A (1:04)

It's on my schedule somewhere. All right, so here's what we're doing. There's a billionaire tax proposal that's going to the ballot in California. I had been planning to write about it, and then I was waiting for the right moment. And the right moment came because they filed their signatures to make the ballot last week, and they have 1.55 million signatures. They need 875,000. Typically speaking, the rule of thumb is you need around 1.3 to 1.6, the number of signatures to get to the valid number, because people sign fake names. People aren't residents, whatever it might be, but they're good. The other side's not even contesting it. So the proposal is a one time 5% tax on the assets of California residents worth 1.1 billion or more. So these are the sides. So the coalition supporting it is labor, primarily SEIU and afscme. And then kind of the typical progressive crowd. Sanders, Ro Khanna, Bob Reich, people like that. The opponents are also kind of what you would expect. So Sergey Brin, Eric Schmidt, Peter Thiel, California Business Roundtable, California Chamber of Commerce, plus Gavin Newsom, and interestingly, every serious candidate for governor on both sides of the aisle. So the substack that I wrote in the conversation we're about to have is kind of my take on the motivations for proposal. It's like impact on California's economy and budget, its chances of success, its chances of replication in other states, and then other ideas on how to deal with income inequality. Megan, who, you know, always reads the substacks and gives me feedback, disagrees with my underlying position. So we thought it'd be fun for her to come on and debate this with me. So Hugo's going to kind of be the moderator here.

B (2:51)

Yeah. And I have one thing I just want to point out first. And the prediction markets have the chance of it passing at 45%.

A (2:59)

43 as of last.

C (3:00)

Oh, really?

B (3:01)

I'm on Calci right now. It says 45.

A (3:03)

It was 43 yesterday. It's going up. Yep.

C (3:04)

Wonder why it went up a little.

B (3:07)

So first of all, I guess Bradley, just, just why is this happening right now?

A (3:10)

So look, it's two things. Three things. One, if you are a public sector union, you always want more revenue for the budget, full stop. You know, your job is to get your members as much as possible, as much money, as much benefits, as little work. And that gives. Gives you more dues. So they always want that. So that's number one. Number two, on the progressive side, they always want to raise taxes because it meets their view of social justice. And we'll get into my views as to why they feel that way. And then third, and this is the most tangible reason is the big beautiful bill. Trump's big budget bill last year has huge cuts to Medicaid that are going to affect all 50 states. California, because it's the biggest state, has the biggest cut. So Rand estimates that they're going to lose $112 billion in federal funding. 112, yeah. Others say it's smaller, but I don't see any scenario where it's not a very big number. However you look at it, Right. So that's the rationale for the why now? Although I think the proponents would be happy with this even if there were no rationale for it.

B (4:19)

So what do we know about the, like, real world impact of the tax?

A (4:22)

So I'm gonna give my take, and I think Meghan's gonna disagree with some of this. But so I try to be in the piece at least to sort of acknowledge both points of view across the board, even though I ultimately concluded with, with my take or my, my how I would vote. So the proponents say would generate 100 billion. The opponents say that that number is wildly overstated because a lot of billionaires are no longer California residents. A lot of people. The bill is, the measure is actually retroactive to January 1st of 2026. So you couldn't wait to see if it's made the ballot and then leave. But I think the people who have 1.1 billion or more are smart enough to be aware of these things in advance. So I know people who, for example, have, you know, moved their official residence to another state in late 2025 in anticipation of this and the possibility of it passing. So the Hoover Institution, which is at Stanford, says 40 billion because a lot of people will leave or have left or everything else. The proponents say you're overstating it. You're double counting things like that, but somewhere between 40 and 100 billion. So if you want to take the Midpoint, call it 70 billion. So that's the ballpark of how much revenue it could generate. And then you have to weigh that against the question of how much money will leave the state and therefore jobs and long term tax revenue and higher costs for the state as a result. So that breaks down into a couple of different categories. So there's a guy named Mike Jenest who I've known for a while now, and he's like the budget guru of California. He's been the budget director under multiple governors. Definitely a couple of Democrats, because that's when I knew him. But I think maybe even going back to some of the Republicans, Mike says 108,000 jobs will be lost. Again, he might be wrong, but I think he's generally about as good of an expert as you're gonna get on this stuff. So I then ran some searches to try to figure out if you took the loss of 180,000 people's income tax revenue, sales tax revenue, property tax revenue, the multiplier effect on all the businesses they currently shop at, because they're going to obviously lose business too. And what they pay higher social services costs, higher law enforcement costs. And there are formulas that can kind of link up job loss within increased costs of government. And then I. And these are in perpetuity, right? Because the tax is one time, but the losses are permanent. Once the job is gone, it's gone. So that's a present value if you discounted at 4% of 41 billion. So if you take the $100 billion estimate is accurate in terms of the revenue gain, that would leave you with a $59 billion gain. If you take the Hoover Institution, it would leave you the $1 billion loss. And if you take the midpoint, and it would leave you with a $29 billion gain. The Hoover Institution ran 100,000 simulations with different estimates of discount rates. Wealth tax revenue, lost income tax revenue. In their study, the state ultimately loses more revenue than it gains 71% of the time. Additionally, I think when you think about this, there's the immediate impact of what's the lost revenue from people leaving the state as a result of this. Then I think there are some secondary things that I would want to think about if I were there. So the first would be what's. Is there a chilling effect? And if so, what is it? So I would argue. It's funny because I had a version of this debate when we were fighting the qsbs issue in New York about a month ago. Whereas in New York, I was making the case to the state saying, look, we don't have Stanford, we don't have mit. Cornell Tech has not become what they hoped. In fact, I was at a tech conference that was hosted at Cornell Tech on Thursday, and I hosted a session specifically about what New York City and New York State could do better to help the tech community. And I asked, has anyone here built a startup at Cornell Tech or pitched the startup, like anyone from Cornell Tech? And it was no.

B (8:51)

So.

A (8:51)

And the case I was making that I think actually seemed to work because we won was, look, we don't have something that kind of binds people to New York. And so we have a lot of startups, we have a lot of VCs, but we also have high taxes, bad weather, high cost of living. And so as a result, like, they don't have to be here. They could go anywhere. And what was ironic was my counter was, oh, well, unlike, say, Stanford, which anchors the Valley. Right. Stanford is kind of what helped start bringing together when HP was really kind of the primary mover in the 1960s and kind of building Silicon Valley, and then it's kind of built upon itself and it's this incredible ecosystem. And even when San Francisco really fell down in the past decade, and it's coming back now, but when it fell down, the Valley remained really strong. Right. That wasn't the issue. But if the companies that anchor the valley leave, the VCs that anchor the valley start leaving. If the Stanford grads, say you. I think, because here's one thing I know as a VC, every founder thinks they're going to be worth $1.1 billion.

C (9:55)

Yeah.

A (9:56)

So if they're 99.9999% will not. But they all, 100% think it. If they all start saying, all right, we could just all meet up in Austin or Miami or wherever. You guys know what network effects are?

B (10:09)

Yeah.

