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Speaker 1: Welcome to another edition of The Chicks on the Rate Show,

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where we talked to our BFF and sponsor of the show,

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Zach Abraham from Bulwark Capital Management. Okay, Zach, we're going

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to talk tax cuts today. So that now that Trump

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is back in office, well he will be back in

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office in the next couple of months. We're going to

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have a Republican led House, a Republican led Senate, and

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advisors are predicting an extension of the twenty seventeen Tax

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Cuts and Jobs Act that the TCJA, which was the

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largest tax code overhaul in thirty years, and it provided

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a lot of relief, a lot of tax productions for

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businesses and individuals, and most of those benefits are set

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to expire at the end of twenty twenty five. I

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imagine that some folks that even hate from are possibly

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stoked that he won. Just from an economic I'm talking

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to you, Bernie Sanders, are kind of excited about him, maybe,

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you know, reinstating some of those tax cuts and so

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what I guess, what do you think about that? And

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then also it's a two pro first question, what do

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you think about the tax cuts? And then what do

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we get from Trump? Tax cuts possibly getting extended.

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Speaker 2: Yeah, so the I think the extension of the corporate

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tax cuts are baked into the cake. And I think

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that that's probably one of the biggest underpinnings for the

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market rally that you've seen since the election. Right, So

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stocks had to start pricing out the possibility of that

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tax break going away, and then they add to price

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back in, you know, the reality of that tax cut.

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So that's probably been a big part of that run

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that we've seen in markets. And and I think that

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and look, that's a good thing. And it really doesn't

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matter what you think about that tax rate when you

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start talking about corporate tax rates. I think it's hilarious

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when people say that the rate needs to be higher

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and I look at them and I go, based on

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what they're like, well, companies make too much, and I

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go stop, stop right there. Okay, what you need to

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look at is you need to look at the international

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average corporate tax rate, Okay, because if you are above that,

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you are incentivizing employers to leave our country. Okay, Yeah,

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so what you think they should pay really doesn't matter. Right.

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We cannot have a corporate tax situation that is non

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competitive with the rest of the world, so you just can't.

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So whatever that average is, you need to be right around.

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If that average was like twenty percent, could you afford

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to be at twenty two? Yeah, probably right because there's

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not a big enough relief there. But if you're thirty

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year domestically and by going to Ireland, they can be

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at twenty if they're going to save fifty percent in

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taxes per year, like buy them a going away present

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now because you're going to.

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Speaker 1: Need one, right, Yeah. Yeah, it's and it's just.

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Speaker 2: It's just common sense. I am really hopeful on on

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what they can do on the personal tax side of it.

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I think a lot of that's going to be kind

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of what they're some of the stuff they're talking about

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doing with the I R S is incredible.

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Speaker 1: That that was one of the because that's what I

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was going to ask you is a lot of people

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say only the rich benefit from this. Is not rich.

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I'm not rich. So it's like, you know, so people

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that you know, watch our show and everything, they'll be like, okay,

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so what about like the normal what about the normy?

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You know, are they gonna what's what's the benefit? Because

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I mean it's like, okay, they're not going to a

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company is not going to leave, right, But then how

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does that affect somebody who is not, say rich, Because

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this is what liberals say, right, it only like helps

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the rich people, Zach, You.

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Speaker 2: Know, yeah, I mean or or people that work for

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that company.

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Speaker 1: Right right, right right exactly.

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Speaker 2: Yeah. So so and I think you need to, like

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I said, I if we want to really tackle these situations.

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It's one of the things that drives me nuts about

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liberals is they want to talk about fair and then

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want right. And I'm like, okay, so now that we've

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had fun with nursery rhyme time, let's let's let's step

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over to the adult part of this conversation. Because fair

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inequity have nothing to do with it. Right, So, what

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you think is good, nobody cares. It's it's it's if

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you're not willing to give them a twenty percent corporate

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tax rate. There's plenty other corporate companies that will countries

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that will, They'll be happy to do it. They're populous,

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will will you know, reap the rewards and all that

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kind of stuff, all.

