now I like I need it I got to pay my mortgage or I got to pay my rent or whatever it is so I’m gonna do it but as soon as I’m doing that I’m
Looking for other ways that I can make more money I’m looking to make myself more valuable to where this company has to pay me more because if they don’t somebody else will that is the natural progression one of the one of the biggest things that Thomas Soul talks
About that is so powerful is that when we talk about these quintiles the bottom twenty percent the top one percent here’s what most people don’t understand 75 percent of people within their life will actually be in the top 20 percent of income earners in the United States
Seventy percent of the people in the top one percent right now won’t be there next year most of the people in the bottom 20 percent won’t be there by the time they hit 26. see they talk about these quintiles and they want you to have this idea that the
One percent is a permanent class of people and the bottom 20 is a permanent class of people now is it true that there are people that are are in those places for Generations yes but the vast majority of people within a market economy within the United States
I’ve I was in the bottom 10 when I started off and I worked my way up what’s the number one indicator that somebody has wealth in this country age why because you gain experience your labor becomes more valuable in the market you’re able to charge more for it
A lot of the people working at Walmart are doing there for one of two reasons either a it’s an entry level position or B it’s supplemental income or C A lot of these companies that also have jobs that are not as um you know it’s
A lot of them will open them up to people that either have records or they might have some sort of other disability that makes it difficult for them to be able to find employment in other places and so you look at all these combined factors and what you end up concluding
Is is well no it’s not that they’re screwing over their employees because their employees don’t have to work there Walmart doesn’t Force when Walmart opens up it does not go and Roundup people in the fields it doesn’t go round up people at high-tech jobs and make them work as
Cashiers that’s not what happens they find people that want a job working at Walmart and then they give them one and then the turnover rate is very high because people generally get some work experience or they get through and then they go to school or something like or
Something like that so we need to understand that a lot of the people working in minimum wage that’s 25 and under and most people if you work in the same job for more than six months you won’t be making minimum wage so so this idea that it’s this permanent
Class of people that are just stuck there no matter what for the rest of their lives that is true of some people in almost every case though that’s usually because there’s some sort of debilitating component right there there could be a disability involved or it might be because they’re dealing with
Issues of you know substance abuse or or they’re retired and they’re just looking for some supplemental income that isn’t that is one of the common things that like the YMCA was one of the people that fought against um the minimum wage increase in Virginia because they said you don’t understand
We have people that come in that they work at the YMCA because it provides them an opportunity to stay involved with their community and the reason why they get paid minimum wage is because we don’t require a lot out of them if you if you start making us charge more we’re
Gonna we’re gonna we’re gonna fire the nice elderly person that we don’t need to do a whole lot right now we’re going to replace her with somebody else and we’re going to give them more work to do we’re gonna have to you’re forcing us to so that’s what I would say now some
People come in and say the reason why Walmart does that is because the government provides supplemental income through food stamps and everything else so Walmart is paying them less than what they actually should pay them because the government’s coming and using tax dollars to my answer to that is
Don’t blame Walmart blame the government because they’re the ones creating those conditions to where Walmart has to do this in order to be competitive real quick it’s also worth noting that a lot of these major corporations like Amazon actively Lobby to raise the minimum wage yes and actively Lobby for things like
Like online sales taxes and stuff like that because they can pay it and they know that a startup cannot yeah why would they do that for what he just for what Christian just said is that a lot of the more powerful established companies which have a a much larger
Market share we have a Big Mo uh yeah they have a much larger market share and they also have usually diversity of products so they can afford to lose money in one area while making money in another they will they will go into AWS they will ask for higher regulations
They will ask for more taxes they will ask for all of this because they know it’ll run their competition out of business and so you have to ask yourself is that really what you were intending I mean it’s fascinating to me that the more regulated the economy becomes the
More higher taxes that we get the more consolidation you see within the economy me the expense of smaller competitors your percussion you just used the term moat can you define that real quick it’s an economic moat it means that there’s barriers to entry so for for example and
I love this as an example one of the most prominent Industries in the entire world with a massive economic MO is railroads because who’s going to spend 100 billion dollars laying 3 000 miles worth of track all across the country that’s a natural mode now there’s other modes involved with that because
Railroads are heavily regulated and they’re forced unionized by the federal government so there’s moats there there’s barriers to entry which explains why a hundred years ago there were like five or six times more railroads than there are now it’s instead you’ve seen a trajectory of consolidation within the