A (10:10)

Yes. Right. So network effects, like Uber's the prime, sort of most easy example, which is riders will use it if a car is available in a reasonable amount of time. Drivers will go on the network if there are enough riders to make it worth their while. And as each one adds, it grows and grows and grows. Because now there's more cars, you get more drivers, there's more and more riders, you get more riders. That makes more drivers want to do it. But network effects can work in reverse, too. Right? And things can actually go the other way. So I think one, there's the risk of California, of reverse network effect on the tech sector, which creates a huge amount of that state's wealth. The second would be. So when Facebook went public in 2012, based on the research I did, they think that the state of California. So when there's an IPO and you make money on it, you're paying capital gains taxes to the federal government, to the state government. And then in New York, there's some on the local side, too. And for the state, they think they got about 1 to 2 billion in new tax revenue from employees of Facebook. Right. So OpenAI and Anthropic are both going to go public sometime in the next 24 months, let's call it. They're both valued at just under a trillion dollars. Now. That could go up. So if those two companies left California today and they went public, that's 10x. Right? So that's 10 to 20 billion in potential lost revenue from each. Now, because the tax is retroactive to January 1, Dariel Madei or Sam Altman, they would still probably have, unless they've already moved their residence, have to pay it. But the vast majority of the employees are not gonna make $1.1 billion. So they won't. So if they're all gone, that's not even factored into any of the estimates that I've seen. But do you think.

B (12:06)

All gone. So you think that, like, tens of thousands of people in California are gonna leave?

A (12:13)

That's what happened. SpaceX did that.

C (12:15)

Yeah, but that's also.

A (12:16)

Right, but that's one company, but it's Elon. So he sets the tone for everyone else.

B (12:21)

Right, but he left, what, like, five, seven years ago? Right. And there hasn't been, like, a crazy exodus, has there? I mean, the California economy's growing like

A (12:28)

that, but this proposal just hit the ballot.

C (12:31)

Right, but that's where I think my take, and I know that there's holes in it. But I also, at the end of the day, I think that the strongest argument the billionaires can have is saying, we're just going to leave now. My biggest gripe with it is that one, that they're growing jobs when simultaneously, pretty much everyone is seeing in the news that there are layoffs in tech. Right. So this promise of the fact that they're giving jobs revenue to the state but don't tax us, but if. And if you do, we'll leave. It feels like hostage.

A (13:03)

It's a good idea. It's a thought. So in theory, there could be a deal cut between now and then. Right. Between now and November, between the proponents, the opponents, the legislature, the governor.

C (13:16)

Yeah.

A (13:16)

What if there was something where it said, okay, we'll drop the measure, but we want a commitment that you're gonna preserve X amount of jobs. Like you use it as sort of a cudgel or threat.

C (13:29)

Absolutely. But that's the thing. I think the billionaires have so much power, they don't even need to negotiate.

A (13:34)

Like, well, they do if they didn't move and before January 1. And the tax is gonna pass totally.

C (13:40)

But that to me signals they're not even willing to negotiate. And that is.

A (13:45)

Or maybe that hasn't. But that doesn't even become a realistic discussion for negotiation until the ballot qualifies what you did. So now would be the time when. If there. And I haven't heard anything that's happening, but if there were to be negotiations, now would be the time. That would be really interesting. Maybe actually before tomorrow we post this, try to come up with an additional section for this already 4,500 word like tax credit piece, or just like, what would a deal look like if you averted it? Right. Because that's a really good point that I haven't thought of. Keep going.

C (14:15)

Yeah, no, and I think. And look, I'm not a resident of California. I'm a big fan of, like, stay out of people's business if you don't live in that state, like, the people should be voting on it. But I do think as a New Yorker, and we have a similar debate here right now of like, taxing the rich, taxing the billionaires, to be very specific. And I think California is a good example right now, at least of, like, look, we all know that we have. Anyone who's a Democrat or liberal, we have no control in D.C. on raising federal tax. It's not gonna happen. But it just came out of tax season. Myself being a taxpayer and my bracket Went up. Thank you, Bradley. But part of it is, well, you

A (14:49)

have the worst of all worlds because you're paying regular. You have not the worst, but in the sense that Meghan doesn't have, other than her, her stake in the, in the new venture business, which will be, I think, really good. But not for a little while. You're. You have a high income, relatively speaking. All regular income. Yes, in New York.

C (15:09)

Exactly. And so. And we pay. And I am, at the end of the day especially, I am a fan of Zoran. Right now. I'm happy to pay taxes into a state that is giving my child right now free education, actually universal school meals right now. So there's things that I am as a taxpayer, glad to pay. But what's most infuriating is knowing that people who are so much wealthier than myself, any of us at this table, quite honest, the billionaires we're talking, they don't have to. We all know that they get out of paying taxes.

A (15:40)

Exactly.

C (15:40)

And that's the part that pisses me off.

A (15:41)

I don't think anyone would dispute the number statistic that 1% of New York City residents pay 50% of the local taxes. No, but that they are paying. Okay, sure, I'm talking. But they are paying taxes, obviously, because it's half the city.

B (15:55)

But she's talking about a separate category. Right. That 1% is not the super rich. Right. There's a much smaller group within that that has money that's at a completely next level.

C (16:07)

And I'm not saying everyone needs to have my mentality. When they pay their taxes, everyone can feel however they want. It's their money that they earn and they're giving it to the government. It's, it's your own relationship and how you think about it. But I'm not against my taxes like paying my taxes. What I'm against is the fact that there is clearly a system. And it speaks to the larger narrative that I think Democrats are finally getting around to here, which is there are these loopholes for the ultra rich and they can dictate policy, what's gonna happen, what isn't gonna happen. And I think California is a good example of them right now saying, woe is me, I'm gonna leave. And it's kinda like eye roll. First of all, you guys aren't bringing more jobs. At the end of the day, you're paying how much more in taxes? Like you're almost having a hissy fit. It's a one time tax.

A (16:53)

Yes, but it's a one time tax. Now, and we'll get into this later. The proposal actually gives the legislature the ability to expand the category of who's eligible to pay the tax if it's consistent with the purpose of the tax. So that 1.1 billion could become 110 million. It could become 1.1 million.

B (17:12)

So it's not going to come 1.1 million.

A (17:15)

I don't know. Millionaires, taxes. They're millionaires. But politically speaking.

B (17:19)

Right.

A (17:19)

That's not probably like half the homeowners

B (17:21)

in the state of California. Right.

A (17:23)

Well, but if they exempted your. They could do it in a way that says it's only this types of assets or whatever it is. But this gets into me the question of I don't think you're going to disagree with this completely, which is. And we'll talk later about all the other ideas I have around income inequality. Because you and I agree on that. Right. There's no, there's no disagreement on that. It's a question of efficacy. Right. One of the challenges of jurisdictional, individual jurisdictional tax increases is we live in a federalist system with 50 states that each set their own local tax rates. And as a result, there's an arbitrage game that happens. And the people who are the most useful to tax because they have the most money are the people with the greatest ability to leave the jurisdiction. Right. And so I don't know anybody. I know one person who like, would renounce their U.S. citizenship or green card.

B (18:16)

You do know somebody.

A (18:17)

I do. You do, too. To avoid higher taxes. Right. Based. So if the federal government, people complain about it, but if the federal government raises taxes, no one's leaving the country.

C (18:29)

No.

A (18:29)

Right.

C (18:29)

Yeah.