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Speaker 1: The businesses and if businesses benefit, it benefits everybody that

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works for that business. It triggers down. I mean, well,

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why can't people see that?

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Speaker 2: Well, and here's the other thing that liberals really don't see. Okay,

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one of the biggest things that you can do for

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wages the common man, and and and small business. Remember,

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small business still employees. I think you're at sixty percent

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of the jobs in this country are provided by small business.

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So remember, most small businesses do not directly benefit from

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those corporate tax cuts because those corporate tax cuts are

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reserved for C corps. Right, you got to be much

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large corporation, like for instance, Bulwark is a is an

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LLC operating as an escortate. Okay, that's what that's what

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That's what most small businesses are. So when you start

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talking about regulatory cuts, regulatory cuts work a lot different

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than most people think. Regulation regulation cuts tend to be

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the most positively impactful for the smallest businesses, not the

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other way around. And it's because of those regulations. An

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easy way to think about it is if you're if

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you're a global corporation and in one of the thirty

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countries you operate in, your tax rate goes up twenty

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five percent. Right, you can just move things around the

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globe a little bit and offset that charge. Right, if

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you're a small business that operates only in that environment

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where tax rates just went up twenty five percent, your

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stock your labor costs just twenty five percent. Right, So regulations,

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it's taxes tend to benefit. Tax cuts tend to benefit

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the people that make the most money because they get

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the largest nominal amount of savings. Regulations tend to benefit

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the smaller company. They benefit everybody, right, But yeah, largely speaking,

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it's it's going to be you know, because like if

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you have a regulatory like pullback in regulations, it's not

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going to really impact JP Morgan too much because they're

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going to have that team of lawyers on standby all

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the time no matter what. Right. Whereas if you the

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impact has on bullwork, it can be quite, it can

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be quite you know, a meaningful, a meaningful impact. So

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I think I think that's the biggest part of it, right,

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that regulatory ripped down. If they follow through with what

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they're saying, and they sure seem they sure seem pretty

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you know, pretty determined to do, so those regulation cuts

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might as well be tax cuts for small businesses.

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Speaker 1: What about downsides? Are there any downsides to this? Like

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are there are there are there downsides to like him

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doing tax cuts. I mean, would you or is it

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just all positive? Would you see it as all positive?

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Speaker 2: Well, I mean, look, you're not going to There used

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to be a myth and this will upset some people

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when I tell it to them, and I would tell

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them to take it and stride because I had to.

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It's a myth I used to believe in as well,

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which is that tax cuts always pay for themselves. I

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mean the stimulation they provide for the underlying economy offsets.

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It's not true. Mathematically, it's not true. So taxation is

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really a maximization game, does it? You know, are these

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things helpful? What are the end impacts? Yeah? I mean

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these things are going to be overall helpful to the

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over to the broader economy. I think that you've got

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bigger things in play though, Like I mean, the type

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of the type of regulations they're talking about slice or

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cutting out would be massively beneficial for productivity for so

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many different things. Tax revenues a lot of those corporations

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are going to have higher profits, right, So you've got

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a scenario where a government could be paying less in

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terms of money going to the regulator. But because the

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underlying corporations in those sectors are generating higher profits, right,

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government spending less, but it's also taking more in on

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taxation side of it. But bottom line is moving around

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tax tax levels here and there. That isn't going to

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fix our problems on the debt side of things. On

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the depth side, they're too large, meaning you're not going

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to fix any of these things on the margins. If

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we want to be realistic, if somebody wants to come

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out and really level with the American people about what

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we're going to do with the debt, here's what they'd say.

