Ray Madoff (on how billionaires avoid taxes & threaten capitalism)

Welcome, welcome, welcome to armchair expert experts on expert and he was Daniel Shepherd and I'm joined by Monica bad man. Wow. What if your name was a Daniel, you would be so different. I would be a claims adjuster. Yeah. And you'd be still wearing those glasses though. Well, but only have these glasses. I don't have to look at a lot of claims and I can't see anything anymore. Okay, our guests today. And this was if if people listen to Ezra Klein episode. She was suggested to us by by Ezra and boy was he right. Great lead. I'll take more suggestions from send him over Ezra our guest today is Ray Mattoff and she is a professor at Boston College Law School where she teaches and writes and tax law and policy wills and trust law. And a state planning. She is co founder and director of the Boston College Law School Forum on philanthropy and the public good. Now hold on the guys. Don't run. It's not a tax law. No session. So interesting. It's one of the most interesting guys we've ever had. Her book is called the second estate, how the tax code made in American aristocracy. So. Everyone's very understandable frustration with the huge income inequality. You know, one guy's got a trillion dollars and we find out what these people paying taxes. It's infuriating. We find out how that's happening. Yes. It's really necessary because she breaks it all down how how this what the loopholes are how this happened. And if you like capitalism, so many don't that's fine. I happen to like it. This is an enormous threat to capitalism. The billionaire is not paying is unraveling the trust. And yes, it makes capitalism not work as a system and our system has to work for everybody. Yep. So anyways, this is fascinating. The numbers in this are going to absolutely make your head spins. Yeah, please enjoy Ray Mattoff. He's an entrepreneur. How many outfits I tried? Nobody wears sandals. Nobody wears sneakers. I'm a show only seen sneakers. I went and tried on 50 pairs of sneakers. Okay. I just look like a man. You look super cute. Let's just start there. Thank you. That's the most important thing. And you have a savage tan. Has the summer been treating you? Okay. And here is the conversation that I didn't hear myself but a good friend of mine heard at the beach plum in. I grew up going there my whole life friend of mine was eating breakfast at the beach plum in and she heard somebody say to the guy that was running the breakfast. You look just like Dex Shepherd. And he goes, oh my god, that's a huge compliment. He's my favorite podcaster. No. I'm so delighted. I know it. Is that nice? Is there anything better than a compliment heard behind your back? Wait, how come you've been going there since you were young? Are you from Boston or something? I'm from Boston. Well, so you're from Boston. You teach in Boston. And even worse, I'm from Newton. I teach in Newton. And I live in Newton. Really make me like the guy that you know is working at the gas station. Never left. Yeah. Yeah. Yeah. Yeah. Yeah. How do you end up with Ray? Just closure. We have a historically male name given to our daughter. So I love Lincoln. Our first born is Lincoln. Wow. Okay. Here's the weird thing about Ray. So I was actually named after my grandmother who was a sort of a huge figure. And our family were at large. And she came to this country and she was like Rivky or Rishky or something like that. But everyone called her Ray. And then she spelled it R-A-Y. The weird thing is I have yet to meet a single Ray in my whole life spelled R-A-Y as a woman. And it's weird because women are named everything, women are named Joseph, women are named Frank, you know women are named R-A-Y. You think it would be a good name. They mean R-A-E or it's like, you know, Norma Ray, like a second one. Oh yeah. Yeah. He's a Ray. And here's the really weird thing. So there was a movie. It was one of these really lame rom-coms where somebody had to go into the witness protection program. A couple had to go to the witness protection program. Okay. They were about to get a divorce and they witnessed a crime. Together they had to go to the witness protection program. And they went to Ray Yoming. Okay. Spelled R-A-Y. The pen ultimate line in the movie because of course they end up getting together. Obviously they have a baby. Obviously they have a little girl. And the pen ultimate line is and we'll call her Ray and the ultimate line will spell it R-A-E. Literally as if like, it would be too impossible. Everything else was very possible. But the idea that they name a girl R-A-Y, that was just too much beyond the limits. That is so funny. Yeah. Well for suspension of disbelief would have been violated. So even though the town was spelled presumably R-A-Y. Yeah. They could have changed the name of the town. I mean it's probably a fictional town. Somebody obviously swept in last minute and said, "Whoa! This can't be-- no one will believe it. It'll be an outrage." Before everyone totally believed it. Exactly, believe it all. Do you walk into a lot of rooms and people expect to see a male? Yes. Well here's the problem. So originally of course and I think you're being very deafed about this and nothing I wouldn't expect. I'm not positive I know the definition of deaf. Okay. But you'll get there with the story. Yeah. Okay. But the contact clues. Whoa! Your name! Tell me about Ray. And not your name. Are you related to the biggest crook in the history of the world? Well that's too pedestrian for me. That's on a silver platter made off. I mean that's what everyone is going to say. Of course that's what everyone's thinking. No, no. They don't say it. They just think it. So let me just clear it up. So the Medyev's and the Megadowskis all came through Ellis Island and they gave us both the name M-A-D-O-F. We have always been mad off. We then found out back in the day when we wanted to be related to them because my uncle wanted to get madoff.com, madoff.org. Remember early in the internet you could get them. And they said this guy from New York has hoovered up all of the M-A-D-O-F. Yes. But we didn't know who he was. And then yes the plot. So it's mad off. We're mad off. Yes. But the problem is this. When I say it's mad off not mad off. Basically it sounds like I'm saying that's Frankenstein. Like literally I'm definitely trying. It would be great as if I had dug up an interview from the early 90s of you where you were saying made off. That's exactly what I can't even tell. I can't even correct people because I just sound like I'm being a big jerk and trying to be like. That's not us. We're mad off not mad off. Okay. My first question is I would say it's kind of unconventional for you to be drawn to the field that you're in. You're a law professor and you specialize in tax law in a state law. How do we explain that interest? Yeah. I know it. First of all, I mean to say I'm a proud member of the highly mediocre high school student. Oh good. Yeah. Yeah. Yeah. Yeah. Thank you. Thank you. Yes. Super proud. Are you a DHD? Do you think? I think I probably am because all of the things like I do better if I'm doing two activities at once and that type of thing. Okay. So I was a highly mediocre high school student barely in the top half of my public school class, mediocre scores. I somehow thought that the SATs were sort of like a blood test and I thought well I'm smart and it tests smart. Therefore like any piece of crap answer I give must be the right answer because that's what it's testing. Yeah. I was really out of it. And so I started at UMass which was the best thing that ever happened to me because I found this philosophy class with this professor who was just tremendously influential in my life. And all of a sudden I found this area that really spoke to me. I loved it. I loved everything about philosophy. I then had an identity. I became a really good college student because I like totally was into the subject. You were on fire for it. I loved it and I had an identity and it was great and I eventually graduated college with a degree in philosophy and wanted to go on philosophy and be a philosophy professor. But it was the era where somebody said to me like you're insane. If you're lucky you'll get a two-year position in no place, nowhere. So lots of competition, few slots for philosophy. No slots for philosophy professors when I graduated college. And so I did what I think probably 50% of my college class did which is I went to law school. After a year of like I don't want to go I'm not going to go to law school. I'm not going to be pre-professional. I'm not going to go to law school which I shockingly loved. It was actually super interesting. I would imagine it was appealing because I think on the surface when people think of law they think of their interaction with jurisprudence as opposed to like law is all about thinking. Yes. It's all about structuring language. It's very philosophical. Very much so and I loved it. I loved law school. It was so fun for me particularly because I had worked a year and I could see what types of jobs were available which were things like a note from my supervisor who said please call information and get the phone number for this person. It's like okay you could have done this in the time that you told me to do the stupid task. Anyway but law school very intellectually engaging. But the thing is I thought that the value of law school for me was I would be able to do good because because philosophy I liked, but I also had that feeling of like I should do good in the world. - Yeah. - Also, the questions, even in philosophy were like, does redness exist? - Yeah, it's not solving anything. - You're not solving any problems, exactly. And so then I went to law school, I thought, I'm gonna like, and the issues back in the day were like saving the whales and battered women. I'm like, that's what I'm gonna do. I'm gonna be like a hip litigator. I'm gonna be so hip in law school applying my analytic philosophical skills and fighting the good fight. And in my second year of law school, I did a litigation clinic, and I also took corporate tax. I took it because it was in the '80s. And I was at NYU Law School where everybody was doing like a one head to a head test for the big law firms, very easy to walk into the big law firms. And they were like, just take corporate, anyway. So I took corporate tax and I was shocked to find that I had no feel for litigation because you couldn't just think your way through. My husband's a litigator. You have to get a deposition that has someone say it. Then you have to get a case that says it. Then you have to do something else. It's so much form. - Right, right. - And for somebody who's like a little. - Was it to feel tedious? - It felt tedious and like I did not have the patience for that type of thing. - Yeah, yeah, yeah. - Yeah, tedium to me is a, that's my. - No, no, pretend. - It's absolutely my bet more being bored. I cannot tolerate it. - I mean, come on, I've diagnosed you. This is great. - I didn't even realize I should never have gone to anybody else but you. So, are you also on the same personality time? - I mean, at this point, it seems like every single person has been. - First we've all been told that way with our phone. - I guess we all have it. - I was actually thinking that one of the things I was looking forward to is I'm getting like a two-hour break from my phone here. - Oh my God, yeah. - It's huge. - I don't know if it's age or I think it's just the times. We can't focus. None of us can focus. - It's very hard. - Our brains have been hacked with stimuli. - Yeah. - And they're responding to the core. - It's hard to know what's in you and what's in the ass. - Yeah, exactly. - And I didn't like litigation but what was particularly destabilizing was I found that I loved corporate tax. Now, one thing is that I had a woman professor in corporate tax, so that does, I think, make a difference. She made me think like, okay, this is for you. You could do this. - Yeah. - But also, it turns out that it's really very similar question. So like a big question in corporate taxes. What's debt and what's equity? That's a lot like what is redness? Does redness exist? - Sure. - Because it depends right where you're viewing that from. You can change on a dime. - What are the parameters? How do we conceptualize the world is a lot of what tax law is about. And I went off to Wall Street because that's sort of what everybody did. Super easy at the time. And I was probably one of the worst tax lawyers ever. I could do it, but I could not care less if my clients paid taxes or didn't pay taxes. Like, you know, what you want is a tax lawyer is somebody really, they treat your money like their money their way. For me, it was like a little intellectual exercise. Super interesting. And I definitely didn't have a preference one where the ugly interest in the outcome. - Not at all. - That's how you want to pay the lawyer. - Exactly. Somebody who finds it an intellectual engagement. - Yeah. I see that you're having fun, but do you have any sense of how this is going to end? No. - Exactly. - Nor do I care. You may owe $10 million. I don't care. But very, very luckily I got a position in teaching, which I had long wanted to do. If you remember back in philosophy, I love school. I love fall in New England. I love that you put on your plads. You go back to school. The whole thing about it. I love, I love students. - Campus. - Campus. - Campus. Now it's coffee. Now you walk around with your coffee all day long. - What's the point? It gets the best. - Yeah, yeah, it's dreamy. Okay, so we must get into your book. I'm gonna start with the title because my first question has to do with the title. The second estate, how the tax code made an American aristocracy. So I think my first question for you is, can you tell us a little bit about pre-revolution France or this term? - What the heck was the second estate? - The second estate. - Can I tell you a little bit about how what the book was supposed to be called in my dreams originally? - Yes, they always make you change the name, right? - Yes. So when I put in my proposal for the book, it was called Why You Pay More Taxes Than Billionaires. - Cut straight to the chair. - That's what I thought. - Yeah. - And my editor, the person would become my editor. He said, "Love the book, but if you insist on this title, I will not use it." So I'm like, "All right, I want to publish with you." - Was he himself a billionaire and he felt offended? - He felt, I don't think so now. He didn't really give me a reason, but he did say, I think you should call it this. This was like in our original correspondence. And I thought to myself, there is no way I am calling it that. Like, I'm gonna yes him to death and say, yeah, sounds great. - Kick it down the road. - Exactly, but I was thinking, forget it. It's bad enough that it's a book about taxes. And now I'm gonna layer on that it is a title that you don't understand at all. So now you'll be confused, then you'll find out it's taxes like none of this would seem to be work for me. But what happened was, I began to look more and more into this whole thing about the second estate. And I realized how unbelievably apt it was. And it actually came to me to be like, one of my favorite things because he liked the idea that the title was a bit of a mystery. And in fact, I think if it had been why you pay more taxes than billionaires, it just would have looked like every other book on this subject. - We're gonna get into it towards the end of this, but yeah, there is a climate right now. And people, a lot of people hate billionaires. - Yeah. - Across the board, they're the villains. So this book is more substantive than that. If I'm looking and I'm like, here we go is another, let's kill all billionaires. - Exactly. - I'm off put by that, doesn't feel thorough. - That's right. So the second estate, let me go back to that for people who don't know, 'cause I myself, and the most often think people say to me is, second is like, the fourth estate is the journalist. That's all anyone knows. The fourth estate is the journalist. And that's true. The fourth estate here in the United States are the journalists. But basically in France and pre-revolutionary France, the first estate was the clergy, the second estate was the aristocracy, and the third estate was pretty much everyone else, right? Your bourgeoisie, your peasants, all of those people. And what was interesting about it was that the clergy, of course, didn't pay taxes and owned a whole bunch of land. But also under the explicit French rules, the aristocracy had these special privileges, like they were the only ones who could carry swords, and they were the only ones that could hunt in certain places. And their best privilege was they were explicitly written out of the tax system. - Wow. - So they didn't have to pay taxes just because they were aristocracy. And what's interesting is that you didn't have to be born into an aristocracy. You could actually buy your way into an aristocracy because people would sell their title. And so basically there was this guy named DuPont, who was an economist in France, and he said, "The only way to avoid taxes is to become very rich." And I thought ding, ding, ding, ding, ding, ding, because that is exactly the situation here in the United States. And I think what makes this a very good title, if I may, is because the public doesn't really know this. The public doesn't know that the rich have been written out of the tax system because by its appearances, it seems to be heavily burdening