8/24/26: Insane MAGA Linked Plot In Bolivia, Silicon Valley Panics Over Wealth Tax

24:46is diagnosed with cancer. Think about that for a second. Some of the bravest warriors you'll ever meet aren't professional athletes or superheroes. They're kids in this fight. And every day, these young warriors face challenges most adults couldn't imagine. Yet they continue to show up with incredible courage, determination, and hope. That's why we're proud to support Hyundai Hope on Wheels. For the past 28 years, with support from Hyundai, their dealers, and every new Hyundai sold. Hope on Wheels has contributed over$300 million to childhood cancer research, helping save more than 40 ,000 kids.

25:17But we're not done yet. We need your help. Together, let's bring every warrior home. Learn more at HyundaiUSA.com slash Hope on Wheels or ask about Hope on Wheels at your local Hyundai dealer. Hey, it's Ryan Reynolds here from Mint Mobile. Now, I was looking for fun ways to tell you that Mint's offer of unlimited premium wireless for$15 a month is back. So I thought it would be fun if we made$15 bills, but it turns out that's very illegal. So there goes my big idea for the commercial. Give it a try at mintmobile.com slash switch. Upfront payment of$45 for three months,$90 for six months, or$180 for 12-month plan required.

25:53$15 per month equivalent. Taxes and fees extra. Initial plan term only. Greater than 50 gigabytes may slow when network is busy. See terms. So actually a major press freedom victory out of the D.C. Circuit Court of Appeals. James O 'Keefe has won a reversal of a verdict that went against him previously and put up E1 here. This is a case O 'Keefe versus Democracy Partners. So this is kind of an interesting one for me to cover because I actually know a whole and like a lot of the people involved on the Democracy Partners side. I do not like at all James O 'Keefe's political project that he's engaged in throughout his career, particularly the kind of deceptive destruction of ACORN from almost 20 years ago at this point.

26:40Geez, was it? Yeah. 2007 or 8. Something like that. Yeah. But we're separating all of that aside because this is a case about press freedom and what is allowed under the First Amendment. And so what happened here is in 2016, O 'Keefe sent some undercover journalists. And we're going to call them journalists. Some people are like, oh, he's not a journalist. First of all, it doesn't matter because all citizens have the protection of the First Amendment, whether you're a journalist or not. But he's gathering information and he's publishing it. I don't have to like the information that he publishes.

27:16It still makes it journalism. So he sends an undercover journalist into this bar. and he catches and and what what they do is they say provocative things right and then try to get democratic operatives to agree with those provocative things right it worked fantastically with this one guy foval i believe his name was the old fed tactics basically yeah so he goes in and the guy says basically you know what we should do i he's like i he's like the guy that funds my left-wing organization hates voter ID because he loves it when illegal immigrants vote for Democrats. And so what we should do is we should bus in a bunch of illegal immigrants into Wisconsin and have them vote.

28:00And it's idiotic Democratic operative. It's like, that's a brilliant idea. Let's do that. And the guy even says, he's like, are you, have you worked with Bob Kramer at Democracy Partners. Maybe he'd be interested in something like this. Like, oh, my God. So Keith's got this footage. Then he sends a fake intern into this firm, Democracy Partners. And the intern goes in with, you know, filming everything. And the firm does basically no, doesn't ask for ID, does no due diligence. The young woman works there for eight days and then abruptly quits. And they publish this video that includes some footage from inside the office, but mostly it's relying on footage from the bar.

28:49Immediately, the firm gets, his contracts are cut from, AFSCME was a major client of theirs. They lose that. It's a giant mess for this firm. Yeah. Because in the footage, they're also making kind of grandiose claims like, oh yeah we're working very closely with hillary and um oh the other thing the guy says in the bar uh he and another guy they say that like oh they're paying people homeless people to go to trump rallies and instigate violence there like you know say you know just get under the skin of trump people wear a planned parenthood shirt yeah do anything you can to like get them to then be aggressive towards you and then film that chicanery yeah yeah um and so then then the firm suffers all of these consequences.

29:36They sue. They win at the district court level. A jury finds in their favor and says that because there was fraud and deception involved in the way they got it, that the First Amendment doesn't apply. Luckily for O 'Keefe, his trial attorney made a motion right before it went to the jury saying this as a matter of law, as a matter of First Amendment, that should be thrown out. And the judge said, we're going to put that aside, put that motion aside. We're going to let the jury decide. The jury fines four democracy partners. And first, it's like$120 ,000 to pay them back for the contracts. But then buried underneath that, if they can prove this kind of tortious fraud, that the intern had violated her fiduciary duty that she had to the organization, then they would then o 'keefe would owe legal fees as well which um from from when i would i talked to o 'keefe and his lawyer yesterday that would have been well over a million dollars if they would have gotten gotten hit with that and so the appeals court um which is the the three judges were two democrats and one republican all three of them basically sided with o 'keefe there was one dissent, but it was a dissent in small part.