A (18:31)

But, you know, you can disagree with this, but this Citizens Budget Commission in New York, which is a respected nonpartisan group that's tough on every mayor, did a study and I linked to it in the piece that said that in 2012, New York City had 12.7% of America's millionaires. In 2022, we had 8.7%. The difference in lost tax revenue for the city and the state is $13 billion. If you look at everything Madani wants to do, of which like a lot of them to me sound great, if you could afford it, you would be able to pay for all of these things and not have a budget deficit if you had that 13 billion. Now, a bunch of stuff happened between 2012 and 2022. Yes, there were new taxes. I do think that was a motivating factor. There was also, I think New York handled Covid poorly in the sense that we overreacted to a lot of it, shutting down the schools. To me, it's gonna prove, once they do all the studies to be like one of the most damaging things to kids in history. So I think people were re. Rightfully so. Look, there's a lot about Florida and Ron Desantis I don't like, but I think he got Covid right. To be honest, quality of life worsened a lot under de Blasio and Adams. You had, you know, more regulations, as always. And then you have this, you know, endless public excoriation of the rich, which some of it might not be wrong, but. But Pete, it seemed wrong.

B (19:55)

I have to say, when Donnie went after Ken Griffin by name, it just seems. I mean, the guy is actually investing,

A (20:02)

has thousands of employees here and $234

B (20:04)

apartment, but who cares? I think there's a good policy to tax people like that, but you don't

A (20:12)

have to like, here's why I think

B (20:13)

he did it because he likes entertainment.

A (20:17)

Yeah. But I. But I actually think there's a more because I do think with Zohran, there's usually a method to the madness. So look at it this way. He ran in part, as all demagogues do on both sides, on the promise of telling their voters, you're being screwed and I'm going to get you justice. Right. So if it's trumpets, I'm going to close the Bor supporters deport this. That.

C (20:38)

Yeah.

A (20:38)

And if it's Sanders or Madame or it is, it's like, oh, you're not in the 1% and they're evil and I'm going to make sure they pay. Right. He then didn't actually succeed in getting the kinds of taxes that he wanted done in Albany. Right. In a year where, quite frankly, he has the most leverage. Because it's an election year for all of Albany and it's probably Hochul's last election ever. So if she doesn't need him now, she's never going to need him. Right. Because at that point, if you're not running again. Yeah. She doesn't want her numbers to go down, but it's not that big a deal either. So this is his most leverage. He didn't get the income tax increase. If there is a corporate tax increase, I don't think it's gonna be that meaningful. And so I believe, and this is maybe a slight conspiracy theory by me, but that the piano terror tax, which again, I don't really have a problem with, to be clear, but putting That

B (21:27)

I don't like it.

A (21:28)

I have a left. No, you could potentially segment it, I believe.

B (21:32)

Yeah.

A (21:33)

That a lot of those apartments in, you know, on 57th street or whatever that is, are 59th people from Russia and China and the Middle east who are washing money. They're not think that they are getting money out of their country in their system, because they can't leave it there. And as a result, if they're effectively washing money and they pay a couple points more, so fucking what? They're going to pay the tax to launder the money. Like, in my view, not all people who have those, but I do think that's a significant portion of. So therefore. And again, Ken Griffin is not that, but obviously, because he lives in Miami, he's an American. But what I think Zoran did, and I think Hochul.

B (22:11)

So why not go after them? Why go after Ken Griffin?

C (22:13)

I mean, that's a good question.

A (22:14)

Okay, maybe. Yes. But let's put that for a second. I think overall, Griffin might have been a specific strategic mistake. But from a holistic strategic standpoint, you're Mondani and you're Hole. Right. So if you're Mondani, you're saying, I didn't actually deliver on the thing that I was elected to do, but if I can create something that gets the base riled up and they feel like it's a whim, that will really help.

B (22:38)

So go after someone who actually employs people.

A (22:40)

Again, put that aside for a second. I don't disagree with. You put that subject. And for Hochul, the reason why it's good for her for the left to get really excited about this is it takes a huge amount of pressure off of her in the budget negotiating room, because given that most of the arguments to increase taxes by the left are about emotional validation and not economics, they feel the validation, they're happy. So you could even argue. And again, Ken Griffin, from what I can tell, does not deserve to be, from context of this, the target. And yet, even then, the fight that Zoran and he had was good for Zoran, because the fight, no one on the left is like, oh, that's so unfair to Ken Griffin. Right. So it cemented in this notion that he did something.

C (23:24)

There's no empathy right now for billionaires.

A (23:26)

I think from a political strategic standpoint, it was smart. Now, if Ken Griffin says, I'm pulling all my jobs out of New York, really fucking bad for New York. But from a political strategy standpoint, I don't know that Mondelmi made a mistake.

B (23:42)

But if he does do that, then it's a huge mistake.

A (23:44)

No, because I don't think his voters will hold him accountable for that.

C (23:48)

If anything, seeing that to my point earlier about just billionaires holding all of the cards, right?

A (23:54)

And I mean, the funny thing in

B (23:56)

New York is I think that people with a lot of money are an industry in the city that does create jobs for people. And I don't love it. I don't love the idea that there are florists and you know, like crazy limousine drivers or whatever, but there's just tons of shit. And more and more New Yorkers work in that industry of like, of like high end service.

A (24:15)

That again, ripple effect that I mentioned in California for sure. And look, keep in mind some of the argument that I used to kill the qsbs tax was, look, guys, you know, when the city bus. Okay, well then, all right, we won't do this tax. What do you want? I said, here's the good news for you. We don't need money, right? Like most of the startups don't make money for a while, so they're not paying taxes anyway. And you know, there might be some grand, some office space, whatever it is, but just don't be assholes to them, right? If they're creating jobs here and they're not even asking you for anything. People emotionally don't like fucking being publicly berated. And if you just say to them, hey, we're glad you're here, we want tech jobs in New York that'll go a long fucking way. So.

C (25:02)

Well, and I also think there's more. I'm more empathetic to startups in tech because the majority of them aren't billion dollar companies. Million dollar companies, right?

A (25:11)

Like they're, well, they're million dollar companies.

C (25:12)

Well, yeah, I mean, that's the hope here. But at the end of the day, I'm seeing the like folks that are frustrated with the billionaires in New York. I think it's also like, yes, we need more jobs and opportunity, but it's also the fact that you get a job in New York now, the opportunity to have an apartment that you can have a family in is much lower than it was even 10 years ago. I think that there's this matching of the affordability agenda that again, Bonnie has, you know, successfully pointed out. And the billionaire saying, well, we have the jobs in the city. There's also this disconnect of like, even if you have a job in this city, a lot of them don't feel like you're gonna get Anywhere you're not gonna be able to save anything. It's kind of like there's not really a future. That's the feeling we're talking about the emotion, not the economics necessarily, but that is the vibe right now, especially for younger folks in the city.

B (26:02)

I mean, I agree with that. But on the other hand, what's the answer to that? It's to build more housing. It's not to, like, for sure.

A (26:09)

And this will be.

B (26:10)

And they have to make it profitable for, like, you know, people to build.

A (26:17)

We're going to get to that, but for sure. And look, I do think one of the tests of Mondami will be, are you willing to stand up to your own base who demands affordable housing? But yet then they oppose removing all the things that make it hard to build affordable housing in order to do so. I think a great mayor says, I'm going to do what it takes to achieve the substantive underlying goals, even if it's politically unpopular. The jury's out on him on that. I don't know yet.

