00:00:00- What's happening with this California flight stuff?
00:00:02Cause I was with Palmer over Christmas
00:00:04and a bunch of other guys from that side
00:00:07and I didn't know about it.
00:00:10I knew that it was gonna be brought in
00:00:12before the end of the year.
00:00:12It's this sort of sticky thing
00:00:14that seems to be following people around
00:00:15but it's also gonna get worse over time.
00:00:17It seems like there's more and more rumblings
00:00:18that stuff's gonna keep on.
00:00:20This feels like the sort of core engine
00:00:23of California's prosperity since the 1800s
00:00:27is now unraveling.
00:00:30- I'm in a bunch of group chats.
00:00:33I talk to a lot of people.
00:00:34I would say probably a third of people I talk to
00:00:38have already left.
00:00:39You're asking about people leaving, right?
00:00:41And I would say like a survey we did informally in a group,
00:00:46which has been published, talked about,
00:00:48is close to 87% of people are gonna leave.
00:00:52These are the core leaders in tech.
00:00:55And the other thing is I talk to a lot of emerging tech CEOs
00:00:59of startups that are doing really well that are growing
00:01:02and they're all looking to leave.
00:01:03Like there was one company I was talking to,
00:01:04they're gonna move up to Northern California from Southern
00:01:06and they're like, "Now I'm gonna move to Nevada."
00:01:09And that's because they're worried about what's next.
00:01:11So California's in this fundamental sinkhole right now.
00:01:14It goes back to my point about people making promises.
00:01:19In order to get elected, politicians promise people
00:01:22something that they don't have today.
00:01:23That's how you get elected.
00:01:25You don't get elected by saying,
00:01:26"I'm gonna take stuff away from you."
00:01:28The government's gonna do less for you.
00:01:30Show me one politician in the last hundred years
00:01:32who's been elected saying that.
00:01:33So in order, and there's a fundamental kind of like moment,
00:01:38this come to Jesus moment.
00:01:40Can you keep doing these promises?
00:01:41Can you even meet the promises you've already made?
00:01:44And in California, the answer is no.
00:01:46California set up a system where we created
00:01:51the highest tax rate in the country
00:01:53because of all the success in Silicon Valley,
00:01:55all the income that's being generated, all the success
00:01:58and capital gains and whatnot.
00:02:00And use that to fund a bunch of nonsense.
00:02:03The bullet train to nowhere,
00:02:05friggin' like $30 billion in, nothing.
00:02:10- How much is it?
00:02:11- 30 billion.
00:02:12And they've had six CEOs, by the way,
00:02:15that have all been fired, or the one guy just got arrested.
00:02:18It's insane.
00:02:18It was just published that this homeless program,
00:02:22$220 million was spent on it.
00:02:25Six homeless people got themselves out of the cycle
00:02:27of poverty that they were in.
00:02:29You go down the list.
00:02:31- What was it, sorry, just what was that thing
00:02:33about the affordable internet bill?
00:02:37- Rural broadband.
00:02:38- That was it.
00:02:39And for the same amount of money that was spent,
00:02:41I think every American citizen could have got Starlink.
00:02:43- Yeah, and that one, that's a federal problem.
00:02:47I don't- - Yeah, yeah, yeah, but-
00:02:48- You're gonna get me very emotional.
00:02:49I've been very like- - You seem like
00:02:51an emotional guy. - I've been very like
00:02:52unemotional during our talk about science in the future.
00:02:56And then this is the opposite.
00:02:58Okay, this is the bullshit, the opposite that happens
00:03:01when social systems become manifest like rotten.
00:03:05It's a system where people lie to each other
00:03:10in order to keep themselves in power,
00:03:12in order to keep their money flowing,
00:03:14in order to keep this nonsense up and running.
00:03:16People lie to themselves, they lie to their constituents,
00:03:18and the democracy starts to become like, what's the point?
00:03:21Like, does this even work?
00:03:22California in particular, we made a bunch of changes
00:03:27to the pension system, so we have public pensions
00:03:30for public employees in California.
00:03:32And over the past 12 to 15 years,
00:03:37those changes have resulted in a bunch of guarantees
00:03:42to people on their future retirement benefits
00:03:44that the state simply cannot afford to meet.