31:02They would have just narrowed the amount of money. They would have, it was mostly a victory for O 'Keefe from all three. So I don't think they're going to appeal because if you get two Democrats or mostly siding with them, like you're not going to do much better either with the whole appeals court or with the Supreme Court. But what they effectively said is that you can lie to somebody in a bar, say that you're a Democratic operative, say whatever you want in a bar. First Amendment allows you to lie. And if you then trick that person into saying incriminating things in public, then that's fair game.

31:41And you can publish that, and that's First Amendment protected activity. The opinion is much more confusing and unclear about whether or not going into the office is kosher. It leaves it kind of open. The way I read it was that you can't... Because it's possibly trespassing at that point? Well, there's a higher level of fraud. The fraud is going on for longer. They never made her sign an NDA. They said they would, but then they never gave it to her. That was a mistake on their part. So they made a lot of mistakes. Had they not made, they would have been more protected. And so basically you got to make your interns sign contracts and like.

32:26Yeah. And then if you do that, then it's going to be harder for them to get away with. That makes sense. But but they so they leave it a little bit gray, but they completely in my reading protect the right to go into a bar. now mark zed zaid or zed democratic lawyer is still suing o 'keefe on behalf of some of the people who went on dates with his operatives and he's he said and i asked him on online about this he said no we're still going forward because this says you can't commit fraud you can't you know deceptively um you know obtain this information that's not the that's not what it says so i'm not a lawyer, he is, but my reading of his ruling here is that those cases are screwed too.

33:18We'll find out. But this seems to set the precedent that the dates are fine. And just to back up, when you were explaining this, I think part of the important point is about precedent and how legally judges, attorneys could read into deceptive practices what may be perfectly acceptable journalistic behavior. And I don't think that a lot of what James O 'Keefe does is acceptable from like ethical practices of journalism. Legally, though, we have to have what we do be covered as broadly as humanly possible, because when people try to shut down free speech, they rely on narrowing those definitions of things like what's deceptive.

34:06So you could easily find a journalist and in the art or in the act of totally normal journalistic information gathering say, well, that was deceptive. So that's why you have to have a very broad protection for what constitutes as journalism, because it's then weaponized if it's not broad enough. And so while I think, you know, journalists hold themselves to the standard that you generally tell people you're trying to get information out of that you're a journalist, you identify yourself as a journalist. If you're in a crowd, if you're at a protest, you're at a riot, unless your life is in danger, you identify yourself as a journalist even when it's hard.

34:43That's part of the standards that you hold yourself to formally at news organizations. Those aren't legal standards. Right. Exactly. But you could see how you say you're working on a story about one thing and someone says, well, it's deceptive because you didn't narrowly describe exactly what the story was about. Which is what people do all the time. All the time. It's going to be a great story for you. And if you're smart as a person in government, you know that's what happens. And nobody's forcing you to say anything. Nobody was forcing them to say absolutely anything. They said it of their own volition.

35:18And to Mark Zaid's point, here's on page 19 of the ruling. This is why I think that his reading of this is incorrect. So the ruling says it's basically saying that it's going to allow the bar footage because, quote, there was no trespass. All of the Fovall conversations were held in public locations. There was no theft of confidential business information. Everything that Fovall said in these conversations, he said willingly. And although the defendants lured Fovall into these meetings based on an elaborate web of lies, Bob Kramer does not claim that conduct amounted to fraud. And so in other words, in this case, they were able to lie to get Fowall to come to the meeting and to spill the beans on, or not beans, like made up beans.

36:13He doesn't have any project of bringing people into Wisconsin, but he's open to it. Now they say separately though, applying this principle, we agree with Bob Kramer that the First Amendment does not protect the video segments that O 'Keefe procured through Moss's fraud. Moss is the intern, the fake intern. Namely, the portions of the video that show Moss inside Democracy Partners speaking with Kramer and his staff. Moss obtained that footage by subterfuge and the jury found that her conduct amounted to fraud. So they're relying on the jury who said that it was fraudulent the way that they got the intern into the office, but it was not fraudulent the way that they got him into the bar.