C (26:42)

I would bet that he will be, though, the mayor that does that, because look at just a small example, Elizabeth Street Garden, that when he was running and that was that community is like hardcore. Keep this community. And I love community gardens, but they're like, do not build here. Do not do it. And he was the only one that was like, I'm willing to do that.

B (27:00)

And is that gonna happen?

A (27:02)

I don't know where it stands. Right. There's been injunctions, all kinds of stuff. I don't know. It's actually fight to the death, though, again, I get it conceptually, so I'm fine. If they do happens to be a lovely community garden, we're happy. When she was in high school, we'd do her homework, but. All right. Should we move over to the odds of success here?

B (27:19)

Sure.

A (27:20)

So it's unclear. I'd say so. There's a lot of different data points. There's a lot of different ways this could go. So there's the most recent poll that I saw came out the very in March from Politico in Berkeley, and it said it was 50% for the tax, 23 undecided, 28 opposed. So that argues for passage. Last I saw it on calcium polymarker, it's 57. Said it would fail, 43. Yes. Hugo said it's now up to 45. So that's different. Turnout is going to be really high. So you've got a gubernatorial election the way California does their elections, which I like is something called the top two system. So rather than being here's the Democrat, here's the Republican, which then effectively means the elections decided in the primary under top two. There's. If the top two vote getters are both, say, Democrats, then they're the ones competing in the general election. So if that's the case, then you're going to have a higher turnout in the general election because Democrats will say, okay, we have to choose two candidates. By the way, there was a scenario where it was possible, though Swalwell's departure from the race, I think, changes the math a bit, where you could have had Hilton and Bianco, who were two Republicans, arguably come out as a top two. If that happened, you would decrease turnout, but you probably increase turnout against people against the ballot measure. There are five House seats that are competitive, and given that control of the House is up for grabs, half a billion dollars could be spent collectively on those five races, which is fucking crazy, because the law of diminishing returns kicks in so quickly that almost all that is just profit for consultants and nothing else. But nonetheless, that's gonna happen. So that still does drive turnout. There are other ballot measures. Normally, if you are the proponents and you have a ballot measure, you don't want high turnout, because low turnout means that you can mobilize your members. The average person doesn't turn out, and so you have a disproportionately higher share of the electorate. However, in this particular election, looks like

B (29:24)

there's gonna be very high turnout.

A (29:25)

But I don't know if that's bad for this measure, because 45% of California registered voters are Democrats, which is pretty high. It's 28 nationally, and this is the first real opportunity they've had to go to the ballot box since Trump won in 24. Right. And Trump only gets more unpopular. There's a Washington Post poll today, they had him at 62% disapproved, which is just like record level.

B (29:51)

And George W. Was higher. Right.

A (29:54)

Maybe in 2008, as things were falling apart. But by the way, every day the Iran war goes on. I saw yesterday that was coming back from Newark Airport, the gas station right by the Harlem Tunnel. The highest price was 507 a gallon. Right. Insane. So that's insane.

B (30:10)

Yeah, I paid over 5 yesterday.

A (30:12)

Yeah. So that's just gonna. That number will go proportional. The disapproval will go proportionally with gas price.

C (30:17)

Right.

A (30:17)

But. So one of the reasons I think Mondami won, not the only reason, but a reason, is it was the first chance New York City Residents had to vote after Trump and people were fucking rightfully ultra pissed off and pick the most sort of anti Trump candidate. Andrew Cuomo was playing footsie with Trump the entire time. So I think that's gonna drive Democratic turnout and drive the kind of voters who will vote for the ballot measure and even more simply. And our friend Howard and I, we were at the Knicks game the other night discussing this and I thought Howard as often can sort of distill things really well. He's like, look, if you're a voter in California, you're gonna say to yourself, I'm not a billionaire. I don't know any billionaires. They should pay more.

B (30:59)

Yeah.

A (31:00)

I don't want cuts to anyone's health care.

C (31:01)

Yes.

A (31:02)

And this is never going to affect me, so why wouldn't I vote for this? And that's really fucking compelling logic for the. Yes. Right. So then the other factors would be, one, the money spent on the no side will be. The unions will spend like $50 million, which is a crazy amount of money in and of itself. But the opposition could spend 250. Right?

C (31:24)

Yeah.

B (31:25)

Now why are the unions not persuaded by like the logic?

A (31:29)

That's not their job. Their goal is to maximize their own interests. Which is if there's $112 billion in budget cuts that are not set off, offset in some way, that means that they'll lose members and they'll lose dues. Right. And the people.

B (31:48)

Right, but you're saying those budget cuts won't be offset. That's the point.

A (31:51)

Right, but they probably would be in the short term. Union leaders are like every other politician. They're elected, they want to win re election. And they're not thinking 20 years down the road, they're thinking till the next election, two years, four years, whatever it might be for their union. So they know that if the budget cuts happen and a bunch of union members get laid off, they're vulnerable in their next election. It might mean long term that they actually do have fewer members at the end of the day. But just like politicians aren't thinking about the long term, union leaders aren't either. And even by the virtue of just trying, that will probably, even if they lose this and the layoffs happen, they'll get some grace.

B (32:28)

So I guess what I'm curious is like you're a person generally of the left in terms of your.

A (32:34)

Center left.

B (32:34)

Yeah, center left. And you're persuaded this is a bad idea. Why are there not more prominent voices?

A (32:43)

Well, I think there are. And I think, look at all look at, say, Katie Porter, who's pretty liberal.

B (32:46)

Right.

A (32:47)

He's against it. Right. Tom Steyer is obviously going to be affected by this. Of course he's against it.

B (32:52)

But is he against it?

C (32:53)

Is he.

B (32:53)

Actually, I think he, I think he's for it.

A (32:55)

I thought when I was doing to

C (32:58)

not actually know what his.

A (32:59)

Unless my research is wrong and it might be. That's Claude. There was only one fringe candidate supporting it, but Becerra was in the Biden administration. He's, you know, if, if Claude was right and maybe I'll go deeper that all the major candidates are against it. A lot of those are center left.

B (33:17)

Tom Syrus, heavily backing the 2026 California billionaire tax act according to Gemini.

C (33:22)

That makes sense though.

B (33:23)

Proposed one time. Five.

A (33:24)

All right, I'll. He's the only one who can say like I'll take the heat and he's so desperate to be in office.

C (33:29)

Yeah, exactly.

A (33:30)

And by the way, if he loses, if he's not in the top two, he could still come out and oppose it or fund the obvious anyway. Right. So. Or move his money out of state or whatever it is. So but anyway, there are definitely. Unless Claude was wrong and they're for it.

B (33:44)

There.

A (33:44)

There are. And Gavin Newsom, who's going to have to get through a Democratic presidential primary, is unquestionably against it. And I think that's, you know, because I do think that if you've run the state for eight years, you know what it could do. And obviously probably for as far as

C (34:01)

donors, I was about to say to me that screams you want those billionaire donors paying like giving you the money.

A (34:07)

But the. So there's a little bit of a question of so the opposition is going to have more money. Money. We know that. But the underlying narrative is so much in favor of the other side. The money is only meaningful if you can come up with a counter narrative that actually resonates. Right. Because if you just say what I've been saying, which is the long term impact, if you discount a perpetuity, this. That doesn't mean anything to anybody. Right. It's too obscure. But if you can show people here's how this could affect you in the relative near future, that's how you could potentially change their views.

