From “What Next”: How “Tax the Rich” Went Mainstream

0:00Stephanie Ruhle: Thinking long-term about your investment career? Hear stories, advice, and lessons from seasoned leaders at Capital Group on the Capital Ideas Podcast. Subscribe and start listening today. Published by Capital Client Group, Inc. Hey guys, it's Mark. Our team is taking a breather over the holiday weekend here in the U.S., but we wanted to share a podcast we think you're going to love. What Next is the daily news podcast over at Slate.com. It features some of the biggest news stories each week, and it's got that tongue-in-cheek introspective analysis Slate's known for. The episode you're about to hear is all about wealth taxes, you know, the ones in New York and California.

0:40As some billionaires threaten to jump ship, residents are left wondering, what next? If you like what you hear and you want to hear more, follow What Next wherever you listen. You can find a link in the show notes. And now I'm going to hand it over to host Mary Harris. Enjoy. Enjoy.

1:02Earlier this week, New York's mayor, Zoran Mamdani, released this video where he is standing right on top of City Hall and taking what amounts to a victory lap. New York, it's executive budget season. I'm proud to announce that our city's budget is fully balanced. He rattles off a bunch of numbers, as if balancing the city's budget was as simple as racking up a high score in a video game. And then he gets to his signature achievement, taxing the rich. Thanks to Governor Hochul, State Senate Majority Leader Andrea Stewart-Cousins, Assembly Speaker Carl Hastie, and months of organizing from New Yorkers, we tax the rich.

1:42That tax alone will raise half a billion dollars per year. And that's not all.

1:50What Mamdani is not saying here is that his new tax is nowhere close to what he campaigned on. He wanted to raise income taxes on millionaires. This tax is a lot more limited. It's a higher property tax for people with second homes, sometimes known as pied-a-terres. And it only applies to places that are worth$5 million or more. Of course, this has not stopped the very wealthy from getting mad about this tax. And in circumstances like this, I call up my friend Stephanie Rule. So I wanted to call you up. Because you wanted to hang out and talk? Steph's got her own show at MS Now, where she's also a senior business analyst.

2:35She used to work in finance. She knows a few rich New Yorkers. And she knows how they are feeling right now. They are very upset. And I'm not defending it. I'm not complimenting it. They are very upset. Steph was actually just at this conference in Beverly Hills for the Milken Institute. It's the kind of place where rich folks talk to rich folks and try to get richer. And at places like this, Steph says, there's a little anxiety. They're feeling the eat the rich sentiment. And if you look at sort of the super rich in New York City, they would make the argument to you. The reason New York is the arts center that it is.

3:15This is the most philanthropic city in America. Like this is the one city where wealthy people don't move out to the suburbs. They stay in the city and they give back to the city. Our philanthropy is extraordinary. They would argue that like their philanthropy excuses their wealth or people don't appreciate that. So even more than saying, how could these rich people not pay more taxes? The question I don't think is that. The question is to all of the lawmakers who created all of the loopholes for the super rich to swan dive through. So for every lawmaker out there that created a loophole because they got a$25 ,000 donation from a super rich person, that lawmaker needs to take a long look in the mirror because they're the reason that the divide is only growing.

4:04Steph's got a point here. But with the Trump administration dead set against raising taxes, this self-reflection has fallen to local electeds. And it is not just Zoron. Lawmakers in Maine and Washington state have gotten on board with taxing the rich, too. In the fall, voters in California are going to have the chance to weigh in on a one-time tax for all the state's billionaires. In preparation, folks like Google founder Sergey Brin have already packed up their things. It's a wealth tax. And we're going to see, I just think in the case of California, and again, I'm not saying don't tax them more, but I don't think that the way they have this structured, I don't think it's going to get them the result that they're looking for.

4:50So in California, it's this one-time tax. In New York, we're talking about a tax on second homes. It feels like that's just those are very different prospects to me. Yes. And I actually think that what they want to do in New York could be absorbed and people could say, like, don't like it, but OK.