37:04And just because you lie doesn't mean you're committing fraud. These are very different things. And then their footnote is, they say, it is generally true that for a lie to constitute fraud, a tangible harm must follow. It is undisputed that Maz's lies at least partly contributed to creamer's harm uh in other words AFSCME had said one of the reasons they cut ties with the firm was because of their embarrassing lack of vetting of their intern and so they're saying like it wasn't just the story itself because the story itself is protected first amendment activity it was this embarrassing fact that wait a minute so you're just letting any random O 'Keefe plant come into your firm without checking ID, and then you're just sending them to DNC headquarters.

37:57To them, they were like, that is a problem for us, and so we're cutting ties. Right. And that is a result of her fraud. So anyways, it gets a little complicated, but that's where they seem to be drawing the line. Yeah, this is a really interesting case, and it's not getting a lot of attention, but it's worth, I think, appreciating the broadening of what constitutes as deceptive because that can be weaponized. Speaking of, by the way, speaking of undercover operations, we can put E3 on the screen. This is, you may have heard like NBC News and other places had these big headlines. NBC's was FBI thwarts an alleged ISIS inspired plot to bomb New York Capitol.

38:39This 35-year-old woman named Jessica Bowie in New York converted to Islam, I think they say five years ago. And if you read the federal complaint, you find out—and actually, if you read the NBC News story, you have to get almost to the bottom of the article to find this out. Quote, one of the confidential sources working for the FBI gave Bowie$200 to purchase bomb-making materials, which she is alleged to have done August 5th at a Home Depot. She then gave the items to the confidential sources when she met with them in the days that followed. So between August 5th and I think the arrest on August 19th, this is all really recent, this person who they were encouraging—I mean, we'll see more in this trial because I imagine more of what the confidential human sources were saying came out.

39:27I went through the complaint. We just put it up on the screen. You can see some of this is like they're not putting even everything in the complaint, obviously. But you can see that the confidential human sources are egging this person along. They literally gave the full list of necessary ingredients to create a bomb and started explaining how to do it. went—gave$200 to go to this Home Depot. And then for over a week between August 5th and the ultimate arrest, this person who absolutely, like, appears to have—they appear to have the goods pledged support to ISIS has all this information on how to make a bomb.

40:09They've gone through the plans about the Albany state—the state capitol in Albany. They've gone through all of this, and this person isn't arrested after they gave them—they apparently took the bomb-making materials. But there's a week where you've given this person the necessary information for how to make a bomb for arrest. I mean, it's just in all the headlines say things like FBI thwarts alleged ISIS inspired plot to bomb New York Capitol, which again should read FBI thwarts an alleged FBI inspired plot to bomb New York Capitol. So I didn't want to let that one go without mentioning a classic of the genre, a classic of the genre.

40:43Yes, indeed. FBI is on it. We've got Gabriel Zuckman standing by, Ryan? We do indeed. Let's get to it. Hey, this is Kevin. This is Joe. And Nick Jonas from Hey Jonas. This episode of Hey Jonas is brought to you by the all-new drink lineup at McDonald's. I don't have to tell you that there are already so many great drink options at McDonald's, but the new drink lineup, I mean, it takes things to another level. They've got delicious caffeinated refreshers like the strawberry watermelon refresher, crafted sodas like the Spriteberry Blast and now the all new Red Bull Dragonberry Energizer. We're talking about a total game changer.

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41:54Hey, this is Kevin. This is Joe. And this is Nick from Hey Jonas. You know, I recently learned that every 36 minutes, another child in the U.S. is diagnosed with cancer. Think about that for a second. Some of the bravest warriors you'll ever meet aren't professional athletes or superheroes. They're kids in this fight. And every day, these young warriors face challenges most adults couldn't imagine. Yet they continue to show up with incredible courage, determination, and hope. That's why we're proud to support Hyundai Hope on Wheels. For the past 28 years, we support from Hyundai, their dealers, and every new Hyundai sold.

42:25Hope on Wheels has contributed over$300 million to childhood cancer research, helping save more than 40 ,000 kids. But we're not done yet. We need your help. Together, let's bring every warrior home. Learn more at HyundaiUSA.com slash Hope on Wheels or ask about Hope on Wheels at your local Hyundai dealer.

43:06or through your travel advisor.