Industry as as fewer and fewer companies merge with each other because no new ones are being created and arguably no new ones ever will be created anymore as long as we have the current regulatory structure so that’s how a moat works there’s one question that I have that I think
Needs to be asked um in this in in this live stream and it is I just want to know why the IRS is this an audience question this is an audience question yeah I just want to know why give the name please I I unfortunately don’t have the name I
Copied it oh um I just want to know why the IRS has to have American citizens calculate their own taxes and they already know how much you have to pay yeah no it’s it’s it’s interesting there’s this meme that was going around for a while that it was like Hey I want
To buy my pay my taxes okay you need to figure that out and pay it oh okay well do you know the number yes well can you just give me the number no you got to figure it out oh okay well what happens if I get it wrong like do
You just give me a warning oh no we’ll cart you off to jail and we’ll increase the penalty so it’s it’s it was it was it was this total joke of a system that we have um no I I agree I think it’s really problematic now one of the things you
Understand is that most people are paying uh taxes through automatic uh deduction automatic withdrawals right so from your employer so your employer is responsible for collecting uh the taxes for the government right the the IRS this is nothing that is crazy the IRS doesn’t collect taxes okay the IRS makes sure that businesses
Collect taxes for them and then hands it to them and then they conduct audits to make sure that the business has got it right and then punish the business businesses or individuals when they don’t what I find so frustrating is there are a lot of employees or contractors that will you that will
Decide whether or not to take a job but based on whether or not the company does take out the taxes for them and I hear that I’m like no if you just paid your own taxes yourself you would think about this whole situation differently yeah
And you yeah well that was one of the things Milton Friedman admitted getting wrong is he would say well yeah the most efficient way to collect these taxes would be for automatic withdrawal from the paycheck and what it does is it creates a scenario where people really
Don’t have a concept of how much they’re paying in taxes because each month it just it never enters their and never enters their bank account in the first place and then at the end of the year many of them get a tax return like oh
This isn’t so bad and it’s like well no if first of all if it was entering your bank account and then leaving your bank account you’d be like what the hell yeah that’s why Hamilton doesn’t pay us all at once like all of a sudden you realize
Oh I’m not getting a good deal out of this yeah or you’d at least be a little bit more that’s one of the other reasons why I think a fair tax is is pretty cool the reason why is because everybody has to pay it right now politicians get away with saying we’re
Going to raise taxes but not on you we’re going to raise it on the rich and nobody really puts themselves in the category of the rich when they’re thinking about this and then the end result is like oh what do I care but if every time if if the only way taxes
Could go up is as if they were going up if they were increasing sales taxes every time they did that 300 million Americans would be like you’re going to do what yeah what for what are you spending it on and that leads me that leads me where there’s a couple there’s
Just a couple more things we’re going to get to quickly and then I want to get into reading off some of the things that the government spends money on the another myth I wanted I want to dispel is this idea that redish you know that the government’s job is to create quote
Equity in society which more and more has been defined it’s not the actual definition but more and more it’s been defined as equality of outcome and recognizing that well because not everyone starts off with the same advantages it’s the government’s job to level the playing field this is a very
Very dangerous situation because the only way you could do that is basically destroying individual freedom and choice because now you’re going to have a you’re going to have a third party the government deciding what Fair looks like you know the third party deciding what Equitable looks like and the only way
That they can get to the sort of equity they’re talking about is with a whole lot of violence that’s it because you’re not if you worked really really hard all of your life in order to build up your bank account get your house finally get that property that you wanted and then
The government comes in and goes we’re going to take this away and we’re going to give it to somebody else one of the first questions you would ask is wait a second I followed all the rules I did what I was supposed to do and now you’re taking this from me
And then you’re also going to ask who are you giving it to we’re giving it to somebody that has less wait that’s it you’re not going to ask why they have less they could have less they could have less because a fire came through and burned everything down in which case I
Might be sympathetic to that and I’d be willing to give you money in order to help them out or they could have less because they’ve decided to deal meth and those two ways of having less are not the same but the way the government largely determines who’s going to get more and
Who’s going to get less is based off of how much you have without ever asking the question why and when you create a system when you create an economic system in a tax system that is no longer based on saying the government has to collect some proceeds in order to provide essential
