Speaker 1: Welcome to the Three Stories version of The Todd Herman Show.
Zach Abraham's going to join us. I'll tell you what
the three stories are. We're going to talk through the
Kamala Harris economic Plan, price controls twenty eight percent, corporate
gains or corporate tax forty four point six percent, capital
gains tax twenty five percent on unrealized gains. Talk to
that history of price controls, and then what is an
unrealized corporate gains tax?
Speaker 2: What is that?
Speaker 1: I mean, I think we know, but what does that mean?
Zach Abraham's here is to help us explain it. We'll
get this with the help of our YouTube channel. It's
YouTube dot com slash at the Todd Herman Show. And
of course we can't do this without God Almighty.
Speaker 3: The Todd Herman Show is one hundred percent disapproved by
big pharma technocrats and tyrans everywhere from the high mountains
of Free America. Here's the Emerald City exile God to
her Man.
Speaker 1: Today is the day the Lord has made, and these
at the time so which God has decided, we shall live.
Zach Abraham joins us Chief investment Officer Bolock Capital Management.
Zach Cabraham here's what I'm hearing from the people who
run Kamala Harris. We're gonna have some price controls. We're
gonna have a twenty eight percent corporate gains tax. We're
gonna have forty four point six percent capital gains tax.
I said that twice, twenty five percent on unrealized gains.
Speaker 2: Right off the bat. Let's take the big picture of.
Speaker 1: The Kamala Harris plan so far for the economy. On
a scale of nine to ten, how disastrous.
Speaker 2: Is this for the country?
Speaker 1: I would I would uh, now, I'm not a scale
of nine to ten, I said.
Speaker 4: Yeah, yeah, I'd say nine and a half.
Speaker 2: Oh wow, wow, give it her some credit.
Speaker 4: Yeah. On a scale of one to ten, it's not good.
And it's not and it's and it's not good.
Speaker 5: First of all, for what I believe or constitutional reasons.
You can't tax somebody on something that hasn't been made.
Speaker 2: So we got to talk about that. I want to
save that one.
Speaker 1: That's a big one, the unrealized corporate or unrealized gains.
You can't tax someone and something that's not been made,
so right, well, dig into that. That's a big constitutional issue.
Speaker 4: Yep.
Speaker 5: Yeah, And I and I think it could be something
that is devastating to the economy because what will end
up happening is you're going to get a deluge of
selling and it I would anticipate it that it would
be a really heart especially after the biggest longest bull
market in the in the history of the United States.
I mean, remember, people need to realize you've got you've
got a lot of investment accounts out there, you know,
that have been in the market for the last fifteen
sixteen years that you might be sitting on seventy to
sixty five. Seventy percent of the entire value of that
portfolio could be capital gainst.
Speaker 1: Okay, so we'll dig into this further because I also
want to talk about price controls in this whole package
together as well as the corporate tax. There's something people
in this audience, this viewership probably knows, although out in
the YouTube generation, I don't think people understand.
Speaker 4: This at all.
Speaker 1: We'll talk about this with Zach Abraham, Chief INVESTMOPS or
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Zach abrahams with this, Chief Investment Officer, Capital Management. So Zach,
let's go through this piece by piece. Price control, corporate
gains tax at twenty percent, forty four percent, capital gains tax,
twenty five percent tax on unrealized gains.
Speaker 2: Let's start with the corporate tax. Do companies pay taxes?
Speaker 4: Yes?
Speaker 2: Do they pass the costs under the consumer?
Speaker 4: Yes?
Speaker 2: So do companies actually pay tax?
Speaker 4: Not really, not in the traditional sense.
Speaker 3: No.
Speaker 2: I don't think people understand this.
Speaker 3: We can.
Speaker 5: I think there's a lot of I think there's a
lot of people don't understand like what well, I mean,
I mean, I mean, look, I personally, from the looks
of it to me, I think the support for Kamala
Harris is overstated. That being said, if let's say forty
five percent of the electorate wants her to be president,
I would say by definition that half of our society
doesn't know much at all of if anything. The other
thing I think people need to look at is she
supposedly raised five hundred million dollars in the last month.
Speaker 2: Sures.
Speaker 5: Yeah, well, here's here's something that people need to come to,
a realization of the Democratic Party is no longer the
party of the working class man, you know what I mean, Like,
it's it's so hilarious to me that that that that
trope or that meme is still out there in existence.