B (34:39)

Well, it feels like the argument that you made earlier, which is, look, Elon Musk already left the state and we're increasing the incentives for major employers.

A (34:49)

Yeah, right. Small ish amount of voters if they

B (34:55)

care about major employers in the state.

A (34:57)

Well, if you're the employees at Anthropic or OpenAI or whatever it is. Yeah. Maybe you're motivated to vote against it, but I don't know that, like, the average person at the average company is really thinking about it that way. Right. Hollywood's Hollywood Chase is set in California. And then, and then the productions are wherever the best tax credits are anyway. Right. The defense industry is pretty set in Southern California. It could move. Right. But that's if you're an orthop Grumman or someone like that, McDonnell Douglas. It's a pretty substantial process. You have your plants, you have all the stuff. So, you know, the Kaiser Permanente is not going anywhere, obviously, the State of California government's not going anywhere. The University system's not going anywhere. So I don't think that's enough votes. Right. So to me, there's two things. It's what we talked about, which is one, the ability of the legislature to expand the category. I will tell you this. If the measure passes three days later, some legislature will say, let's do it for people over 500 million, and then it'll become 100, then it'll become 50, and maybe it never gets to 1.1. But that's invariable.

B (36:04)

But you already have. I mean, according to Kaushi, Right. You already have less than 50% chance of it passing in a heavily Democratic state.

A (36:11)

So in, in a. Hold on. That's count. But keep in mind, and I do actually think that there is real value in prediction market, you know, sort of a political analysis, because it is a much bigger sample than a poll.

B (36:25)

Right.

A (36:25)

And people are not only predicting what, how a poll is, how do you feel?

C (36:28)

Feel.

B (36:28)

Right.

A (36:29)

Prediction market is how do you think your neighbors and friends and others would feel? So there's value there. However, the more that the people who are betting are also the people who are there, the stronger the correlation. Right. So for President, it works really well because everyone who is everyone, at least in the US Is participating is also able to vote if you're an adult. Right. And it's just so. But like, when you look at like a congressional primary, you know, that's like Cuomo for a very long time was up over Mondami in the prediction markets because the people who were doing it didn't live in New York City. They weren't feeling it. They heard of Cuomo, they hadn't heard of Mandami. They widely overestimate the value of money in politics.

B (37:13)

Interesting. So you'd say the same dynamic is

A (37:14)

this, I don't know. California's a bigger state.

B (37:16)

Right.

A (37:17)

So.

C (37:17)

But it could be.

A (37:19)

My only point is, I think It's. I think 50. 50 is sort of a fair. Ish estimation. But I also think that apart from the polling and the prediction markets, there is that underlying logic of just what the person asks themselves.

B (37:30)

So given the array of forces, the no argument is doing pretty well. Right.

A (37:36)

The no against the campaign hasn't really started yet. It's already a little bit. It hasn't really, really kicked in. So we'll see. But the point to me is they're gonna succeed if they can take all their money and convey a message that feels more tangible to people. Right. So one would be this is eventually gonna come for you. And knowing the California politics, that's a very credible threat. And two would be in order for them to audit. And Meghan and I disagree about this provision. But in order to know who would it apply to, they now have the power to look at your credit card statements, your bank accounts, your cell phone records, your travel records, anything they want. Right. I think there are at least some segment of people who are gonna be like, fuck, no. I don't like that at all. And I also think if I were running the. Or involved in the no campaign, I would link that to. These are the same people who won't let anyone speak on college campuses that they don't like, who cancel anyone who says anything. They don't like most regular people. The not because the progressives are voting for it. They don't matter. There's no reason to campaign to that. Right.

B (38:42)

Right.

A (38:42)

So. But everyone else really dislikes that culture. And if you can tie this measure to that culture, I think that could also be helpful. There's also a few other related taxes in the ballot that maybe at the margins help the. The no side a little bit.

C (38:59)

I mean, I agree with that, even though I disagree with it on, like, what the translation of it all is. I agree that that's like.

A (39:05)

Right.

C (39:06)

Strategy.

A (39:06)

Substantively, you're not worried about it, but politically you would see it as a valid thing. Okay. Yeah.

B (39:11)

Will other states seek to replicate this?

A (39:13)

Yeah. So, I mean, it's already happened to a certain extent. Right. So New York's had a fight over this and they have previously increased taxes. And just so you know. And this affects me, but it affects Megan too. Probably affects you. I know it does. Actually, if you're at the highest bracket, you're already paying 15% in city and state taxes. Right. It's really fucking high. So. Which means if you combine it with the 39.6% federal rate, you're paying almost 55% of your income in income taxes. And then when you add in sales taxes, property taxes, excise taxes, the gas tax, all kinds of other stuff, it's well over 60%. So it's interesting because obviously, and I'm gonna get to a point where I say people should pay more, but at the same time, when you think about it from the perspective of from January to August, every penny you make goes to the government.

C (40:05)

Oh yeah.

A (40:05)

And then you only keep the after that. That is a fucking compelling argument against that.

C (40:13)

But it's also a compelling argument against with billionaires. I'm sorry, but at the end of the day, the billionaires that have so much sway in politics and money behind everything to say we don't want this tax on us or whatnot, the amount of taxpaying Americans that do not have anywhere near that amount of power on politicians, I think is what is part of the anger, the growing anger at that class. Because it's like we're paying into this

A (40:39)

system, we are coding something that could change that. But yes, true. But yeah. So first of all, a lot of this has already happened, right? So Massachusetts has already double tapped people making over a million. Washington state has just enacted a 9.9% tax on people making over a million. Maine enacted a 2% surcharge. There's stuff in Maryland, so there's definitely it. But I think the thing that's interesting also is what the ripple effects will be because this is going to be so high profile, right? We're a New York City based podcast and we're doing a podcast on it right now. We're in an episode on this. Whatever happens here is certainly going to have a ripple effect nationally on either side, right? If it passes, I think you will see a wave of proposals. Now California's a lot more billionaires than anyone else, so it's not quite as apples to oranges, but Maybe people make 100 million or whatever it is, but if it fails, same thing. So to me, the best corollary was AB5, which was a piece of legislation that passed in 2019 in Sacramento that effectively said everyone in the sharing economy is now a full time employee, which would have, according to the company, you know, doordash and hard uber left, whatever devastated their business. So went to the ballot and the voters rejected AB5 overwhelmingly. So what when AB5 passed, my thought was the 20 California session goes later than most states. So I was like, okay, when the next session start, four or Five months later, you're going to see a huge blitzkrieg of bills that will have a good chance of success to do the same thing other states. But then when the ballot measure was so overwhelming, and then also Covid hit. When those two things combined, it killed it forever completely. So obviously, hopefully we won't have another global pandemic. But either way, I do think that you're going to have either way. If this fails, I think that's going to create a deterrent, and if it succeeds, you're going to see a lot more replication.

B (42:36)

So what's the big picture then?

A (42:37)

Yeah, so I mean, this is obviously, I threw out seven ideas. Someone else could propose seven others that would be potentially equally valid. But you have 1% of the country owns 31% of the wealth, 50% of the country owns 2 1/2% of the wealth. Right. To me, if that doesn't change, the French Revolution's coming, like, I clearly believe it.