Services that the government is uniquely suited toward and moves into a situation where the government is going to decide who wins and who loses who gets what based off of what politicians who need 50 plus one of the vote to win decide is fair or equitable
Get ready for a society where it is no longer pushing toward meritocracy get ready for society which is no longer pushing toward how do we how do we be the best of what we’re doing how do we find our place in society and benefit not only ourselves but our families and
Our community no no it’s none of that now it’s all about how do I get the most connections to the politicians who are ultimately going to decide regardless of what I do who gets what lobbying becomes the most valuable profession in the economy and that is the way to destroy the economy bastiat
Warned us about this he actually writes um in in his uh um essay Justice and fraternity if socialists mean that under extraordinary circumstances for Urgent cases the state should set aside some resources to assist certain unfortunate people to help them adjust to changing conditions we will of course agree this
Is done now and we desire that it be done better there is however a point on this road that must not be passed it is the point where government foresight would step in to replace individual foresight and thus destroy it yeah um well and I mean everything he says I
Mean he he has written like treatises on this I encourage anybody that’s listening either live or or listening after we’re done recording if you have not had a chance to like read anything from Boston yet just look it up it’s all free in the public domain on the
Internet just read any of his essays and he talks about many of the things that we’ve brought up in today’s episode Nick I know that there well I want to read one other quote from bastia because it’s right right on this thing because he distinguishes between plunder and profit
Oh this is a great one yes and he goes when plunder because again profit is when you and I voluntarily exchange and I end up making additional money as a result of of that exchange that we both agreed to right both found benefit in plunder is when you take something by
Force and this is what bastiat wrote he goes when plunder becomes a way of life for a group of men in a society over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it that is where we’re at
Right now when you look at leftist leftist economic Politics the politics of Bernie Sanders of Elizabeth Warren of AOC is all rooted in this idea that the government must plunder in order to redistribute the plunder is the legal code that authorizes them to do so and the redistribution is what gives
Them quote the moral Authority that this is for the good of people by the same token and this is the part where the left actually this is the part where many on the left have a point right I want to give them their due here
Many on the left look at our tax code and they say wait a second I’m watching all these rich people get away with all this stuff that they shouldn’t be getting away with and their response is well we need to stop that well how do you want to stop
It more government power or if they’re going to get away with it well then I want these people to get it too now the solution is not to increase the number of people engaging in plunder the solution is to stop the plundering but they want a system where they get to
Pick and choose who gets to plunder and who doesn’t who will be plundered and who won’t to build an Amazon in 2023 it’s likely significantly more difficult than it was when Jeff Bezos started and founded Amazon because there are likely more regulations now on Imports exports to
That point sales taxes to that point the um demand that found at Home Depot said if if I was trying to establish Home Depot today in the modern era I I wouldn’t be able to I mean it is so no you’re totally right Hamilton no the
More the more difficult you make it the more and one and it’s interesting the the founder of Home Depot hates that fact there are other companies that set up that love that stuff they love the fact that nobody else is going to be able to legally compete with them
Bring up um I want to bring up one other thing here uh this is let me see where where is it is it the Rand Paul Festivus no no we’ll get into that one last okay uh no the the one okay yeah this one right here
All right so we’ve kind of talked about all the different taxes we’ve talked about a lot of the common myths we’ve answered questions from the audience and Christian if we have more questions from the audience please let me know because we’ll we’ll get right to them but I want
To talk about this real quick this is the uh this is a a thing that was done in Massachusetts been in other places too but Massachusetts is one of the main ones where um they actually have a program for voluntary tax payments if you would like to give the government
More of your money because you think it’s a good use of your resources and you want to support all these programs you may do so and what’s interesting is the state of Massachusetts which has a program for voluntary tax payments but the Boston Globe revealed that Elizabeth Warren
Somehow couldn’t bring herself to cop off additional money to finance bigger government and then here was the other thing Elizabeth Warren acknowledged this morning that she does not pay voluntary higher tax on her state income taxes a question her campaign had previously refused to answer State Republicans have
Criticized Warren who has earned a six-figure salary and owns assets worth millions for her previous refusal answer whether she pays a voluntary higher rate calling her an elitist hypocrite who lectures others about the responsibility to pay higher taxes John Kerry also decided John Kerry also decided that he
Wouldn’t pay extra taxes to the state’s politicians John Kerry sailed into hot water last year when tax returns revealed that he also paid the Bay’s State’s lower tax rate perhaps he intended to pay Massachusetts higher rate but his calculator slid off his yeah the the point is the point is and this
