The GOP Tax Bill, United Health’s Terrible Week, & Chinese Tech Earnings

26:48What is even worse about all of this is that this is probably the worst board in media. Warner Brothers' discovery, since the merger, the stock is down 62%. All right? That's bad. They faced a lot of headwinds. Despite shareholders losing almost two-thirds of their value, the board has decided to pay their CEO, David Zaslav,$387 million. over the last four and a half years. So shareholders, you give us a dollar, we'll give you back, we'll give you back 38 cents. But we're going to give our CEO who oversaw this destruction of shareholder value, a third of a billion dollars. This is a absolute destruction of shareholder value.

27:43It shows that the people who are some of the most creative people in the world can't save themselves from themselves. And I will say this, a step back from the wrong direction is a step in the right direction. So good for them. They probably realized they really needed HBO. I'm triggered by this because HBO has literally garnered some of, in my opinion, has inspired some of the most incredible moments in creative history. When When Jon Snow and Ygritte, when Ygritte comes to her end in Game of Thrones, I think there's some incredible love stories in there. Plus, Game of Thrones, hands down, everyone always said, what about a porno if it was a really good story with high production values?

28:25Congratulations. That's called Game of Thrones. My son, true story, my son did not refuse to have the sex talk with me. I said, okay, it's time for your sex talk. He screamed out no and started running from me. He literally just refused to have a talk and said, okay, we don't have to have this talk, but you're watching Game of Thrones with me for eight seasons. That's basically sex education for any 15 or 16-year-old. And it starts with a scene where you have sex with your sister, right? Oh, that's right. Not the greatest education. Yeah, but if there's one message from Game of Thrones, if there's one moral, it's that family comes first.

29:00That's good. That's good. One of your first relevant sex jokes. I love it. What's your favorite HBO series? I love Last of Us. I, yeah, I watched season one. I thought it was great. I'm watching season two. But I'm not a huge TV consumption guy. And that's part of the issue, I think, why I was wrong about all of this, is that I don't, the HBO brand doesn't resonate for me in the way it does for you, because I'm less of a TV guy, which is why I shouldn't really be weighing in on what HBO Max should be doing in terms of branding because I'm not really the target consumer. But what is striking to me is it just sort of reverses all of the intention behind the merger in the first place where the idea was we're going to merge with Discovery, take all of the Discovery product offering and all the Discovery IP and we're going to kind of try to blend it together and the way we'll do that is by calling it all max and this is basically them admitting wait all the shows on discovery suck they're kind of cheap shitty shows meanwhile we have all the shows on hbo which are beloved and high quality and a sort of the luxury brand of streaming media we shouldn't really be meshing or merging these two together so let's sort of walk things back and go back to the hbo max brand and the fact that the architects of Max, the fact they're giving up on the name, I think it shows that you were right and that the importance here is that you maintain the brand positioning that you built up for years in HBO.

30:38Let's move on to Airbnb, yeah? So Airbnb is getting into services and experiences. This is sort of a complete revamp of the app. It was a place where you book vacation rentals. Now it's much more. You can book chefs and tour guides and personal trainers. Basically, anything that you'd be offered at a nice hotel, you can now get on Airbnb. Brian Chesky, the CEO, is calling it Airbnb for everything. People are calling it Airbnb's attempt to become the everything app. The stock rose almost 3%. You give us the analysis here. What do you think of this move? I would imagine they have figured out that there's a target market of pretty wealthy consumers with a lot of disposable income, specifically corporate travelers who like the amenities of hotels.

31:24And so they're starting to add them. I think it's a great idea, but it's high margin revenue. I talked to Brian on a semi-regular basis and brainstormed. This was not my idea. The idea I had for Brian is if you're in Munich and you say you're 29 and you're working for Salesforce and you're on London sales team and you're in Munich meeting with, you know, I don't know, BMW or whoever, you can turn on a switch that says you're visible and there's groups or coordinators, almost like a Reddit page manager that says we're all meeting at the Hofbrauhaus tonight and everyone's welcome. Because what I found when I was your age, Ed, and you don't do as much business travel as I did.

32:05When I was your age, it was literally molesting the earth trying to sell brand strategy services. I would find myself in an amazing city as staying at an amazing hotel with a little bit of money, and I had nothing to do. And sure, I could walk around the city on my own, but I would have loved to have gotten together with a like-minded group of people. And Airbnb, I think it's a really nice community. My sense of people who engage in Airbnb are professionals or culturally interesting people in their 20s and 30s. That's my sense of the populace. I don't know if that's true. But to give them another reason or to create an added feature where when I travel with Airbnb, I get stitched into this really cool community of people where I can make friends, find professional contacts.