the rich because it's heavily burdening a portion of the rich. But the real rich, it's giving a free pass. - Yeah, and I think even in your book interchangeably, and I think we could use it going forward as like, there's rich, and then there's wealth. Often what we're talking about is wealth being exempt from taxes. - Exactly. And I think that one problem that we've had is that there has been a conflation of high income earners and high wealth owners. And this has been caused by a lot of different people. In part, Democrats had a role to play in it. I think what they were trying to say was, we're not gonna raise taxes for people who earn less than 400 million. But people heard it as, if you earn 400 million, you're the problem. And that is not the problem. People with high incomes are paying lots and lots of taxes. And it's politically, I think, been a big mistake, not to recognize the high burden carried by high earners. - I agree. - What do we qualify then as wealth versus high earners? - Right, so basically, the issue is that if you earn money through work, you have a podcast, you do an actor, you know? No matter what you do, when you earn money, you pay a lot of taxes. And it used to be the case, prior to 1986, that there were all sorts of ways that people with high income could avoid taxes because we had tax shelters, remember? There was a lot of talk about tax shelters. You might be, you're giving me the fake nod of like, you know, she was born in '87. - Yeah, in '86. - In '86. - No, yeah, yeah, yeah, yeah. - Did you hear your grandparents talk about back in the day? - She was born into a tax shelter free America. - Exactly. - I remember quite well. I was 11 watching 60 minutes with my grandparents every weekend. And yeah, that was a regular topic. - Yes, they actually, and this was under Reagan, closed the loophole that allowed high income earners to reduce their tax liability. My father was a doctor, so he was always being told to go into tax shelters. In any event, all that came to a crashing stop in 1986 because they closed that loophole. They said, you can't offset your work income with what they call passive losses. So that closed that loophole and it has been closed. So right now, you have lots of people, who have high incomes and they're paying all the taxes. - As I like to say, I work for free until July 1st. - Ah, yes. - I start getting paid July 1st. - Yeah, right? So yeah, I give away half of what I make across the board. - Yeah. - I'd like to go through it chronologically. So I think let's first talk about when we get a tax code in 1909? - No, so the first tax code is earlier during the Civil War era. It has a very expansive definition of income. It has lots of really interesting stuff to it, but we have a very conservative Supreme Court and they find the whole tax unconstitutional. - So it's gone. - It's gone. And so the country is entirely relying on-- - Terrorist. - Terrorist. - So the early part of the 20th century. So let's place ourselves where the world is, right? We're post-Civil War and then we have the rise of the industrial age. And with the rise of the industrial age, we all of a sudden have these super rich people that we didn't have before. We have Vanderbilt, we have Carnegie. - Yeah. - And then their kids are getting the money and they are acting like royalty. They're building mansions all over Newport, New York. - This is really relevant, right? Because that was this unheard of explosion of wealth that the common people got to witness and they're like, hold on, what's going on? And that's currently happening again. - Yes, exactly. - In a very dramatic way. So these are very parallel. - That was the time you might have heard the phrase conspicuous consumption because there was a book written by Veyblen, I've called the theory of the leisure class and it described about how they proved their worth in the social world by showing off their wealth. And they had these extraordinarily lavish parties. They had elephant serving champagne. They had cigars. They'd give you as a little party gift, a cigar that's wrapped in a hundred dollar bill. - Yeah. - And so you had this lavish lifestyle. But at the time, people were thinking, this is very un-American. America is a place of equality. And America is a place without dynastic wealth. It's a meritocracy. And Jefferson wrote about his concern about this false aristocracy of wealth. We should have an aristocracy of merit, not an aristocracy of wealth. And yet the country had become a place where we had this massive accumulation of wealth of people who were running around wearing crowns. It also was the time where under our constitution, you can't have a title of aristocracy. But what they would do is 'cause they so loved aristocratic life is they'd sell off their daughters, right? Downton Abbey, all these other shows. They were going to England and they were marrying off their daughters so they could bring royal titles to their family. And Cornelia Vanderbilt wore a crown around New York City. Okay, so the problem is that there came to be a concern about the stability of the country and about capitalism itself surviving. And if you remember, McKinley was assassinated by an anarchist, right? There was real concern that the country would be thrown over because socialism was so big, right? Socialism was running through Europe and Russia and leaders were being overthrown. What was this country gonna do? And because of that, there was a big push to let's make sure we don't have this aristocracy anymore. Let's bring taxes into the picture. Because the other thing is that tariffs are an interesting type of tax because tariffs, what they do is they raise prices. And so they really affect, back in the day, they really affected farmers and regular consumers, both because of things that were imported, but also because of things in the United States that were produced in the United States. Now they could raise their rates because their competition was knocked out by the terror. And it's asymmetrically painful for lower class people. This is my issue with the gas tax in California. I'm like, this is a liberal state. Why are all of our taxes are punishing the people that it affects the most? - Yeah, exactly. - Like you were to the fricking gas tax. - Exactly, yeah. - Okay, so that was the mess we were in. You had Carnegie writing in the Gospel of Wealth. We've got to do something because we need to maintain the alliance between rich and poor. Everybody has to be in this thing together. And he said what we need to do is we need to have really, really heavy taxes on transfers of death to make sure that we don't have a bunch of rich people running around and not taking, not contributing to the public. - Well, it starts to threaten the core of capitalism. - Exactly. - Because we're all playing monopoly. Anyone who's played knows once you have boardwalk in these other ones, the game can't be played. So if someone's starting life owning boardwalk, how is this now capitalism? - Exactly. - Yeah, so it's an effort to save capitalism ironically. - It was an effort to save capitalism. And that's why Teddy Roosevelt also advocated for taxes because he was worried that capitalism would crumble. - I think we're in a back to the parallel. - You believe exactly. - Yeah. - And so, you know what? I think what we have had until now is scary. I think that this might be a solution, but I don't want to get out of it. - Yeah, I don't know that's the end. - That's the end, that's the end. But right now, you have all these people very concerned and even the Wall Street Journal wrote, we've got to do something about taxes here. We have to because we have all these rich people and they're in a front to what it means to be an American 'cause what it means to be an American is to work hard. Even to Tocqueville, who is that, you know, famously reflected us about what the American culture was, said like what makes America America is that everybody values work. Now we get a bunch of rich kids sitting around and they're showing off their money and this is very destabilizing. So the answer, even though Teddy Roosevelt was a big advocate for it, he never got it through. It wasn't until 1913 that we got first the constitutional amendment that allowed the new income tax and then three years later, the estate tax and then in 2024, the gift tax to back up the estate tax. So now we had a way that we were actually going to tax rich people. You have to realize that they had all these investments and the investments produced dividends and so they were taxed on their investments during their life and they also produced interest. So like the two ways of profiting from your investments were to get interest in dividends. And then on top of it, there was this additional tax that was imposed whenever the property was transferred. And together, these taxes were designed to impose taxes on the richest Americans based on their capacity to pay. - And was it always progressive? Wanted to be progressive. - Well, originally it was just a tax that only applied to the richest 5% of Americans. So 95% of Americans were completely exempt. Then when it came time to funding World War II, we had to do another round of tax raising. And so they say it changed from a class tax to a mass tax. But then we had to keep it that it was based on capacity to pay, we had these progressive rates, which meant that the later dollars that you earned, the higher dollars were taxed at a higher rate than the earlier dollars. - So this was working pretty well, right? We had kind of a golden era between World War II and the '70s and things start to change. - Yeah, they start to change, yeah. - Stay tuned for more armchair expert if you dare. - We are supported by all state. Checking all state first could save you hundreds on car insurance. Not checking your teeth before walking into a meeting. You smiled at six people in the hallway. - Confidently, full teeth. You felt great about it until you caught your reflection and realized you'd been carrying a piece of spinach like an accessory sense lunch. Yeah, checking first is a good idea. So check all state first for an auto quote. You could save you hundreds. You're in good hands with all state. Potential savings vary subject to terms conditions on availability, all state North American insurance company and affiliates, North Brook Illinois. (upbeat music) - So, but I just want to say one other thing about this period that was sort of relevant. So there were a couple of things that were going on that helped fortify this system. One of them is the fact, as I said, that there was a threat of socialism. And then in the 1940s, like when FDR was doing it, there's now a threat of communism. - Yeah, he was scary. - Yeah, and it was scary. And so there was a real understanding. If we want to have a capitalist country, capitalism has to prove that it serves the country as a whole. And the way that it serves the country as a whole is that when somebody makes a load of money, they share the wealth through Texas. And so that's the legitimacy. Texas served to legitimate a capitalist system when it's working right. And that's why it is so disturbing and concerning what's going on now. - Yeah, it's very much threatening capitalism. - Yes, and in a way, this threat to capitalism, I think, is gonna be the thing that saves us because without a threat to capitalism, you're not gonna get the broad public support to actually impose meaningful taxes. People are gonna grab as much as they can get away with. We've seen this over the past 40 years. This is what's happened. So what happened? Why did this change? The system worked well enough, right? We had high taxes on income and we had taxes on states and gifts. - Like a state meaning you've accumulated all these assets in wealth when you die that's getting passed on. That's the estate. So at that point, the government would like to take 40% of that. - This only applies to like the richest one to two percent of America. So a small slice of the country. - Yeah, even currently, you can give away up to $15 million. So this all is active after $15 million. - Exactly. - Right. - The current state tax, $30 million per couple. But we'll see how it's not even active for that. - And sorry, gift is just giving any amount. - Yeah, except for, there's a bunch of exceptions. So you can give, this is a subject I teach and I'm all excited, and I have to explain to you estate and gift tax in just, three minutes. So basically, it applies to all transfers at a 40% rate, right, with a 15 million exemption, but there's a bunch of things that it doesn't apply to. So, for example, you can make unlimited transfers to a spouse, unlimited transfers to charity, and then you can give to as many people as you want every year, $19,000 per person per year. So the idea of it is to keep it out of regular people's lives. So regular people can live their lives, but when we start talking about transferring massive amounts of wealth, we're going to have this system. And the important thing to be aware of that I want to say upfront, because I think the public has been duped about some of these things, is that the income tax system entirely exempts all money received by gift, inheritance, and life insurance. Life insurance is the biggest scam going. So, for example, to say, somebody earns like, you know, $200,000 or $100,000. They pay about $30,000 in taxes between payroll and income taxes. Somebody else is handed $100 million out of a life insurance policy. That person doesn't have to tell anyone. Yeah. They pay no taxes. They don't report it to anybody. It is entirely free. This is your business. So the system is so unfair on the income tax side, because the other thing is if somebody finds $100 on the street, they're supposed to pay taxes. It's interesting. So if you find money, like a treasure or not, you're supposed to, or you have a gold mine, you find the gold, you have a. The treasure trove we call it in the law. If you win a prize, if you win the lottery, if you get unemployment insurance, social security, right? You're forced to pay taxes on every way. If you do a barter exchange, if a plumber does plumbing for a web developer, and a web developer creates a web page for the plumber, they are both supposed to report taxable income on their tax returns. And the IRS has all sorts of like, here's how you do the barter exchange information. They have a table. You can go to. Exactly. In a one area, it's like, we're closing every single loophole. And another one, right, this way, tax-free. Don't worry. It's the real velvet rope world for the people who are lucky enough to get gifts, inheritance, and life insurance. And like, who are those people? Those are the super rich. Those are not regular people. And there has been a big duping with the public about this. They've not been educated about, which is sort of why I'm a little bit of a crazy zealot these days, because I do think that when the public knows, then they see how unfair it is, and they're less likely to be duped. Yeah, yeah. Back to your question. So we're in the period where we have the system, where we have this estate and gift tax system. The income tax system gives a free pass, because we count on this estate tax system to do a good enough job with the richest Americans, right? We carve out 99% of the public, and then we say, here's where you're going to be paying the tax. We'll collect it at the person who's transferring it. Now, I think the reason for that is because back in the day, the way people transferred property, when they transferred property to death, it went through probate court. It was kind of an easy, convenient time to collect this information, right? We weren't living in the modern information age where we track everything. And so it kind of made sense to impose it on the person who died. But I think that that had a little bit of an Achilles heel in it. Because then, as we'll see in the 1990s, as we're coming up to this point, it made it vulnerable because you're like taxing dead people. For some people, they'll already have paid a lot of taxes on it, right? So if you think of like Paul McCartney, he's probably a billionaire, but he's probably paid taxes along the way on the royalties and on all the things that he gets. And they really marketed it very successfully. So basically, let's talk about what happened, right? What happened to make this thing fall apart? And it's a couple of different things. I would say the most significant thing was the attack on the estate tax. So here's what's interesting is that the estate tax was very non-controversial. And Congress used to do its job keeping it up. So in 1976 and 1986, one of the problems with the estate tax was that people could avoid it by creating multi-generational trust. And then we'd go from generation to generation. And so Congress enacted a new tax called the Generation Skipping Transfer Tax that was designed to impose a tax at each generation. 