Transcript
Scott Galloway (0:00)
I think it comes down to a basic question, what is America? And I would. My kind of economic role model is Peter Drucker. I think an economy in America exists to create a robust middle class. The most ascending countries over the last 20 years have been China and India. And it's one basic litmus test. How many people are you bringing into the middle class? The greatest innovation in history is not the iPhone or the semiconductor. It's the American middle class that beat back fascism in the middle of World War II, has financed and built the greatest innovations, whether it's radar, whether it's the Internet, whether it's vaccine. The middle class in America is the greatest innovation in history. And people like to fall back into this right wing notion that it's naturally self healing. It's not, it's an accident. In history, typically throughout history, you have a small number of people who weaponize government. They're very talented, they aggregate power, they weaponize government and they aggregate more and more spoils. And then the good news is it's self correcting. This level of income inequality is usually self correcting. The bad news is the means of self correction are typically war, famine or revolution. And if you want to talk about tax policy, the myth in tax policy is that the rich don't pay their taxes. That's just not true. The fulcrum is the following. There's super earners and super owners. The folks around your table are probably considered super owners who make exceptional livings. But it's all current income reported on a W2. And if you live in New Jersey or New York, you're probably paying 48 to 52% tax rates. Right? But if you're a super owner. I make my living starting and selling businesses. My last business, which was sold for $160 million. Very transparent about money. This, this gestalt or zeitgeist that people should not talk about money is nothing but an attempt to keep poor people down. Because rich people talk about money all the time. It's important to be financially literate. The first $10 million for my $160 million sale was tax free. My effective tax rate over the last 10 years has been 17%. The average tax rate on the wealthiest 25Americans is 6%. Corporate tax rates are at their lowest point since 1939. At the same time, taxes have gone up where the super owners now the bottom 50% don't pay much federal income tax, but they pay a lot in usage and consumption taxes. But this misdirect talking about tax rates misses the point, it's the tax code, which has gone from 400 pages to 4,000. And that 3,600 pages, quite frankly, is there to screw the middle class and continue to transfer more money to the super wealthy. The fastest growing demographic group in America is not seniors, it's not Latins, it's billionaires. We have 500 billionaires 10 years ago, we now have 2500. So if you want to cram more and more wealth into a smaller group of people, we're on our way. And the weird thing about America is that we support it because our superpowers are optimism. The Achilles heel is that 99%, the bottom 99% who are getting screwed, mind these policies because they believe at some point they're going to be in that 1%. But where are we? We're in a country that's had unprecedented prosperity. But similar to the way William Gibson described the future, it has not been evenly distributed. When 40% of US households are struggling with some sort of medical or dental debt, when a quarter or 20% of households with kids are food insecure. And yet we have one man, Jensen Huang. And I like Jensen, who is now worth more than Boeing. I mean, something is wrong here. And just let me go to the psychology of happiness. I think a lot about happiness because I struggle with it. Joe, you effectively, once you get above a certain level of wealth, you get no incremental happiness. So why on earth would you not go back to a tax policy of the 60s, 70s and 80s where say above, pick a big number. 10 million. You actually pay more than 10%, maybe more than 20%, maybe more than 50%. Because the difference between 30,000 a year for a household and 50,000 is enormous to the well being of that household. Low income kids in low income households have higher resting blood pressure. But the difference between making 10 million a year and 15 million a year offers you no happiness. But these individuals have weaponized government and we risk revolution. Whether it's CEOs being murdered in the street, whether it's a MeToo movement that had righteous components of it, or Black Lives Matter. What are these movements? They are targeting the wealthy. We are in the midst of a series of small revolutions to correct income inequality. And the reason we put an insurrectionist and a rapist in office is because for the first time in our Nation's history, a 30 year old man or woman isn't doing as well as his or her parents were at 30. Why? Because the majority of households are having the oxygen sucked out of the room. Such That a small number of individuals and a small number of companies can be worth more than nation states. Income inequality is out of control. Our tax policy has gone full oligarch.