43:13Recently on the All In podcast, Chamath Palpatia said he'd identified who the villains are in this story, and it's him and his buddies. Let's roll this. Silicon Valley has completely lost what made it great. It was a place for weirdos, for people at the fringes, for people that really were idealistic. And it has become something that's far from that now. It is the equivalent of what Harvard used to be. It's a credentialing place. It's a place you come to to say, oh, I came to Silicon Valley. I worked at a startup. I got into YC. When we came, we used to aspire to meet the Bill Campbells of the world, Mike Moritzes, John Doors.

44:01Those folks are gone. We used to aspire to work for Steve Jobs. He's not here. And in that breach, all we have done is focused on making money in every single way that we can, hand over fist. And I think, again, there's nothing wrong with that, except now is a point where we need to do a better job of acknowledging it and trying to do a little bit better. And every time we don't, and we're given a chance to be better and we're not, the hatred builds. The animus, as you said, David, builds. And that's what we're seeing now. We're extremely excited to bring on our next guest, perhaps the foremost scholar on wealth inequality, who doubles as an advocate for doing away with the very thing he studies.

44:44In France, he's both vilified and celebrated as the father of what's known as the Zuckman tax, a 2 % tax that applies to people worth more than 100 million euros. Now, before Professor Gabriel Zuckman joins us, let's do a quick 101 of the problem. Now, we all know that we're living in an era where the very rich are getting richer at a much faster pace than at any time, certainly in the last hundred years. We don't even need charts or graphs for that. We can all just look around. I've been reporting on this trend now since the beginning of my journalism career, which began in the run-up to the great financial crisis.

45:21What I've come to realize, though, is that we in the media have not done a good enough job of explaining why this wealth inequality that's getting so out of whack matters. We haven't explained how it directly comes out of your pocket. We've talked about how it's wrong for the rich to have more power than everybody else and to be able to buy elections. But that misses the more immediate problem that the super rich are getting rich by making you actively poorer. Now, here's how to understand that. In the 1970s and 1980s, as the rich were pushing to massively lower taxes on themselves, deregulate the economy, and make it legal to move capital easily across borders in search of the cheapest labor, they relied on a few metaphors like trickle-down economics and a rising tide lifts all boats.

46:11But after the rich got their wins, a not surprising thing happened. The tide stopped lifting. Since 2000, Western economies have grown at an average of 1 to 2 percent. That's it. The amount of the economy owned by the super rich, meanwhile, has grown many, many times more than that. Gabriel Zuckman has dedicated his life to studying that phenomenon. So in a moment, we can get some detail from him on what we know about the scale of this incredible divergence. But to suffice it to say, it's been absolutely huge. So think about it. if their wealth has gotten many times bigger over the past 25 years and wealth overall has barely grown, where did their wealth come from?

46:58It came from you, of course. Now, to understand this better, think about our economy as holding three different kinds of wealth. Public wealth, normal people's wealth, and the wealth of the super rich. Public wealth is some of the obvious things like schools or hospitals or apartments or land owned directly by the public. When the public owns the schools and the buildings themselves, it's much cheaper for members of the public to go there. Wealth owned by normal people is obvious too. We're talking about home ownership, retirement assets, pensions, cars, that sort of thing. Every year that the wealth of the super rich grows faster than everybody else's, they have to do something with that extra money that they now have.

47:46Because they're too rich to be able to spend it buying new stuff, they buy assets, they buy houses, which drives up the cost of housing, they buy stocks, which drives up the price of the stock market, and they buy companies directly, as we've seen with the rise of the private equity industry. Then they loot those companies, sell off the parts, have the company filed for bankruptcy and take the money in the pension fund to pay themselves off for their trouble. A normal company that once made, say, paper products or sold toys and supported an economy working for normal people in a small town is wiped out and the money flows to the top.

48:23Now the people at the top have even more money and now they have to buy more assets. You see how this goes. Now what you might notice, though, is that things haven't gotten as bad as quickly as you might think. People haven't gone immediately from middle class to abject poverty. That's because while the very rich have been buying up everybody's assets, leaving everyone owning nothing, they've swapped that out for loans. In the run-up to the financial crisis, the super rich loaded up American homeowners with enormous amounts of debt. When they could no longer pay that debt, the government bailed out the super rich but took the homes from tens of millions of people.

49:05During COVID, we shut the economy down, borrowed a historic amount of money, and then effectively gave that money to the top 0.1%, minting more new billionaires than at any time in history. Trump's new AI policy has directed hundreds of billions in borrowed money to the AI industry, money that is again flowing straight to the top. The money we are borrowing increasingly comes from the very rich who are now charging even higher interest rates. We're now paying more in interest on our debt than we are on the Pentagon month over month. That means that every month we are transferring billions of dollars from the public directly to the 1 % who are then using those billions to buy more and more assets, pricing you out of being able to own anything.