And you go, hey, guys, this is really simple. Go
look at the average nominal amount to each party, right
they what is the average size of donation to each party?
Speaker 4: It's not even close.
Speaker 5: It's it's you have way more people giving small amounts
representative of working class people to the Republican Party. And
I got plenty of issues with them, not saying I
don't okay, But then you go flip over. I mean,
it's really obvious, right, the party of the rich and
powerful is the DNC.
Speaker 4: It's it's it is what it is.
Speaker 2: And so let's look at this from a perspective of politics.
Then so why would they do that? So I could
see people going, Okay, smart guy.
Speaker 1: Why would big companies give money to Kamala Harris If
this is going to be so bad for the economy, Well,
let's peace through this. So price controls are coming. She
wants price controls. So who's going to have more input
on which products get controlled pricing? People who pay to play?
Are people who don't pay to play?
Speaker 2: See it's they know this right exact time. I'm wrong.
Speaker 1: Things that are getting price controlled, They're going to have
lobbyist they're saying, and what they're going to say is sure,
price controlled the other guy, but not us. They'll carve
this out. I'll give you an example, one of my
favorite examples. The day Obamacare was shoved down the throat
of the American people. You know what we learned at
the Republican National Committee. A bunch of McDonald's franchises didn't
have to join into Obamacare.
Speaker 2: Guess where they were located? DC Nancy Pelosi's distriction.
Speaker 4: Oh weird.
Speaker 2: They got a waiver from this, So did the AARP.
Speaker 1: So is that one of the reasons why you think
the billion our class is up because they want to
get all these waivers.
Speaker 5: No, the reason they're coosing up buying large is regulatory capture.
What these guys have realized, and very intelligently so, is
that rather than trying to push back and lobby for
less regulations, go out there and sing a song of
regulate me more, right, become like a legislative.
Speaker 4: Jesus if you will.
Speaker 5: Right, Oh, look at him, he's offering to increase his
own costs increase. So what they're realizing is through which
I think you could almost call soft monopolies. Is that
one of the easiest And look, all of the data
backs this up. And if anybody has an issue with
this data, there's several good books out there. One of
them is written by a guy by the name of
Matt Stoler. And I'm forgetting the name of the books,
but during a break, I'll look up the names of both.
But what you see as unprecedented amounts and we all
have seen this. You see unprecedented amounts of consolidation in
industries and sect over the past twenty five years. Well,
when you less competition means that you have more pricing power. Right.
Speaker 4: The more pricing power you have, the less regulatory cost
hurts you.
Speaker 3: Right.
Speaker 5: The other thing is is if you're a multinational corporation
and let's say you're operating in thirty different countries. Yeah, okay,
you can move stuff around at the margins, okay, and
filter this over here, filter this over here, put this
over here, and you can more than account for that
extra regulatory cost almost instantaneously. The companies that can't do
that are American owned, American operated small businesses that only
operate in America.
Speaker 4: So what does it do it?
Speaker 5: When you hear about increased regulations across an entire sector,
the first thing that goes through your head is it
is outsized penal. And this is not philosophy, right, Like
I know this from the financial industry. Right, there's costs
that are a pain for us that JP Morgan doesn't
even blink at because they can reroute some more business
through Dubai or through South America or whatever the case is.
Speaker 4: And you know, for instance, think about it, they just.
Speaker 5: Reroute three percent of their overall income or business activity
on a global basis outside of the United States and
through some other entities they can make up for right there. Right, So,
anytime you hear about increase regulations, the smaller the business,
the more penal it is.
Speaker 4: Period.
Speaker 1: Okay, So it's they're going in for a regulatory capture
in an effort to in a successful effort. It seems
to create regulations so labyrinthine, so puzzle esque that only
big companies can deal within this. And then the game
is you shift these you know, revenue flow? Okay, gosh,
you know what, we've got this tax thing all right,
run three percent through Ireland whatever. I had a friend
of mine who's one of the most successful so called
patentrolls the world. Now I've learned about the so called
patent trolling business. I don't think it's trolling at all.
I think it's defending small inventors. Not small people, but
small time inventors who have legitimate patents given them by
the United States government. Big companies come in and say, hey,
screw you, we don't care you can assue us. Well,
we'll paper you in all fifty states, will destroy you.