Is Daily Caller did a thing too where they went around all these like big time like increased tax politicians and said well would you voluntarily pay more they said well no that’s not the problem is we need to get everybody to pay more right it’s never it’s never their
Responsibility it’s always a corporate responsibility and just remember corporate corporate responsibilities fall on no one it’s just like there’s no such thing as corporate rights there’s no such thing as corporate responsibilities there’s individual rights there’s individual responsibilities that’s it and if these people want to pay more
Because they think it is a good investment within Society they could they just choose not to and what’s interesting is that even when you look at the rate of giving to charity woke progresses are far more likely to give to Charities which are either in the Arts and entertainment world or
Associated with a political outcome then conservatives conservatives are far more likely to give to institutions which are actually trying to alleviate human suffering the most charitable state in America is Mississippi which is just and it’s also reasons yeah it’s it’s usually dead last or tied with with
West Virginia for poorest and it’s also a very conservative State yeah even the Democrats of Mississippi are very conservative so no I mean not just com I mean that that’s embarrassing I mean that that really does but you know what I think there’s I think they’re smart
And here’s why we’re gonna get to I’m gonna I’m gonna read off some things now and I want you and the audience to guess how much you’re gonna because again we have to have all this money and remember whenever they’re asking for the money I’m sorry let me take that back
Whatever they’re advocating to take your money by force right it’s always for the children or for infrastructure crumbling Bridges right or veterans right that’s why they’re taking your money it’s for those things but then when it comes to spending your money let’s look let’s look at some of
The uh the most popular ways that they’ve decided to spend your money all right so I’m gonna list something off I’m gonna read this off you got to tell me how much they spent okay all right unnecessary printing so this is now keep in mind almost everything that the
Government does uh you know like in Virginia we have a little iPad that we use and people could look at them be like oh my gosh I can’t believe the state of Virginia gave you a a you know a thousand dollar iPad well what they
What they still do on top of that which is a little bit ridiculous to me is they print out like the daily calendar they print out the budgets they this is like a lot of printer ink it’s a lot of pain those things go right in the trash
Every day they print out the calendar for every delegate every Senator and every day gets thrown out and a new one gets printed so that gives you an idea as well all the ink and particular all the eager papers so understand how much do you believe that the government is
This Federal this is federal oh it’s gone yes right how much okay Hamilton think of all the Departments we’re gonna we’re gonna go back and forth Federal Government Federal Government how much do they spend on printing this is like in in a year Christian it’s got to be
Tens if not hundreds of millions I’m not asking for what it’s got to be I’m asking for your guess I’m guessing 358 million 350 million 100 million that that’s the low end estimate 930 million dollars printing stuff out not printing money that’s way more expensive I was about to say printing money um
The U.S Department of Veterans Affairs spent money to maintain hundreds of buildings that have been vacant for years for years so I’m going to use deductive reasoning and say that this number’s got to be higher than the printing numbers well this is just one Department oh just the Department of Veterans Affairs so
How much did they spend maintaining empty buildings can you tell us how many buildings no I don’t have that I’d like to I I’d like to photo friend um what do you think I’m starting with you this time Hamilton what do you think how much of the the VA spend maintaining
Buildings that have been vacant for years I’m gonna guess about 80 million 80 million um I will guess well it was it was almost a billion before for all departments so I’ll I’ll do a lower one and I’ll say 25 million 175 million dollars wow okay I need to start really
Up in these these numbers so just remember when they’re telling you you’re not paying your fair share we need all this money because otherwise people are going to starve to death in the streets they then go out and spend 175 million dollars maintaining buildings that have been vacant
For years why don’t they sell them oh I you want to have some interesting conversations on how difficult it is for a government agile property to sell property all right here we go all right how would you like Uncle Sam to pay you to play World of Warcraft
Our tax dollars went to researchers at the University of California at Irvine to fund screen time on video games such as World of Warcraft according to Senator Tom Coburn’s report how much did the government spend in order to fund research on students playing videos in no way that’s a hundred million I’m
Gonna say that that’s that’s three million I’m going with 12.5 million three million I got it yeah all right ha I’m sorry these are this is like I’m I’m laughing so I I don’t start crying okay the US government spent this much on parliamentary strengthening in Eastern Europe we taught
We taught Eastern European politicians how to balance and follow a budget the irony had to engage in parliamentary processes irony how much did we spend teaching Eastern European legislators how to follow parliamentary thing to include balancing and following a budget I’m gonna go with 2.5 million 2.5 million