49:55So now we have sold off most of the public assets, and the assets held by normal people are dwindling. What we're left with is the government heavily in debt, normal people drowning in debt too, and all of us owing that money to the super rich. Now is the time it's getting dangerous. The rich don't need to be as gentle with us as they did before, because we don't really have anything anymore that they want, or we don't have much at least. There's a YouTube channel in the UK that's done a terrific job of mainstreaming all of these ideas, and it's called Gary's Economics. And the homework assignment for people watching Breaking Points now is to switch over to Gary's Economics.

50:34Go find a couple of the videos that make sense to you. Watch those and watch several until you fully grasp what's at stake here. He does a very good job of putting the choices we face quite simply. If we want to fund our growing deficits, the money has to come from somewhere. Either we have to raise taxes on the super rich, raise taxes on the middle class and the upper middle class, or we have to all get poorer by slashing the government, which would raise your cost of education, housing, health care, and so on. Now, I know what some of you might be thinking. No, there's a fourth option. We can end the stupid wars, stop funding Israel, and stop wasting money on stupid things.

51:18Great, yes. If you watch this program regularly, you know both Emily and I will immediately agree with doing all of that. End the wars, cut the waste, jail the fraudsters. But even if you cut the entire Pentagon and lock up every fake Medicaid ripoff in Miami, That still won't do it because the gap is too wide and you haven't fixed the problem we identified at the top. The primary problem is that the speed with which the rich are gobbling up resources is faster than anything else. And it is swallowing up everything. We have to reverse that trend. The rich have to start giving back some of their wealth to normal people rather than the other way around.

52:03the only way to do this is to tax their wealth.

52:33And now the all new Red Bull Dragonberry Energizer. We're talking about a total game changer. It's made with Red Bull. It's mixed with blue raspberry flavor and topped with freeze-dried dragon fruit. Wow. McDonald's has given us a refreshing new boost for your day. And the Red Bull Dragonberry Energizer is arriving just as you're heading back to the dorms for the fall semester. It's got a boost of energy and a kick of flavor when you need it the most. You know, powering through those lectures and studying sessions, you're going to need it. Kicking the afternoon slump or rallying for the weekend.

53:07Try one of the many new drinks like the Red Bull Dragonberry Energizer, also available with Red Bull Zero, now at McDonald's. Hey, this is Kevin. This is Joe. And this is Nick from Hey Jonas. You know, I recently learned that every 36 minutes, another child in the U.S. is diagnosed with cancer. Think about that for a second. Some of the bravest warriors you'll ever meet aren't professional athletes or superheroes. They're kids in this fight. And every day, these young warriors face challenges most adults couldn't imagine. Yet they continue to show up with incredible courage, determination, and hope.

53:36That's why we're proud to support Hyundai Hope on Wheels. For the past 28 years, we support from Hyundai, their dealers, and every new Hyundai sold. Hope on Wheels has contributed over$300 million to childhood cancer research, helping save more than 40 ,000 kids. But we're not done yet. We need your help. Together, let's bring every warrior home. Learn more at HyundaiUSA.com slash Hope on Wheels or ask about Hope on Wheels at your local Hyundai dealer.

54:25or through your travel advisor.

54:34So joining us all to discuss this is Professor Zuckman himself. Professor Graham Zuckman, thank you so much for being here. Thanks for having me. So I wanted to start by getting your reaction to Chamath's assessment there, that Silicon Valley has basically kind of been destroyed by the pursuit of greed. Indeed, as you've been involved in so many of the debates, both in Europe and the United States, over how to respond to this kind of yawning wealth inequality, what are you noticing change? Yeah, I think I share that assessment. And indeed, you see it today with the reaction of most Silicon Valley billionaires to Proposition 40, the California billionaire tax that's going to be on the ballot in California in November, where they are spending hundreds of millions of dollars to try to defeat what would be a very modest one-time tax of 5 % on the wealth of California billionaires.

55:35millionaires, frankly, a rounding error in their wealth, which has grown by more than 200 percent just over the last couple of years. I think this is really, indeed, illustrative of how Silicon Valley has changed over the last couple of decades, let's say. And one of the big criticisms of the wealth tax that obviously you're familiar with, because you've received this criticism many times, I'm reading from a Forbes contributor here who specifically is writing about you and uses the example of the U.K. to say the U.K. is an example where the recent policies of the Tories and labor have allegedly scared all the billionaires off to either Milan or Dubai, which is something that the Chamas of the world say would certainly happen in California.