00:03:47The estimate currently is that there's 600 billion
00:03:49to a trillion dollars in the whole, okay?
00:03:53The state then has a question,
00:03:54how are we going to like pay for all these people
00:03:57all the stuff that we promised them?
00:03:59And that's a big part.
00:04:01And then there's also all the near-term stuff
00:04:03like healthcare costs.
00:04:04Hey, we promised them healthcare.
00:04:05We promised our union workers healthcare.
00:04:07We've got to figure out a way to fund the healthcare
00:04:09because the promises were made.
00:04:11But the promises were never funded.
00:04:13The promises were never possible to be funded.
00:04:16And then suddenly it all comes to roost and everyone's like,
00:04:18well, how are we going to make the payments now?
00:04:20How are we going to fill the hole?
00:04:21That's the situation California's in.
00:04:23California has such a heaping liability problem
00:04:26that it's now you're seeing like all the rats
00:04:29jumping off the ship or they're burning the ship
00:04:32or the people are leaving the ship.
00:04:34I don't know what the right analogy to use is,
00:04:36but that's the chaos that's ensuing in California
00:04:38in this very moment.
00:04:39And so we talk a lot about the billionaire tax.
00:04:42The billionaire tax came about because of one union,
00:04:44one guy at one union called SEIU UHW
00:04:47who set up a scheme where they would tax you 5%
00:04:50of your net worth if your net worth is over a billion dollars,
00:04:52which everyone in this audience is like, who cares?
00:04:54Screw the billionaires.
00:04:55But what it does is it gives the state assembly,
00:04:58the legislature, the ability to, in the future,
00:05:01change the threshold and the amount.
00:05:03So theoretically you could take the 5% on billionaires
00:05:05one time and make it 1% on billionaires every year.
00:05:07- Wasn't this the case with the original income tax?
00:05:11- 1930, it was a 1%.
00:05:14- Tell people the story of how the original income tax-
00:05:16- I mean, the original income tax was pitched
00:05:17because we did not have an income tax in the United States.
00:05:20And that was, again, why this country was founded.
00:05:22It was set up as no taxation without representation.
00:05:26There was a huge tax scheme to fund all of the nonsense
00:05:30that was going on in England.
00:05:32- Careful, careful now.
00:05:34- I mean, at the time, very different,
00:05:37not to speak to the people,
00:05:37but let's call it the aristocracy
00:05:39and what we call the elites today.
00:05:42And by the way, I think about the term, the elites,
00:05:45it's sort of like that Spiderman meme where like,
00:05:47everyone's, you're the elite, you're the elite,
00:05:49you're the elite, like the tech guy's the elite.
00:05:51That's kind of the moment we're in right now.
00:05:53Like the tech guys aren't the elites,
00:05:54but like the tech guys last year were telling,
00:05:56they were calling out the NGOs as the elites
00:05:58and then the, you know, it's just like, everyone's an elite.
00:05:59- Your privilege is more privileged than my privilege.
00:06:02- Yeah, this is all rooted in Marxist philosophies,
00:06:04by the way, it's all this like oppressor oppressed stuff.
00:06:06Like again, but all of those philosophies
00:06:09fundamentally distinguish people's agency.
00:06:12Like this is so critical for people to understand.
00:06:14When you give people a bunch of stuff
00:06:16or you create a governmental system or economic system
00:06:18that says you do X, you get Y,
00:06:20you're a slave to that system.
00:06:22You are now oppressed no matter what anyone tells you.
00:06:26You are not getting risen up and you're not,
00:06:27and pulling other people down
00:06:28doesn't solve any of your problems.
00:06:31Another conversation for another day.
00:06:32But in California, so we started out as a one,
00:06:34and so the way they started the income tax
00:06:36in the United States was they're like,
00:06:37hey, we'll promise everyone 1% on incomes over
00:06:40whatever it was at the time,
00:06:41I think $10,000 a year, you could probably look it up.
00:06:43And that was it.
00:06:44And then over time, it's like, wait, we had to fund a war.
00:06:46So we, and now we're like gonna expand the highway system.
00:06:49- So the original income tax was 1%.
00:06:52- 1% on high net worth people,
00:06:53on high earning people, and that's it.