32:51I mean, that's what you should be doing, create a community. My question, that sounds nice and I agree it would be nice for society. How does it make money? I think it's just another feature. I don't think it's a money-making thing. I think what you could do is turn it into Airbnb Plus and it creates the ability to go visible and you charge, I mean, if you want, I didn't see this as a moneymaker. I saw it as another feature that creates a more sticky brand where people go, I always go. What it does also is it takes advantage of their scale because I bet at any given time, there's four, seven, 1100 people staying in Berlin that night at an Airbnb.

33:24And no one else can do that. Anyways, that was my idea, but he didn't do it. That's why he's a billionaire and I'm here stuck with you celebrating our one year anniversary. You want friends, I want money. So I'm thinking about how does this company make money? they've kind of maxed out on growth at the moment. Like they created this category sort of, which is vacation rentals. They conquered that category. They executed practically to perfection, but the growth of that business is slowing. And if they want to be a 100, 200,$300 billion company, which I think is what he wants, then they need to go after new businesses.

34:00And so their answer to that question here is, we're just going to go after all services. You were saying it feels more like a sort of, they're trying to become a hotel. The vibe I was getting, and by the way, I actually prefer that as a strategy. The vibe I'm getting from Brian Chesky and from the announcement is he wants it to be just Airbnb for everything. It's almost like Craigslist meets Uber. If you have any sort of service that you can provide, you just sort of rent out your service on Airbnb. I think it's almost too ambitious. Like they're kind of, instead of going after one additional category, they're going after like 15 to 20 at the same time.

34:42But at the same time, it's like, I respect the ambition. And it shows me that they want to be bigger than they actually are right now. It shows me that they're thinking big picture. And I think the market sees it that way too. And that's why you saw the increase in the stock. I don't think it will work, but I don't really have a problem with that because they're trying things out. And if it doesn't work, they can just pivot. I think a lot of hotels live and die by this ancillary revenue. And that is, when I stay at a hotel, I bet I spend, you know, probably 50, say the hotel costs a thousand bucks a night.

35:17I bet I spend, you know, another four or$500 on food services and stuff. Is it that much? Maybe, I don't know, maybe not that much, but hotels, 30 % of the revenue comes from ancillary. And I bet at high-end hotels, it's more than that. And by the way, that story that you're telling me there, I actually think is more compelling than the story that I was hearing from Brian Chesky, which is it's just trying to be, offer hotel services. But the story Brian Chesky is telling is, we're going to offer all services. We'll start here with, like, we'll give you, like, a tour guide. We'll come and take you to the Eiffel Tower.

35:57But ultimately, we want to do everything. and that's the story I don't buy as much. Your story, you're telling me, I'm totally with you. Yeah, for me, I would start, I would just say, okay, are you looking to cook dinner? We have a service where we have a chef or we have someone just get your groceries. Tell us what you want when we get your groceries, right? Do you want us to make restaurant reservations for you? Actually, we should bring in, I think Claire and Mia did one of these services when they were at an Airbnb. Claire, do you want to tell us about it? Yeah, me and I were in Mexico City a few years back, and we did a tour of the temples right outside of Mexico City with this local guy who lived nearby.

36:39He also had a home where he was making chocolate, so he took us over to show us how he makes chocolate. We got to meet a bunch of other tourists who were there kind of doing the same thing, just checking out the city for the first time. And then he took us underground into this cave. It was a very kind of magical, unexpected experience. And it was nice because we actually got to interact with other people, even though we were kind of traveling solo. I'm in awe of the fact that you are literally a different species. is if someone said to me, you have to go with a strange man to his apartment and see how he makes chocolates, and then he's going to take you to a cave, but you have to pay$10 ,000 not to do it, I'd be like, I'll pay$11 ,000 not to do it.

37:26Your generation is so different than mine. That's incredible. I mean, it sounds very kind of hip and millennial and free to be you and me. You guys weren't doing mushroom chocolates or anything? Not on this trip. You decided to do this sober. It wasn't you weren't. Wow. That's super interesting. Anyways, that's why Brian Chesky is a billionaire. He probably did a focus group with Claire and Mia and figured out what it is they're looking for. I think that sounds, I mean, it sounds, I'm being serious. I think that sounds really, really cool. It was. And thank you, Alejandro, if you're out there.

37:58I still remember the guy's name. We'll be right back after the break with a look at Chinese tech earnings. If you're enjoying the show so far and you haven't subscribed, be sure to give the Prof. G Markets feed a follow wherever you get your podcasts. Thank you. You can even automatically spot tax write-offs. And the best part, there are no hidden fees, no maintenance costs, no minimum balance, and signing up is completely free. With Found, your financial world is streamlined and your time is freed up, so you can put your energy into growing your business. Oh, and by the way, other small businesses are loving Found, too.