5:12You're going to think I'm naive saying this, but I'm going to give it a shot. You're going to think I'm so naive. I wish there was a way to rationally have this conversation because the economic and cultural divide is getting so much worse and we cannot have that toxicity. We have to address it. Today on the show, eat the rich politics are ascendant. So where's that going to take us? I'm Mary Harris. You're listening to What Next. Stick around.

5:58can i ask you to like put on your reporter hat for me and just tell me what happened on april 15th in new york city because i feel like in some ways this whole conversation about taxing the rich and the anxiety around it its origin story is april 15th new york city zaron mabdadi releases is a video where he's basically mocking Ken Griffin in front of his building. Well, today we're taxing. I'm thrilled to announce we've secured a pied-a-terre tax, the first in New York's history. This is an annual fee on luxury properties worth more than $5 million whose owners do not live full-time in the city.

6:34Like for this penthouse, which hedge fund CEO Ken Griffin bought for$238 million. Ken Griffin founded a massively successful hedge fund in Chicago that's a broker dealer now, Citadel. He's a hugely successful guy. He's a monster philanthropist. He was angry with Chicago. He was angry with the liberal politics or safety issues in Chicago. And he picked up and he moved to Florida and he has made giant investments in Miami. He believes Miami is the new New York. He's done a ton there. He is a big Republican donor. At the same time, he's been one of the only business people or Wall Street people I can point to in the last year who has spoken out against Trump when it comes to the tariffs and insisting that the Fed should be independent.

7:23And listen, Ken Griffin is building a huge development here. He hires a ton of people here. And and things are so toxic and so divided. It only hurts everybody when we give one side the opportunity to play the victim where I'm like, you could make the argument. Right. Mamdani won in New York. New Yorkers overwhelmingly said this city doesn't work for me. I'm a young person. I'm not afford to live and exist in this city. And I think there's a constructive argument to be made. My worry, and you're going to be like, oh, Stephanie, don't you boohoo for the rich. But my worry is I want their philanthropic dollars, right?

8:03Like I selfishly want all of these super wealthy people in New York to keep on giving. I want them to give to our charter schools. I want them to give to the arts. And what I don't want to do is give them an excuse to say, well, I'm hated here. I'm picking up and leaving or or I'm going to build a moat around my castle and I'm going to stop giving. For my listeners who don't know Ken Griffin, like we should just explain, he has this 24 ,000 square foot Manhattan penthouse. He paid two hundred thirty eight million dollars for it. So if you are, you know, living a few blocks away in a studio apartment, you look at that and you're like, seriously, what the F is happening here?

8:44Yes. But you could also make the argument. He bought a 238 million dollar apartment. He has a zillion employees here. He's going to have more employees here. He has huge he has a huge construction project that's going to take place over the next few years here. Like all of my point to you is all of these things can be true at the same time. But this tax, it's theoretically going to bring in 500 million dollars worth of revenue because any second home over five million dollars will be subject to this tax. Kathy Hochul behind it. But in the video, Zoran Mamdani is very cheeky. He like knocks on the camera glass and he's like, we're taxing the rich.

9:23Ding dong. Here's where this guy lives. And as Ken Griffin pointed out, his home in Manhattan is very close to where the United CEO was killed. And I think that that lives large. Yes. In a lot of wealthy people's minds. And I wonder if you hear that When you're speaking to folks with a lot of resources, is that part of what's happening in their calculus? They're like legitimately scared. Yes. Yeah. You hear it, you feel it, you see it. And again, I'm not saying let's cry for them, but that sentiment is real. Remember, after the UnitedHealthcare CEO was murdered, you couldn't even find private security.

10:07These companies were rich people were companies were scrambling to hire private security for their executives. And there wasn't enough to go around. And I'm saying we need to do something collectively to lower the temperature because we shouldn't be at a place where anyone is fearing that they're going to get gunned down. Ever. And we shouldn't be in a place where people can't afford to live. And I'm saying these two extremes, I don't want to live in a world where one wins and the other loses. If either one of these two groups win, then we all collectively lose and we have to find a solution. The other point I think you're making and some with a lot of money would make would be, hey, we do a lot of philanthropy.