Speaker 3: Right.
Speaker 1: You know what, my friend it pays in taxes zero
zero because he has done everything offshore. It took him
millions of dollars to create this machine. He can also
launch a company with international footprints. It takes him about
a day to paper it all, to have it all done.
He's so good at this because he can't have the
big companies find out who he is because they'll come
at him personally. So he knows how to play that game.
Guess where he learned it. One of the top three
tech firms.
Speaker 2: Yeah, oh yeah, there you go.
Speaker 4: Well and they figure and these guys, to their credit,
are really smart.
Speaker 5: And if anybody has been kind of scrapped your head
about why these capitalists would be in favor of higher.
Speaker 4: Regulations, it's just really really simple. Guys. You're when you
are a monopoly.
Speaker 5: So like let's think about you know, bulwork versus JP
Morgan is a perfect example. Okay, when there is a
regulation that has to do with myr corporate tax rate
or anything like that, it is what it is.
Speaker 4: There's nothing I can do, right, I've got no levers
to pull, I've got no I got no.
Speaker 5: Clients that are not US citizens, I've got no offshore funds,
I've got none of that stuff. So you're just stuck
with what it is. So every increasing regulation. The other
thing is is that bigger firms like a JP Morgan,
they've got armies of lawyers already, right, So dealing with
that and knowing how to navigate it doesn't cost them
anything exactly.
Speaker 1: This was my point about the patent trolling thing. My
friend learned this in one of the big three tech companies.
He knew exactly when he got into the patent trolling business.
He knew exactly what to go after them as dollarwise,
where it would get kicked up into oh my gosh,
this we can't have this good to court. He knew
the formula to a t that was the settled formula
so that he could get a quick settlement. He knew
the ones where hey, I'm willing to go to court
on this, and they figured out pretty quickly. We don't
know who this guy is. We think we know, but
dang it, he gets this business. He knows our formulas.
Speaker 2: So people rely on that.
Speaker 3: Got it.
Speaker 2: And here's the thing to pay attention to.
Speaker 3: Guys.
Speaker 1: The bigger the government, right, the more invested they are
in detail. The bigger the government, the more invested they
are in detail, the more detail that exists, the more
you can come around with the tool of scoundrels. Of scoundrels.
Needless complication is a tool of scoundrels, and we are
being bossed around by scoundrels.
Speaker 5: Okay, hold on before you go on to that though,
the one thing and there may be some questionable language
in it, So I'm just gonna give I'm going to
give a quick disclaim on that. But if you want
to know about this from the horse's mouth from a
guy that is not politically biased in this. If anything,
I think he leans to the liberal side. But he's
one of the best VC investors of all time, Bill Gurley.
He's one of the guys that launched uber d lab yep, yep.
He did a phenomenal ted talk on this that's about
twenty to thirty minutes long where he explains exactly what
regulatory capture is and how when big companies, especially big tech,
is an agreement with the government about increased regulation, you
know the fix is in and that ain't coming from Todd,
It isn't coming from me. That's coming from Bill Gurley.
This is not a political issue. This is a fairness
and constitutional issue, and they are fleecing the American public
with this.
Speaker 1: Super super well said story number two, price controls. There's
a history to this, and understand something that this is
one of the predicates of price controls.
Speaker 2: This is how it's sold.
Speaker 1: Things are so unfair people can't pay for groceries.
Speaker 2: We're going to cap this. And look, it's an emotional plea.
Speaker 1: The gas prices. People can't pay the gas prices. So
we're gonna come in and we're going to cap this.
People who are emotionally captured by government. And there's a
large of reasons for that we can talk about. We
talk about this on the show. Their identity is due
to governments. Their physical appearance, the wrong sex hormones, that's
due to it. Their whole race is protected because of government.
They're bought in on this that government protects. So the
price controls, man, that makes a lot of economic sense,
That makes a lot of emotional sense. So, Zach, there's
a lot of history behind price controls. So let's talk
about this history because I think this has been tried
in every kind loving totalitarian regime in history.
Speaker 4: Yeah. So it's very very simple. Price controls equal higher prices.
Speaker 1: See young people hear this, They go, no, you idiot,
she's capping the price.
Speaker 2: Price control means low prices.