38:56This Found user said, Found is going to save me so much headache. It makes everything so much easier, expenses, income, profits, taxes, invoices even. And Found has 30 ,000 five-star reviews just like this. You can open a Found account for free at F-O-U-N-D dot com. Found is a financial technology company, not a bank. Banking services are provided by Piermont Bank, member FDIC. Don't put this one off. Join thousands of small business owners who have streamlined their finances with Found. Every day, millions of customers engage with AI agents like me. We resolve queries fast. We work 24-7 and we're helpful, knowledgeable, and empathetic.

39:35We're built to be the voice of the brands we serve. Sierra is the platform for building better, more human customer experiences with AI. No hold music, no generic answers, no frustration. Visit sierra.ai to learn more.

39:55From Pushkin Industries, I'm Jonathan Goldstein, and Heavyweight is back. The new season is bigger than ever. Bigger hopes? I keep waiting for this moment when he says, Mom, I get it. I'm sorry. Bigger dreams. Tom Hanks wants to meet with you. This is a real chance. And bigger heartbreaks. I thought it would be my movie moment. And maybe he would even whisper in my ear, I've always been in love with you. Check out new episodes of Heavyweight on Apple Podcasts.

40:39we're back with profiting markets chinese tech leaders alibaba and tencent reported earnings this week offering a mixed picture of the sector tencent posted its fastest revenue growth in over three years fueled by strong performance in its gaming and advertising segments net profit rose 14 while capital expenditures surged 91 year over year largely due to increased ai investment Alibaba, meanwhile, missed expectations on the top and bottom lines as it continues to rethink strategies to drive consumer spending. Still, the company reported a 7 % year-over-year revenue increase with cloud revenue climbing 18%, despite the growth, shares fell around 5 % in pre-market trading.

41:22So Scott, let's start with Alibaba. You predicted the company would beat and that the shares would pop. That did not happen. It was, in fact, a miss on the top and bottom. Shares dropped around 5%. I think it's worth asking the question, how bad was this miss? And the answer is not really bad at all. They barely missed on revenue. Net income was a miss, but it was mostly an accounting issue because they got rid of some of their subsidiaries and they had to account for those losses in this quarter. But I think the thing that Wall Street really didn't like, I think Wall Street, like you, believes that this company is now kind of an AI company.

42:02And similar to Amazon, similar to Google, they're mostly excited about the cloud unit and they're mostly excited about the AI prospects. And that's why they expected, as you did, that the company would beat expectations. They wanted to see the AI business come in and just pleasantly surprise us, give us something really great that exceeded expectations. That's not what happened. And it was strong, but not crazy strong. Cloud revenue up 18%. Now, I'll give you a chance to respond to the earnings, but I just want to tell you what I think you missed with this prediction. You know, all the global shifts we've been discussing, the turning of foreign nations away from America towards China, increased trade partnerships with China, the turbo boosting of AI self-sufficiency in China, which Xi Jinping's been talking about, the AI chip investments from Huawei and all these other Chinese companies.

42:59All of that is so recent. And if all of that is happening, I just don't think you would have seen it in this earnings report. I think if it's happening, you're going to see it in the next report, i.e. the current quarter. And even then, you'll only start to see the beginning of it. And if it's all happening, I think really, if it's going to be really fully and truly reflected, it would probably be the report after that. And so what I would argue is that your prediction here was directionally correct, but I think the timing was wrong. And I think if you were to make the prediction again for fiscal Q1 this next quarter, I would back that because I do believe we are about to see a transformation in AI in China.

43:42And I do believe that will ultimately benefit Alibaba. But for now, I think it's too early. Yeah, I got this wrong. I think that I'm still seriously considering buying the stock because I think that they're making the same transition, but they're sort of three, four years behind that Amazon made. Essentially, Amazon is a cloud company now with a retail unit and it trades. It's experienced multiple expansion because it's now considered a cloud company with much better margins. It's just a much better business. I have in the data here that their AI cloud-related product revenue grew over 100 % for the seventh consecutive quarter.

44:18Is that accurate? Yes, but those AI-related numbers, they don't actually break out what the number actually is. So I'm always a little bit, eh, when they say AI-related growth, and it's definitely coming off a very small base. So I think what we should really be looking at is just cloud revenue, which is up 18%. And that's good. But I think it tells more of the story. I think until 100 days ago, the idea of being a Western company in Canada, Australia, or Germany and using cloud-based products from a Chinese company was unthinkable. I think as of today, it's less unthinkable because it's now choosing between the lesser of two evils.