B (42:58)

You think French or Russian, the most violent one.

A (43:01)

They're both pretty bloody. But either way, right. France did a lot better afterwards than Russia.

B (43:08)

Fair. Yeah.

A (43:09)

Yeah. So, you know, I've talked about some of these in the podcast before. Others less so. The first one to me, and the biggest one by far is universal basic income, which is an idea that's been around for a while. You know, Martin Luther King started talking about this in the early 1960s.

B (43:26)

Let me, let me back up for a second because I want to ask you. So you're, you're. We're sort of pivoting here.

A (43:31)

What else could you do?

B (43:32)

We've addressed the political sort of situation and the economic sort of, of playing field and some of the different arguments about it. But how are these things actually related? Now you're talking about here's things that we could do to soften the blowout.

A (43:44)

No, no. I would say to me for. I don't think the California tax is a good idea. Right. But, but even put it so. So the point of this section is what could you do instead? Right. But it's also much bigger picture society

C (43:57)

rather than to just not keep it.

B (43:58)

But is this also, is this also like, are you sort of proposing like that, for example, people who are like, hugely opposed to tax, including billionaires in California? Okay, we don't want to pay this tax. We think this is a bad idea for society, but we want to support things that we think are good. Is this what you're proposing for them?

A (44:18)

Would you say no, not necessarily. I don't know that they're Going to, I think some of, I mean, it's interesting. If you take my seven ideas, the only thing that's consistent is it will definitely piss everyone off because some of these ideas are things that the left will love. Some of these ideas.

B (44:30)

Well, if they're going to piss someone off. Like, like what? I mean, like how do we. Well, go ahead, let's talk about.

A (44:37)

Right. So universal basic income here to me is my personal experience and informs my thinking. So I was, as everyone knows, the deputy, not everyone, but the people listen to podcast know, was the deputy governor of Illinois for four years. I ran the state budget and so I was sort of, you know, every day figure out both what should and shouldn't be in our budget and then negotiating the budget with the legislature during the session. And what was very clear to me was we would tax you a dollar, you would pay it. By the time that dollar got to someone in need, someone who needed public housing, someone who needed Medicaid, someone who needed food stamps, whatever it was, a good chunk of it, 20 cents, 30 cents, maybe more, got frittered away. It could be because of our own bureaucracy, it could be because of wasteful systems, it could be because of patronage. It was oftentimes we'd have to cut deals to build things like prisons we didn't need in order to get the votes for the things that we did need. And that's democracy. But ultimately, by the time the person in need got the dollar, it was a lot less than a dollar. And I truly believe that if you gave the poor person the dollar instead, 90 something percent of the time, they would use it wisely. Would some people spend that on hookers and blow? Sure. But I really do think that the vast majority of the time people will use it to pay the rent, pay their medical bills, pay off their debt, pay student loans, feed their families, pay for utilities. And their ability to do that would be significantly greater than instead waiting in line at some government social service office for some sort of handout that is the most inefficient possible manner to do it. And there would be a huge boost to the economy because instead of it getting further away into a government bureaucracy where it just evaporates, they're spending it right. So that's all extra spending, just juicing the economy itself. Just like when they talk about, like occasionally, you know, usually Republicans, sometimes Democrats also will do these sort of tax refund, broadband, $300, whatever it is. While it's mainly political nonsense, the good news about it is it does actually all get re spent back into the economy pretty quickly. So I think that you would be able to help poor people exponentially more, which to me should be the point of. Of taxation in the first place. And two, you would help the economy a lot. So then the question becomes politically, is it feasible? And the challenge with UBI is it kind of has a fatal flaw for each side. So the fatal flaw for the Republicans will just be the, oh, no, they're all gonna spend it on, you know, drugs and whatever it is, the welfare queen, Ronald Reagan stuff. We know that. Right. I actually think the real opponent's gonna be the Democrats and especially the progressives, or at least the institutional progressives, maybe not the people on the ground holding.

C (47:21)

I would say Institutional Democrats.

A (47:22)

Institutional Democrats, yes, absolutely.

C (47:24)

Absolutely.

A (47:24)

Which is. So let's say right now you're paying 54. You're a new York City resident, you're paying a top income earner, you're paying 54%. I would envision a system where that number might even go up. However, in order to put money in ubi, the tax rate goes down, and then the UBI payment is sort of adjacent to it. And the reason why you can do that and not make it 80% is because if you're giving people money directly, there's a lot of government programs you no longer need. Right. So you would dismantle the vast majority of social service programs that the government runs now. You would still need the things that require collective action. You can't build a road with ubi, you can't have a military with ubi, but you would cut out big chunks of the government, every level of government.

B (48:14)

Well, the biggest thing is healthcare. You wouldn't cut that out. Right.

A (48:17)

Well, I get to that separately.

B (48:18)

Right.

A (48:19)

So.

B (48:19)

And, and is the, the other thing, though, is, is this has to be federal. Right. Because if New York State does this. Right.

A (48:26)

It has to be so federal, but then you wouldn't then need the city, and the state wouldn't need these huge bureaucracies on the social service side if you're now doing ubi, and that their money should be redistributed as well. Right, Right. So. But the real problem, as Megan sort of alluded to, is one of the biggest institutional bases for the Democratic Party are the public sector unions, who are the ones running the ballot measure in California. And one of the biggest bases of voters are public sector workers, not counting the military. Right. Which is a little more split. So if you're the Democratic Party, you'd effectively be cutting out a huge part of your own voter and donor base. And I think that even though someone like Elizabeth Warren would say I just want to help poor people, I don't think she really means it. I don't think she's like every politician. She does, but just like the union leader who wouldn't say, oh well, this is bad for the California budget over a 30 year period. She's not gonna hurt her own political career or the people she supports in order to help poor. I mean, if all government was trying to do is help the poorest people, both parties would behave radically differently. Right. All the time. So I think the real opponents of UBI will actually be the Democrats who will be opposed to cutting out a huge chunk of their own.

C (49:45)

I think you're underestimating how much Republicans would hate them.

A (49:47)

This. Okay, fair enough.

B (49:50)

Giving money to port almost welfare by another name.

C (49:54)

Exactly.

A (49:56)

Yeah. I do wonder if the argument of all could you could. I'm sure if someone already had, but if you haven't, you could assume pretty safely that 99% of UBI payments are going to get spent pretty quickly. Right. Not going into stock market.

B (50:10)

But that's true with welfare payments too. Right. And that argument didn't keep them alive.

A (50:14)

But the welfare payment is at least being sucked up 30%, 40% with other nonsense. Right. So if you're cutting out the nonsense, that is a big area of attack for the government. Right. For the Republicans. And then if you can show your local small business is going to have a 20% increase in revenue.

C (50:32)

No, totally. But I think anything with universal feels like Republicans. There is this like, and I'm saying like Trump Republicans.

A (50:40)

Is that just a branch or is that a.

C (50:43)

In some ways because it's like. And I think the reason why universal basic income is much more, there's much more potential with it than welfare as we know it is because it's everyone. Right. So there isn't this like the system is, you know, it's representative of everyone in some way and there's this benefit across the board, same way that you talk about with universal school meals. At the end of the day, the shame and kind of the neglect that happens on school meals is because it's only for the a portion of students, the poorest. And so if everyone has access to it, similar to how public schools are or the concept should be, then you're going to have a higher quality outcome when it's for everyone versus just trying to tailor it for the poorest. Because our country fails at that.