56:19It's been leveled at Zoram Amdani in New York City. What's your response to the argument that everyone's just going to leave? first that the empirical evidence is not consistent with that view. So, of course, if you tag the super rich, some of them are going to try to relocate to some low tax states. But the academic literature is very clear in finding that those relocation responses are quite small. And number two, and that's what's more important in my view, is that this migration of high net worth individuals, it's not a law of nature like gravity. It's a policy choice. So you can structure taxes in such a way that there's not going to be an opportunity, a possibility to avoid the tax by moving to some low tax state.

57:18So for instance, in the case of the California billionaire tax, It's a one-time tax that would be owed by billionaires who lived in California, who were residents of California as of January 1st of 2026. So it's just too late to move. You cannot avoid the billionaire tax if it passes in November by relocating to another state. Now, if you think about wealth tax at a national level, if the U.S. had a federal wealth tax, The U.S. taxes its citizens based on their citizenship, meaning if you move to another country, you still have to pay federal taxes as if you were still living in the U.S. And I think this is something that many European countries should emulate, perhaps not exactly the U.S.

58:05system, perhaps some variation over it. They could say, for instance, if you've lived for a long time in the U.K. and now you move to Dubai, then you have to keep paying taxes in the U.K. for 10 or 20 years. We can debate the details. But what is important is the idea that this out-migration, it's a policy choice. It's not a law of nature. And you recently published a book, We Need to Tax Billionaires. And in it, you address one of the objections that people have to wealth tax, which is that it's just too complicated. And the kind of wealth is just a different beast than income. Income is obvious.

58:45A company pays you a wage, but if your wage is$100 and the tax is$15, you owe$15 of that$100. Quite simple. Whereas wealth exists largely in assets, whether they're equities, which are rising in value and haven't been sold, or paintings. You bought a Hunter Biden painting for$100 ,000, and now it's worth a million dollars. So add that to your net wealth. And they say it's too complicated for us to do that. Now, Representative Ro Khanna, who represents Silicon Valley, has recently presented a solution to some of the billionaires in a back and forth on Twitter. He said, well, we can value your wealth.

59:28Let's say it comes to a billion dollars. We can make the government can make you a non recourse loan, which you can use to pay the tax. If your wealth then declines, you don't owe that money back with the government just eats it. But the government then takes a 2 % share, takes 2 % of the shares, and you could securitize them or you could create some other product, financial product. So as you've been involved in this for so long, and you were fighting for the Zucman tax, as they call it in France, what are the mechanisms that you've come up with or that policymakers have come up with to overcome this objection that this is all just too complicated?

1:00:12You know, these arguments sound very similar to the arguments that the opponents of the progressive income tax were making more than a century ago, at the end of the 19th century, beginning of the 20th century, when the U.S., other countries at roughly the same time, created their income tax. And one of the main arguments of the opponents was to say that income is just too complicated to measure and to define what counts as revenue, what counts as an allowed expense that you can deduct from your income. And look, we know the end of that story. We created the income tax. It's a big success overall.

1:01:03it has some limitations, especially for the super rich, which is why we need on top of the income tax, a wealth tax for the super rich. But by and large, it has worked pretty well. And the reason for that is that fundamentally, when you create a tax, you always create much more than a tax. You create accounting standards, you create norms, you create an administration to enforce the tax, so that those difficulties, which in some cases exist, you know, I don't want to minimize that, but precisely by creating the tax, you create tools and solutions to those problems. So for instance, how do you value paintings?

1:01:42You might say, well, it's very complicated. No, it's not. If you have a very valuable painting, if you have a Picasso, it has an insurance value. And so you can use those insurance values. The tax administration could ask insurers to report those values to the tax authority. So there are lots of practical solutions. But to make progress, we need to start somewhere. In one state, hopefully it will be California in November, to do it first and to demonstrate by example that those problems, they have solutions. One of the concerns coming from the right that I would have is, does it create a worse, more crony system if you have—let me just ask for your response to that.

1:02:34Is there a concern? Because my preference would be something like a flat tax, close loopholes, raise revenue that way. But obviously there are problems with that approach, too. Nothing's perfect. On the other hand, if we do a one-time tax like this, it does seem like the system will still— really wealthy people will still find ways to game the system. So how are you thinking about the possibilities of further cronyism or worsening, exacerbating that problem that already obviously exists? I think that, number one, in the ideal tax system, you have an income tax, You have an inheritance or estate tax for meritocratic reasons.