45:03And the thesis I'm trying to figure out a way to make money off of is the following. And there's always one piece of data that just blows my mind. And I'm like, this is going to have huge ripple effects to the economy. And I try and think about how do I make money from this? And that is the following. For the first time in history, global consumers or global citizens, on average, believe that China is a better force or a bigger force for good in the world than America. And I think that means, how I drill down to that is I think there's going to be a lot of Western companies or companies in Latin America who are going to decide to use cloud services from a firm like Alibaba and not immediately defer to AWS or Azure cloud services or Google's cloud.

45:49So I think that these Chinese companies are specifically Alibaba. I'm disappointed in that 18 % number. I don't know what that 100 % year on year number was. I took it and extrapolated it out and said, this will be a cloud company pretty quickly if it can maintain that growth, but your deeper analysis is the better one. I just think it's early. I think it's a very small base that we're looking at, so we shouldn't take 100 % too seriously. But there's some issues here. The domestic economy isn't very strong. Your analysis is the correct one, that the impact or the slowdown from exports is probably not going to show up until next quarter, but maybe the market's already anticipating that.

46:23I get the sense that I think these companies are going to find a lot more foreign buyers contemplating and doing meetings with them than would have would have four months ago but there's just no getting around it i missed this one but i still might i thought well if i liked it yesterday why wouldn't i like it now that it's off there we go there's the warren buffett in your five or seven percent yeah there you go yeah and let's just quickly talk about tencent um missed on profit but beat on revenue the stock slipped slightly but not massively there's honestly not that much to say with these earnings but the thing that jumped out to me was their CapEx number, which almost doubled up 91%.

47:00And almost all of that is, of course, AI spending. So to me, the takeaway is Tencent is jumping headfirst into the AI race. They're stockpiling up on chips. They're building data centers. They're developing these proprietary models. And they're perfectly suited to do this because it's primarily a gaming company. That's their main business. But it's also an advertising company because remember, Tencent owns WeChat. And I think what we've seen so far is that the main beneficiary of AI in terms of actual revenue growth is advertising. If you have great AI, you have better, more accurate ad targeting.

47:37And that's what we've seen with Meta, which is why Meta is on such a tear right now. So I think we will probably see the same thing with Tencent. I think it was pretty good earnings from Tencent. But the larger story to me is AI, as indicated by what Tencent is doing and Alibaba in terms of their spending and their investment in AI. AI in China is coming. It's coming very hard, very fast. I think this should generally make you bullish on China, specifically the Chinese tech sector. And I should point out just the PE multiples again. China, we got at 15x average compared to the US at 27. And that's despite the fact that the Hang Seng is up 20 % year to date.

48:19It's been a great year. for the Chinese market, but you're still looking at really low multiples when you compare it to the US. So, you know, we've been balancing this US versus China argument all year, and it's beginning to become less clear what's really happening because now you've got the S &P back up above where it was before Liberation Day. So the whole global rotation thesis, I would say is on hold for now. I'm not sure if it's dead. But I think just if you look at just pure earnings growth, forget the multiples. I think there's a lot happening in China. I think there's a lot of reasons to be bullish.

49:02I agree with all of that. We'll be right back after the break with a look at the Republicans' tax bill. If you're enjoying the show so far, hit follow and leave us a review on the Prof. G Markets feed.

49:20As a founder, you're moving fast towards product market fit, your next round, or your first big enterprise deal. But with AI accelerating how quickly startups build and ship, security expectations are also coming in faster, and those expectations are higher than ever. Getting security and compliance right can unlock growth, or stall it if you wait too long. Vanta is a trust management platform that helps businesses automate security and compliance across more than 35 frameworks like SOC 2, ISO 27001, HIPAA, and more. With deep integrations and automated workflows built for fast-moving teams, Vanta gets you audit-ready fast and keeps you secure with continuous monitoring as your models, infrastructure, and customers evolve.

50:05That's why fast-growing startups like Langchain, Ryder, and Cursor have all trusted Vanta to build a scalable compliance foundation from the start. Go to vanta.com slash vox to save$1 ,000 today through the Vanta for Startups program and join over 10 ,000 ambitious companies already scaling with Vanta. That's V-A-N-T-A dot com slash vox to save$1 ,000 for a limited time.

50:35What do walking 10 ,000 steps every day, eating five servings of fruits and veggies, and getting eight hours of sleep have in common? They're all healthy choices. But do all healthier choices really pay off? With prescription plans from CVS Caremark, they do. Their plan designs give your members more choice, which gives your members more ways to get on, stay on, and manage their meds. And that helps your business control your costs, because healthier members are better for business. Go to cmk.co.access to learn more about helping your members stay adherent. That's cmk.co.access.