1986, 1990, Congress was added again. And they enacted a tax because people were finding a way to squeeze the value of their assets. So they were hiding value. Congress said we can fix it. And they enacted something called special valuation rules. And what's interesting is both of these things happened under Republican presidents. This was not a political issue. This was a, this is a tax. We got to fund this enormous government of ours. We have to fund a government. Exactly. And it's appropriate to have this tax and to maintain it. In 1990, what happened was a group of 18 of the country's richest families, the Waltons, the Mars, the Coats, right? All of the, all of the favorites, the wall. They're all around still today. They funded this campaign to turn the public against the estate tax because if you think about it, they were already able to avoid the income tax by avoiding salary. So one way people avoid is salaries are for suckers. You don't want to salary. And then the other way was through investments, which we'll talk about. They avoided. They stopped getting dividends and they started to do a stock buybacks, all of this type of stuff. They've gained all the other. This was the last stubborn one. And so they started a campaign. What was the man's name? Chester Thigpen. What a name. Chester Thigpen. Chester Thigpen, a grandson of slaves who had a Christmas tree farm. Kids would come play in the farm and the neighbors would hunt. As my son said to me, I hope not at the same time. He was this very idyllic figure, very sympathetic. He testified in Congress. Matter of fact, he testified many, many times in Congress because he was a favorite. And he said, I have worked my whole life for this Christmas tree farm and it's beautiful. And I love it. I want to pass it to my family. And I'm going to be hit with the estate tax. It's going to become timber. It's going to be destroyed. And this was tremendously effective. I mean, just also just picking that farming is so manipulative. Yeah, and I want to get back to that point because it's really important. By focusing on family farms and businesses, if we think back to this whole thing, remember when I said that in the early part of the 20th century, there was a concern because we had all these rich people running around and people thought of Americans as being people who had family farms and businesses. That's what it meant. But it was because it supported a livelihood. People would work on the farm and then their kid would work on the farm, right? Yeah. But what's happened is is that the Mars, the Cokes, all of these people, they're trying to say that their companies, they're not saying it directly because they know it won't sell, is like a family farm. Right. We're just a family business, right? It would be like Carnegie saying that US steals just a family business. You know, it's crazy. But this is what they have pulled over the American public's eye. And as it turns out, thigpin would have not been affected at all because the estate tax already preempted that. Yes. When he died, he was not subject to the tax because he didn't make enough money because it was under the threshold because he had a Christmas tree. Exactly. The exception was big. It was wholesome. Yeah. Down home. Yeah. And also we have all sorts of protections for family farms and businesses in the tax code for real family farms and businesses that provide low interest rates and special valuation. And we could easily exempt real family farms and businesses. And back in the day, I testified in Congress. It was obviously a Republican Congress at the time because it was called the impact of the death tax on family farms and businesses anyway. And I got a call from some Democrats like, well, you go testify in this thing. It was like, it was ugly. Also, they've now rebranded it as death tax as opposed to a state tax. Yeah. So they called it the death tax and they basically made it seem they grant such an effective campaign that even today, a huge portion of the public believes it primarily hurts low and middle income people. I mean, it's crazy. It was a tremendously effective campaign. So what we look at what happened since this campaign in 1990, right? One thing that happened was, so Bush was the big leader of repeal the death tax. I hear his voice in my head. I know George W. Bush. Yeah. HW Bush. HW Bush actually was the one under who we had the special valuation actually fortifying the state tax, right? But George W. Bush, he was part of this campaign. It was the era of government is bad. Let's get government off our back. I get it. It was also trying to tie his right to all this stuff. But when George W. Bush enacted this thing, what he did was he said, okay, let's have a gradual increase of the exemption amount and a decrease in the tax rate. And in one year, we're going to have no state tax at all. This is bizarre. I mean, I don't even really know functionally how this happened. Yeah. It just went away for one year. Because he didn't have the votes to have permanent repeal. Because we have these rules that anything that costs the government money has to be resolved within 10 years. This would have cost the government a lot of money. And so you had to fit it within the 10 years. So we had one year, and we called the Jubilee year for rich people to die. Yeah. - Some people got lucky. - Yeah, some people at Steinbrenner got lucky. - Why don't we make $20 billion or something? - Yeah, Steinbrenner had a load of money. - God bless those kids, man. They just got the whole lot. - Did anyone kill themselves? - No, that was a year, by the way. There was a lot of humor amongst the estate planners of like things to get your relatives in that year, which were like, you know, warm chicken salad. - Right, right. - And lighting lesson. - Yeah. - Yeah. - We sort of had our day, the estate planners had their day, brainflight. - Let's get grandpa some hang-light in lesson. Also, granddad, if you ever tried heroin, you shouldn't leave the planet without trying that on time. - But then next year, Obama was in office. The estate tax was scheduled to revert to its $1 million exemption and like a 60% tax, right? But Obama, he ended up just kind of continuing. He made a $5 million exemption. He continued it 'cause he knew the public had been turned against the estate tax. But then, of course, Trump came in and he doubled it to $10 million and now it's $15 million, but that's not the real issue. And this is a super interesting part of the story, which is that the real way that they succeeded was that Congress stopped closing loopholes. The last time Congress has closed a loopholes in the estate and gift tax was 1990. - 36 years ago. - George H. W. Bush. And so the thing is, the way tax rules work is you count on Congress. Basically, Congress provides rules. Tax payers find their way around rules. Congress is supposed to close the loopholes. Tax, right, it's a dance between taxpayers and Congress and the IRS. - Catmos. - Yes, but all of a sudden Congress has engaged in quiet quitting. They are doing nothing. And so as a result, there has been an explosion. And so what's happened to the estate tax is instead of it being a well-maintained tax, it in fact has become a tax that is a tax in name only. And I'm gonna give you two reasons why we know this is the case. One of it is because it raises basically nothing. - I'll just hit you with those numbers. In 2000, there was 122,000 estate tax returns. In 2010, there was 47,000. In 2013, there was 32,000. And in 2021, there was only 2,584. So the number has gone way, way down of estate tax returns. If an even more concerning is the tiny, tiny amount, it raises. It raises hardly anything, now only 28 billion. 28 billion, an amount that Elon Musk easily gains and loses in a single day, multiple days. It's nothing. But here is the biggest, in case you need any further proof that the estate tax now works for the benefit of the rich people rather than as a harm. Is the fact that in 2025, when Trump is in office, he has the capacity to have whatever tax bill he wants. - 'Cause he has the Senate, the House, and he is in the executive. So they can pass anything they want. - They can pass anything he says in his campaign, he's supposed to the death tax, the immoral, double death tax, right? But guess what? Doesn't even mention it. - He doesn't get rid of it. - He keeps it in the books. And the reason is by keeping the estate tax, believe me, if rich people had wanted it repealed, it would have been repealed. But what happened is, is that rich people realize they benefit, because if you actually repeal the estate tax, people would wonder, wait, wait, I don't understand, you can get $100 billion tax free, never pay anything on it. It's only because they're pretending they're subject to the estate tax. It provides cover for the rich, no real cash for the estate tax. Yeah, so look, I'm counting 40%. - Yeah, and that's sort of the tricky, super interesting part of the story. - Okay, so this is what I think the headline of all of it is, so in 2021, public published leaked IRS returns. - Yeah, by Charles Little John. - Who is now? - These names are great, this is like great. I know it. You think I made it up, but if I was like a fiction writer, I'd be so proud. - It's very Charles Dickens all of them. So in this article, what was revealed is that the true tax rate that Warren Buffett was paying, remember, the highest rate on income is 37%. - Yeah. - He was paying 0.1%. Bezos was paying 0.98%. Michael Bloomberg was paying 1.3%. And Elon Musk was paying 3.27%. And now this is my favorite part of the book, is how the mechanics work of them not paying any taxes. Somebody who earns $60,000 a year pays in just federal taxes, $14,000 in taxes, okay? Can you imagine that you're getting by on $60,000 a year, that can be the difference between having a car, or paying your rent, or buying food, or health. - It's less than $1,000 a week deliverable. - You can't live like that. - No, you absolutely can't. And yet, these people with their massive wealth are like, we're doing such good for society. I mean, or what they say is, I don't know if you saw the recent interview with Bezos where he was interviewed by Andrew Ross Sorkin. And there's a lot of perpetrating of this baloney. And they go, look, the top 1% are already paying 40% of the taxes, right? You hear this all the time. - Which is true. - Which is true, but they're not talking about that. - No, talking about everyone in Beverly Hills, all these neighbors here. - We're talking about people with high income. The high wealth owners hide behind the high income earners and make it seem like they're paying taxes when they're not. - So I think we should go slow here and lay out some terms, but you have a couple different kinds of taxes. One of them is income tax. Everyone listening virtually will be paying income tax. You receive a check on Friday. They've withheld money that is your taxes. The other kind of tax is capital gains. - Oh, what? - But I thought you were gonna talk about the other very important tax. The hidden tax for the person who earns a payroll tax. - The payroll tax, which is 15%. 15.3% is a significant. When I talk about our person who are in $60,000, most of those taxes are payroll taxes. Payroll taxes start at dollar one. They're really burdensome and they're entirely hidden from the public because if you look on your pay stub, they're called like contributions. Have you ever been confused by that? - Yeah, and then social security's in there. Don't even break down. - Fight up, fight up, fight up, feud up. - Yeah, they break it into a few categories. - Yeah, they put up a different pockets. You don't know what the heck they are, but they make it sound like because they call it contributions and then you get from social security. Sometimes they'll send you these periodic statements. This is how much you have. They make you feel like you've somehow set this money aside for your own saving. And now when they're going, we got to cut social security. Hey, all these people that are paying social security now for current retirees, you're saying like, we're gonna screw these people after they've paid for everybody else. It is so unfair. So anyway, payroll taxes, I just wanna make sure that we mention those because those are very burdensome and as you might recall, when Mitt Romney said, 47% of the makers, they're takers, not makers. And they're gonna vote for Obama no matter what because they're not giving to society. And they were not paying income taxes, but almost all of them were paying payroll taxes. And payroll taxes are so burdensome. When you actually look at the figure of non-pares, including payroll taxes, the number is like 16% of non-pares, which is basically the same number of people that we have over the age of 70. So this story about the non-pares and the Republicans love the story, we have to have a skin in the game tax. I mean, these are the people who are actually paying taxes. These are the people who are actually paying double taxes, not the inherited wealth people who are paying no taxes. And that's the thing that the public again, is being misled about. - Okay, so you have ceiling of 37% federal income tax and then you have the payroll tax, and then you also have capital gains tax. And that is set at 20% plus 3.5% I'm not sure with that. - 3.8, yeah. - 3.8, and that is if you sold the house, you might have dealt with capital gains. You bought a house for 100 grain, you sold for 150, you have $50,000 of income, but that's capital gains tax. And then the other place capital gains applies is investment. So I bought Nvidia, I 10x my money, I'm gonna pay on that 90% of, you know, and that's set at the 20% and then the 3%. We could debate all day long why that is kept at 20%. You're gonna find that I'll dance. I'm not full alignment with you. I do think there's a global thing where we do need to protect people, but we'll get to that. - You might think you're not in the line with me, but maybe, maybe, maybe, yeah, yeah. - I think that you are, but okay. - So at any rate, now there are incredible ways that are so inventive to get around these, which is why we're seeing someone like Buffett Paypoint 1%. So if you never sell the stock, you've never realized the gain. There's nothing to apply the 20% tax to. So anyone whose livelihood comes from ownership of a company, ownership of all these different stocks, as long as they don't sell it, they're not gonna be tax on it. Which again, I can make a great argument for them. We'll get to that down the road. But explain how people are living, how his bezos have a yacht in many, many homes. - Yeah, how do they have any liquid money if it's all in? - This is incredible. Let's talk about Larry Ellison, because he's been spending like crazy. - $30 billion he's has in loans or something like that. - Maybe more because he actually had to incur another $40 billion on his purchase of paramount, which he's also been backing. So Larry Ellison is somebody who spends a lot. He bought the island of Lennon and Hawaii just for fun. By the way, on the island of Lennon, he bought all the businesses on the island and he also owned all the property. And he put into his contracts. If you get fired from your job, I am throwing you out of your house. your house. Oh, my God. Yeah, that's the kind of nice guy he is. Anyway, so he runs this island, right? Like a feast. How is this legal? I can't. I know. I'm on the plus side. There's two four seasons on that. There's two four seasons. Yeah, he owns the island because there's just a management company. Yeah, it's exactly. He owns it all. Anyway, it's interesting actually because I met somebody from Malachi and they said that a rich person tried to acquire Malachi in a similar way and the island of Malachi fought against it and they are getting back at them by leaving everything just to be like waste. They're not taking care of the property there. They've bought it all. They have abandoned theaters and everything else and they won't sell it back. Sort of like nice island you got here. You better be a shame if we didn't keep it up anyway. So that's just another story of billionaires run a muck. Any owns oracle? He owns oracle. A big chunk of oracle. Yeah, he owns about 30. Always in the top 10 richest people in the world. Yes, exactly. Super rich. He owns tons of oracle. He buys tons of stuff. He never sells his oracle stock, but what he does is he uses his oracle stock as collateral and enables him to buy loans and because it enables him to get money to buy everything he wants to buy. I want everyone to go step by step. So Larry Ellison walks into a bank and he says to them, hey, I'd like a billion dollars and I will secure it with a billion dollars of equity or my stock. Yeah, or 1.5 billion of my securities. Yeah. So a bank's primary mission is to loan out money. The risk they incur is what if the people don't pay, how do we get the money back? And that's all done with collateral when you buy a house. The house is theirs, right? So he says, let me just put this stock up as the collateral. I'm going to borrow a billion dollars. And then what happens? So he starts receiving, does he get it all in one chunk right in front? Whatever. I'm sure whatever he needs because remember, these people are in the business of lending money. The banks. The banks or private lenders, you don't have to be a bank. You know, all sorts of people. They lend. And that's what their business model is. And they want to lend to Larry Ellison. It's risk-free. It's risk-free. Well, is it though? Because even the collateral isn't an asset, isn't a tangible asset. Well, they talk about it right. So what happens is they retain the right. And this has happened with some other owners of companies. In Oracle, by the way, it's gone down about 50% in value in part because of over leveraging of Oracle. And then add on to it, Ellison's extreme leverage. The lender holds the stock. And so then, they're going to make a margin call. If it falls in value, they're going to be like, give us more stock or sell your stock. Or we're going to sell your stock because we're going to get their sell. So they're able to sell it. Yeah. They can sell it. So the bank can sell the stock. The bank can sell