A (51:29)

Right. So maybe the answer is ubi has to hit. Even ironically, if it's people paying in and then getting back, it has to hit at least the middle class.

C (51:39)

And that's how you help business, too, because you're talking about people that say middle class, who at the end of the day are so scared to lose their job if they're getting UBI and moving into your Medicare for all and they have healthcare, that takes pressure off of businesses as well to have to provide for all of that. Like, it's not coming onto businesses saying now you have to. Unlike with AB5, where it's like you have to make them full employees, that goes entirely on the business. I actually can understand why people oppose that. But when it comes from the fact government is going to help people on this side of the aisle.

A (52:08)

So it's the structure of the system. Yeah. Okay, let's talk about Medicare for all. Yeah. So I believe Bernie was right, right about this. Right. I don't know that I would trust him to develop the actual and run the program, but I think conceptually he's right about it. And like, we have the most expensive healthcare in the world, and it's people. Our lifespan is actually significantly lower than a lot of other countries. Right. So now that's partly our healthcare system, that's partly our culture. Obesity, drug addiction, lots of guns, lots of stuff that causes car accidents, a lot of other shit, too. But nonetheless, our system's not, not working. Right. It might work for someone like me, where if you, if you're obsessed with your health like I am, you have effectively unlimited money to spend on it, then you can get absolutely incredible care. But that's a, you know, that's a rounding error of the, of the society.

C (52:57)

Yeah.

A (52:57)

And so I, I think basically, and I think Obama, his greatest accomplishment by far was the aca, and I guess he took it as far as he could. But in a perfect world, what that would have just been was every. Medicare is a, is a government program that works pretty well. 65, it's a, you know, I understand politically why it came about that way, but it's a somewhat arbitrary number. Right. It doesn't have to be 65. 65 is not even really considered old these days. And so it's funny, as I get closer to it.

B (53:23)

Yeah, don't seem that old.

A (53:24)

It feels younger. Yeah. You could expand it, let everyone have access to it, still have private insurance for anyone who wants it, and we'll see how kind of how that all breaks down. Breaks, breaks out or whatever it is, and then you get a Government. So there's already about 70 million people on Medicare. Let's double, let's say 140 million people choose to be in it under the system. One of the reasons why Europe and Canada, for all the complaints about their socialized medicine, has lower prescription drug prices is they have a lot more negotiating power. Because if you want to sell into Sweden or wherever it is, you gotta cut a deal with the government. Right. And Trump's even tried to do a version of this. But it's just very hard structurally with the way our system works. So. So if you were to double the size of Medicare, I think you're also bringing down the cost of health care meaningfully. There is one big caveat that to me is a really good one, but I politically challenging, which is you would need to significant. We need to anyway significantly increase legal immigration legal because we don't have enough taxpayers. And your FICA payment that when you look at your pay stub, that's Medicare and Social Security and they're both slated to run out of money in the next sort of seven years or so, the numbers kind of shift around a little bit. You need a lot more taxpayers, you need a lot younger taxpayers. And if you were to do this, you would need that even more. Again, to be clear, I am a proponent of really strong border security. I do not believe that significantly higher legal immigration to meet the needs of the economy, which has big holes in lots of industries, is mutually exclusive with strong border security. And I think by the way, most Americans feel that way. It's just again the age old problem of it's not the way how primary voters on either side tend to feel, but you would definitely need to do that as part of it. Third is tort reform. So if you take the kind of the tort reform Advocate number, it's $367 billion a year is lost to frivolous lawsuits. If you cut it in half, it's still a very big number.

C (55:34)

Yeah.

A (55:34)

So either way a tremendous amount of money gets spent on frivolous lawsuits. And what that means is it gets passed back to us. So that's our renters insurance, our homeowners insurance, our car insurance, our business insurance, whatever it might be. And when we talk about affordability, one of the things that doesn't kind of get talked about quite as much, although Hochul is trying to do this in New York right now around car insurance to her great credit, is if you want to make life more affordable for people. You know, again, if, if a, if someone is, if a Car is made, manufactured in a way that has safety defects. And they, especially if they knew it and ignored it, of course they should

C (56:13)

be liable for that.

A (56:14)

Right. When the cigarette companies knew what they were doing and lied about it, of course they should be liable for it. But when there is a system. Do you guys. We talked this in the podcast. Did you read the New York article about slammers?

B (56:25)

Yeah.

A (56:27)

So it was remarkable. There was a whole scam in New Orleans, of course, where plaintiff's lawyers would hire. Recruit people to drive their trucks, drive their cars on the highway into 18 wheeler trucks. No. And they learned how to do it, usually in a way that didn't cause significant injury, though there were sometimes. And then they would sue. And because it was Louisiana, where it's so slanted towards the plaintiff's bar, because they control everything, the insurance company, even though they knew this was what happened, would still just settle it anyway rather than risk going to a jury. The FBI eventually found out and kind of cracked down on it. But you know, there are versions of this all over the place. And what it's not, you know, it's sort of like when people think, oh, well, the government's the defendant in this suit, so we'll just award whatever. It's your tax money. Yeah, right. And the same thing is true here. They're your insurance premiums. And so I think when we talk about affordability, I just don't see how we could talk seriously about it without enacting really comprehensive tort reform. This will be an issue, obviously, that Democrats will not like because they are the major beneficiary of trial lawyer money. And then there's some places where Republicans are too. And look, the other thing, what you would really want is fully autonomous vehicles because I know most people think they're really good drivers, but someone dies in a car accident every 15 minutes. And occasionally it was the slammers, but usually it's just a normal car accident. And if you had fully autonomous cars and trucks 100%, the number of accidents would decline exponentially. A lot of lives would be saved, and then the cost of auto insurance would come down exponentially because it's just a totally different product at that point. But the federal government, both parties have been shameful in selling out people who die in car accidents and people who buy a car insurance, which is almost everybody, in order just to placate the teamsters. So in 2015, the House Energy subcommittee bipartisan, unanimously passed a initial regulatory framework for autonomous vehicles. And the reason why the federal part is important is you can't cross state lines usually without. It could be an interstate compact, whatever. But basically you need, because of the commerce clause, you need that. So Teamsters didn't like it. Donald Trump said I'm a Teamsters kind of guy, guy blocks it. Then Joe Biden says I'm a Teamsters kind of guy, blocks it. So when people just tell you how virtuous is, he runs for president, he's fucking responsible for a lot of those accidents. And then now again Duffy, who doesn't seem like one of the worst people quite frankly in the Trump world, but nonetheless does what Trump says something.

B (59:03)

Yeah.

A (59:05)

Is a Teamsters guy. So as a result we have no regulation that's needed. So that has to happen.

B (59:13)

Education.