Speaker 5: So there's something that we called the law of supply
and demand. Okay, And when you cap price controls, you
are capping potential margins and profits. Therefore less will be
invested into those areas. Therefore less will be produced in
those areas. It will, as it has always done, lead
to goods shortages and higher prices. It will also lead
to black markets.
Speaker 2: Okay, that sounds like it's a pretty bad idea and
they're gonna horrible.
Speaker 1: But let's go through this bit by bit because I
want you to know that in the podcast Family, the
radio show Family, people get this, but YouTube generation a
lot of people do not get this. So you said
profit and margin, let's start there. Kenmy Harris comes along
and she says, you know, the cost of food is
so high. Someone should have done something, but we had
this demented old man.
Speaker 4: I'll do it.
Speaker 1: I'll cap the price of donuts at a penny per
donut and she laughs all joyfully.
Speaker 2: So profit is what, well, I.
Speaker 5: Mean, there's different lot of different ways to describe profit,
but I mean product profit is reflective of value that
you deliver it, okay, and margin is margin is the different.
Margin is what defines profit. Right, So your whatever percentage,
your margin percentage is, that's what defines what your profit is.
Speaker 1: All right, So if it costs you ten bucks to
make a widget and you sell it for twenty bucks,
your margin is ten dollars, right, and that's a pretty
good margin, Like that's one hundred percent.
Speaker 4: It's okay, your margin is fifty ten dollars, yeah right, Okay.
Speaker 1: So when this happens and they price control, let's take
an item like beef. So they come along and they say,
we're going to price control beef. It's too much for people.
We're going to drop the price. They'd actually know they'd
want they'd want beef to be super high. They'd want
that price to go up. So they'll do it on
something like milk. So they're going to pretend milk.
Speaker 2: Is healthy for you.
Speaker 1: They're going to cap the price of milk. How does
that then, let's let's play that out. The price is capped,
what the milk suppliers do.
Speaker 5: So, so I think the easiest one to use it
is that everybody understands is actually just on oil and gas.
Speaker 4: Hey, this' use oily yess so, And you can apply
this to anything.
Speaker 5: But so if we look at them, if we look
at in the US today, the US is now the largest,
the largest producer of oil in the world. Okay, and
industry wide it ranges quite a bit, But we've got
about a sixty five to seventy dollars a barrel industry
average cost.
Speaker 4: Okay. Some companies are higher, some companies are lower. It
depends on you know where your wells are located. Things
like that. Okay.
Speaker 5: One of the reasons you invest in oil, or if
you're a company, one of the reasons you drill barrels
of oil is it's about an average cost on that
over time.
Speaker 3: Right.
Speaker 5: So if you cap me, let's say it's seventy dollars,
so I can't sell a barrel of oil at seventy dollars,
by definition, that investment into that oil well will pay
substantially less over time. Why, because there are times. One
of the reasons we invest in oil is not because
we're sure that oil is always going to be hired
than seventy dollars.
Speaker 4: What we realize is.
Speaker 5: That for the times that it is below seventy dollars,
we will also have times like we did during COVID,
where it's one hundred and twenty hundred and thirty, right,
and we average that out. But if you cap me
at seventy, I'm never going to get that upside.
Speaker 4: So what will I do, I will invest.
Speaker 5: Substantially less and oil. Okay, so we will produce less
and oil, which will result in higher prices globally, which
will result in increased international production, decreased domestic production. It
will weaken our economy. There will be less supply, prices
will go higher, and it will result in gas lines.
Speaker 1: So we look at countries that used to produce a
lot of oil. Yeah, Mexico, Venezuela, they used to be
and they're coming back. Venezuela's coming back, thank god, because
of the leadership there. But when we look at this
and we see the history of this, Cuba used to
be a net export of all these things. They had
very successful you know practices. If Fidel Custo comes along,
he employs controls. We've seen this in country after country
in South America that used to be huge oil producers,
and we've we've seen this barrel. Has there ever been
a time in economic history where price controls have worked?
Speaker 2: No, no, think of one, no, full stop.
Speaker 5: Just I mean maybe maybe in a transitory way right
right at the beginning, but no, just because listen, people
invest because of profit. When you cant profit, you'll have
less investment. It's it's not complicated. Right, So, anytime you
hear somebody using price controls, if you want to push
prices down, increase production, right, it's it's really simple. But
this is the problem when we when we start the
other The other problem about this is the look. I
don't think she knows this. I don't think she knows a.