Oh man how many countries am I allowed to know that this is Eastern Europe yes to Eastern Europe okay so that’s got to be more than one country then so um and we give a lot in foreign aid so I I’ll I’ll guess five million this is
2011. it was 2.6 million okay nice look this up no no I haven’t even looked at it I was gonna say the producer’s probably looking at the show notes I haven’t looked at anything all right here we go of okay during the Super Bowl the U.S Census Bureau bought a 30-second
Spot to air a commercial that was so bad and so terribly produced that it was bad after it aired leaving most of its viewers completely uncertain of its meaning Super Bowl commercials U.S since U.S Census Bureau so we’re not talking about all government agent U.S since bro
How much did the U.S Census Bureau spend on a 30-second spot at the Super Bowl that was so bad that it was banned after it aired what year was this doesn’t say um 5 million is gonna be my guess I’m gonna go with eight million 2.5 million
Oh wow they got a discount they did I’m surprised they didn’t spend as much money producing this crappy advertisement all right here’s another one how much did the federal government spend on zoo poetry the buddy was spent to create poetry in four different large zoos Little Rock New Orleans Milwaukee and Chicago
This was supposed to be an increase in environmental awareness poetry this is a great example of what happens when you give people money that didn’t earn it and then they think to themselves well we have the money and we have to spend it so we’re going to
Spend it on zoo poetry poetry well and I will tell you exactly how the person that voted against this right or the person that would have voted against us let me tell you how that commercial was delicate Nick Freitas voted against critical spending for local ecological environmental awareness programs that
Could save hundreds of jobs and help protect our environment that’s how that commercial gets riding strikes black and white ominous music me kicking a baby poetry for zoos my answer is a million dollars okay uh let’s go with you no I haven’t I haven’t looked at anything based off your reaction a million
Dollars that’s right your tax dollars I was thinking 250 000 Brazilian nothing a million dollars million dollars all right let me see all right um parents you might want to if you got kids listening the National Institute of Health was given stimulus funds to study the significance of genital
Washing program on South African men that sounds like a topic that we would bring up in an episode dealing with woke culture wars sounds like something I would this sounds like something I would throw in there as is this did this actually happen all right the National Institute of
Health one agency one agency this is this is fauci’s fauci’s people right here oh that was giving stimulus funds to study the significance of a genital washing program on South African men how much oh my god did the National Institute of Health spend 6.5 million no
No it can’t be that much 500 000 800 000. oh darn it eight hundred thousand I mean even one cent is too much for that but here we go here we go cronyism cronyism at his best baby you ready for this how much money did the federal
Government spend to subsidize an IHOP in an underserved area of Washington DC One IHOP in one area of one city how much did the federal government spend to subsidize oh well it’s in DC so it’s got to be an inflated number right I mean because the politicians only are
Only going to care about things in there in their Hometown how much was it Hamilton how much 250 000 is my guess what I’ll go 200k 765 000. all right guys I got bad news for you this will be my last episode I’m going to go start an IHOP I came in
Conservatively because of how far I was off I thought that was a conservative number I I I honestly thought it was going to be like 50k or something like that how does an IHOP spend that much money 750 000. you know what it is you know what it is property taxes [Laughter]
Of it is on that yeah okay here we go uh I will do a few more of these oh my gosh I’ll do two more next question so difficult to pick so do okay lightning round we’re going back to the National Institute of Health because those guys
Have had so much money to spend the National Institute of Health spent this much money to study the behavior of male prostitutes in Vietnam oh my goodness all right National Institute of Health spend this money to study the behavior of now I wonder I don’t even want to know what that
Research entailed yeah what does behavior mean I don’t even want to know I don’t think I want the day all prostitutes in Vietnam how much the National Institute of Health spend on that 450 000. I was gonna say five hundred thousand four hundred and forty two thousand three hundred wow you really
You were spot on and how much to study the behavior I mean the the correct answer for all of this is too much well I’m happily concerned I’m a little bit concerned that Hamilton was almost like you’re really nice and Christian didn’t think they spit enough
Well I’m happy that I got the number somewhat correct or I was at least close but way too much money okay okay there’s there there’s one last thing that I want I I we’ve got to show the audience before we actually wrap up and we get to
The closing here okay Hamilton can you bring up this map that I showed you right before we started recording we can do that this is the distribution of income taxes by state in the country now some of these states oh sorry I have no clue what that was but some of these
States technically on paper have no income tax but then they tax things like dividends interest and so like Washington State on paper no income tax but they tax other forms that’s why they’re colored but if you just look at this map you can immediately see why in
Hamilton I’m going to ask you to pull up just briefly the Fox Business article just the headline and then and then go back to this map here if you pull up this uh Fox Business headline lo and behold High tax state Exodus accelerates as more Americans