it. He doesn't return it. The bank can sell the stock. So they are well secured. They're very well protected. And they get more stock than they need to cover their goods. So step by step, he goes into the bank. I want a billion dollars. Great. Here's this amount. Here it is. Here's this amount of stock is collateral. He gets a billion dollars. He spends it now. He's on some schedule. What's the average terms of these loans? Are they one year loans, five year loans, 20 year loans? Do you know? Well, I think that the point is that they can be demand loans. So most Americans think about loans in connection with their mortgages, right? Or their student loans. Okay, we're lending you money for some set period of time. Then we want to get our money back. But there's another way of lending money, which is called the demand loan, which is like, we're giving you money. No set time. You just pay the interest. And that's fine with us. Great. So he borrows a billion dollars. It's at three percent. So every year, he's got to give him 30 million dollars back of this billion dollars. Now at some point, he can then go to bank B and say, hey, oh, this bank of billion dollars. I need a billion and a half. I pay off that loan. Yeah. He gets his securities back. He gives them out of this bank. They can just leap frog endlessly. And he doesn't need to leap frog endlessly. Because if you think about it, you're in the business of lending money. Who would you rather lend money to that you don't want it back? If you get it back, you got to find another rich person to lend it to you. You said this on Ezra Klein's podcast, like they don't want them back. Keep going back to the bank and asking for more money. Yes. Exactly. They love you to do that. So my question in all this was I am unclear. Eventually, the bill comes due. Says you? Well, at some point, either the banks can have to sell those securities. I'm saying when he dies, why? I mean, the point is this, you're living in a world where you are imagining that this amount that he's borrowing is like bumping up against the total money that he owns. Right. I think a more accurate way to think about it is like, imagine you needed $10 and you need to borrow $10 and you needed to be able to pay back $10 and then maybe you needed to increase it to $80. There would be no difficulty with you paying it back or passing that loan on and having your kids take over the loan. Right. You have to realize the amount as much as they borrow. I mean, this is crazy because of course he's borrowing enough literally to buy paramount islands, everything. But his wealth is extraordinary. Yes, but here's my only question. So he borrows a billion, eventually goes through that, right? He borrows a billion and now he's got to borrow another billion. And that's fine because now he's just still making the interest payment on the original billion. And he's banned. He's by not having sold his stock. Oracle's an interesting case because it did plummet in value. That's why I like like Bezos as an example. So pride himself. He wants to get all sorts of credit for not borrowing against his stock. He's actually occasionally sells his stock. He thinks that he should get a big pat on the back. This is what he was telling Andrew Ross. And me, I sold some stock. I mean, I guess that is better than. Yeah, but the point isn't whether people sometimes pay capital gains or not. The point is that we have people with multiple hundred billions of dollars and they are able to choose whether or not to pay taxes when nobody in this room can decide, you know what? I don't feel like paying. There's no game for me to even play. There's no game for you to play. Here's what I want to do. And actually, I have a little gift for you guys, even to if you'd like them. Okay. Oh, it's important to let people know from that original story we just told them about the borrowing that you pay no income on a loan. Yes. That's really important. So he gets a billion dollars from the bank. That's a loan presumably has to pay a back. So that's not income. Right. Because we might have missed that. People may not have realized, yeah, that billion dollars. He doesn't pay one penny. Right. Your congressman actually is working on a bill right now to tax borrowings say that that should be taxed. Some people think that that's way. I think there's other ways of solving it. Okay. Okay. But so we're talking about like debunking myths. Right. One of the myths is like the top one percent already paying 40 percent. No, that's high earners. And the other is 40 percent paying no taxes. No, they're paying payroll taxes. Okay. The third myth I'd like to do us to debunk today here now is this idea that the rich don't have enough money to make a difference. We're going to have to tax the middle class. You hear this all the time, right? We have to go after the middle class because the rich simply don't have enough. So here I want to give some numbers. I'm going to give broad general numbers in 2025. The government took in about five trillion dollars. They spent six point nine. They actually four point nine six minutes. So they had to borrow one point eight. Add it to our death. By the way, this year today just came out. I don't know if you saw this. The highest interest rates that the government has ever had to pay on 30 only 5.2 percent. We are paying so much money. A trillion dollars a year just to maintain this debt. This is when we have seven trillion dollars of expenses, five trillion of income, right? We are spending a full trillion just to maintain this debt. And the other thing is, by the way, if we go to back in the day, you used to not be able to go to war and not raise taxes. In the 20s, we raised taxes when we went to war. Now it's in the 21st century. We're going to war. Push it on to our kids. Our grandkids let them pay for it. We don't have to pay for it. Okay, big problem. But so we had to borrow because we didn't raise enough money from the richest 1 percent. And as people like the Wall Street Journal and now the Washington Post like to say, and the economists like to say, that's because the rich people are already being heavily taxed. Not true. And in any event, they don't have enough money. You know this already. So I can't say, I'd like to say, guess how much, maybe I can say, let Monica, yeah, yeah, yeah. Guess how much we had to borrow just under two trillion dollars. Guess how much the richest 1 percent owned at the end of 2025. Guess how much the richest 1 percent owned. So now you know, the total revenue that the government took in was five trillion. Okay, from all sources, this is from corporations, payroll taxes, tariffs, and staying together the whole, this is so mean of you to put mine. The whole enchilade. The whole enchilade. Okay, so how much wealth do you think the richest 1 percent owned? Nobody knows the answer to this by the way. So don't feel bad. I'm scared to answer. I know, but you say a reasonable number. What do you think's the real reason? What's your guess? Not trick, which is what do you think the total value of the assets of all 1 percent are? But including the wealthy people. No, no, I'm sorry. The top 1 percent of wealth owners. Not income earners. Good. Okay, Monica, you're an A student. Oh, no, you do not have ADHD because you're like, because you're paying very, you're not just jumping some obvious answer. No, if that's, but yeah, so 50. 50 trillion. Is it 47 or 50? It was 47 when I wrote the book because it was 2024. Okay, and now it's 50 trillion in 2025. 55 trillion now. Their wealth is growing astronomically. By the way, 50 percent of the country owns under 5 trillion. So right out of the gates, you just say a lot of the person would say, okay, with a 40 percent state tax. If the young The longest person in this lot is 40. In 40 years, minimally, we are going to get back $20 trillion in a state tax. That's what the number should be. If there's 50 trillion out there, we should get 20 trillion in the state tax. Or it should be subject to the income tax. Yeah, but just alone that, that could solve the gap for 10 years. Let me tune for more armchair expert, if you dare. The other thing is that's going on is there's been enormous gifting that's going on. Because that's where all the action is. And do you know how much the state tax raised from this 50 trillion out 55? But when it was 50 trillion, we had that number 28 billion out of 50 trillion. Oh god. The trillion is 1,000 billion. Yes. So, the middle class is making up for that other five trillion. I feel that this chart really shows a lot of that. Give to you guys. Thank you. So, this is this idea that it doesn't matter if these people pay taxes. We had to borrow $1.8 trillion and we know that many people in the top 1% of wealth owners don't have to pay taxes because they don't have taxable income. Which by the way, is the reason why the Buffett rule was such a snow job on the public. What's that? Yes. So, back in the day Warren Buffett said when Obama was running and even before then, Buffett says, "This is so unfair, I pay taxes at such a lower rate than my secretary. My secretary pays payroll taxes, income taxes, I pay capital gains taxes." But he was hiding the lead when he said that. Is the problem, well, yes, it's true, rates probably should be the same. We might disagree about that. But the bigger point is that he didn't have any taxable income because he only earns his total salary was $100,000 including bonus. He would never take more than that and he even reduced his salary for the private use of his office. He was like, "I've got to pay the company back for that." So, we got like a $90,000 salary, right? What was he living out? Was he selling? Well, he had a little bit of side investments, that was on private things, but-- Outside the Berkshire Hathaway. And then Berkshire Hathaway, he had as the policy of Berkshire Hathaway to never issue dividends. If he was issuing dividends, he would have had regular taxable income. But he knew not to issue dividends because just as salaries are for suckers, dividends particularly in the 20th century when they were subject to tax like ordinary income, we're also for suckers. So, now he didn't issue dividends and that's why he didn't have any taxable income. So, a rate differential wouldn't have made any difference with him. Yes. So, the two things that blew my mind about this book was a) how they function, learning about this borrowing against your money, never really paying. That was startling. But what's crazy is how the tentacles of this change everything about the whole financial sector, which is dividends, right, so you had an investment in a GE, they profited acts amount of money. Well, they don't keep it, they distribute that to the shareholders in the form of dividends, which get taxed as income tax at the highest 37%. So, slowly these companies decide, well, shit, our shareholders don't really want to pay that income tax on these dividends. We don't want to pay taxes on it. What if we take that profit? We buy back shares from people. Let's just stop for a second though. Up until 1982, the only way a company was allowed to share profits with its shareholders was to issue dividends. That was it. So, a dividend is simply the way that the company earns money, they're worth a hundred, they earn ten, they distribute ten, and that was how companies worked. And then it was subject to. And when I was growing up, when you were buying a stock and you were a middle class person, you were looking for a company that had a great dividend. That was the whole game. And in the 1970s, 70% of returns of stock value. I think it was 74%. 74%. 74%. Came from dividends. It was all dividends. And what's really interesting is what the stock market looked like. It looked like a jiggly, like a sign curve that went in a very narrow margin. So, in 1982, the stock market was at about 3,000. It was also about 3,000 in the '70s, '60s, '50s, '40s. So, all the way back to the '20s, it had been 3,000. This is inflation adjusted. So, the stock market just looked like a little squiggly line. And that's because every time the company shared profits, it became profitable and their value went up, they shared the profits and the value went down because the money was sent out to people. Yes. Then, in 1982, something happened, which is that under Reagan, he had a Dean-Witter executive be the head of the SEC. And one thing that companies were not allowed to do was to go out into the market and buy their own shares of stock. Because when they did, what that did was it boosted the price. And they said, "This is price manipulative." Yeah. You can't just distort the value. And in 1982, pretty much on his own, this Dean-Witter executive that became head of the SEC said, "It's okay. We know it's price manipulation. We believe it." But we're just going to let people do it because they want to do it. And as a result, since 1982, it has never been more than like 16 percent, maybe 17 percent of profits have been shared through dividends because instead, companies are buying back their own shares like crazy. And last year, more than a trillion dollars was spent buying back your own shares. And when you buy back your own shares, rather than the stock price going down, the stock price stays up and maybe even goes up a little higher, right? Because you've reduced the total number of shares that are outstanding. More demandless supply. And that's why one of my favorite charts in the book is this chart that shows the stock market from 1915 to 1982, looking like this squiggle line. And then in 1982, it takes off like a hockey stick because, of course, there's a lot of reasons. This is not the only reason I don't want to get like letters. Boom, boom, boom. Yeah, yeah, yeah. But before, if you had booms, you'd be sharing profits, you'd still have to share the profit somehow. And also, executives began to be compensated with stock and based on the value of stock price. And things happen to cause stock prices to increase. But the point is that from tax worldview, that we used to have a system that taxed the big theme. We used to have a system that taxed people according to their capacity to pay. Now we have written the rich out of the tax system. We've created our very own second estate. Yeah. Nice pivot. Beautiful. The way you wrapped it up, you took all the loose ends and braided it like Rapunzel. I want to bring one more terrible thing that's happening into it. And then I want to have some just fun questions and then maybe I'll, maybe it'll be pushed back, maybe it won't be. But the other huge thing that has to be addressed is step up in basis. No. I think so. Okay. Isn't that what ultimately they're getting out of the estate tax with? No. Step up in basis is a super giveaway that we shouldn't have. But it's not the nature of the problem. It's just like the, what we call in Boston, the Jimmy's on the ice cream, Jimmy's of the chocolate sprinkles. It's the garnish. You already have like all the benefits kept again. So I'm going to explain what step up in basis is. People love to say the problem step up in basis. Let's fix step up in basis. That would be letting the biggest problems remain, remain. So here's what let me explain what step up in basis is. And we also call it the angel of death loophole. Okay. Now let's say bought in video stock and it went up to $10 million. You bought it for like 50 cents and then which worth $10 million. If you sell it, you'd have to pay this 23.8%. But instead, if you pass it on to your kids at death, they're treated as if they bought it for $10 million. Even though nobody's paying any taxes on it because we have an exemption amount, there's no estate taxes on it. How is this not the most enormous, if I'm trying to get $50 billion out of this person and their $50 billion is solely held in stocks that have appreciated. And they pass it under their children. The children inherit it. They're not saying, oh, 40 billion of that is profit. Am I misunderstanding? No, no, no. You're misunderstanding because the example that I gave was $10 million. Okay. So let's do that. This creates a problem because it creates this problem of lock-in effect. Nobody wants to sell anything. People don't want to sell their homes. They don't want to sell their stock. They want to pass it on to their kids because they can avoid taxes. The thing is, the cost of it is you have to pass it at death. And if you're passing property at death, it's much harder to avoid the estate tax. All of those things that arose, remember I said a whole bunch of loopholes arose in their call, like crats and crats and grats and grats and intentionally defective granteurs across them. The flourishing of all of those things, they are all dependent on gifting. And gifting, when you give property, your kids get the same basis that you had or whoever you give it to. Explain basis. So you bought your Nvidia stock for $50, it's not worth $10 million. If you make it as a gift to Monica, of course, just because you love her, she has your basis, which is the amount that you paid for at $50. So when she sells it, she would have to pay gains based on subtracting $50 million. $50 as the amount that she had invested. If instead you gave it to Monica when you died, she would get a $10 million basis so she could sell it for $10 million and she'd have no taxes. But when we're talking about where the real money is, which is our very rich people and all of our private equity people, we haven't even talked about them right, they are all avoiding taxes because they're essentially creating zero value gifts. They are doing zero dot grads and all