Speaker 2: Lot Kamal Aarris.
Speaker 4: Yeah, I think she is.
Speaker 5: An extraordinarily intellectually limited human being.
Speaker 2: It's a conflict. It put it.
Speaker 5: Hey, I'm trying to bed I did my devotions this morning.
Speaker 4: God, trying to I'm trying to be a nice guy.
Speaker 1: Yeah, you feel about black women though, I mean, having
married one? Well, well I mean that, why, said chief
operaty officer of your company.
Speaker 4: Yeah, that might be the only redeeming quality.
Speaker 3: Right.
Speaker 4: Well, Look, I'm partial.
Speaker 5: Like when I was a little kid, I had a
crush on Jana Jackson. I ended up marrying a black woman,
so obviously I'm partial. I'm gonna give her the benefit.
Speaker 4: Of the doubt.
Speaker 2: Okay, Gods, and she's.
Speaker 5: An attractive woman, Okay, Like I'm not saying that she's
as dumb as a box of rocks, right right, So,
But but the other thing is that generally speaking, you know,
everybody knows this, Bill Bill, Bill Gates knows this, Bill
Clinton knows this.
Speaker 4: They know this.
Speaker 5: They just don't care, right because it doesn't negatively impact them,
pure and simple, and it allows them to say we're
doing stuff. Another really funny you know, the one that
I've been laughing the hardest about, is we're going to
stop price gouging at grocery stores. Right right, Do you
know what the industry wide? Do you know what the
average margins are for grocery stores?
Speaker 2: Yeah, one to one and a half percent.
Speaker 4: Yeah, there you go. Yeah.
Speaker 5: So so if they do that, you will see yet
again more locally small business owned grocery stores, like you know,
for instance, a Sprouts farmers Market would be a perfect
explanation to that. I love that company. We actually own it.
It's not a recommendation to buy it, but I just
love them. Okay, but they only operate in the United States.
Speaker 4: I think they have.
Speaker 5: Hundred two hundred and fifty different locations, you know, delivering
a great service.
Speaker 4: They focus on.
Speaker 5: Organics, right, uh, non pesticides, way all the you know,
good stuff that we want to be getting out of
our food. Like that's you know, they're kind of like
a they're like a working man's and they're actually better,
but they're there are reasonably priced whole foods.
Speaker 3: Right.
Speaker 5: If you pass that antiprouse price gouging rule, I would
be pretty sure that a chain like Sprouts Farmers Market
will probably end up selling out to a large national
chain and you'll just see, you'll see more consolidation.
Speaker 4: That's the other thing that happens.
Speaker 5: Okay, so right, And this is where they are unquestionably
the party of big business. The more regulation you put
into any industry, the more inspiration you are providing for conglomeration,
and the less inspiration you are providing for competition. Because
the more regulatory costs there are to operate in a business, right,
the easiest way to spread that regulatory cost and make
it a smaller percentage is to combine business and widen
your footprints. Who are the businesses that can buy the
most companies and consolidate the most the biggest businesses. It
like everything these people propose is putting small moment pop
shops out of business and strengthening fortune five hundred companies.
Speaker 2: Right, And with consolidation, there's also this loss of jobs.
Speaker 1: Why would you say that, Well, because we don't need
multiple accounting departments, multiple marketing departments, multiple sales departments, multiple
shipping departments.
Speaker 2: We don't need that.
Speaker 1: And by the way, just this week thereat the FED
came along and said, uh, yeah, you know what, we
actually overestimated the job growth by about a million people.
Just darn the stink and luck, yeah, what you gonna do? Well,
it's just the Fed. Understand this, guys, something about big
business and these price controls. It's proven not to work,
So why are they doing it? In my judgment, it's
because it doesn't work, except it gives the government an
excuse to get more power.
Speaker 2: Story number three. We've tried this.
Speaker 1: We've seen this in the in parts of the country
on human beings, not on businesses, and businesses are nothing
more than a collection of human beings. It's called unrealized
gains taxing unrealized gains. I want to present this scenario
to you guys in a way that I'm going to
just let you know. Zach's gonna explain how this works.
Zach Abraham, chief investment Officer bol Or Capital Managements, can
explain how this works. This is not going to remain
on companies. I guarantee they intend for this to come
to you. It could be on your savings account, it
could be on your inheritance, it could be on your house,
which is where I think it's really going to start.