Flee to Florida and Texas and then the sub title California New York suffer biggest resident losses in 2022 As Americans flee High tax states now go back to the map G what color is New York in California and once the income tax in Florida and Texas oh that’s right
Florida and Texas have no income tax in California New York are literally the two highest tax states in the country for income tax in California the highest marginal tax rate is over 13 that’s insane yeah I did the math somebody that makes a hundred thousand dollars in
Um uh um you know working in uh in New York in fact I’ll do the math live right here somebody that’s making a hundred thousand dollars a year that’s that’s living in New York that then decides to um to to relocate to Miami the person making a hundred gram has a tax burden
Of over thirty thousand so that their marginal tax rate is almost a third almost a third of their money is just being gone before they even get to touch it right and they’re left with under sixty nine thousand dollars a year that that that’s like without any you know
Contributions or anything like that just base pay right now that same person moving to Miami in Florida is bringing home oh after taxes they have a marginal tax burden of less than 23 percent yeah so a third of your income being gone immediately living in New York City versus less than a quarter
Being gone if you move to just just moving to Florida and then people wonder why it was something like over a hundred thousand people move to Florida from New York in one year which you don’t understand is the taxes of the price we pay for homeless encounters outside our
Children’s elementary school right taxes the price we pay for naked people dropping their syringes on the ground and defecating the Streets of San Francisco that’s what you don’t understand you big it I I guess I’m a bigot like I guess I’m a bigot because
My long time like like I I don’t get it I mean Nick I want you to close out and all right let me promise two more yeah you only did one so now we got one I got a question I have to ask before we’re done all right all right so here’s
Here’s the last one and and I’m going back to my old alma mater the Department of Defense all right because again conservatives we gotta we gotta take our medicine on this one just because it’s a defense expenditure doesn’t mean it makes a lot of sense all right
A gas station in Afghanistan oh no the Department of Defense built a gas station in Afghanistan that fills cars with compressed national gas or CNG the problem is almost no Afghan cars run on CNG how much the Department of Defense spend on this project uh 225 000. well if it
Costs New York City I think it was almost two million dollars to build a bathroom John Stossel actually did an episode on that it’s a great episode yeah so 200 000. so usually not as a baseline to build a bathroom and it’s the military I’m I’m gonna guess
Um I need to revive five five million I’m gonna revise my answer to be 3.8 million you’re both you’re both off you’re both and okay they were building a gas station 43 million dollars for okay oh my can I just say can I just say knowing a little something about how contracts work
In Iraq right not even Afghanistan Iraq there was probably a little something in overhead that got there was there was probably a couple tribal leaders that uh well the good news Nick is that we are no longer having to subsidize the 43 million dollar gas station Afghanistan
Because we lost that war well here’s what I look here’s what you needed the Taliban now run the gas station if we’re being intellectually honest here right it was 43 million dollars used to build a gas station no it was used to build a villa for an Afghan warlord in the
Caribbean all right that’s a little bit different right the gas station was probably like a million tops Hamilton right and the rest of this went to like ammunition roadside bombs training the Taliban and you know again villas for versions by the way the comments are like blowing up right now people are
Like 40 million dollars 43 million for a gas station Hamilton what’s your what’s your question that you wanted to ask so Nick you are in a a very unique position where you’re not a career politician meaning you’re not uh right so you have two to three months
Out of every year that you’re in session uh but the rest of the year you have a normal job like everyone else but during those two to three months every year you play a role in deciding or try attempting to guide where the tax system goes you get one vote and 141. so
When I find so fascinating about this is you know Christian and I are obviously not in the house of delegates in Virginia we have zero say over where the tax bill goes what we pay in taxes it’s decided for us by other people what do
You mean you don’t have a say you get to vote for me uh yeah that’s your say but so it’s just true explain to us how your situation is different in that you are on these committees and I think do you feel like even in your position you lack
The ability to make a significant change to the tax code in Virginia okay the thing here’s the thing to keep in mind about all this right um we we don’t design government to operate efficiently right all right and and there’s a reason for that you want to know a super super efficient government
North Korea when Kim Jong-un wants something done it’s done or he feeds you to a pack of dogs right like that’s boom you want to be done well it won’t be done well it’ll be expensive it’ll still suck but my gosh it’s done quickly or else somebody’s kibble the one is in in
The United States we we’ve set up a a system of deliberation because we wanted the government to move slow that’s why we have competing power between the house and the Senate and competing power between the legislature the executive and the Judiciary it was all of that now here’s sometimes that’s frustrating