00:06:55- Jared, chad this and find out
00:06:58how the income tax progressed over time.
00:07:00I wanna see this.
00:07:01- Right, and you can look at this.
00:07:02And so then it became like suddenly today,
00:07:04everyone pays an income tax.
00:07:05In California, I pay 53% income tax.
00:07:08And most people pay an income tax that's,
00:07:11and now they're like creating a whole new tax regime.
00:07:13And I wanna talk about this importantly,
00:07:15what they're trying to do in California.
00:07:17Here you go.
00:07:18It was a temporary war time tax.
00:07:19And you know, again, leading up to this,
00:07:21we had tariffs to fund the government.
00:07:22The government was small.
00:07:23Like the government wasn't meant to be this big system
00:07:26that took care of everyone and did all this stuff.
00:07:28- Keep going.
00:07:29- Coming out of World War II.
00:07:31And here's the income tax started out as 1% on income
00:07:33over $3,000 a year.
00:07:35Okay? - Yep.
00:07:37- And then there was like a progression.
00:07:39They added a 7% top rate later.
00:07:42And then you can kind of see here
00:07:43when the thing kind of expanded.
00:07:45- Oh, wow.
00:07:461944 to 1945 in World War II, the top rate was 94%.
00:07:51- Yeah, they took everyone's money to fund the war.
00:07:53But that set a precedent.
00:07:54Because what happened at that point
00:07:55is after they set the precedent,
00:07:57and then we had this kind of FDR,
00:07:59kind of New Deal expansionism,
00:08:00all the stuff that happened post World War II
00:08:01in the United States, was like, holy crap,
00:08:03we can get the government to do big stuff.
00:08:05Let's do big stuff to make our lives better.
00:08:08You can see that that sound principled.
00:08:10Like it makes sense.
00:08:11It sounds good in principle.
00:08:12But this is where it leads us to today.
00:08:14Because every year, once you start thinking
00:08:15about the government as solving your problems
00:08:17and doing things for you,
00:08:19that becomes something that only escalates up.
00:08:21It never goes down.
00:08:22- The thing about if 51% can vote themselves,
00:08:26what the 49% have got.
00:08:26- So this is the next thing that happened.
00:08:27So now, so that's income.
00:08:29Let's say you've paid your income tax
00:08:32and you own a bunch of stuff.
00:08:33That's now your private property.
00:08:34You own this stuff.
00:08:35That's yours.
00:08:36So now comes along the government or this new bill,
00:08:39the Billionaire Tax Act in California.
00:08:41And for the first time ever in the United States,
00:08:43we're trying to create a wealth tax.
00:08:46It doesn't matter that it's billionaires
00:08:47and it doesn't matter that it's one time or 5%.
00:08:50What you're saying is that the stuff
00:08:51that you've already paid taxes on,
00:08:53that you now own, that's in your backyard,
00:08:55all your iron ore that you've stored in the backyard.
00:08:57- That's correct, get off it.
00:08:58- Yeah, or your cool podcast studio.
00:09:01You own these things.
00:09:02You've paid taxes, you've earned your money,
00:09:04and you bought this stuff.
00:09:05But now the government can come in and say,
00:09:06you know what, we want that lamp.
00:09:08We want half your iron ore.
00:09:09We're gonna take all your private property, right?
00:09:11Your iron ore, they're gonna get all your private property.
00:09:14That's what a wealth tax does,
00:09:16is it taxes people on post-tax earnings.
00:09:18It takes away private property.
00:09:20If you give the government the ability to do that
00:09:22on even 1% of net worth for billionaires,
00:09:26the next step is 5% of the billionaires
00:09:30or maybe 2% of millionaires.
00:09:32And then maybe it's 3% on people making,
00:09:35that have a net worth of a hundred grand a year.
00:09:37And by the way, to figure out how much you have,
00:09:39what your assets are,
00:09:40you gotta send me a list every year of everything you own.
00:09:43So now the government gets to look into your house,
00:09:45not just see what's in your bank account,
00:09:47what stocks you own, but what cars do you own?
00:09:48What's the value of those cars?
00:09:49How much is that art worth?
00:09:51What's everything here worth?
00:09:52Private property rights go out the window
00:09:54when you institute a wealth tax.