They don't like little people owning houses. They told us
we should own nothing and be happy. They've said, in fact,
home ownership's a bad deal for most people. We shouldn't
own homes, but they should. So we'll have Zach explain
what this means and what it means for you. After
I tell you about this, in your home or your business,
or your RV or your dorm, you may have the
unavoidable fact of bad smell. Let me give you an
example of this. I went out the other day and
I visited with a friend of mine who was a
horse property. So he's someone who's in my discipleship group.
Speaker 2: But I just was nearby.
Speaker 1: I'd never seeing the horse property, so I popped a text, said, hey,
I wanted to swing by, and sure enough.
Speaker 2: His house is a beautiful, beautiful house, but.
Speaker 1: The downstairs area and he admits it, Hey, look, you
know a bunch of ranching clothes and stuff in here.
Speaker 2: You walk in through that wet room or whatever they
call that. And there, yep, Overall's boots.
Speaker 1: It smelled like well, horse stuff, and I jokingly said,
you know what you should get the eating pure auxy
leaf two should throw that in her. He views and
listens to the podcast and he suff for a second.
He goes, dude, he goes, that would work. And here
I goes absolutely because with all I mean, even with
the fresh stuff coming in, I go, it will work.
I guarantee it will work. See, this produces ozone. It's
not an air filter and El Virgil's not going to
clean that up. That's not a clean up the smell,
but the oxy leaf pure the oxy leaf too from
Edenpredeals dot com. Yeah, it will because it produces ozone.
Ozone goes into the air and it bonds to the
molecules coming off the horse, doodoo and the mud at
the cetera in that room. And that's what it is,
is a mud room, and it bonds to those smells
and its them. It even works with viruses. So I
guaranteed my friend, this will absolutely work in that space.
So he's buying some, just like many of my friends have.
We've got one in the studio. It smells like the
day after the thunderstorm in here all the time. We've
got two at home. Now I'm gonna save you two
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So zach, what is an unrealized corporate gains tax? And
why should people be concerned about this? Starting with what
is this thing?
Speaker 4: Well, I'd have to.
Speaker 5: I'd have to dig through it, because I mean, there,
there is what it is, and then there's the way
it's legislatively defined. Right, But generally speaking, an an unrealized
tax is any investment or any asset that's been purchased
that has gone up in value, but that asset has
not been sold and that gain has not been realized. Right,
So I think the easiest way is to put it
in the house. Right, you paid two hundred grand for
a house, it's now worth six hundred grand. You have
four hundred thousand dollars worth of unrealized cab gains. Okay,
So people are sitting there going, let's first get down
to let's first get down to brass tacks on something else. Though,
Any discussion about people paying their fair share or paying
down deficits that does not start with spending cuts at
the government side is an absolute joke.
Speaker 4: The numbers aren't.
Speaker 5: There is no way you tax yourself out of these
deficits without completely collapsing the economy. And that's not an opinion,
that's just math. Okay, And you're gonna hear people step
up there and there, Well, that's not true because by
year you look at all of those assumptions that those
guys make, they make the assumption as if US debt
isn't going to grow, right, So you're sitting there going,
this is a joke.
Speaker 1: Right, So, yeah, you pay off the existing debt. Let's
say you seize all the money held by the top
five percent in society, Yes, seize it, and you pay
off the debt for a couple of years, Except we
don't stop spending, right, it's just continuous to grow on
day one.
Speaker 4: Yeah, I mean you know, I mean you're running six.
Speaker 5: I mean the idea that you're discussing up in taxes
to better financea government that's running six and a half to.
Speaker 4: Seven percent deficits. It's absurd.
Speaker 5: It's absurd on the face of it, and it has
nothing to do I mean, they might believe it does,
but the people that push these these these policies, it's
all about seizing more control over the economy. It has
nothing to do with paying down debt. And like I said,
you can look at this in a in a very
simple mathematics or the other part of it that is
completely unconstitutional is that how do you tax Again that
hasn't been realized. What happens when the value of that
goes down, You're going to pay them back to taxes.
Speaker 4: But no, so so.
Speaker 5: You know what it's doing is it is an erosion
of ownership. If you can tax capital gains, then you
don't actually own anything.
Speaker 1: Well, let's look at what happens when you view it
that way. Property tax already means you don't own anything.
