The $84 Trillion Wealth Transfer + The Real Value in Prediction Markets

0:06Welcome to Office Hours with Prof G. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question for next time, you can send a voice recording to officehourswithprofgmedia.com. Again, that's officehourswithprofgmedia.com. Or post your question on the Scott Galloway subreddit, and we just might feature it in our next episode. Question number one. Hi, Scott. This is Pat from Boston. You talk a lot about how there's a greater concentration of wealth among retiring age Americans than at any other point in history.

0:36As someone who's both a well-off and a father who presumably leave an inheritance to his children, what's your thought on the current estate tax given as a$15 million lifetime exemption,$30 million if you're married? Do you think that a more aggressive estate tax is healthy for a meritocracy? And secondly, do you think that given we're about to experience the greatest generational wealth transfer in history, we're currently in a unique opportunity to attack the federal deficit by taxing that transfer. Thank you. Thanks for the question, Pat from Boston. It sounds like we're brothers from another mother.

1:09Look, what do we know? We know that we are recklessly spending money. We're spending$7 trillion a year on$5 trillion in receipts. That is, our government spends$7 trillion and collects$5 trillion. That's not sustainable. Leads to massive money printing, inflation. And at some point, someone has to pay that money back or it crowds out other investments in technology and education that have a greater ROI because we're busy sending so much money to seniors who keep electing other seniors to devote themselves more money. So just some data. The one big, beautiful bill signed July of 2025 made the estate tax exemption permanent, 15 million per person, 30 million per couple.

1:43The bill's estate tax expansion is estimated to add$212 billion to the deficit over the next 10 years. Oh, yay, more deficits. The estate tax currently hits fewer than one in 1 ,000 estates and raises only around 37 billion a year against a$36 trillion national debt. In sum, estate taxes are meaningless now because of that exemption and the fact that you can put money in and it grows well beyond that 30 million exemption. Research from Warden estimates the tax would have generated nine times more revenue under the 2000-year tax code, still roughly 85 billion versus the actual 9 billion. Baby boomers in the silent generation are set to transfer, God, I thought it was 50 trillion.

2:19It's not, it's 84 trillion by 24. Oh my God, think about that. In the next 20 years, 19 years,$84 trillion. can be transferred, the largest intergenerational wealth transfer in the history of the planet. Of that$73 trillion goes directly to heirs, and the wealthiest 1.5 % of households account for 42%, almost half of expected transfers. So again, small number of people taking the greatest advantage of this tax loophole, and the ones who need it the least, quite frankly. Americans 70-plus currently control more than 30 % of all U.S. wealth, according to Fed data, and wealthier boomers are more than two times as likely to leave inherences as poor Americans, meaning the transfer entrenches inequality rather than resets it.

2:55So again, see above dynastic wealth. So that's where we are. So the key is with taxes is to try and find taxes that are the least taxing. And the idea of a progressive tax structure is that the wealthy, if they lose 40, 50, 60 % of their income, it doesn't really impact their lives. Daniel Kahneman, the Israeli-American psychologist, has written a ton on this and done great research and said that above a certain amount of money, the happiness is really incremental. And that is once you're making three, four, 500 ,000, or if you're in New York, a million or two million bucks and can afford to have kids and absorb an economic shock, have good healthcare.

3:29And by the way, that's not a lot of money. Above that, no real incremental happiness, which lends me to believe that, okay, if you're getting no incremental happiness, you're making 15 million versus 10 million a year. And the difference between universal childcare in a household and no universal childcare in a household, which is an incremental 10 or 15 grand in government services for that household, is enormous, then it just strikes me that we should have fairly aggressive progressive tax structure. Now, the problem is once you become a super owner and stop making a lot of money, but making money from investments, you can defer all of your taxes.

4:05So this is kind of how billionaires work. They start companies, they own stocks, they never sell those stocks, they borrow against them, never triggering a tax liability. So if you think of yourself as a stock and you make$100 ,000 every year, every year that$100 ,000 is taxed at 30%. And even though you're gaining$70 ,000 a year, instead of getting$100 ,000, if you own stocks that were increasing $100 ,000 a year, they compound. And in 10 years, you have tripled the amount of money on the tax deferred ownership basis versus the earnings. Now, some people never make enough money to save enough money to become owners, but that's the key when you're young is to find something you're focused on or focus on something, live modestly and start building that base such that you can transition from an earner to owner.

4:47That's a whole shooting match. It's not earning millions of dollars. It's transitioning from earner to owner because of the tax policy. Now, the problem is when you can transfer ownership to new generations and you never tax that money, that is probably the greatest tax loophole. In sum, how do we raise revenues, increase taxes that are the least taxing. And I think you've zeroed in on it. One, I would have an AMT. The tax code's gone from 400 pages to 4 ,000. And all of those goodies are basically there to protect special interest groups, see above corporations and the rich. And there's all sorts of tax loopholes.