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They'd say, Look, we're going to try to eliminate as

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much government waste as we can and cut corners where

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we can. Right, We're going to save what we can,

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and we're going to try to be as sane as

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we can. But spending has been so out of control

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for so long that if we were it's sort of

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like getting a takeing somebody. It's a heroin addict, right,

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you want to use methadone and you want to weed

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them off it. Well, gradually, if you just go cold turkey,

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chances are pretty good that you lose the patient. Same

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is true. In our scenario. What you've got to do

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is you've got to be stimulative enough to the underlying

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economy where wage growth outpaces the inflation rate. That should

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be the goal, because the only way we're going to

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get out of here, out of this position, is with

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higher than normal inflation. And the reason I say that

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is there's a couple of ways we can deal with debt. Right,

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we see it on our own personal balance sheets. You know,

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let's say we go buy a house, we put two

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hundred and fifty thousand dollars down and buy a seven

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hundred and fifty thousand dollars house, Okay. Or let's say

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we put five hundred thousand dollars down and buy a

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million dollar house. We've got fifty percent debt taquity. Right,

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we can either pay that loan down really aggressively, or

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that house can go up in value. If the house

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goes up fifty percent, my debt taquity just got a

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lot better, right, therefore improving, and that's kind of what

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we need to do here. Is perverse as it sounds,

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is we kind of need to let inflation run hotter

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for a period of time and let asset prices go up,

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so by default that sort of shrinks the debt as

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a percentage of the overall asset base. Yeah, and either way,

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because if you don't do that, the impacts are too

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negative government. You know, we're running seven percent deficits. If

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you balance the budget right now, we go and do

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a depression.

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Speaker 1: Yeah my god.

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Speaker 2: Yeah, I mean it's just it's it's become too big

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of a problem. So you're just gonna have to take

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a longer term trajectory out of this thing.

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Speaker 1: Okay, I did like that. I don't want to end,

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like we don't want to talk about that. I just

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want to listen. I just want to I want to

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think to myself that I'm we're all going to make

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a lot more money in the next four years. We're

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all going to do better, and we're all going to

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need somebody to ask how do we handle this money? Zach.

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And that's where you get into play, So like, how

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can people get in touch with you? Zek How can

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people find you and to get information from you as

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to how to handle their money and to invest it.

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Speaker 2: Yeah, No, go to Bowarkapitalmanagement dot com. We've got our

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last road show of the year coming up Thursday. What

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would that be Thursday the twenty for twenty eight. I

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believe this is what that would be. No or no,

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excuse me, Thursday of the twenty first.

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Speaker 1: And you also have a radio show, right, you do.

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Speaker 2: Have radio show every single week on and we do,

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and we do a podcast segment every single day called

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the Daily Dots where we discuss everything that's applicable that

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happened in finance and politics.

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Speaker 1: And yeah, you have a lot more positive stuff to

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talk about now.

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Speaker 2: Yeah, no, and look want to I don't want to

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overcrowd this. Look. I think that we are going to

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get the best, in my opinion, we're going to get

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the best economic outcome possible. And when you talk about

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the regulatory cuts and things like that, I think they're

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going to be extraordinarily bullish for wage growth. And here's

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the deal. If you've got an economy that's averaging six

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six and a half percent wage growth and you're running

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four percent inflation, which is above trend, that isn't a

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bad scenario. That means that our wages are growing faster

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than the cost of goods around us. That's a really Yeah,

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that's a great outcome, and that's better than what we've

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had for the last several years, so I think it

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does look good.

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Speaker 1: It's awesome. I think it's great news. I love it.

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It's better than what we would have had had we

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had more of the same. Oh my gosh, so great.

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Speaker 2: Yeah. Well, I mean I was getting ready for litterboxes

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in every bathroom, you know.

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Speaker 1: I mean, you know, I know us too, So it's

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all good. It's all good. So yes, everybody check them out.

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Know your Risk Radio dot com. Thank you, Zach. I

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appreciate it.

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Speaker 2: You bet, thanks for having me fun as always. Investment

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advisory services offered through Trek Financial LLC and SEC Registered

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Investment Advisor. The opinions expressed in this programmer for general

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informational purposes only and are not intended to provide specific

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advice or recommendations for any individual or on any specific security.

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Any references to performance of security so it thought to

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be materially accurate and actual performance may different.

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Speaker 1: Investments involve risk and are not guaranteed.

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Speaker 2: Past performance doesn't guarantee future results. Trek twenty fourth three

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zero