You don't own your home. You're branting your home from
the government. But let's expand this thought. This is basically
like reparations. You are taxing people money they haven't earned
to give to people who are going to burn it in.
Speaker 2: A barrel right.
Speaker 1: It's basically that. So if this happens, you'll never know
how much money you actually owe on anything. And the
government could come along and this is exactly what they
will do. I guarantee this is what they will do.
They'll look at people who had a six hundred thousand
dollars home they purchased and it's gone up into the value.
Let's say it's now worth nine hundred thousand dollars. They're
going to come along and start taxing you on this.
And they've tried this with property tax. We're going to
tax you in that nine hundred thousandar home. But here's
Zach where this is headed. I promise you it's headed
into good best use cidaris. You know what this is
right where your house right now is a nice six
bedroom house. It's got a little bit of a view
of territorial view. But you know what could go there
is a condo. We could put eighteen units there and
have on the bottom floor a coffee shop and a
little mini whole foods. Therefore, the good and best use
of this is a two million to three million to
four million dollar condo. We're going to start costing you.
We're going to start taxing you on that this will
be an effort to force people out of their homes
so that they can build even more tax spaces in
the city.
Speaker 2: I think this is where this ultimately goes.
Speaker 5: Yeah, no, I look, and the interesting one is I
need to actually dig into what they mean by.
Speaker 4: Corporate unrealized. I mean, just think about it.
Speaker 5: It doesn't give you the ability to control your own
balance sheet. It's insanity. It's I mean, it's it's complete insanity.
It doesn't give you the ability to control or or
work your own cab gains schedules.
Speaker 4: It doesn't, I mean it.
Speaker 5: And and I I agree with your assertion that property
tax is very similar to that. But but property tax
is Look, there is what we call a carry cost
to any investment. Okay, explain that any and all investments
have some type of cost to them, even if that
cost is only opportunity cost. Meaning when we've got when
we own an investment or we put money into an investment,
there are you know, uh, there are maintenance costs we
have to pay on a business. There's property taxes we
have to pay. There's you know, upkeep there. You know,
there's there there's different things right. There can even be
while we're sitting in one investment, we're simultaneously taking the
risk that there is a better investment that will be
more productive.
Speaker 4: Right. That's what we call opportunity costs, meaning you know,
if if it's.
Speaker 5: Not just does this you know, does this investment pay well,
it's does this investment well compared to everything else I
could have put the money into.
Speaker 4: Right, So, so you know property tax, well, I agree
with you.
Speaker 5: In principle that it is something that dilutes away, you know,
the benefits of legally owning something. It's also a carry
costs that when you look at the traditional like let's
use real estate or even the stock market as an example,
or real estate because we're talking about property taxes, but
real estate historically appreciates at a much faster rate than
property taxes go up and as a property right. Okay,
So so I see, I agree with what you're saying,
and I think there is something criminal about the way
that we handle property taxes in this country. That being said,
most property taxes, virtually all actually are While I don't
like paying them, they're a localized tax.
Speaker 4: The vast majority of.
Speaker 5: That revenue goes to the schools that your kids go
to school to, They go to roads, fire departments, things
like that. When we start talking about cap gains taxes
on things like real estate, they go directly to a
federal government that, in our case, living here in the
state of Washington is three thousand miles away. Right, that's
a completely to me, it is a much more pernicious deal.
The other thing is those property taxes, they don't they
do not limit the profitability right now. They chew it
away a little bit, but it's a small enough percentage.
When you're sitting there saying I am going to preemptively
tax money that you have quote unquote made. First of all,
how do we determine that?
Speaker 4: Who's the one?
Speaker 5: Because if we're gonna bet you haven't made it, right,
if you're gonna if you're gonna, if you're gonna push
you know, and I'll give you a perfect example of this.
If you're going to push a tax cap gains on
unrealized gains, okay, then what you're what you're simultaneously doing,
I mean you're you're pigeonholing something. Body into it right
where they've got they've got no choice. They're gonna have
to do it, but who determines what the actual profit is?
Meaning it hasn't been sold, it hasn't been realized. So
the value is theoretical, right, right, but the tax is
real one.
Speaker 4: Right.