5:23It's actually not the tax rates that kill us. It's tax loopholes. There's five Fortune 100 companies that pay no taxes. The average tax rate for the top 0.1 % is single or low double digits. I paid a much greater ratio of my salary when I was making hundreds of thousands. And now that I've been fortunate enough to make millions some years, I pay a lower tax rate. It's got to see above. I'm an owner now, not an earner. Okay, so AMT tax on corporations. So, okay, take all your loopholes, but if you're not paying 30 % of your income in taxes and you make over a million bucks, boom, an AMT kicks in and you pay that 30%.

5:56But what you're talking about is lowering the threshold on estate taxes. Generally speaking, in line with the American zeitgeist, is that we don't build dynasties. And we've always traditionally had a pretty, high estate tax, because the idea is we want to invest in infrastructure, whether it's the internet or medical research or education or childcare that creates opportunities for the next generation of people who demonstrate grit and hard work and that you shouldn't just inherit wealth. We don't want to be like Europe and have dynastic wealth. So I personally would lower the estate tax exemption to a million dollars because of the$50 trillion in wealth, do you know how much was paid in estate tax last year?

6:3320 billion. So what is that? Less than, I don't know, 0.2 % or something. I mean, basically, not even that. What is that? 20 billion, 50, 2 ,500 times. So it's 0.04%. Jesus, anyways, my math is getting wrong here. 0.04%. Anyways, I don't know. I don't know. I did a lot of drugs in college and used to be very good at math. And now that part of my brain is just dying along with calendars or ability to remember people's names. Anyways, I would absolutely pretty much go to 1 million from 30 million for estate taxes. And not only that, that number is misleading. Because if I put something, a stock into my state and it goes from being worth a million to 7 million, say when I pass away in 40 years, it's not a 30 million tax exemption that it's priced at that 1 million.

7:22So technically that$30 million exemption could grow to be hundreds of millions or even billions that doesn't get taxed. And what do you want? You want a tax that doesn't decrease people's happiness. And if your kid inherits a million bucks or more and they lose 40 % of it, say at 10 million, instead of inheriting all 10 million, they inherit six or seven, it's not in any way gonna change their life or their happiness. So I love the idea of lowering the exemption from 30 million for a married couple or 15 million from single to a million. Sure, you've worked. You wanna be able to pass along a decent amount of money tax-free, I get it.

7:57But above a certain amount, We need you to reinvest in the great things that made you rich to begin with, such that other future generations can live up to what is truly an American dynamic. And that is have the infrastructure and investments and wind in their sails such that if they demonstrate some grit and character and register some luck, they too, like you, can have a bunch of money. But I'm writing a book on public policies or kind of ideas on how to increase the health and prosperity of America. and one of my kind of, I think, no-brainer ideas is to pretty much do away or dramatically lower the exemption on estate taxation.

8:32Very much appreciate the question. Question number two comes from a listener who emailed us. Hi, Scott. I'm a 28-year-old veteran from Minneapolis, currently transitioning from active duty into marketing. You've mentioned your interest in data from prediction markets, including CalSuite, to gauge your wisdom of crowds. I'm curious how you think young professionals might leverage this type of data to strengthen the storytelling in their work. Are there any industries or use cases where you think this approach could be especially impactful going forward? Okay. So I love the data from prediction markets.

9:04We use it here at PropG all the time. CalShield secured exclusive deals with CNN and CNBC this year within 48 hours of each other alongside closing a$1 billion funding round. CNN deal is exclusive. It says that they won't work with any other prediction markets. CNN pays zero licensing fees. Polymarket struck a deal with Dow Jones in January 2026 for their data to be displayed across W's Wall Street Journal, Barron's Market Watch, and Investors Business Daily, including in print. Polymarket data was also integrated into the Bloomberg Terminal in 2024, the first signal that Wall Street was taking prediction markets seriously.

9:37And Polymarket also has deals with X, Yahoo Finance, and Substack. Okay, so what's going on here? Why is this data so powerful? There is a phenomenon called the wisdom of crowds that if you ask one person to make a bunch of predictions across different subject material, and then you ask 100 people their prediction, and you take the prediction that is most prevalent among those 100, the wisdom or the crowd will beat the individual almost every time. So there's a wisdom of crowds. And that is it balances out all emotion, super smart, not super smart, biases, etc. So I find this data is absolutely just powerful and insightful.

10:15And if you look at the elections, the prediction markets have gotten elections correct more often than any pollsters. As a matter of fact, Calci has predicted Fed rate cut decisions correctly 100 % of the time. And that is the crowd on Calci has predicted what is going to happen with respect to Fed interest rates and the amount of that cut or not cut. Its track record is 100 % right now. So I think that looking at this data, using it as just another data stream is really powerful. And just to incorporate into your own analysis. I don't see it as, I'm trying to think, is there specific businesses based on the data?

10:59Probably. But I would just think of it as another data source. And when you go into a meeting where you're talking about an issue that might be impacted by an issue, I think it's interesting to go to one of these markets and see if a market has been started and what the market or the crowds are saying about the likelihood of something happening or not happening and incorporate that into your data set. And some, I just think of it as another arrow in your tool set. It's also just interesting to go on to these platforms and just look at the data set and see how things are forming and how things are going up or going down.