00:09:55'Cause now the government has the right
00:09:57to assess all your value
00:09:58and to take anything they want from you based on a vote,
00:10:01where a bunch of people raise their hand and say,
00:10:03we'll increase the tax rate to this.
00:10:045%, 2%, 10%, whatever it is.
00:10:06And here's the threshold, and we'll take it every year.
00:10:09And when you do that, it eventually leads
00:10:13to 51% of people voting to take everything from 49%.
00:10:18That's the worst case.
00:10:20That's the end state of this, is it eats itself.
00:10:23And that's socialism.
00:10:24And so I think that a wealth tax,
00:10:26and look, it's not gonna affect me, this California tax.
00:10:29So don't think that I'm trying to speak my book
00:10:31or whatever the comments or bullshits are.
00:10:34I think this is a fundamental principled issue
00:10:37that by degrading private property rights,
00:10:39we are setting a precedent in the United States
00:10:41that is the foundation of why the United States
00:10:43was set up in the first place,
00:10:44which is for all of us that came to this country
00:10:46to get away from tyrannical governments
00:10:48outside the United States that took all our shit
00:10:50and controlled everything and told us what to do all the time
00:10:53and we came here and we get to have private property.
00:10:55Sure, I'll pay my tax.
00:10:56Here's my 53%.
00:10:57Thank you very much, government,
00:10:58for all the great stuff you do,
00:10:59for all the services you provide.
00:11:00- Now fuck off.
00:11:01- Now fuck off and leave me alone.
00:11:03And that's not the case anymore when this passes.
00:11:05Bernie Sanders, Ro Khanna, all these national politicians,
00:11:09AOC, Elizabeth Warren, they're all saying
00:11:11we need to have a national wealth tax now.
00:11:13So it's not just in California.
00:11:15This is gonna be the issue between 2026 and 2028.
00:11:19The elites are the billionaires and the tech people.
00:11:22They're coming after them.
00:11:23And the manifestation of that is to create this wealth tax.
00:11:25And that gives the government the system
00:11:27by which private property rights are gone.
00:11:29And the United States is a very questionable future
00:11:31at that point.
00:11:32That's the thing I worry about the most.
00:11:34And I juxtapose that with my optimism about the future
00:11:38and this amazing shit.
00:11:39Like, I mean, think about it.
00:11:40Like this amazing shit that's happening in the world.
00:11:44We're gonna have free fucking energy.
00:11:45We're gonna live forever.
00:11:47We're gonna have all of this insane stuff
00:11:49that we never imagined, abundance and resources
00:11:51that we could never contemplate.
00:11:53Happiness, spending time with family, working less hours,
00:11:57robots that build shit for us.
00:11:58Everything is gonna get better.
00:12:00Everything is getting better.
00:12:01Everything is getting more amazing.
00:12:02And then we're like, let's fuck ourselves.
00:12:05Like, why not?
00:12:07'Cause we'll just fuck ourselves.
00:12:08That's, and you know, this is this principle of like,
00:12:13I don't like using the term good versus evil,
00:12:15but it's like, are you thinking about the future
00:12:17optimistically or pessimistically?
00:12:19If you're thinking about the future
00:12:21as these are control system.
00:12:22This is, these tech guys are crazy.
00:12:25This is dystopian, blah, blah, blah.
00:12:26You know, the number one most unfavorable thing
00:12:29in the United States right now
00:12:30according to a recent poll is AI.
00:12:31More unfavorable than Donald Trump,
00:12:33more unfavorable than everything.
00:12:35It's the most unfavorable thing because it is this,
00:12:38like this narrative that everyone's been instituted
00:12:40in their minds that like, this is the thing that destroys us,
00:12:42yada yada, and that's the choice we have.
00:12:45That's the choice we have right now
00:12:46is do we wanna walk this path of abundance
00:12:49or do we wanna lock ourselves up?
00:12:51And I will say the counterbalancing force,
00:12:53and people won't like hearing this,
00:12:55but the counterbalancing force in the world
00:12:57will be a place like China.
00:12:59Because if the United States walks this path,
00:13:01other countries will not walk this path
00:13:04and it will glean the benefits they're in.
00:13:07And we have to recognize that.
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