these different things that will be too boring to explain. But basically what they're doing is they're finding a way to transfer property, make it look like it's worth nothing, and then it pops up and the other person's worth all this money. But you can only do those during life, very hard to do them at death. And that's why the step up and basis is something that people love to point to like because it's such an outrage where the real problem lay is in the fact that somebody can start a company or do something they're worth nothing, they become worth several hundred billion dollars. They never pay taxes during their life, they give it away, they never pay taxes, they give it a death, they don't pay income taxes, right? There's never a tallying of the gains and that's the problem. It's not the step up and basis, which is kind of yes, that's so egregious. But the bigger problem is that we should be taxing those gains to the person who earned to them. And this was proposed by both Richard Nixon and Barack Obama. That is how common to bipartisan it is, exactly. And it's the rule in Canada, right? When you transfer property, that's the person who enjoyed the gains. Mark Zuckerberg has enjoyed the gains. Larry Ellison has enjoyed the gains. Let them pay the gains when they transfer the property, not just when they sell it. That's how we should be addressing that. Okay, so here's my couple of questions, because I would say if I had to plant a flag, I would say I'm a centrist. I'd say I'm a centrist. Okay, great. So my fears are a couple of things. So we've seen a huge impact on economies when they raise their lower business taxes, right? Pretty well established. England had a horrendous business tax for a while, and then Thatcher yes, slash that, and they kind of revitalize their financial sector. We are competing in a global economy with other countries that can host companies, amusing just business taxes as an example. Because it's a global economy, and because many of these multinational companies can put themselves anywhere, countries have had to compete with business tax rates, right? What's a business tax rate? 15% or something or 20. No, I don't know. It's small, right? But it's small. Corporate taxes raise their own complexity, and there's a lot of reasons why they're complex. One is this issue of competing, right? But there are movements that there would be a global agreement to have a minimum. And the absence of that, though, we have to be competitive, is the point I'm making. Maybe I'm going to leave that aside, because the point is that when you're talking about an individual, I mean, do you want to move to Qatar? Because you'll get lower taxes there? I don't think we have to worry about Americans. First of all, we have a big exit tax for somebody who leaves the country. You can't just pack up all your stuff and go, "Yeah, right, right, and they track you down. They're good at that." You're a big exit tax. And then you give up your US citizenship. Is that really something somebody wants to do? That's a big move. So I don't think we have to compete globally when we talk about personal taxes. But the reason I bring it up is we're now starting to see attempts at that within the country, right? It's an entirely different story. So this is the big question I'm glad we're turning to it, because this is obviously the question of the day. Yeah, yeah, yeah. Is wealth taxes, both on the national level and on the state level. So we have talked about the fact that people are able to acquire $55 trillion of wealth and all sorts of rates and not pay any taxes there. Yeah, zero, yeah, yeah. And so what are we going to do about it? And so a logical thing is let's have a wealth tax. And first we heard it on the national level, Bernie Sanders and Elizabeth Warren and other people are now pushing for wealth tax on the national level. On the national level, the problem is there's a very real risk that the current Supreme Court would find it unconstitutional for some very boring reason. And you're great at illustrating how almost impossible it would be to evaluate someone's total assets. What's that pain worth? What's that property worth? It's almost impossible. It's very difficult to do it on an annual basis and there'll be a lot of incentives for people to start hiding their value on an annual basis. If you have an annual tax on all the people's wealth, people might find it's invasive, people might move out of the stock market. There's all sorts of reasons that it's a problem on the national level. So now here comes California and it is proposing this thing. And I think there's a really important piece that we've been talking about, but I want us to bring it back, which is that California is a hugely successful state. It's the fourth biggest economy in the world. It's bigger than Japan. Yes, amazing. People say yes. Why the hell are roads look like this is a mask? Well that's all that's a separate question, but the point is that California should, it has a high income tax, right? Yeah. It has a lot of rich people. High property tax, high income tax, high sales tax, high gas tax. I think that they should be able to raise a lot of money. What we've been talking about here is all the ways the federal government has betrayed California and every other state. And some of them has been that they have allowed a corrosion of the income tax base. So that, for example, we used to have a lot of dividends. Now we don't have taxable dividends. So the other thing that California used to be able to have was in a state tax, its own a state tax, and every state in the country had an estate tax. And the reason for it is because the federal tax allowed a credit, allowing states to raise a state taxes and people's overall tax bill wouldn't increase. What's interesting is that the federal government used to care about having strong states. And it allowed strong states by giving credits for states to be able to raise taxes and not lose its citizens. And that is something that we've moved away from. And the estate tax allowed states to raise money from its wealthiest citizens because they had a credit for every state. The SWBorsche changed the credit to a deduction and then as a result, all the states began to run away, including California stopped having a state taxes. So now California doesn't have an estate or gift tax. The income tax, you get all these people, Mark Zuckerberg's not taking a big salary, Sergey Brynnotting, but none of these people are taking big salaries, right? So they're not getting money on their salaries, they're not selling their stock. And so what is California to do? Because we don't have the rule that whenever they transfer the stock, they're subject to tax. We've really sold the states out because the federal government has allowed the corrosion of the base. And so California now, which has a massive amount of wealth, held in publicly traded stock, which is very easy to value. And now, by the way, the feds have just thrown in and said, "Oh, yeah, you know what? If that's not enough, we're taking your Medicaid too. You know, we're not going to provide for anything." And so California has been backed into a corner. And even though I write about being opposed to wealth taxes as the answer for the federal government, and I recognize that states have this problem of people can always pick up and move to another state. I come from a high-tech state, Massachusetts. And I do think it's a problem. You know, we have this millionaire's tax now, and you know, I'm a good lefty Democrat type, but I do worry that businesses are going to open a new half-sharp and not a Massachusetts. Of course they have to worry about that. We're taxing the income earners enough for my money as this centrist, we don't need to be raising the tax rates and people paying income. Exactly. But so then, what do you want California to do? They've got a big hole in their budget. They're not able to raise money with their high-income taxes. If they continue to raise money, it's just like a leaky bucket. There's nothing that they're taxing, the taxing the income enough. So then, the wealth tax, it's all this sort of there to see for the public to see the wealth, because it's all publicly traded stock. I'm quite sympathetic to it, even as I am opposed to wealth taxes generally. So I've gotten a lot of interest on the federal level on my tax proposal, particularly from moderate Democrats. And I think the reason for that is because of the pressure that's coming from the left. And if we go back to our story that we've been telling, it was the threat of socialism. It was the threat of communism. And what I worried about was that with capitalism reigning supreme, right? We no longer have real threats to capitalism. So this is something I talk about in the book. Bronco Molanovic has written about this and Tony Jute has written about this. Capitalism no longer has to prove itself because there's nobody competing with capitalism. But now we have these Democratic Socialists, right? And they're creating a little bit of a competition, tiny, with capitalism, and it's having an impact. And so that's why, even though I see the risks of the California wealth tax, I also see how we need to get a change of our federal system. We can't keep running up this debt for our kids and grandkids, it's so unfair. And so we've got to find a way of raising money. And we have to do that by fixing our tax system. And I think that we're only going to fix our tax system when people worry that there's something worse out there. And that's something worse is wealth taxes. Yeah. So I was on a hike with my wife and she was like, you know, yeah, why can't you just cap it at like a billions of the most someone can have? Which I think is a pretty common thought, especially for young people. And I was like, okay, but explain how that works mechanically to me because you're Jeff Bezos. You start this incredible company every time. his value goes up, do we reduce his ownership and should we make it so this person who started a company and is pretty responsible for its success owns.01% of their own companies so that they can be capped at a billion dollars. Like how mechanically does this work? Go ahead. So I want to respond to that because I think that this is exactly why we have to be careful about what conversations we're having. And this is why I think conversations that like every billionaire's a problem, the problem's a billionaire is misleading us because it makes it seem like these are people who are paying lots of taxes along the way and now we're going to punish them because they have more than a billion dollars. It's such a false narrative. If we start with the real narrative which is these people have been able to acquire hundreds of billions of dollars and so far have contributed nothing or at least if they have they didn't have to to all of our expenses. That's the system that we have and so that's the system that we should be trying to fix. I want to make one argument and I just want to hear what you think about it. Amazon's worth $2.9 trillion. Yeah. He owns 8.2% of that stock which means he has made other people $2.6 trillion. Yeah. So I think a lot of people are like kill the billionaires and it's like okay, you killed Jeff Bezos but what you've also killed is $2.6 trillion that is in pension funds, retirement accounts. Other people have made $2.6 billion off of this person. Sometimes you've got to step back I think and go like okay, but what's the net result of this person we all hate? I'm answering the public right now and I want your opinion on what I hear is that everyone should hate Bezos and he shouldn't have this much money but what I'm saying is remember 92% of the money generated by Jeff Bezos other Americans have. That's what they're saying. They're saying that he can make as much money. He can make all the money but he has to give the money back not just to other people who will make a lot of money and also not pay taxes. Yeah, I'm not the issue. I'm not doing my point at all. So he has made $2.6 trillion for other people and he's done so by having 10% of this company being very invested in it and still leading it to make these other people 2.6. My ultimate question is like what is the mechanism by which you're going to get him to pay taxes without him selling his shares of his own company to get the money? What do I think we should be doing? How are we going to get the money from Bezos without forcing him to sell? We do two things. One is that whenever he gives away the property. Yeah. He should tally the game. That I'm working life for a death. Okay, that's all that I want Bezos to do. So I'm with you on all this and the estate tax. Then the estate tax we have to get rid of the estate tax. So here's the thing about the estate tax. The estate tax is debt. Obviously. The fact that the Republicans kept the estate tax. It is dead. And you don't know that you can say you can't sell it. You can't be saved. Well, not be saved because it has this Achilles heel. We are looking at the wrong person when we're looking at the dead person. The question is if it's the case that anybody who gets money in any way gets a tax free, how much of a preference do we want to give to money received by gifts, inheritances and life insurance? And I think what we should decide is like fine, people can inherit a million or two million. Whatever you want to say tax free, noting that it is a preference for inherited wealth. And then after that they should pay taxes like anybody else. Great. I'm with you. So would you not have a problem with Bezos having lived his whole life accumulated $200 billion. Never paid taxes on while he was alive. So long as once that movie moved on. Okay, that's the solution. Yeah. But all these people who want to immediately see Elon Musk pay taxes. I don't think it's practical. I don't understand though. This seems weird to me. We have the plumber and the web designer. Each paying taxes when they're doing barter exchanges. And you're like saying like, I don't want Elon Musk to have to pay taxes. What do you care if Elon Musk has to pay taxes? I want him to pay taxes if he borrows $2 billion to fund his lifestyle. I want that tax. But I don't want to force somebody to have their stock holdings evaluated on a given day at this stock price and say, you know what, you owe half of that money to the government. But the thing is, and this is why I'm so glad you're asking these questions, right? These are the types of arguments that are such red herrings about the actual reality of the situation. Right. I agree. But I don't you think that's what America's demanding right now? No, I think that the problem is the American public has been duped about the amount of taxes that are paid by the wealthy. Then they're thinking, okay, they're not paying taxes. How should we have them paid taxes? They're not tax lawyers. They don't know the details. Yeah. So they're they're saying like, well, let's just do this because this sounds good. I think that people simply are like, I'm paying a load of taxes every year. I'm looking around. These people are not paying anything. What is up with that? Agreed. The fact that Jeff Bezos claimed the child tax credit, which is what it showed, feels wrong. Yeah. Yeah. Yeah. It feels wrong. That's why they work. It's unfair. I disagree with how pro-publica chose to do it by saying it's this small percentage. That isn't how I would choose to describe it. But the point is, how is it that we are living in a world where all of the richest people have many, many years of no tax contributions? And they're living luxuriously. And there's one thing if they're living in a one bedroom apartment, like the other person and just keeping the money in stocks. Okay, but they're not. They have multiples. They're on yachts. They're spending money and they're not contributing it. I agree. That's a huge problem. They should get taxed on that money. They're spending. But to your point earlier, that money they're spending is such an insignificant piece of their wealth. Right. But they should be paying some of the profits. Yes, yes, yes, yes. Our system should be fixed. This line of questioning was wonderfully revealing. We're in lockstep. You're not asking for them to be paying a significant portion of taxes year to year. No, I'm not. But you are probably asking for them to pay taxes on the money that they're spending year to year. Well, you know, it's an issue because the problem is paying taxes on borrowing. You can't have a lot that applies to just that. They have to fix that. It's hard to fit it into the structure of the tax bill. Can it be if you borrow a certain amount you have to pay on it? What I worry about is sometimes you get like a fetishistic response to a problem and then the actual problem doesn't get solved. Yeah. Or it's like Pennywise Town Foolish. Yes. And so that's my concern. There's a lot of lack of information and lack of sophistication in the public for taxes. And you can't really blame them. Our system is really confusing. It's confusing. And we shouldn't be so confused. We have to simplify it. I think that yes, then public might be speaking in broad terms, but not because it's a fundamental problem that we need to be getting at. I guess that's what I'm trying to say. No sensible person is saying that somebody should be subject to 50% tax every year and all of that. Okay, so we have the same thing, which is I want these people at the end of their life to have paid 50% of what they've made back to the government. That's what I want. Yeah. Good. We both want that. Yeah. And I just wanted to be clear