11:35You know, what it thinks oil is going to do, what it thinks the Fed's going to do, what it thinks earnings are going to do. I personally would be careful not to engage in this type of gambling personally, especially if you're a younger man who's more prone to this type of addiction. But using it as a data source, gosh, I think it's powerful and I use it every day. So again, it's just another tool, another data set, get facile with it, find out if you're in an industry where there's a lot of markets being formed, providing predictions, then check on them and incorporate them as a data set. A second order thought here might be, could you potentially use it as some sort of interesting insurance market?

12:13That's a little esoteric and generic, but the idea is that there might be, so in Florida, it's near impossible now to get hurricane insurance. So the feeling is there might be markets started where they make bets that a hurricane will hit and that you make the insurance market invest a small amount of money that the hurricane will hit. And if it does, it pays off. And that's the equivalent of insurance because maybe you incurred damage from that hurricane. I think there's a lot of different applications for how this might be used to insure or hedge certain bets. If you're worried that the market's going to go down because Trump is elected, then maybe you bet on Trump being elected.

12:55And if he is, that hedges what you think might be downside risk in your stocks or what have you. So that's probably pretty esoteric and for specific industries. But I think it's just a way, I think it's an interesting way to think about how you use different types of markets. Anyways, thanks for the question.

13:24We'll be right back after a quick break.

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16:46Welcome back. Question number three is another email from a listener. Hi, Scott. I'm seven years into the corporate FP &A, financial planning and analysis at a tech company. Good money, zero soul. I want to move into sales, but the company is asking me to start at a lower tier, essentially a demotion for a year before I get to the level I'm actually targeting. That means a 20 % pay cut at a time when my wife and I are relocating to Chicago and she's starting grad school. I'll be the sole owner for three years. The financial logic says stay put. Is the short term sacrifice for the long term career alignment a reasonable trade off?

17:16Or am I rationalizing a bad decision at the worst possible time? Thank you for everything you do. Okay. So the retail advice is do what you love and take the risk now. But the reality is these people providing advice don't have to pay for your kids, you know, night nurse or give your wife some semblance of financial security. So I don't know your financial situation. Like if you have rich parents, that solves everything. Or if you have a couple, you know, if you have some money saved up, you're in a position to take more risks. But if you're like most people, young families, and not living hand to mouth, but not a ton of cushion, then I think it's really hard to take a pay cut.

17:57And I empathize with that. The silver bullet here, if there's a silver bullet, if it gets fired, is to go find an equivalent job, an equivalent position at the better pay and then be able to go back and say, I want to stay, but I have an offer at this. I find that generally speaking, corporations don't value you until they believe there's a non-zero probability or a credible possibility you're going to leave. And then all of a sudden, they really decide what your net worth is. And then I would also potentially go to someone in your organization, you trust your boss and just explain the issue. I really want to be in this field.

18:34I think I'd be good at it, but I'm struggling with how to do that while supporting my family. I think transparency is a really good, you know, is the best way to communicate, you know, be authentic. The truth has a nice ring to it. So let me summarize. One, if you, like many new families, are really focused on or don't have a lot of cushion, I would say stay put. just because money is important. And it's especially important in terms of your mental well-being with a new kid. When my first child came marching out of my partner, all I felt was financial anxiety, quite frankly. And it really fucked with me mentally because I was worried about how to, you know, it was no longer just taking care of me.

19:13I was taking care of a kid. We were living in New York. I was not broke, but had gone nearly broke in the 08 recession. And it was just tremendously stressful. So you need to be, it sucks to be a grownup and you might just have to suck it up for a while and stick with a higher paying job. to go to someone internally or trust your boss or someone in HR, be very transparent about the struggle. And maybe you've already done that and they've said, sorry, this is what there is, but they might be able to find some sort of creative solution for you, tell you to wait a year and then you'll transition at a higher level or something like that.

19:42Finally, the silver bullet here is to be able to walk in and say, you got another job in the department you want at the pay you want. So that's sort of the three legs of this stool of this decision, if you will. But look, I don't want to say this is a good problem, but what it means is it sounds like you're making pretty decent money. You have a job and you have a new kid. And oh, and also make sure you get alignment with your partner around this. Talk to your partner, get her view, make sure that whatever decisions you make, these are joint decisions and you have alignment with each other. Otherwise, if something goes wrong or it doesn't work out, you don't want her to feel as if you're surprising her or, you know, you just need alignment here.

20:22That way you guys own the victory or the mistakes, own the decision together. Thanks for the question. That's all for this episode. If you'd like to submit a question, please email a voice recording to officehoursofproptomedia.com. Again, that's officehoursofproptomedia.com. Or if you prefer to ask on Reddit, post your question on the Scott Galloway subreddit, and we just might feature it in an upcoming episode. This episode was produced by Jennifer Sanchez and Laura Jannere. Kami Rika is our social producer. Brad Williams is our editor. and Drew Burrows is our technical director. Thank you for listening to the PropG pod from PropG Media.