Speaker 5: So let's say, you know, let's say you've got a
neighbor or or somebody across town and you know it's
it's a considerably more desirable location or whatever, but you
both have thirty four hundred foot ramblers that are on
you know, half acre lots. You know, is that going
to be your comp even though houses in that part
of the you know, it's still within a half a
mile or a one mile radius. But you know, there's
several different places in the States where if you move
one mile, real estate fluctuate. Real estate prices can fluctuate
by twenty five to thirty percent, right right right.
Speaker 4: The place I used to live was like that. It
was a a in a gated community.
Speaker 5: If if you went a quarter of a mile to
another house, everything else being held equivalent, and you left
the gated can unity, the prices went down by about
fifteen to twenty percent, right.
Speaker 4: Well, so who's who's.
Speaker 1: It's get Who's going to pay the twenty five percent
less who's going to pay the twenty five percent money?
Right Washington, DC doesn't care. They're going to have a
formula and it's going to be laid across the country.
Speaker 2: Let's boil it down to this. This is really what
we're talking about.
Speaker 1: Quantitative easing is the conjuring of money, and I've agreed
on that.
Speaker 4: This is what this is.
Speaker 1: It's a reverse quantitative easing. It's the government coming to
you and taxing you on money you don't have. They're
taxing you on money you've never made. They're taxing you
on a profit you've never realized. If they can do
that based upon corporate unrealized corporate gains, unrealized corporate gains,
they can do that in unrealized private gains, because corporations
are nothing more than a group of individuals. If you
accept the premise that the government can tax you on
money you have never earned, then the government can come
to you with your house and the government can say
your house should be a condo. Since it's not a condo,
we're going to tax you like it is one. Because
that's what the capital gains could be. If you would
get off your butts and sell the house to the
nice people from the big investment banks who want to
buy up all the houses. So you choose let them
pay you for your house or pay a two million
dollar tax on a property that you bought for six
hundred thousand dollars.
Speaker 2: And it's unrealized gains.
Speaker 3: That's it.
Speaker 1: You're giving the government the right detation money you've never made.
Speaker 5: That's what it is, right, yeah, yeah, well and it's
also once again right, this is not stuff that is
beneficial for the little guy.
Speaker 4: What does this do an aggregate? It pushes prices higher?
Speaker 2: Right, And sitting there looking at this is black rock
going love me some of that. Guess what?
Speaker 1: I can handle that stuff all stinking day long. Plus
happens that I got speed dial over to the irs.
You know what, we need some help with a thing
or two.
Speaker 4: Yeah.
Speaker 5: Now, what's funny is I just saw a headline come through.
The Other thing that the Democrats are simultaneously doing and
trying to add to their platform is some serious anti
trust legislation with teeth. And I just put out a
tweet where I quoted that tweet that that breaking news,
And I just said, look, you're promoting anti trust legislation
while you're pushing cost controls while you're pushing attacks on
capital gains, et cetera.
Speaker 4: It's like brushing your teeth while you're eating oreos.
Speaker 5: I mean, you're instantly undoing any benefit that you would
get from anti trust legislation because every single thing you're proposing,
whatever you're hitting them on the anti trust side, you're
giving it right back to them in the forms of
these cost controls and increase with you know, it's just
it's just insane. And this is why these guys, especially
these tech guys, have been so smart to attack things
the way that they've been because they can stay in
friendly with the media, they can go along with the
liberal zeitgeist. And what they found out, and this goes
back to that bird Bill Gurly video that Ted Talkie did.
What they found out is it's actually way more beneficial
to their business than if they got the.
Speaker 4: Regulatory cuts that they probably should get. Yes, just they all,
they all woke up to that realization.
Speaker 5: We'll wait a second, right, more regulations, more costs, more advantage,
we've got more. We consolidate our power and we can
make that up in other markets.
Speaker 2: Well said.
Speaker 4: It's just blind, man, It's just well said. There's not a.
Speaker 5: Single citizen in the United States that will benefit from
any one of these policies.
Speaker 2: Well said.
Speaker 1: Praise God for wise counsel as You've joyed to have
you on Zach Abraham Know Your Risk Radio dot Com.
Speaker 2: Appreciate you, my brother. Thank you so much for joining us.
Speaker 4: Hey, thank you for having me. Man, God bless you
with all the listeners.
Speaker 2: This is a Todd Herbert show.
Speaker 1: Please go, be well, be strong, be kind, and remember
but don't place your trust in the economics, the charots
and horses of money place It's your trust in God Almighty.