1:03:15And you also have a wealth tax for the super rich, just because for them, the income tax is not enough. When you're extremely wealthy, it's just very easy to organize your wealth such that this wealth will generate no or very little taxable income. And that's how you end up in situations where people like Elon Musk or Jeff Bezos or Larry Page, in some years, they report no or barely any taxable income and they don't pay income tax. And this problem has been long understood, including by economists in the U.S. One interesting element is, for instance, in the late 1940s, there was a commission by U.S.

1:03:59economists to advise the new Japanese government after World War II on how to build their tax system for a new democracy starting from ground zero after World War II. How should the tax system look like? And this is the troop commission with people like William Vickrey, who went on to win the Nobel Prize in economics. And what they said is, they said, look, there should be a highly progressive income tax, just like in the U.S. of the time with top marginal income tax rate of 80, 90 percent. But also on top of this, there has to be a tax based on wealth, just because from super rich, wealth is a much better indicator of their ability to pay taxes than income, which is very easy to manipulate.

1:04:43So that's why you need a wealth tax. and California billionaire tax, it's a one-time tax. So don't get me wrong, that's not enough. No one thinks that you can, no one believes that you can fix any structural problem just with a one-time tax. But the reason it's so important is because it would be the first ever tax on billionaire wealth enacted anywhere in the world. And it could have a massive ripple effect just by demonstrating that, look, the billionaires, we don't have to accept that they are bound to live in their own parallel society free of tax, which is the current situation. We can actually address that issue very completely with the wealth tax.

1:05:36So one of the other objections that I've heard, and this is, I don't know if this is from the left or the right, One would be that a wealth tax that ends up forcing the 0.1 % to sell assets to then pay this tax ends up then pushing down asset values. And so the government ends up not really actually getting anything. All they do is kind of reduce the amount of paper wealth that exists in the world. It just ends up being some paperwork. And a parallel argument is that, OK, even if they do end up extracting some of that wealth, it ends up being inflationary because the super rich have a maximum amount of wealth that they can actually consume at any given moment.

1:06:26And if you take some of that and spread it around the middle class, they're going to actually consume it, which then drives up prices and doesn't and has a similar effect of just kind of moving paper around. What's the reaction? What's the response to those criticisms? On the second point, you know, I think, look, the revenue from the wealth tax, in the case of California, 90 percent of the revenue would go to health care, would go to making sure that people don't lose access to Medicaid, which will otherwise happen because of the cuts that were introduced by the One Big Beautiful Bill Act. and there would not be an inflationary effect, but quite the opposite.

1:07:14If those cuts go as planned, what's going to happen is that not only millions of people are going to lose their health insurance, but also premiums for private health insurance are likely to increase. And so if you get$100 billion or so So to protect Medicaid, you would prevent that increase in private health insurance premiums. That's California, but what about on a more... So that's California. So more broadly, so on the first point, and more broadly beyond California, the point is that the government, of course, is not going to redistribute the revenues from the wealth tax lump sum to consumers across the board.

1:08:01is going to use the money to fund what is the true engine of economic growth, which is access to education, high-quality education for all, access to health care, public infrastructure, which if you take a broad view of history, and I think it's one of the main lessons, frankly, of economic history, this is these investments, public investments in those things, education, health, infrastructure, that have been the core and drain of modern economic growth, that has allowed productivity to be multiplied by a factor of 10 over the last century. So it's not going to be inflationary. It's just going to allow us collectively to continue the rise in well-being and in productivity and prosperity that has characterized the past century writ large.

1:08:58Now, on the first issue of the effect on asset prices, I think this is a common objection, but I think there's a misunderstanding because what determines asset prices fundamentally is the future income streams that are going to be generated by those assets, right? So what fundamentally determines the stock market value of a company is whether people believe that this company is going to make enough profit or not in the future. This has nothing to do with how much tax the shareholders of this company are going to have to pay. And so if some billionaires must sell some shares to pay the tax, you know, that's fine.

1:09:43Other people are going to buy. And because the tax itself doesn't affect the profitability perspectives of the underlying company, it has no reason to affect its stock market value.

1:10:00Any other objections? What else we got? I don't think we can solve any other objections. It's so interesting. And just really appreciate you walking us through it. Yeah. Last thing for me. What did you learn from the fight in France that could be applied to the UK? The California case is interesting. I don't know how closely you've followed the details of this because the funding is supposed to go to this Medicaid situation in California. And it was pushed by a kind of local SEIU, not even the statewide SEIU, which is the nurses union. There's a lot of intramural fighting among the California left.