11:01And that's good, too, for these places and for the people who live there. But I think the pushback on that would be, isn't taxation a fairer way to redistribute this income? Because theoretically, the people decide then how it's spent versus someone with an agenda. And I agree with you. So my point isn't to the rich person. My point is to the lawmaker who, for a twenty five thousand dollar donation, allowed the carried interest loophole to still exist. My argument is to the lawmaker who said, yes, every person who's building a A.I. data center who can write it off completely. Right. And so they're not going to have to pay taxes for years and years.

11:48My argument is, honestly, it's more to the lawmaker of like, then let's put together some smart, impactful legislation to actually even the playing field. Right. And you're 100 percent right. We shouldn't need their philanthropy. I don't want to have to beg for your philanthropy. I want you to be taxed appropriately. Yes, that is how I feel and that is what I think. But absent of us putting in smart regulation and taxing them appropriately at the same absent that I don't want to lose their philanthropic dollars. Do you know what I'm saying? Yeah. I mean, I think the hard thing is what you're talking about is national rules, right?

12:26Which obviously are not going to be made anytime soon. And so instead, you have these local actors making these choices because it's quite popular with their constituents, as far as I can tell. and because their constituents are feeling something real. Yes. Zoram Damamdani didn't win by a little. Okay. He won by a lot. A lot. Okay. A lot. And he's a very successful and very impactful political leader. And so if you're going to live in New York City, which a lot of these people want to stay living in New York City, and he's going to be our mayor, My naive hope is that they can find a constructive that there can be a constructive path.

13:10Yeah. I mean, it was interesting to me that Mom Donnie chose to do this video at Ken Griffin's apartment. He's an easy target, but he's also someone who literally left a city because he was arguing with the people there. I'm talking about Chicago. He was arguing with people there about crime and taxation. so it's like if you're gonna pick one guy like this is the guy who's gonna be like well obviously i'm gonna take my toys and go yes and i guess a lot of people could argue here they want his money right they want his business here they want the and some people could say no get the hell out of here but i'm saying that's a huge development there are lots of jobs associated and um right these people are feeling like they could be gunned down no one should feel that way and again no one should feel like they can't afford to eat or live in the city where they work.

14:03That doesn't work either. This divide is so extraordinary. And couple that with a president yesterday. Like, I truly think what Trump just said yesterday when they were talking about the war in Iran.

14:14Stephanie Ruhle: To what extent are American financial situations motivating you to make a deal? Not even a little bit. The only thing that matters when I'm talking about Iran, They can't have a nuclear weapon. I don't think about American financial situation. I don't think about anybody. I think about what this is. This is the same line the president has been using. He told this to me. I don't know. I talked to him eight weeks ago where he said before we struck Iran, they were two weeks away from developing a nuclear bomb and they were going to use it. That's just not true. There's no evidence supporting that.

14:48And so we have to get back to a rational place because this K-shaped economy is only getting worse. So, like, I'm not surprised when I'm with investors, they feel great. The market has soared. And they also know that if they keep their heads down and their mouths shut and keep smiling, Trump answers to the market. Because when you see it tank, you see him suddenly say, no, we got a one pager with Iran. on. No, we've got something to do. But how long will that last, especially right now where we see inflation going up? Like, I just wonder if that becomes something that is a point of leverage, because I think people are going to get angrier if they see the divide getting more extreme.

15:38They are. Listen, is it smart short term politics for Democrats to ride the anger of the American people to the midterms? Maybe. But I don't think it's good long term for America or democracy or humanity. Right. And so for everybody who's like, I'm just going to hole up in my bunker and say, I can't believe the eat the rich sentiment. I'm just going to sit here and watch the market and continue to soar. Are they ready that we could lose our democracy? Are they ready that capitalism, which is what they built their careers, which is why they're so successful, Like, when are we going to actually have some hard conversations?

16:18And it can't just be this side is evil and this side is stupid. I know that's not the answer.

16:27We'll be right back after a quick break.