51:34be embarrassed. It's okay. We all do it. But just because we all do it doesn't mean we have to all do it. Smartsheet knows how easy it is to get distracted. They know how easily opening a new window to start a work task can turn into a series of rabbit holes, work-related and otherwise. And that's exactly why Smartsheet designed a seamless all-in-one platform that allows you to flow between tasks. Smartsheet customers know that Smartsheet is a distraction-free zone. Smartsheet. Work with flow. Learn more at smartsheet.com slash vox.

52:16We're back with Prof. G. Markets. House Republicans' new tax plan cleared its first hurdle last week. With the House Ways and Means Committee voting to advance the bill, the plan includes several major provisions, including increased defense spending, cuts to federal Medicaid funding, and a higher exemption for the estate tax. The bill is still in the early stages and is likely to undergo changes as it moves through Congress. House Speaker Mike Johnson is aiming to send it to the Senate by Memorial Day. I'd like for us to really investigate this because, you know, I think about everything that we've talked about over the past few years.

52:50And I specifically think about your TED talk. Okay. I'd start us with a question. Do we love our children? Sounds like an illegitimate question, right? Well, I'm going to try and convince you otherwise. Essentially, as we go down generations, we're seeing that for the last two generations, people are making less money on an inflation-adjusted basis. In addition, the cost of buying a home, the cost of pursuing education... And it was the most popular talk of the year. We're seeing more and more discussions about these issues. We even had a week ago where Trump said that he was OK with increasing taxes on the rich.

53:24But I look at this plan here, this plan basically does the opposite of everything we have advocated for in the past three or four years. And I'm seriously not being political or sensationalist here. It genuinely does the opposite of what everything we've been talking about. I'll just go through a few of them here. For starters, massively increases the deficit. It's going to reduce federal revenue by$5 trillion over 10 years does not make up for those losses with spending cuts. There are cuts, but we'll go over them. The cuts are very misguided. So what does that mean? Larger deficits, more debt, increased interest payments.

54:04We're screwing over the next generation of Americans who are going to have to pay the bill when our parents and our grandparents are all dead. The carried interest loophole is staying. Trump talked a big game about getting rid of it. This nonsensical tax break for private equity. It's staying in there. We're getting tax breaks for old people. If you're over the age of 65, you're now going to get a larger standard deduction than you did before. The worst part of the plan, in my view, the estate tax exemption. Wealth inequality has gone totally haywire, out of control in America. We've discussed it a lot.

54:41And the question we have all been trying to answer is, how do you redistribute that wealth that has been sequestered into the top 0.001%. How do you redistribute the wealth in a way that is fair, in a way that isn't crazy, and in a way that doesn't mean showing up to rich people's doorsteps with a shotgun and a pitchfork? My view on this has always been, the easy answer is, just tax it when they die. You've got$124 trillion that are going to be passed on in 2048. Greatest generational wealth transfer in history. That's the moment to redistribute the wealth without making everyone upset. And how do you do that with an estate tax?

55:24It's very simple. You're not going to just seize all the assets, but you're just going to tax it at a normal rate. So I couldn't believe it when I saw this plan where they are actually going to increase the estate tax exemption, which is already absurdly high in America. they're increasing it to$30 million, which means you can pass$30 million onto your children tax-free. In other words, we're deciding we actually like the inequality, we want to maintain it, not just for this generation, which seemed like an anomaly, but for many generations to come. We want the children of rich people and their children to keep on ruling and ruling over many generations of society.

56:05And by the way, the way we're going to do that, we're going to subsidize that by cutting healthcare spending for poor people. what the fuck is going on, Scott? The most powerful in America formed a coalition where their rights are a function of their wealth and their rights are respected anywhere in the world. I can get access to family planning, lawyers, healthcare, good schools for my kids, because there's now kind of a different class of oligarchs that consists of both Democrats and Republicans. And as a result, the most powerful people don't feel a vested interest in the long-term success of America.

56:40And it's from both sides. Now, it took Republicans to be the vessel to do it, but it's been a slow creep of both Democrats and Republicans. Just to be clear, during the Biden administration, taxes were lowered. For all the railing of Senators Warren and Sanders, when we controlled all three houses of government and President Biden was president, taxes went down. so there are a lot of co-conspirators here including many of my friends who claim to have democratic ideals and clutch their pearls about you know how awful it is what's going on but this really is um this is another extension of it and as you know i was supposed to be on bill mar with steve bannon and i decided to back out because i couldn't figure out a way to not confront him about a nazi salute without grandstanding or and so i backed out and he He said on that show, Trump and the MAGA movement will raise taxes on the wealthy.