Especially when it seems like the left can move things through so much faster than the right can and I would say that in part that’s because of two very very different competing philosophies with respect to the role of government within the right we have a lot of argument
About what the government should do versus what the government should not do within the left they have a lot of argument on how much they should spend on what the government’s already doing and of course the government should do more so when you so that there is there
Is a reason why things tend to fly a little bit faster when the left’s in power but yeah what it really means is by serving on the finance committee right and on a finance subcommittee um probably the the part where I have the most power sitting on a subcommittee
Because you usually need five to six votes to to kill a bill or to pass a bill on a subcommittee and so now you’re one of five or six yeah but then it goes to the full committee okay well now I’m you know one of 20 something and then it
Goes to the Full House and I’m one of a hundred well then it goes over to the Senate and the whole legislative now one of 140. well the governor’s got to sign it now I’m one of 141. all right so it’s it’s important to remember that it
There’s no last thing too and if it’s challenging it goes to the course yeah it could be there who knows so it but that is not bad in and of itself right we want we want those those checks on on power um the the real struggle here is is for people
The real struggle is for people to understand that there’s a lot of things that that sound good yeah and it can be done from people that you might you know genuinely like or think are really good people I have colleagues on the other side of the aisle
Um I’ll give it I’ll give it a four instance because he he just retired and so there’s it won’t it won’t damage his political career that I’m saying something nice about him but uh delegate Mark Keem I used to represent an area up in in Fairfax him and I voted together on
Almost nothing um but when I had a family of you know the people that these were Afghan refugees that were trying to get their family out who had fought alongside Americans and was trying to get protected and I need to get in touch with the U.S senator real quick well the
U.S Senate U.S senator options are Mark Warner Tim Kaine like I tried to run against Dave right not now not to say they wouldn’t have helped me simply because we have political disagreements but I knew it would probably be quicker if I called up Mark and I said hey Mark here’s the
Situation this is what I’m trying to do can you help me out within 30 minutes Tim kaine’s you know office is on the phone with me hey delegate Freitas you know how do we help this situation go so so there are there are connections like that now when key when Mark comes
Up with the bill saying I want to do this I believe him when he says he thinks this is going to help that doesn’t mean I agree that it’s going to right or it doesn’t mean that I agree that the the consequences don’t outweigh the potential benefits of what he’s talking about
And and the the biggest lesson that I think people really need to learn is that you you don’t need to you don’t need to hate or despise your political opponents you don’t need to assume that every one of them has bad intentions I believe some of them either out of
Extreme ignorance that they should be held responsible for or something else I I’m very frustrated um if that doesn’t excuse the fact that they still want to use coercion to get you to do what they want you to do right there’s something wrong with that but that’s what we need people to look
At it as we need we need people to start to question this this idea of oh solution solution solution Solutions nope as Thomas so said government is dealing Solutions we deal in trade-offs and those trade-offs are going to come through the use of coercion and force
And so let’s let’s just be careful about how much power we give them um but in the end yeah it’s it gets frustrating when I said people look at me and like I don’t want to hear excuses I want results I’m like okay well I voted the right way I carry the right
Legislation I fought for it as hard as I could I strategized it right I strategize that I tried other things but you know again we have a slow process and purpose of believe me you don’t want it to be faster there’s there’s one comment from the audience that I want to
Read off because I feel like it’s a great way to to to close this person says if the average citizen manage their finances like the government handles our finances we’d all be in cardboard boxes behind the convenience store yeah yeah and look look here’s the here’s the oval
Argument I would make about this um there are a lot of myths about taxes and a lot of times it’s difficult to try to cover all of them because we’re all not sitting there right there with with all of the different references and and forms and we’re not we’re not all
Experts on pointing through tax data all the time one of the biggest questions that really should come up initially whenever we talk about this is what is the purpose of taxes now if you’re talking to an art laugher who was worked for Reagan and what the
Purpose of taxes is to take as little as possible only as little as possible as fairly as possible to only pay for the essential functions of government and obviously we have some disagreements on what that is but if that’s a starting point like okay we’re gonna have a
Police force we’re going to have the military maybe we have some money for for roads or some other things if that’s the starting point I think we kind of all understand we’re going the moment taxes become a way that you allow politicians to achieve equity in society
Or to to achieve greater prosperity in society you’re not going to get Equity you’re not going to get Prosperity you’re not going to get any of that what you’re going to get is a system where politicians get to decide what your society looks like and they get to do so