16:40Can we dig into the idea that somehow wealth taxes drive rich people away from places where they're implemented? They do. You believe that's a thing? I mean, it is like it is like we've seen lots of people do it like in California, where there are lots of regulations where business people will argue that the barriers of entry have only gotten higher and higher. Many of them have left. I mean, other people would disagree. They would say that while taxes were put in place in places like Massachusetts, people stayed. Yes, totally. And listen, I would argue that in New York, as expensive as New York is, they're always like, people are leaving, people are leaving, and people do leave, right?

17:17But New York City is still kicking. I mean, do you remember during COVID when everyone's like, New York will never come back? Yeah, it is. Anthropic is about to take a huge amount of office space here in New York. Yeah. I mean, I was reading this article about how hard it is to actually leave New York. Like if you are a wealthy person and you hire an attorney, the attorneys were basically saying out of every 10 inquiries I get from people about leaving New York for whatever reason, only one does it because it's so hard. You have to get an app to track the number of days that you're living somewhere.

17:51Okay. That's the funny thing. The people who I know who like really do it, they're the richest of the rich people. And you'll be sitting next to them and they're like, here's the app on my phone. And I track my nights and I track and I'm just like, what? Because New York's auditors are like no joke. They these lawyers also said, like, if you make over a million, you're probably going to get audited if you leave. If you make over 10 million, 100 percent chance they're going to come for you. They're going to ask where your pets live. live. But I guess I would just make the argument if I was super, super rich, I would just live where I want to live, where it gives me the joy because I'm so rich.

18:27What do I care? Right. Like I never even moved to New Jersey where it would be cheaper to live because I didn't want to miss one single minute commuting because I wanted to be with my kids. Right. And I'm not rich compared to the people we're taught that. What I'm saying is the people who are tracking their nights of sleep and the app are tracking their nights of sleep and rushing to the airport to make sure they don't sleep in New York tonight. And that airport ain't LaGuardia. They're going to Teterboro on their private plane because they're tracking their nights. I'm saying the people who leave are like the richest of the rich people.

19:02And I'm always like, dude, you're the ones who could really afford to be everywhere. Do you know what I'm saying? Like, why not stay? Yes. Why have this app. Yes. Seems like a pain in the ass. That's my point. The business people that I speak to in California who have left, and a lot of people are still there, obviously, aren't finance people like they are in New York. They are people that have run more businesses that have said the barriers of entry and regulations in California are prohibitive and it's hard to do. And I'm not defending it, but I'm just saying guys who I cover, that's what I've heard from and they've moved their businesses.

19:40Well, the story right is Sergey Brin, who looked at this potential wealth tax coming down the pike and moved right across Lake Tahoe to Nevada by a certain deadline so he could avoid it and aggressively lobbied Gavin Newsom, like, please, no wealth tax. And now it looks like, well, maybe it's going to be on the ballot anyway. I think that's what people see. And they're like, oh, maybe maybe that's going to be what happens when we have some kind of wealth tax. But maybe it's the kind of tax too, right? Maybe it's the fact that this is this one-time hit that just seems hard if you're a wealthy person versus something else.

20:20I don't know. Or I don't know if it's hard or it's that they can game it. And I guess, again, maybe I'm naive. Like, hey, Steffo, as long as there are tax specialists out there, right? When I worked in investment banking, we had entire tax groups on the trading floor. They're not doing our clients taxes. The purpose of those tax groups is to figure out every possible loophole and tax advantage for our clients. That was the purpose of it. And so part of me is like, I don't know, maybe the most sophisticated businesses or the wealthiest people are always going to figure out how to lobby to get the loophole or find their way around it.

21:00well, the majority of the American people will not. And so with California's wealth tax, and I'm not saying whether it's good or it's bad, but potentially, you know, you were saying like in Massachusetts, it's worked. Maybe it's really about how it's structured. Like maybe if we can get to a place where the majority of people aren't just absolutely incensed and angered, they can't make ends meet. And there are people in their state across town who make a hundred times what they make. Maybe there's a way to get the stakeholders at the table with reasonable lawmakers to say, how do we make this work?