57:34I was watching it with my 17-year-old and I said, he's lying. There's no way Donald Trump is not going to cut taxes on the rich. That's just what he does. And he is not a good business person. His attitude of debt is anyone who's willing to loan you money is a fucking sucker. I genuinely think there's a decent chance that Trump in the back of his mind is just not that worried about America going bankrupt. He's gone bankrupt a bunch and he's still a billionaire. But what about everyone else? I mean, we know he's insane for many reasons, but what about everyone in Congress? Like, I don't understand how anyone would be okay with we're going to cut Medicaid spending.

58:21I mean, that argument alone, I'm willing to have that conversation. But then pair that with, oh, and by the way, we need to increase the amount of money that rich people, ultra rich people can pass on to their kids tax free from$27 million to$30 million because of inflation. Bridge that gap for me. The way the Democrats should frame this, and it's the truth, is people of my generation who are wealthy are asking your generation to loan us$24 trillion. And we're not going to pay it back. You're going to assume the loan. That's what we're asking right now. And that's how the Democrats should be positioning it.

59:01Now, as it relates to trusts, as someone who has a trust, the trust has gone from, I think it was a maximum of$11 million, then it went to$23 or$24, and now they're talking about raising it to$30, meaning you can shield from all taxation$30 million. But it's even worse than that, because the way estates work is if you put money in and it grows, it grows tax-deferred and it grows, you might end up with a trust that ends up being worth a quarter of a billion dollars. But my understanding is as long as it's worth less than 30 when you put the assets into the trust, it can grow and then you can pass it along tax-free.

59:38What's the point of all of this? The point is to have purpose in your life and to have a good life and to be happy and to have reward. And I would argue that most of that is around relationships and potentially finding the right partner and maybe deciding to have a family with that partner. I think that's the whole shooting match. And money plays a big role in that. Because middle-income people are happier than lower-income. Upper-income people are happier than middle-income. Money does by happiness. But as Daniel Kahneman, the Israeli-American psychologist, proved, above a certain point, there's no incremental happiness.

1:00:14And I can validate this firsthand. As someone who has worked really hard and been very lucky and aggregated some wealth, I believe that I have the right to pass on some of that good fortune and wealth to my kids. Okay, fine. but above a certain amount, much less than$30 million, my kids are going to get no incremental happiness. And so if the whole point is prosperity and happiness and purpose and meaning, then there really isn't a reason to increase the cap on the estate tax. You should be lowering it and even increasing the tax rate, which I think now is 40 % because nobody loses. And that is, If you redistribute that income for things like a child tax credit, for a great public school system, for K through 12, such that kids grow up and can be a little bit more critical thinkers and maybe think, am I voting for people that have my best interests at heart?

1:01:09All of these wonderful things, right, can be taken from estates, and there's no degradation and happiness or purpose among your offspring. But no one wins here. No one wins. The only people that lose are the future generations that need that tax revenue because what we have to come to grips with is the reality that there has been a myth fomented in America that the middle class is a natural self-healing occurring organism. It isn't. If you don't massively invest in it, let me use the R word, if you don't redistribute money from corporations and rich people to the middle class, it starts to wither and die.

1:01:50Look, if you want to give your kids$10 million tax-free, and I'm one of those people, I get it. I want my kids to have a certain amount of economic floor. I've worked too hard for my kids to go through. And a lot of people, a lot of parents will say, I want my kids to make it like I did. I don't. I work so fucking hard. I don't want my kids to be fearful about money. I don't want, if someone in their life is sick, I don't want them to have the same fears I had when I had someone in my life sick. I want to give them that. If it makes them spoiled, so be it. But they don't need more than$30 million.

1:02:23That's not going to do anything for them. It's unbelievable. And by the way, we're almost talking about it as if the thing that's on the table is just having a total cutoff rate for the amount that a child can inherit from their parents. We're talking about an exemption. It's like you get the$30 million tax-free, and then everything beyond that point is 40 % taxed. so you're still going to make i mean these kids are going to inherit literally hundreds of millions of dollars and the question is why are we increasing the tax-free exemption why is that such an important thing and you when you're saying like who wins here it honestly feels like the only ones who win i agree with you i don't think the kids win i don't think you win because you got 10 10 million dollars more tax-free from your parents i think you'll probably just become more of a douchebag, less in touch with reality, probably live a worse life, as you put it.

1:03:20I think the only people winning here are the parents who have this perceived sense of, I fucking crushed it. And I worked so hard, and I made all these hundreds of millions of dollars. And because I worked so hard, I need to do everything I can to hoard that wealth and to protect it. And I'm not going to be able to spend it over the course of my lifetime. I've got, what, 20 years left. What am I going to spend$200 million on? So the only other option is to say, oh, well, the last thing left to conquer is to make sure that the most amount possible can go to my children. The thing that summarizes America right now is what Bill Gates said.