on what mechanisms you think we're going to get that. I think it's counterproductive to try to do it along the ride. And I totally agree. That's just a point I'm making. It's like you can't really do it year to year. And you can't ask people to give up percentages of the other company while they're running it. But I don't think that they would actually have to give up percentages of their company. They have plenty of access. They can borrow money just as they borrow money to buy a super yacht. They can borrow money to pay for the taxes. So I don't think they would have to. You don't think it's impossible, but I don't think it's very plausible. I mean, it's certainly not with this 5% billionaires tax, which as I say, I'm generally opposed to billionaires taxes, but I can understand how California has been backed into a corner. Yeah. And nobody's has going to have to give up anything. Great. I'm just constantly like what's the mechanism everyone's proposing to get these people to pay today. And I just don't see how that can happen. And you can't, because I do think like we talked about with Oracle, it's lost 50% of its value. And I think the public is aware property goes up in value and down in value. And it's too complicated. That was the Biden proposal and minimum tax on billionaires. It's hard. I think a lot of people had that type of reaction of like you're taking money. Then you're giving a credit. And what are you doing? It feels kind of hard to do. Yeah. So in an ideal world, we would be able to do it. But we can't do it. Yeah. I think it's impractical. Yeah. Me too. Yeah. Okay. I love your book. I love your message. And we could probably do another three hours together. Neither party. Neither part. It would be so fun. It's hard though, because the people who are making $40,000 a year don't have time and energy to differentiate between in that one percent. Like to them, all of those people are on a different level in a movie. Yeah. Whether you're a billionaire or you're a millionaire. Exactly. That's one of the things I talked about in my book is the difference. It's very hard for people. I'll tell you my own baggage and my own personal. The reason it's heated for me is like people are angry at just money now. I find it very ironic. We live in a country where the promises you can make yourself and anything. And regularly when we see people do that, everyone's mad about it because they're conflating these classes that seem like the same from the outside that are dramatically different. Again, I pay 50%. Exactly. And so don't be mad at me. Absolutely. But the mistake that I think that people make and this goes back to our earlier discussion is when they say the problem is billionaires. No. The problem is how did you acquire your wealth? The problem is the system, not the person. People, people, people, people, good people, all up and down the thing. We don't say to Jonas Sock, you created the polio vaccine therefore you never pay income taxes. No, you pay income taxes just like everybody else. everybody should be paying taxes because that's how we have to support the country. It shouldn't matter, it's not about hating billionaires, it's about hating the system and having a fairer system. - I adore you. - Yeah, I really hope you can-- - That's why I don't get to see you guys every day. - I want to audit your class. I want to have lunch with you and Boston, and then I hope you'll come back for your next book. - Definitely, so fun, thank you so much. - Yes. - I have this-- - Yeah, I love that. - I have a big coffee drinker, so-- - That's from my answer being correct. - What's that? - You nailed that, Monica. - That's correct, exactly. - I wouldn't have come closer to that girl. - You were a star, a star. - All right, well be well, everybody read the second estate how the tax code made an American aristocracy. - All right, be well. - Thank you so much. (upbeat music) - Hi there, this is Army and Permian. You like that, you're gonna love the fact that you've missed Monica. - How do you feel about Diana Ross? - I feel good. I don't have too many opinions. - You down. - I don't-- - Ain't no mountain high. - I love that song. - It's a solid one, right? - Yep. - What else do we hear this morning, Aaron? - Um, I'm coming out. - Great song. (singing) - Upside down your turn of me, you're giving love and sing to me. - I guess I love her. - Yeah, I just came to this realization too. - Wow. - I've been waiting for Aaron to join me on the 70s Army V. Training for 40 years. - Yeah, it's been rough enough slowly over a lot of years. - Oh my gosh. Well, now that you're into astrology, - Well, I know, I find myself dancing in the car or the other day to Diana Ross. - That's fun. - My kids are even like, oh my God. - What's happened to you, sir? - Yeah. - Speaking of legends, we brought it up a little bit yesterday, but dolly passed away and I thought it was so luck, like just everyone is so sad universally. - Yeah. - And I think that's like just what an indicator of a beautiful life. - Yeah, that's a good point. I know she might be one of the least polarizing people in the world. - Yes, everyone is very, like, bereft. And I think, and she deserves that. She, but it's like such a lovely, beautiful thing. And it was sim. This part's gonna seem off color. - Oh, I have a few as well. - But I was at a store this weekend where they had vintage shirts. They have a very small collection of vintage shirts. So they're insanely overpriced, like crazy. So there was a Chinato connoisseur that was $2,000. - Oh, great. - A T-shirt. - That's crazy. - It's crazy. - I bet my brother Polly still has his from that era. I should ask him. He might be sitting on 2K up there for one. - Seriously. - I would call him and go, good news for you, buddy, you're sitting on 2K. You're set for life. - Okay, but there was a dolly shirt. - Oh, okay. - And we were like, "Oh, this one's so cute too. This is so great." And then I was like, then I, whatever, left. And then yesterday I was like, "Oh, my God, that shirt's probably $10,000 today." - Oh, yeah. - Yeah, probably skyrocketed. - What was the price? - I don't know. - Okay, you weren't interested enough in it. - No, because I didn't like love, love the shirt itself. I think it was really big. - Okay. - Are you looking for a thinner or thicker material and the same, same. - Me too. - I want a cheese cloth. - You want it to be basically see through. - That's right. - Yeah. - To transparent. - Couple holes, if you can. - With a hint of the old screen print on there. - Yeah, that's nice. - Just a tiny hint. - Done fortunate part is I would splash grease on it immediately. - Yeah. - Like having oil or some butter, yeah, same. - You know, this shirt, this one in particular has been baking soda like five or six times. - Mine has two. - This shirt in particular loves to get oily stains. - That shirt does. - Yeah. - I agree. - I didn't even think I went near the kitchen when I wore mine. - Oh no, that fat and dorsified shirt. - That's not great. - This one. I don't find that to be the case with any of our other merch, but this one is like every time I put it on, I'm like, oh my god, I did it again. And then I knew wonder how many oil scenes of my collecting on other things that aren't showing it. - Yeah. - That's what you got to wonder. - You got to. - You got to sit there and wonder about it. - I haven't unfortunately haven't held on to anything from our youth. - Yeah, I was very jealous when you were, when Lincoln started wearing the exploited shirt. - And I was saved 'cause I think I was getting rid of those. And I think Kristen was like, secretly maybe was like, you can't be getting rid of these shirts. - No. - But do you know the whole thing with us in our t-shirts? This was a great hack though. - Oh, you wore tiny t-shirts? - I wore extra tiny t-shirts. (laughing) Baby t-shirts. - You did, didn't you? And you went to like Donald's and you had like tiny t-shirts. - Oh, yes. - Yeah. - The horse, the prince. - Prince, and then Aaron had these baseball pants that were way too from when I was a little eager. - No, but this was a great hack for my mom who was of course, on a huge budget is that my brother and I love these punk rock t-shirts. And we would take a trip every year before school. Our school shopping was going to Young Street in Toronto. - Okay. - And we'd spent the whole day going into all these t-shirts. - Oh my god. - Always in the basement. They were all, what do you call them, fougaisies. They were pirated, you know, they were, they weren't official merch from these bands. - Oh. - And so they were super cheap. All these shirts were like, I don't know, $8 or something. And I would come home with six exploited shirts, GBH shirts, dead Kennedy shirts, just all these cool shirts with all the, and of course, everyone was so jealous 'cause you can't buy them anywhere but Toronto. - But then of course I would give Erin some. - Yes. - Oh, that's nice. - And it was really the uniform of junior high. - It was. - It was cheap shirt. - So it's cool as shirts. For the most part, black and white. - Yeah, yeah. Casional splash of red. - Yeah. - But it was a hack for my mom 'cause she could get our whole school clothes shopping done for like $90, you know. - That's so smart. - It made the trip to Toronto free. - Back to school shopping was really fun. - Oh my God. - You liked it, right? - Oh my God. Of course. - Who doesn't love it? - It gave me anxiety. 'Cause you have one day to find every outfit you're gonna wear for a year. - I know, it's not realistic. - And then you're also worried you're gonna bump in. I was worried. Look, this is all luxury, right? Erin, did you ever even go school clothes shopping? You feel bad after you're playing with my clothes? - I know. - Oh, please. - Yeah, no. (laughing) - I'm not complaining. I'm saying I'm grateful. - No, she loved it, but I'm good playing with it. 'Cause I would go there and it's like, generally I'm kind of picky, even though I, you wouldn't think I knew. - You weren't thinking, yeah. - So it'd be like, I hope there's a bum equipment sweatshirt I like. There's only three. - Is that a band? - No, that was like a popular brand in the early '90s, late '80s. But you don't remember bum equipment, B, U, M, these oversized sweatshirts. This is back in the Z Cavareachies day. - I also miss that band. (laughing) - I don't miss it. I did yesterday. - You look great in a pair of Z's. - Oh, absolutely. You'd freak. - Yeah. - Because they're so big. - Yeah, I love the big tones of pleats. - I love pleats. - Like the fact that I was like loved a pair of jeans with tons of pleats is hysterical. I can't imagine getting them to. - The power of trends. - And I got, one time I got the parachute pants. That was great. But anyways, I would go there and it was like, if you don't find your whole wardrobe today, then you're shit out of luck. And you go to my, there's only three stores I liked at the mall. And then you bumped up into your budget a lot. - I just found it very stressful. Was yours protracted over multiple days? - No, it was kind of, gosh. I mean, it depends on the age. Like at some point back to school shopping was just me and Callie going to the mall. - And you got mom's credit card? - I hadn't allowance $20 a week. - Wait, you were buying your own school clothes? - Yeah. - That can't be. - I was. No, I mean, I'm thinking more throughout the year. Like maybe I bought like one. I don't think my mom and I went shopping for a high school back to school. Like I think at that point I was sort of on my own, buying my own stuff. - What about you in high school or middle school? - I know, well, yeah, a limited two was the place. My mom never wanted to buy me anything from limited two. So I would be begging and pleading. Sometimes she would give me like one shirt from there. - Okay. - That was it. Yeah, they didn't really, we didn't do a huge amount of back to school shopping. But like she would, this is funny, we just had this conversation. Do you guys know Uptans? Did you have Uptans? - Uptans? - New Claire? - No. - No, it was a store. And we spent all week trying to figure out Uptans. My parents when I was home. 'Cause I told my mom, she used to shop at goodies. I brought up goodies. Did you guys have goodies? - These are all some very Southernity honestly. - Sam goodies? - I don't have Sam goodies. - Gutties was a clothing shop. - Winkies, pinkly wings. - Winkly winkly. - Winkly winkly. - Winkly winkly. - Winkly winkly. - Winkly winkly shirt that I do love. Anyway, yeah. I said something about goodies. 'Cause I vividly remember my mom bringing home leggings from goodies for me. - Okay. - They had hearts on them. - Remind me on leggings again. 'Cause I remember I got it wrong once. - Leggings? - Like you wore what you called leggings. And I thought leggings were like pantyhose. - Right. - What do you think leggings are? - Well, I think it's different now. Isn't it just yoga pants now? But back then I thought it was pantyhose. - Okay, pantyhose. - Maybe in the whole affair anymore. - Does anyone wear pantyhose? - I don't think people wear pantyhose anymore. - I love pantyhose. - It's disgusting. Oh, it's a hoes me. Well, it isn't a chase, but a hoes, yeah. Like a garden hoes, yeah. I mean, it is a panty and hoes is. It is sort of an extension of your panties, 'cause you're not supposed to know you're wearing those. But you are also supposed to-- They're wet, they're nude. Oh, and they have a group. And they're so tight. They have a gruddle in them too. Are you not supposed to wear panties with them? I think you are. Okay, that would be bad. They should be called second panty hoes. I think they're sexy. Sorry, we interrupt the uptown. Sure. Well, everything is sexy. I don't think you would have you ever seen a woman with only panty hoes on? I think I have, I think I have. Can you walk in? Yeah, bend it getting done to business. That's nice. That was really popular in the '80s to have the woman. They was very coming on the cover of Playboys. It would be panty hoes no top looking over the shoulder. You couldn't show the group. I feel like I've seen Cindy Crawford in that look. It was a look in the '80s, black generally, not like nude color. Yeah, because not like panty hoes. Yeah, nude color, I think. Yeah, nude is. You guys are eating your grandma and they're saggy. Nude is the main color. They're invented because you weren't supposed to have your legs exposed. So women would wear it under their skirts and stuff. Also for secretaries. Also for chilliness and the winter, when you want to wear your skirt to work, I think it was also supposed to be a little. They added that. Yeah. The warmth. Yeah. And also it was supposed to make your skin look smooth. It does. Anyway, no leggings in this case were like '80s leggings. They're like thicker. They're pants, basically. And then they had stirrups. Oh, yay, yay, yay. You know? Sure. Okay. They're really cool. Anyway, my mom brought me some from goodies and I brought this up for some reason and she was like, no, I've never shopped at goodies. And I said, well, you did. I know for sure. Remember you bringing the bag and I was so excited because sometimes my mom would go shopping on her way home from work and bring me items. She had a time crunch. She was a career woman. Yeah, exactly. But she wanted to shop. Then she said, no, I used to go to that one store a lot. And I was like, what? And we couldn't figure it out. Couldn't figure it out. I was asking chat. Oh, sure. So many questions I was asking chat. And my dad then got very demoralized by AI. He was like, yeah, no, we're not in any trouble here. It couldn't figure it out. It could not figure it out. And then I just went to straight up Google. I have said a few questions and it got it. Now what's your dad's general feeling on AI? Does he have a take? Mm-hmm. I'm sure he does here. Is he using that? My dad's back to work. Oh. Oh. Do you know those stories that I do? Yeah, yeah. Yeah. I was even in here when this was happening. Yeah. It was the retirement party. And then he was at work Monday. It was a consultant. Exactly. Exactly. Exactly. And now he's like picking up more hours. Oh, my God. I'm so happy for him. He's got to get that mind. I'm signing up for O.T. So you figured out it was uptowns with Google. Optance. Optance. Very specific. It's UPTON. Like Kate Optance. Yes, correct. That's uptown. No. Uptown will be UPTOWN. Oh, okay. We're missing a W. Yeah. Okay. Optance. Optance. Shout out Optance. I mean, it was a great play. It was like Coles before Coles. Okay. I mostly only know Ross and TJ Maxx. I love TJ Maxx. Is the other one you just said in that category? Optance. No. Not Optance. Coles. Is Coles like a good luck to everyone? No. Like when you walk into Ross, it's like the greeter should say good luck. No. Coles is much better. Yes. Okay. It's like department store. It is. It's like a standalone department store. It doesn't have because TJ Maxx and Ross are all like resale. Okay. Or like, you know, like things that didn't make it. Optance. Yeah. Exactly. Oh, my dad. My dad. He. He's not that worried about it. Okay. He just thinks this is what happens. Like everyone was worried with the computer and everyone, you know, and then you figure it out. So he's not too worried. Okay. Now, this is probably too nosy about his finances, but I imagine when he retired, he got a retirement package. Yeah. Probably. Yes. So this. No wonder people go back to work as a consultant because he's probably getting some percentage of his original income, and then he gets to go in there as a consultant and also get wages there. So