In one of the most meaningful ways which is they get to decide how much you get to keep based off of your labor right that’s a very different way to look at taxes very dangerous it’s a very different way to look at taxes if you’re now saying that no no I want politicians
To be the moral and economic Arbiters of how much you can make and how it gets spent and what it can get spent on and who you can engage and trade with you’re really running into a real problem of what does it mean to live in a free Society because because
Freedom is not getting to just elect politicians every two four six years freedom is you getting to decide what you do with your life and a significant portion of that is finding your place in society with respect to the talents that you have in order to make a living for you your
Family to be able to give to be able to help to be able to purchase and and everyone doing that in concert with one another that’s that’s far more indicative of what it means to be free than just electing political leaders so if if you accept this notion that what
Taxes is really is about is our moral and intellectual betters at state capitals at in in Washington DC deciding what all of society will look like through taking and redistributing and giving I’m sorry you’re going to get up with a side of the does not not only does it is
It not a free Society but it’s not going to be one that actually achieves the economic objectives that we all have we all want people to be happy healthy prosperous and free and we all know that people are going to produce and people are going to achieve certain standards
Based not only on their own preferences but their talents and that it’s not always going to be fair so insofar as we’re fighting for the sort of society where we don’t let somebody use the law to punish somebody that they disagree with and we don’t use we don’t allow a
Company to engage in the sort of cronyism this fascist cronyism which says I get special privileges and I’m going to deny to all of my competition and we also recognize that if you create a society where the more you succeed the more I punish you in order to reward
Not not just people that are worthy of help but to reward People based off of nothing more than they have less when you don’t ask that fundamental question of why does someone have more and why does someone have less in any given situation because again in one situation
If this person has more because they rob a bank I want them going to jail if this person has more because they cheated people and want them going to jail if this person has less because a tornado came through and wiped out their home and they need help I want to help
That person if this person has less because they decided to make a lot of really really bad decisions self-destructive decisions in their life well then taking money from the person that worked really hard to build up their business from scratch in order to give it to the person that’s making self-destructive decisions
Is not just bad for the person you took from it’s bad for the person that you’re co-opting bad decisions within their life you’ve helped no one accept the politician that now has the power over who wins and who loses based off of nothing more than whether or not they vote for that politician
And that is the fundamental question that we need to get to before we talk about anything else right with respect to Effective Government expenditures effective forms of Taxation what is the purpose of what we’re doing and it shouldn’t be it shouldn’t be to micromanage Society it should just be to pay for those
Essential services for which the government is constitutionally authorized to carry out right and anything above and beyond that you’re playing with fire all right well hey thank you very much uh for joining us for this episode thank you for the questions I hope we did a one of our
Goals for this episode was to better incorporate your questions throughout the podcast we’re going to get even better at that as as time goes on we’re looking at different systems that we’re also using did you want to yeah we are planning to add a few things to the
Stream with getting comments on the screen that we want to highlight I don’t have quite a timeline on that yet but that is something we’re looking towards in the future um everyone who is in our volley chat knows that volley is going to be shutting down on April 30th I had
Promised you all last week that we would be making an announcement today to where we would be moving but we need just another day or two to really test a new platform that we had a couple of folks this past weekend that are in our Valley
Chat test we want to make a good decision on that we want to make sure we move our community chat to somewhere there’s going to be a long-term solution one that’s going to work well for you for us and we’re going to be able to
Serve you a lot better so we’ll get back with you on Thursday on that but we want to thank everyone in our Valley Channel who helped us test this new platform and I think that the only thing that you need to remember to do next is to go
Subscribe to the making the argument channel so we can hit a thousand subscribers by May 1st we are so close to that I think we are probably about 250 subscribers away so we would appreciate your help in that and to our folks who are on audio and not on the
Live stream if you made it through these two hours thank you uh we’re still kind of testing the waters on length for the live stream and we want your feedback a two-hour podcast talking about taxes I can’t imagine why you two guys are still single I I actually loved this episode to be
Completely honest it was worth the time look we are going to bounce around to some other topics we’ve been you know heavy on taxes and some other stuff that’s going on in the news we’re actually going to talk about some relational stuff here coming up fairly
Soon so stick around for that and again and thank you very much for joining us we’ll see you next episode