1:04:01And it's the following. And it was such a rattling statement. I thought, oh my God, that's so accurate and so puncturing and so upsetting. Bill Gates said, the world's richest man is killing the world's poorest children. And that's what we're doing here. America is tolerating the world's wealthiest man worth$400 billion, cutting massive amounts of aid to literally the poorest children in the world. And America seems to be okay with it. There is a lack of a value system in America where people are deciding what makes me feel good, what gets me richer as opposed to any resemblance or any semblance of values.

1:04:41And this runs so deep in America. And I think it's because we have had such prosperity and we have been so divided by social media algorithms that we don't recognize how fortunate we are. We don't recognize that we should be serving in the agency of each other and that we're Americans first before we're gay, before we're Republican. We are Americans first. And that the whole idea of America is that once you make it, you are absolutely going to start and investing in the fertile lands behind you, such that as many people as possible can enjoy the same blessings you registered. Instead, everyone's like, no, I just want the shit in front of me to be laced in cocaine fields and see if I can figure out a way to create clouds that rain champagne.

1:05:23I mean, it has gotten out of control. But they lie about what their intentions are. And I think that's what we're seeing with this tax plan, which is what is so upsetting, is how easy it is to lie and how many people believe you. I mean, the whole point of this administration from the get-go, or at least the fiscal plan, was fiscal responsibility. The whole thing was, let's balance the budget. Just look at the fucking plan. It does the opposite of what was intended. Look at Bannon's comments, we're going to tax the rich. Look at Trump's comments, I'm okay with taxing the rich. I would love to do it, frankly, but what we'll do is, you know, they'll go around saying, oh, this is so terrible.

1:05:59What you're doing is you're giving up something up top in order to make people in the middle income and the lower income brackets save more. So it's really a redistribution. And I'm willing to do it if they want. And you look at this, all these exemptions here. It's like, in addition to that, they're now lying about it. And I'm hoping people sort of see through the lie. So that's why I really want to talk about this. It's like, this is just proof here that it's all been lies in terms of what they've been promising and the direction they want to take this country. The whole thing with the reshoring, the jobs, and it's all about middle-class Americans.

1:06:40Read this tax plan. This is not about middle-class Americans at all. And it's actually insane the extent to which this is catered to rich people. Just a few details. If the changes from this tax cut pass, about 8.6 million people stand to lose their health coverage in the next nine years. And by the way, Medicaid provides health care coverage to one in five Americans, including 40 percent of all children. It's also the largest funder of mental health and substance use disorder care. You want to cut that funding? That just means you're going to pay more for incarceration, folks. Oh, but guess what?

1:07:14There's a private company with shareholders waiting to incarcerate people at$70 ,000 to$90 ,000 a year. Look, you want to cut Social Security for the wealthiest quartile of seniors, or you want to extend the age qualification from 65 to 68 to 70, 72 to recognize that people are living longer and working longer? That should make sense. But when you start cutting costs on things like SNAP, you're just going to end up paying more in other ways. having said all that, there are a few little good things that I will just go over just to end on a positive note. They want to increase the child tax credit from$2 ,000 to$2 ,500.

1:07:53I think that's good. Yippee. But, you know, you know. It's something. Okay, let's take it. The state tax exemption is going from$15 million to$30 million, but we're increasing the child tax credit from$2 ,000 to$2 ,500. Okay, that's something. They want to create savings accounts for babies. Newborns will receive$1 ,000 in a tax-free account. This is actually what we discussed with Brad Gostner, who wanted those America accounts. And Bill Ackman's idea, and Alex von Furstenberg has proposed something similar. Australia has, I think it's the super fund. I love this idea. I would give every kid$7 ,000.

1:08:27That'd be$40 billion. And then in 30 years, you'd start to see a crash in interest rates because you would announce in the next 30 years, we're not going to have social security because every kid's going to have approximately a million dollars. And I wouldn't let them sell it. I'd treat them, I'd be very paternal and say no social security on your 65th birthday. You get a million bucks, put it in an account at four or 6%, you get 40 or 60 grand. If you want to blow it, sucks to be stupid. That's up to you. But I like this. I like this idea a lot. Me too. They also want to eliminate the EV tax credit, which I also agree with.

1:08:57I think the EV industry is well in its way. We don't need to be subsidizing it. If we're having tough conversations about cutting spending, then I agree, let's get rid of the EV tax credit. And then finally, they want to increase taxes on private colleges with endowments exceeding$2 million per student. Those colleges will pay 21 % on net investment income up from 1.4%. Again, I think that's great. And it targets what we've talked about. And spend it. Spend your endowment. Spend it. Exactly. Bring it down. The only trouble is they also go after the less wealthy colleges too. So if you have an endowment of$750 ,000 per student, your taxes are also going up.