he's kind of like double the salary. Hmm. I don't know. Like him on the phone. Let's ask him. Which he wants to share. He. They notoriously never, ever, ever will share their finances with me. They never told you what you're taking on that. That was a huge part of growing up. Like they, I would ask all the time, well, how much money do you make if everything so, if we just have to be so scared of money? Yeah. Yeah. Yeah. Yeah. And then you do set us on my business. Really? My mother very much was like, I have to turn them out into the world with some financial literacy. So like they should know what I'm bringing in, what our expenses are, how this is all working. No, the literacy was just, you should always be like scared. Apparently. Put a ton of it, all of it away, maybe like $1 you can keep, and that's what you should do. But if you were to ask them now, would they tell you maybe like how much they may, how much they have saved. Oh, I think they have alluded to the number, but they wouldn't want me to say it on, okay, I have a question. Yeah, yeah. For both of you, both have children. Let's say one of your children, this is like a Jonathan Hyde sort of, let's say one of your children makes just a lot of money is going to be totally fine on their own. And independent of you, right? And then your other child, one of your other children, does not. Now when you're doing your will, this is David Sidaris, he didn't get any money. Is that him a penny? So yeah. So when you're doing your will, are you guys, you're just even Stevens, or are you thinking it like, well, for sure, for sure, what, even Stevens, no, no. If one kid's struggling, the other one is totally financially set, I will tell the one financially set like, hey, when my dime going to leave your sister more money, because she needs more help than you do, and it's not because it's not any reflection on what I think you deserve, but it is a reflection of how well you've done it and that I want to make sure you're both safe. That's easy, I think. And even I've told my mother, like, you know, I bought half my mom's house at one point, like one of the houses ago, a couple of houses ago. And I even said like, so hey, when you, when you pass, I just want my half back. You can give David and Carly the other half. You don't have to like try to divide that half into thirds so that I then get 66% of it. Like I just want my money back. And then I even changed that and I was like, you know, whatever you have, give to those two, it would be insane to give me more money. So hopefully your children will just offer if they're financially set. I mean, I guess it's okay. Why? Cause are you expecting 50, 50, 12, you are going to do that? Like they are. And so that's an interesting, for me, it is has zero to do with the money. Yeah. I probably will give it to your brother depends on where he is. This is the other thing. It's like you don't know what's going to happen to people. Life is long. It's twisty turvy. Very. And if, and if something like, if what if the rich sister lost all their money and then you've given, well, then ideally they have a good enough relationship that she goes, hey, I know dad gave you all the money because you haven't even know I don't have any. I think, well, your children are different, but not necessarily different, but they're this thing with money breaks up so many families post posthumously, yeah, exactly. It causes so much damage and so that's why you got to do a will because you're just, you're ensuring that they'll be fighting each other. Yeah. And so for me, I think it's just necessary to prevent a lot of that to also, yeah, it's just, you got to go even Stevens. And my parents believe that too. Well, definitely if you're divvying up the money on who you like tomorrow, that's a no-no, but, but depending on who, who needs it more, I think that's really relevant has to be taken into account. But it's just in that moment and you just don't know. I'm superambious of Aaron because he just, obviously you'll just give it all to his son. He has two daughters and a son and he'll give his whole estate to his son. What about the husband? I wish I had a son to make it so clean or the husband's a big daughter. Oh, yeah. Yeah. Oh, yeah. Oh, yeah. It is. They'll be getting some money. I've never, I've never thought about it besides be, yeah, everyone gets an even split. But if I run into some money and these kids start doing their, you know, right now they're not, they're teenagers, but they're, yeah. >> Yeah, it's tricky. >> Another thing you have to factor in is one of your children struggling with massive addiction. >> Yeah. >> The last thing you want to do is give them enough money to kill themselves. So there may be a situation where you have to say to the other sibling, look, I'm giving you all this money, but you got to take care of your sister. >> Yeah, that is of course a different situation. And I mean kind of just pending regular stuff. >> Fifty-fifty. >> Stay tuned for more armchair expert if you dare. >> You know, my brother just had a baby, cutest baby, Memphis. I love him. I bought him a quilt yesterday. I wanted to bring that up, okay, so I bought him a quilt that was originally ding-ding-ding, $1,000. But it was $100. It was on sale for- >> It was on $900, all of them. >> I know, I know. >> I got a wonder if it was ever worth $1,000. >> That's what I wanted to bring up. I was like, do you think that was like a trick? >> There's a moth scut in there or something. >> Oh. >> Aaron and I, if we owned a quilt that was $1,000, we would be selling it for a hundred. We just had this conversation that both of us are so bad at selling. >> Yeah. >> Virtually the time. Every time I sell something, I meet the person and I go like, God, they have less money than me. >> Yeah. >> I remember I saw my Harley room and the story. >> Yes, I remember that. I thought of that story yesterday. >> In the tube. >> I forget what I wanted. Maybe I wanted 10 grand for it. He came and he had like six grand with him and he's like, okay, yeah, I really wanted him. I got a run to the bank and get a bubble on and I go, just fine, take the bucket more. >> Yeah, because he worked at a treatment center and I was like, oh, yeah, that's a good one. >> Yeah. >> So it's like anything you would have shown up. >> I agree. I'm more into the just giving. >> I hate it. >> Yeah. I just want you to leave. >> Yeah. >> Me alone. >> Exactly. >> Whatever. >> So quickly. >> Yeah. >> How much you want to take it? >> Yeah. >> Just fucking get out of here. How much is that? >> Yeah. >> I'm so scared of making mad, but I kind of think they should give Neil a little more. >> I know you think that, but I don't. >> Okay. >> I don't. >> I know. >> It's a symbol. It has nothing to do with the money and it's one thing, you know, you're like, you know, we love you the most, we love you equally, but it's like it's just hard. >> It's too hard. >> That's what Cedar is about. >> Yeah. >> He didn't like it. >> Yeah. It's painful. I understand logically where you are coming from. But emotionally, I don't, I think that would just be very hard, regardless. >> There would be a world where you'd be okay with like 60, 40. >> Again, it's not even a foul. >> It's not about the money at all. >> It's actually just a indication of like, these are my children, they get, you know what I mean? >> Let's think you out of it. What do you think my mom should do between me and Carla and Dave? >> I think she should split it evenly. And I think you will give it like it's, again, it's not, I don't think then you're going to be like, yay, I got all this extra money. >> You're the only thing that's tricky though about that is your parents can pass on their money to you guys. But once you get it, you can't pass it to your brother without a tax penalty. >> I know, I'm just not all that, we, you know, we have the tax. >> Well, you'd have to make half of it disappear now. So basically of this pot that started, it could all go to you guys tax-free. But if you transfer it to him, now we've reduced the pot 25% of the total pot. And then it was like for a Y so that everyone felt good it should just all go to who needed a tax-free. >> But need, okay, again, okay, let's, so the need is I guess relevant. If someone's poor and someone's rich, yes, but also that's not right anyway. If like your sibling is poor and you have a ton of money, that's already a little bit like what are you doing? >> Yeah, why aren't you helping out your sibling? But if you're, if they're fine, okay, I'm not talking billionaire obviously, but even, okay, that's a good thought. So what if it was a billionaire, and then the brother is a lawyer. >> Okay. >> So does well? >> Yeah, yeah. >> But private practice. >> Yeah. >> Okay? >> Yeah. >> Personal injury. >> No, he does IP law, okay. >> He's making $300,000 here. >> Yeah, good for him. >> Yeah. >> Yeah, good job. >> Should the parents- >> What's the other brother? >> A billionaire. >> Oh, yeah. >> Yeah. >> See, so we got a billionaire and then a lawyer making $300,000. >> No, the guy's kidding, I didn't give it all to them, he's going to have $1,000,000 to feel good. >> Yeah, to feel. >> Versus this, like changing. >> Listen, here's part of the thing, I know, okay, in billionaire's situation, I guess I agree, but- >> But you know what's funny is I do think we all naturally go, everything more than what we have seen. So if someone only has $20,000, or $2,000 for their name, and you have $2,000,000, your name, that is the exact same proportion as you having $2,000,000, someone having a billion. >> No, totally. But $2,000,000 is not enough to feel totally safe. >> Depending on what age you are and where you live and how you manage the money. >> Well, yeah, I guess if you have $2,000,000 in your 80s, like great, because you probably, you won't need it all. >> Does remind me one of the funniest things Aaron said to me, and he actually relieved me of this terrible fear I have. We were watching one of the many sports documentaries that always give me financial anxiety, because virtually every sports documentary you watch of a big hero in the 80s, you find out that the city was a gas that he got a million dollar contract. >> I know. >> I'm sitting there with Aaron, and I go, that was the most preposterous amount of money in 1986 when Isaiah Thomas got that, but dude, 1986 was 30 years ago, and there's no way he still has a million, right? >> Yeah. >> And I'm like, that's why no amount of money in 30 years, you know, they say. >> What exactly? >> And then he goes, he goes, yeah, but you're not, Isaiah Thomas is age, you're already 50. I was like, you're already at the finish line, I was like, oh, yeah, that's super relevant. >> It is very relevant. >> It's very relevant. >> Trying to figure out how to make money lines for another. >> How to stretch it? >> Yes, yes. It's pointed out that I'm old, and it was like, I'm getting a great relief. It's where that being pointed out gives you a lot of relief. >> That is true, yeah. Anyway, yeah, so I just think it's an interesting thought experiment. I'm definitely on the side. >> How does your brother feel if you talk to him about it? >> No. He doesn't get to decide. >> Well, he gets to have an opinion. I'm curious what it is. Let's call him. >> Okay. >> Is this forever changing for the parents, like you're calling up your guy, Lincoln's not doing well. >> Uh-huh. >> Let's change the way up. >> Hi. >> Yeah. >> Right. That's a good question. >> So I've done a state planning, and it's a lengthy thing. >> Right. >> And then Christian, I just so lazy about it, we're like, we don't want to, I'll tell you what happens in this estate planning that gets tricky. Is you go, first things like what happens if one of us dies? >> Yeah. >> Okay. Well, that's obvious what happens. And then it's okay. What if both you die? >> Yeah. >> And then you go, okay, well, I want my sister to take over. >> Sure, yeah. >> And then you go, what happens if she dies, right? And then now we're on a third tier. And now, by the time you get to the fourth person, we're now arguing over who should get this. >> Of course. >> And then at that point, I go, this is fucking nuts. We're stressing ourselves out over something that literally statistically could not happen, which is all three people now have taken charge of our children at all past, and we're down to like, who I knew in eighth grade, like, what are we talking about? >> Three of you could be in a car together, I hate that you said that. It's like not that hard to do. >> Okay, where am I in line? >> Yeah. >> So we kind of tabled it over this one, like, we couldn't decide on the fucking fourth person to get the kids. >> Yeah. >> And then we just like, fuck this thing, and we put it off for a while. And then of course, we're getting urged rightly so by our financial advisor to finish this, because we fly together, I raise motors, like, you know, all the shit. Anyways, we finally got through it, but it's like, you know, it's like four sessions sitting with this estate planner for hours and hours and hours, and you don't like thinking about it. A, it's like not a topic. All you're talking about is like, when your kids are going to be without you and all that. And then you're also figuring out like, what age should they get, what, again, what happens if one of them's an addict? You need a lot of legal language to deal with that kind of situation, you're kind of trying a forecast every conceivable And the only thing that I was just dead sure against as I was like, "Let's make this very clear. Nobody gets a fucking penny unless they sign a prenup. I do not want some dead being. I mean, my fucking dollars and getting divorced and taking a quarter of the money I worked my whole life." Or like, that to me was like, "I'll come out of my grave and kill some of them." Oh, nice. Have you guys heard of doing a free, this isn't embarrassing, but I've known it. I don't have a will right now, and I should, no matter what. No, it wouldn't mean you don't want them to get one. No, I want him to not need it. Okay, because I thought you're not, because you don't want the thing that was just said to have. No, my noxers, they know. They have their ambiguous purpose. But this has come up a lot recently, and it's, yeah, it's out of laziness. That's what a lot of people do, I assume, so lazy. It never occurred to me because I was like, "Whatever, whatever, just get this tiny bit of shit." I mean, you got this tiny bit of shit. Yeah. You get some more. It's five for it. Yeah. Yeah, one for it. Right now. Which is pretty good. That is good. That is good. That is good. That is good. So, we've been talking about it, but just haven't pulled the trigger, and I'm like, what do I do, because I'm a fucking jackass, I don't know how to do it, and I'm like, according to chat who you should have, chat, make your will. Yeah, you should. Okay. Yeah. It makes legal documents. Yeah. Yeah. So, there is a way to do it without going through my tattoo contract. Okay. Yeah. Yeah. I had the whole contract made on chat, sent it to my Eric, who's a lawyer, or any writing he's like, this is like bulletproof slash aggressive. Okay. Yeah. Yeah. That's the answer to that then. Yeah. Yeah. We looked at him and I'm like, oh, that's why I don't have to, like, I just take this to a fucking notebook. Now. Yeah. Yeah. Are you going to give yours, so is, so, okay, okay? I like it your whispering, right? Yeah, because this is, it's tricky. Twicky. So, are, are you going to leave your money to Ruthie for your children? That gets real tricky. Too dangerous to answer. I know. That's why I'm asked for it. It even gets more dangerous, but this is life insurance policy on me that I don't know what it is. And this was bought by my ex-wife, and with good reason, yeah, she had a pretty good chance of collecting it. Yes. A long time ago. Yeah. Oh god. Yeah. Now, since I've got sober, there was this one, there was a moment early on where I start trying to do the right, and I'm like, okay, I have to be responsible and pay these bills and these bills and these bills, and she's like, yeah, you got to start paying this fucking life insurance, but I've been paying it for years, and I'm like, cool. So I pay that, but I've never asked the question, like, does this go to you? Yeah. And I'm like, wait, this is what I get in her mind. Rightly so she's like, yeah, if you die, like in the control babies, you still have to pay for half these kids. Yeah. So yes, I should get it, because I'm going to now assume all the pain. This is so confusing. Yeah, because when you re-marry, what, do you have two, can you get two? Double. Yeah. So I don't know the answer to that. Yeah. But you could, you could certainly amend that policy to have multiple beneficiaries. Yeah. Yeah. Yeah. Which she'll never do, but you could. Which I'll forget when I walk out of here. But, uh, yeah. I think, uh, sure. Well, I wouldn't group you to get a PC. Yeah. You're the days. I low-round family. Yeah. She's not going to be able to take care of herself with them. I'm joking. I can't. She does much better than me. I mean, this could be for 20 grand. I, I have no idea what it is. I've never seen details of it. When my dad died, um, obviously he just mostly had a lot of dad. Yeah. But I did get a call that was like, your father had a life insurance policy. And I'm like, first of all, how, and then, you know, how much? And it was like, it was $1,500. Oh wow. And I'm like, where did this come from? What is the kind of life going to your mom? No, David and I, but I was like, just send it to David. 15 hundred. 