21:37I guess I would say, I think part of your argument is about people just turning down the heat with each other, right? Like Zoran Mamdani not like tapping on the glass and say, I'm going to tax billionaires. But I think he would argue if I'm going to tax billionaires, I have to be ballsy about it because they are going to come after me. So I have to do the political thing of signaling I mean business and I have people behind me. And so they've almost boxed him into a corner, he might say. What would you say to that? Listen, he's fighting the guys with all the weapons, right, who know how to fight, who have all the power.

22:17He's got to do what he can. And what Mamdani is great at is public speaking, right, is using his microphone. Nobody's better in the public square than Mamdani. I would definitely argue that. So did the billionaires do this to themselves? But this takes us back to the original point that you were saying. They do have real fear for their lives right now. And you could and people could be like, no, they don't. Don't cry for me, Argentina. I don't feel for them. But I know you're going to think I'm naive. Like, I want to say, turn down the heat and find an answer. Because if these billionaires think that this eat the rich sentiment is going away, it's not.

22:57It's not. It's not. It's not. It's only getting louder. And by the way, just moving to Florida isn't going to solve it because you're going to have a whole lot of people that are mad there. There has to be some solution. There has to be some solve for this, especially if the war goes on and gas prices go up and inflation continues to go up and the market continues to go up, this K is going to turn into like a shark's mouth. Like, yeah, the K is the divide with the wealthy getting wealthier and the poor getting poorer. And it's just. Yes. And OK, right. And imagine now that K with daggers at the end of those two points.

23:36And I'm saying, who are going to be the people to say we have to just start to solve for this? It strikes me that in New York City with this Pieta Terra tax, billionaires kind of dodged a bullet. Like this is the gentlest version of the rich people tax that they could have gotten here. And in a way, it's a shot across the bow. And my question is whether billionaires are going to take the note. and I don't know the answer to that, whether they will dig in and we will, both sides will dig in or whether this will now be the beginning of like, okay, people may be coming for some of my money and maybe they kind of have a right to some of it.

24:19What do we do now? I mean, I think that's an amazing, amazing point and a great question. And it's sort of why I made the original point about like, oh, I wish Mom Donnie didn't make that video only because the video makes us lose the plot. Does that make sense? Because the video then makes it about something else. Some people were delighted by the video, but they weren't billionaires. Totally. Totally. Like Mamdani is trying to take on the extremely rich. To your point, the pied-a-terre tax is the gentlest way to do that. And we're not even having a conversation about it anymore. Now we're talking about a super wealthy person who feels scared for his life.

25:04And so I'm just saying like, oh, like we've lost the constructive conversation I hoped we could have had.

25:15And I'm not blaming the mayor for doing it. I'm just saying, what can we do to turn down the temperature? And the mayor may say to me, if we were talking, the temperature shouldn't be turned down. People are suffering and this divide needs to be addressed. And I hear that too. I'm not saying I have an answer. I'm saying this problem is bigger than we think, and it's not going away. And I'd love to find a way for us to address it in a constructive manner. And it doesn't feel like we're doing that right now. Steph, I'm so grateful for you coming on the show. Thanks for doing it. Thanks for having me.

25:51Stephanie Ruhle is the anchor of MS Now's The 11th Hour with Stephanie Ruhle. She's also the network's senior business analyst and co-host of MS Now's YouTube live series, It's Happening with Valshian Rule. And that's the show. What Next is produced by Elena Schwartz, Rob Gunther, Anna Phillips, and Madeline Ducharme. Paige Osborne is the senior supervising producer of What Next and What Next TVD. Mia Lobel is our executive producer of podcasts here at Slate. Ben Richmond is the senior director of podcast operations. And I'm Mary Harris. Go track me down on Blue Sky. Say hey, I'm at Mary Harris.

26:25Thanks for listening. Catch you back here next time.

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27:10Stephanie Ruhle: Capital raising is being redefined in real time, from macro disruptions and shifting investor expectations to AI-driven demand and the rise of private credit. When headlines can tilt markets overnight. How can companies stay on course? Strategic Alternatives, the RBC Capital Markets podcast, explores how corporates and investors are navigating new pathways to raise capital, create value, and drive growth. When conditions change, alternatives matter. Listen to Strategic Alternatives, available wherever you get your podcasts.