1:10:39The teachers are in particular are very angry that the money is not going to education. And without the support of the teachers, the measure looks like it's going to be in trouble. You know, there's a good chance that it ends up losing, not because the public is against the concept of it, but because there's so much infighting over what to do with the revenue that comes from it. Meanwhile, I'm curious. And also, I think it needs to be national. Doing it state by state just doesn't really make a whole lot of sense. But what did you learn in France from the failed fight there? What is the prospect for it there and elsewhere going forward in the UK or anywhere else?

1:11:22Oh, I think in France, it's going to come back pretty soon in the discussion. So in France, the National Assembly in February last year adopted a 2 % minimum tax on wealth for people with more than 100 million euros, roughly$100 million in net wealth, which was the proposal that I had developed for the G20 the year before and that I summarized in my book, We Need to Tax Billionaires. And it was blocked by the very conservative Senate. But what was really striking is that there have been many polls conducted in France that show an enormous popular support for this measure. So we're talking about 80 to 90 percent of the population in favor of such a proposal.

1:12:10These are numbers that you don't see anywhere for any other kind of social or economic concrete policy or reform. And so there's just a huge disconnect between the popular demand and what elected representatives are deciding at the moment. And I don't think it's going to last forever. I think it will end up passing. And whether it's going to take a few months, a few years, it's difficult to know. There are lots of parallels, again, with the income tax, which was a big fight at the beginning of the 20th century. In many countries, it took years between the first votes in parliament and the eventual enactment of progressive income tax.

1:12:50But, you know, in the end, it succeeded. And this brings me to California and why I'm much more optimistic and enthusiastic, I think, than you on Prop 40 and the California Billionaire Tax. because even though it's just in one state, you're right, I think it would pave the way eventually for a national, a federal wealth tax. And there are good reasons to believe so for at least two reasons. Number one is that this is how it has played out historically with the income tax, which first started at the state level. Wisconsin, famously in 1911, was the first state to create a progressive income tax.

1:13:35And it greatly facilitated the creation of the federal income tax in 1913. And second is that California is often at the vanguard of broader national policy changes. In 1978, famously, California passed Prop 13, which capped property prices, property taxes, sorry, which was kind of a harbinger of the Reagan revolution that would triumph a few years later at the national level. And so I think that for all people who genuinely want to have a federal aggressive wealth tax in the U.S. at a national level, it's very important that they support the California billionaire tax because, frankly, it's our best shot at starting the process, at launching the process that eventually will deliver this federal wealth tax.

1:14:27Well, yeah, couldn't agree more with that at least. and you're targeting Emily's heart by bringing up Wisconsin there. So, you know, they did lead the way on the income tax. Very progressive history. And it is interesting that a lot of the arguments made at the time against the progressive income tax are now being wielded again. Which I still agree with. Of course, of course. Professor Zuckman, thank you so much for joining us. Thanks for having me. Thank you. All right, that'll do it for today. Emily, you sold? You know, those segments are sometimes hard for me because I get the calculations.

1:15:04Like as you were laying out, it's true, get rid of the Pentagon, all of that, it still doesn't do enough. There's a moral question of taxation, though, that I just don't agree with the left on. And that's why I like flat tax. I'm genuinely not in favor of progressive income taxation. But on top of all of that, you said it's funny because you were like, we have to start dealing with the top. I agree we also have to start dealing with the top. But then we have some problems in the programs themselves, too, because most of the spending is Medicare, health, Social Security. We're cut. I'll have all week to convince you.

1:15:36We're cut. You're here until Wednesday. Is that right? Sagar's going to jump in on Wednesday. Okay. But, yeah. No, I thought it was so – I mean, he is one of the leaders of this entire thing. And your point about state versus national I think is really important, too, because in a place like America, you could just – like, South Dakota is basically its own Cayman Islands right now. Yes, indeed. You could just go somewhere. Anyway. All right. Well, we will both be here tomorrow and continue this discussion. We will. We've got plenty to talk about because of Bessence Presser and Canada and all of that.

1:16:04So there'll be plenty of economic stuff to go on tomorrow. We're going to jump into the AMA right now, which you can get breakingpoints.com. That's how you get access to the AMA's. We're doing free month right now. And if the show gets to you a little late today, it was the first day of school. First day of school. So we're a little bit late. First day of DCPS. Get the kids out. Yeah. Yeah, you got to get the picture, the first day of school picture. Yeah, you got to do it. Sorry. Okay, everyone.

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