15 hundred. It's not a great answer on the one cent. One cent a year. 25 cent. Like, maybe he saw commercials like for 25 cents a month. You could leave your loved one. $1,500. He's like, it's something. It is something. Sure. I'm just like, where did this come from? I think he must have, like, it had to be a part of some other thing he got that just got lobbed onto the bill that you had to have if you had, I don't know, it makes no sense. I joined AARP and, um, I thought, this was five away. Wait. It's definitely seven year old people. Yeah. This is an American association of retired people. Yeah. Well, listen. You listen up. I went into your junk mail, but I got it in the mail and saw that I was eligible to be a member of AARP and I left really hard and I, and I was reading through it for a very small fee of like 1499 for an annual, um, anyway. So I was like, this can't be right. It was when I turned 50. Then it got better as I was reading. And it was like, so I'm like, okay, so the perks are you can get like a coffee and a McDonald discounted. Sure, sure, sure. So I mean, yeah, yeah, yeah, yeah, yeah, yes, travel. Then I see you can order a second card for $7.99 to your for your spouse, which wrote these seven years younger than me. So I'm like, well, this is even funny. This is where 20 bucks just for the laugh, yeah. I wouldn't have been part of their strategy when they totally doing their marketing budget. They're like, a lot of people are going to buy this for a laugh. Yes, work. So I order them. And I'm just, it's not a mystery. Oh, I'm telling you about finance. So now I'm like pounded with mail and, you know, you're a sucker. Notification. But one I've been seeing lately and I've set a couple aside and have an open to them was life insurance. And I'm like, well, I don't mean I'll look into this, but I'm doing my life in one of those 15. But your focus is more on the ARP. Yeah, I really would love to go to a holiday and out of town with my wife. And, and we both have to present the cards. That is really fun. Did they give you the sticker for the back year window on your car? I got a lot of stickers. You should put them all over your car. It came with a lot of stickers. I'm trying to think of a more courteous and forgiving of people when I see the sticker or if I'm angry at them, like, I can't remember if I'm forgiving or if the second I see it, I go, they're going to drive like shit. Well, you would be forgiving if you pulled up and saw it was me. What the fuck? Yeah. It's like when you see a guy jump out of his car in the handicap and sprint into the subway. And he's got the fucking license flight and everything. But it's legit. Wow. Congratulations. That's amazing. I told you my father, like, he loved his placards so much. He traveled with it. And so often we would be like, we would pull up. There's nobody there. It's like we're going to Costco 11 a.m. on a weekday. Yeah. It is never plays. And you know, he was obese and stuff. And the spot directly next to the handicap would be open. And I would start pulling you. What are you doing? Go over. And it's like, oh, my God. Why? This is now a weird obsession. You have to be in this spot. We're going to walk all of Costco. You think there's some fucking samples of the power into this door. Oh, no. Oh, I love him so much. I love him most. It is great. Oh, man. It's a great man. Oh, why? Oh, backies. Yeah. Well, I do want to make one thing there because people might think that I'm very greedy. Okay. Because I want half my parents money. But my money will go to my brother, which is all the more reason. No, more reason that like, okay, so, so, okay. I mean, all the more reason that you want them to have it all anyway. No, I want my money from my parents because I earned that money from them. This is part of the reason I did. I did. Part of the reason I have this money is because I was trying to make them proud. and I did it for them and that's real like they and so I deserve that I deserve to feel equally loved and cared for yeah do you think they love you equally I'm starting to wonder now that we got a new baby now that we have a that's sort of how this started I was like oh I wonder what's gonna I wonder if this is going to change what if they left it just all of the baby not to you or Neil that baby didn't earn it exactly that baby earned that baby earned money from my brother and Emily well he's made your grandparents his grandparents extremely proud they think he's a soccer star being born more than doing the thing I've exactly I have to do so he's like a marine gets more known three weeks than most people doing a lot of time going back with a after a after a he didn't have to do shit anyway well it's gonna be great yeah yeah and it's not even gonna happen for like a hundred years yeah all right let's do some facts yes I love Ray Mattoff me too yeah I once in a while these these come up I don't know every 15-20 episodes where I repeat all the data I learned in the interview to every single person I see for the next week and that was this interview yeah this is a this is an alarm call fantastic interview alarm bell great information we all need to listen to this alarm calls not a alarm calls not a thing now it's just an alarm bell an alarm bell yeah okay sound the alarm sound the alarm all so an option yeah okay she said women are named all kinds of male names you know but not Ray yeah she said their name Joseph and Frank I personally Frankie Frankie I know Frankie Frankie sure for Francis generally is that yes and I would say Joseph I've never heard Joe but that's for Josephine yeah but that was just funny that she said that but then it made me want to look up girl names were once more common for boys okay this is from great problem he knows uh oh ding ding ding knows that's from a previous yeah okay Robin that used to be a boy name oh really mm-hmm okay Robin Hood sure yeah I definitely think when I hear Robin I definitely think female more than now yeah um okay jocelyn was a boy name what I know medieval time medieval times Kim these are good good job she knows Kim was a guy's name yeah it didn't even appear on the female name charts until 1944 whoa at which time it was far more popular for boys well Kimberly as Kim right yeah was it Kimbo the boys were named Kimberley they were just named Kim Darcy was a boys name yeah and it's such a good name I could just be at home and make a list you know I could be like Jennifer no they have stat oh my god they have sources yes okay okay if you live in the United States you probably think of Darcy as a girl's name it's firmly entrenched on the feminine side consistently within the top one thousand most popular girl names in the US from 1949 to 1994 peaking at number 349 in 1968 it was on the most popular male name list in this country to barely consistently from 1954 to 1970 whoa yeah mm-hmm and wonder what they went they went by the full jocelyn no Darcy oh Darcy have you said jocelyn yeah okay I did so it's not out of nowhere that I just said jocelyn okay I'm just a few behind yeah okay Aubrey Kim okay Aubrey was a dude's name yep okay when 1810 it didn't even make the list for girls until 1973 up until then it was far more popular for boys having been in the male top of thousand names even prior to 1900 1810 probably peaked probably um dana I know this one you knew that one well I know a male Dana you do mm-hmm he was my teacher a AP history mm-hmm US history and he was awesome shout out Dana you like all your teachers yeah I had a lot of teachers I like yeah I got a good that's what Lincoln and I really diverge and I'm so grateful she likes her teachers she's a teacher spot yeah yeah I was like the bane of most teachers existence and I didn't like them like me yeah and what a terrible way to go through and she loves her teacher so much and I'm so happy and relieved it's so nice to be liked by your teachers it is um Riley I had a male teacher Mr. Shade in seventh grade science air brings us up all the time he grabbed one of those big metal heavy chairs right like the whole bases metal wood back he grabbed it and he fucking swung it and threw it right at my head sitting at the desk and I ducked and it hit the table behind me he would have sent me to the hospital what you do do you remember well no because then he immediately was sending me to the office no I'm saying what did you do to make him oh I can't remember my infraction I think I talked for the fifth time after he had warned me not to mine but we got even we got even you did yeah he in the summertime was a park ranger at Kensington State Park wire oh no like I don't like they threw a chair at you but I'm nervous he deserves this his mother fucker almost took my hat off you can't throw a chair at a 12 year old I know but you were probably being so I wasn't mean to him I think I was talking to Aaron okay park ranger yeah and we kind of knew he couldn't fuck around at that job and so Aaron and I found him a couple different times at that job and told him like crazy after we were at a high school okay Riley where's your pistol why don't you pull your head to give you a best all right um right if you're with us I don't apologize most people I would imagine his life he tried to assault a 12 year old child no I'm fine with don't we're good we're not even we're not even even yet you are a bad kid I wasn't a bad kid I I was an antsy 80 HD kid who talked too much he though let's be he let's take you out of it pretend it's not you yeah okay and it's just a teacher who's dealing who's not good at being a teacher and who has all these kids and doesn't know how to control them and one will always relentless and he lost his shit yeah wasn't the first time either he beat me in the head with a fucking eraser one time too he was on and he doesn't have enough money so he has to be a park ranger in the summer and well that you've added hold on hold on hold on hold on what do you mean he doesn't have no money he lived in my cheap house town he was middle class in my town he just had to jump because he wanted to be a park ranger if you were interviewing say yeah that's okay you can't see in within it listen if it's 12 here's what you do you stop you go let's go out into the hallway of course no one saying he did a good thing okay great no one saying his behavior was appropriate or right but we can also have compassion for his circumstance which is what we normally do always I I um yes there are certain folks in my history that I have a hard time extending compassion to your human to you know you've done you have given you have said that before you have given some compassion I mean more than I would get all I've said the the most I can extend is in the game of life he suffered the most yeah that I can give him I don't want to extend to many but I do want to extend this teacher I don't know why we should meet mr. Shade teachers are just oh it's so hard I get it it's so hard it's too hard but mine can not chuck my chair I know I know and if you and if that's your disposition you cannot be a teacher I agree but I don't think I don't like that he got haunted oh I do I wish I got wish we would have assaulted I'm sorry okay Riley Shannon Shannon Shannon Shannon Carol there's a really tough hockey player named Shannon yes Shannon is I have heard of this with Carol Carol we know that you know Carol girl all these dads have these things so um breeze father Greg would always call for the mom always it'd be like this is such a family thing to do I think stand up and go into the bet you know like oh no everyone's shouting girl so Amy he always girl so I always make fun of him and I would just randomly yell Carol all the time yeah and then Chris and Zad has a great one you've heard her imitate that one Gellie Gell Gelline that's funny he's getting heated it's so funny we all do it right yeah we all do it yeah it's very funny Carol Morgan we know I'm Morgan yeah love him Morgan sack it shout out Hillary was a man's name oh man that's tough if you're like a cowboy and you walk into the soil - I love it. - It's like a, uh, point you to meet my friend Hillary. - I think they probably go by Old Hill, but Hillary, yeah, I love it. That was also 19. - Oh no. - I would say that that's tied with with with with Shell Silverstein and Johnny Cash's boy named Sue. Hillary is rough. If you name yourself in Hillary, like just, you got to acknowledge you're setting them on a rule. - I'm gonna do it. - Oh my God, I would fucking not allow it. - Courtney, I had that part of that. Lauren, Lauren. - Lauren Michaels. - No, that's Lauren. You do often say Lauren, but it's Lauren. L-O-R-N-E. - Okay. - This is, - He's Canadian those. I mean, that's at least a Lauren. - Maybe, maybe, maybe, maybe. Lauren, I mean, I don't hear the difference between what you're saying. Lauren, Lauren. - Okay, so. - Lauren, Lauren. - No, Lauren. - Lauren. - Two syllables, Lauren. - Yeah. - Lauren, one syllable, Lauren. - Okay. - I know. It is hard. - Okay. - It was splitting hairs, but yeah. - Really nice. Really, really nice. Sydney. - I think it's 'cause his last name was Michael's. They're like, let's soften it up. - Sure, maybe. - Lauren Michaels. - Okay. - Sydney. Sydney Poit, Poitier. - Poitier. - Allison, I have heard this. I have heard this. - Mm-hmm. - Allison Crowley. - Yeah. - Allison Crowley. - Yeah. But still. - Still I have some. - Shelby. - Okay. - Shelby Silverstein. - Shelby from Peaky Blinders, but that's the last name. - Shelby Cobra. Carol Shelby. - Carol. - Carol C. - That's a man. - Yeah. - Carol Cheryl Shelby. - And Carol, there's a big actor. Carol. - I'm all in the family. - Yes, yeah. Herbie Bunkett. - No, no. Archie Bunker. - Archie Bunker. - Or something. Carol something. - What the fuck? Carol. - Carol. - Carol. - Carol Channing. - Carol. - O'Connor. - O'Connor. - Okay. Lindsay. Kelly. - Kelly. - Beverly. - Kelly Slater. - Beverly. - I've heard it. - Again. - Uh-oh. Meredith? - Oh my God. All right. All right. All right. We got a lot. - Vivian. - Oh, okay. We got a lot. We got a lot. - Okay. - You just need me in every single girl's name. - No, no. There are a lot on this list. Okay. - The wrong. - Nancy. Cindy. - The wrong con. What do you think is the most girly name? - Lily. If you name a dude, Lily. Again, I hope he can fight. That's all I hope. - No, you better stick up for that guy. - I hope for his sake, he can fight if he's named Lily. - Oh, I see. - Like boy name Sue. You pray he can fight because he's going to be in a lot of-- - See, do you think I have the girliest name? - Yes. - Wow. Okay. The movie romcom, where a couple had to go into witness protection program and then they went to Ray Wyoming. That was, did you hear about the Morgan's, it was in 2009. Hugh Grant and Sarah Jessica Parker. Okay. I looked up what professors are the hardest to become, like what subject of being a professor is the hardest because philosophy is how we got into this. Business and arts is extremely, it says extreme slash brutal job market competitiveness. So it's philosophy, history, English. Then very high job market competitor, one wrong down is pure basic sciences, biology, physics, chemistry. Then moderate, accessible is professional schools, business, nursing, computer science. - Is there anyone that says easy? - Nope. - I feel like physicists has got to be up there. - No, physics is in pure basic sciences, it's very high competitive. - Okay. - Okay. - I just feel like not a ton of people. Here's one, I'm just so you know what I'm doing this. Very few people major in physics. Everyone majors in communications, right? I'm just talking about how many people major in the thing that feels like it being telling. - That might be additive because if not that many people are, well, first of all though everyone does kind of have to take it. So I'm saying every college has a physics professor, yet not a lot of people major and get their graduate degree in physics, a ton of people get their law degree, a ton of people do communications. So that's that many people you'd be competing against versus you graduate in something that very few people graduate in that would have to increase your odds. Does that make sense? - I know, but also they just don't need as many professors in those then. If not enough people are majoring in it. - That's a solid point, but there are certain things like they have to have a physics department. - Yeah. - But it might just be small. The physics department's probably smaller than that, anyway, whatever. Is Paul McCartney a billionaire? Yes. - Yeah, that catalog is valuable. - Is California still the fourth biggest economy in the world? - Yes. - Correct. If it works. - I wish you could do your head that way. You keep it exactly how it is and I'd take a photo of you. This would be, you should figure out how to do this on Halloween. - Okay. - Yeah. - March Simpson? - Yes. A Lebanese March Simpson. - Oh, look. - I'm going to send this to you. - That's a different episode. - Okay. You know how. - I mean, I could probably do a pipe cleaner or something. - You could figure it out. I could help with the physics, ding-ding-ding. - Okay. Yeah. - Gross domestic GDPs are passing 4.1 trillion. - I mean, it's just nuts that a state is higher than Japan. - I know. - Than Japan. - Yeah, narrowly ranking ahead of countries like Japan, India, and the UK. - Yeah. - But still. - Yeah. - I'm pretty proud of it. - I think it's US, China, Germany. - That is right. - California. - That is correct. That's what I just read. - You didn't read that. - I read it in my, I did. I just didn't say it out. - Okay. That's a good distinction. - All right. [MUSIC]