1:09:36And then the other thing that I think is bad is that for whatever reason, they're exempting religious schools. And I assume they're just kind of throwing meat to the evangelicals where it's like, oh, you guys, we like you. You're not Harvard and Princeton, so you guys don't have to pay taxes. That'll create some really unnatural acts, though. It's like, what are we going to do before algebra at sophomore year at UCLA? We're going to go, praise Jesus. us and then we're a religious institution yeah and we're going to do that so that we don't have to pay taxes it's weird anyway the the outcome i actually think is good uh but i think they're probably doing it for the wrong reasons which is again they want to own the libs or own the ivy league schools but whatever the ivy league schools probably have it coming for them those are the good things.

1:10:23Otherwise, terrible plan. My God. Ed Olson has had it. He's had it. Ed Olson. Let's take a look at the week ahead, Scott. We'll see new and existing home sales for April, as well as earnings from Home Depot and Target. Do you have any predictions for us? I have predictions kind of boring. I was thinking I'm just so triggered by this plane being given this$450 million plane. I think that's so embarrassing that the president of the wealthiest nation in the world needs to have someone else pay for a plane manufactured here. It's not going to happen for a very mundane reason, and that is it would take, I think, very little C4 planted somewhere with a pretty sophisticated and small detonation device to put kind of, you know, I won't call it Air Force One, but Qatar's bitch too, whatever you'd want to call this plane.

1:11:20You could sabotage this plane. You could put in, I mean, these, a 747 Supermax, whatever it's called, is basically like a small city in terms of wiring and electronics and fuselage and paneling. There would be so many places to hide listening devices, espionage devices, or even worse, some sort of detonation device. And to think that Qatar would have the ability to take down Air Force One means the only way the NSA, the Secret Service, who's charged with the president's safety, would get comfortable with this is if they disassembled the plane down to every bolt and screw and then reassembled that.

1:12:06And the cost of that is estimated to be$2.1 billion. And you don't think Trump would have an ability to say, shut up, it's fine? I think they're going to sit him down and I say, look, boss, we can't have you flying on something. I mean, that the Qataris could have easily weaponized. I think they're just going to say, we can't guarantee your safety on this thing. So we were stupid enough to let Russia build our embassy in Moscow. And when they opened it, a couple reporters went in there with like just a sledgehammer and into one of the unfinished rooms and just did a little bit of sledgehamming.

1:12:44And they found like seven listening devices every square foot. I didn't know that. It was a perfect example. Oh, yeah, it was hilarious. And they basically said, they basically said, demolish the thing. We can't. We have to bring in our own contractors and we have to build it. We can't have the Russians build our embassy. That really isn't any different. Anyway, so a long-winded way of saying my prediction is that the 747 gift is not going to happen. This episode was produced by Claire Miller, an engineer by Benjamin Spencer. Our associate producer is Alison Weiss. Mia Silverio is our research lead.

1:13:18Isabella Kinsel is our research associate. Dan Shallan is our intern. Drew Burrows is our technical director. And Catherine Dillon is our executive producer. Thank you for listening to Prof G Markets from the Vox Media Podcast Network. Join us on Thursday for our conversation with Scott Goodwin, only on Prof G Markets.

1:13:38Lifetimes

1:13:43You held me in kind reunion As the world turns And the dark flies in love

1:14:13The FT is doing a profile on me and they can't, there's someone outside. Home invasion, here they come. At this point, just do me in the ass. Just take me. Anyway. Support for this show comes from Airbus. It took 100 years for electric vehicles to catch on. Modern solar panels? Half a century. Lithium batteries? decades to go from their debut to daily use. It's a pattern. Energy tech breaks through, stalls, and then something tips the scales. But for every success, there are even more almosts. So what if there was a breakthrough sitting at this crossroads right now? SAF, or sustainable aviation fuel, could forever change the future of flight.

1:15:01Learn more about how Airbus is contributing to accelerate this journey at fly.airbus.com slash theflightpath. The pumpkin spice latte is back at Starbucks. Crafted with our signature espresso and real pumpkin sauce. Then topped with whipped cream, cinnamon, and nutmeg. The PSL. Get it while it's hot or iced. Only at Starbucks. Adobe Acrobat Studio. So brand new. Show me all the things PDFs can do. Do your work with ease and speed. PDF spaces is all you need. Do hours of research in an instant. With key insights from an AI assistant. Take a template with a click. Now your Prezzo looks super slick.

1:15:42Close that deal, yeah you won. Do that, doing that, did that, done. Now you can do that, do that with Acrobat. Now you can do that, do that with the all new Acrobat. It's time to do your best work with the all new Adobe Acrobat Studio.