A (59:14)

So there's about 1.8 trillion in outstanding student loans in this country. There is an NBC poll that we quote in here. Only 33% of Americans now think that the four year education is worth it. And they're not wrong. Like in the sense that they're being saddled with massive debt that fucks with the rest of their lives for most people for an education that, yes, in theory, would it be great if we all had a four year broad liberal arts education? Sure, right. But in reality the value proposition is not there. And one of the reasons the cost keeps going up is because universities are in this arms race with each other. So they're endlessly competing to get higher rankings and so they're spending more and more money on stuff in the pursuit of that. The bureaucracy there, it's kind of the tail wagging, the dog runs, the system. Some of is it around sort of the, you know, intolerance of free speech or whatever else. But a lot of it's just the normal perpetuation of the bureaucracy at the expense of the students. And it doesn't work anymore. Right. And maybe the answer is it should just be two years. And you say here's what I want to get a degree in and basically you can do it in two years if you want. Maybe it is that you get rid of tenure and you decrease salaries. Because why, you know, how does this

B (60:34)

change like in terms of laws does. I mean there's no law mandating a four year college.

A (60:38)

Well, there's not a law, but there's. Every public university is funded by the taxpayers and then every private, almost every private university gets taxpayer money too. So it would be a. You would use it through the, you would use the budget to force it. Now look, I think some of this is going to happen anyway simply because vocational Schools are rising because people are like, I can't, you know, the more that you can offer people what they need and say, here's a pathway to the skills you need and adjust, a lot of people are just gonna choose that. Right. And yes, I know the left's gonna scream, well, it's not fair because the rich can still send their kid to a four year college.

C (61:11)

That's accurate. Right. And also on top of the fact that vocational. If we were looking at the campaign trail in 2016 with Bernie and Hillary talking about reskilling, they were talking about, if you look back, they're talking about different skills than what people need now. So my thing is vocational training is

A (61:26)

really two octogenarians weren't up to speed on what economy.

C (61:30)

I mean octogenarians still roll our government. Let's not kid. So at the end of the day when they talk about, well, we don't need to send kids to, you know, saddle them up with loans, they can do vocational training. Sure, maybe they will. The plumbers seem to be a job that is going to stay outside of that. It feels like there is so much that is upended. But also when we talk, when the left, like when we say that yes, rich kids still get to go to four year colleges, it's not just because that's just something on a list that we want to check off. There's real value, not for everyone. And I mean that on like personally people who are. I went to an okay high school, I went to a really great college. And those four years of college definitely made me the person that I am in terms of being able to work the way that I work. I would not say high school prepared me for that. And so I think giving opportunities in a liberal arts space again, I'm not prescribing it for everyone, but I don't necessarily think it should be, oh well, that's just for rich people because I think it really, it's scary for me to think about the future where people are training for all these things that then the next day could go away and then they've lost any kind of foundation.

A (62:35)

And that's true whether it's, I would say right now, whether it's a two year education or four college students right now have no idea what the fuck is going to be.

C (62:40)

Well, that's the thing. College reform for sure. But like how are, but I don't

A (62:44)

think it's just plumbing. Like to me, I went to law school, right? Yeah, I don't think so. Back in the days of, you Know barristers, you apprenticed under a lawyer and then you took whatever the British equivalent was of a bar exam and you became a lawyer. Right. Like the idea that you need four years of college and three years of law school and all that. Just the system to make money. Right. You could set all that to like three years total or four years total and save people huge amounts of money. So. And again, it might be that the law firm jobs are the first to disappear.

C (63:14)

Yeah.

A (63:14)

So who knows? But putting that.

C (63:15)

Or for schools to have to spend on their endowment before tax, before they

A (63:20)

receive tax, $40 billion.

C (63:23)

All these schools have endowments and they will take taxpayer money because they get

A (63:27)

more points in U.S. news.

C (63:28)

Exactly. That's something I think would be.

A (63:30)

Sure you could do that. But I also just think. But my point is, I don't think it's. I mean, I think vocational can basically, I would look at every possible job.

C (63:37)

Yes.

A (63:37)

In every sector and say, what is the fast track version of this? Which you can call vocational if you want.

C (63:43)

But so many of those jobs are tech. Right. So when, when you're talking about fast tracking jobs in tech right now, that's what I worry is that the speed at which that is changing every single day.

A (63:53)

And then people, I mean, at the moment that, that gets back to the UBI arc. Yeah. Right. Which is why you're gonna, especially in UBI in an age of AI and then of course, K through 12 education, I think we have a system that's just wildly broken. And in the blue states, they basically sell out the kids for the teachers unions. In the red states they don't do that, but they don't put enough money into the schools in the first place to be effective. So, you know, you can't have, you can't reduce inequality and you can't have a competitive economy if you're not educating students. And we are failing terribly at that. And then obviously, you know, school, just the notion to me that we wouldn't feed every kid is crazy.

B (64:31)

We have three more categories. Yeah.

A (64:32)

We're going fast.

B (64:33)

Let's go through them. I'm just going to mention what they are and then you'll talk about them. So I'm going to go super fast.

A (64:37)

Yeah. And affordable housing is. We talked about it already. Which is just. And Derek Thompson, as a client's book abundance, does a pretty good job of which is just there are very specific practical obstacles to what you talked about, Hugo, in terms of building affordable housing. And there are things that tend to be totemic for the left but if you remove them, you could build a lot more, a lot faster and give people more affordable housing. And yes, it would hurt landmark preservation and the character of the West Village or whatever it is. And there would be some environmental harms and some communities would by the gentrify. Unless you're a fucking Native American or you came here, you know, not on your own volition. Everyone's a fucking. Every hipster in Brooklyn a gentrifier. So it's ridiculous. And I do like the idea of a version of Obama's Race to the Top, which I thought worked really well around education for affordable housing, where the federal government would say, for the states and cities that pass the most reform, we will give you financial incentives, both because one, the money. But more important, I was able to run a campaign to go from 200 charter schools, New York to 4 60. And the only reason we were able to win is I tied the whole campaign around. How dare Albany turn up their nose at $700 million, which is a pittance of money in the education budget. But it sounds like a lot, and that was enough to beat the teachers unions. I think you could do the same thing here.

B (65:58)

AI and government.

A (65:59)

Yeah, I mean, we talked this before, but just the idea that we wouldn't use technology to do things vastly more efficiently is crazy. Whether it's procurement or compliance or licensing or permitting or facilities management, data management. And by the it would mean fewer middle management jobs in government. And I understand public sector unions would hate that. But again, if I'm Zoran and you had some balls, you would say, we're gonna use tech. He used tech to get elected in the first place. We're gonna use tech. We're gonna save that money. We're gonna put it into childcare or into free buses or things that regular people would actually feel. Now, again, you have to be willing to take a real beating in the New York case from DC37 or AFSCME or whatever it might be, but you should absolutely do it. And the final one works. Kind of what Megan alluded to earlier, which is closing loopholes and to me, carried interest. And I am someone that has sort of seen it from both sides, because when I was accepting outside capital for my venture fund, I did benefit from the carrot interest loophole. And I still have outstanding investments that will benefit from them. But at the same time, the point of a capital gains tax is to incentivize people to make investments. And if you're running, effectively, a services business where you're raising money and then Deploying it, that's when you make money on that, it's hard to see that that's really investment income. It's really regular income. And look, as Megan well knows, we had this moment. This was back in 2022 when Biden was trying to pass his build Back better bill where it was 50, 50 in the Senate. Kamala Harris was the vice president, so she had the tie breaking vote. And we deployed a losing strategy which, oh, if we can just get one Democrat to say, I'm not voting for this if there's not $10 billion for school meals in it. We would kill the whole bill. They wouldn't let the bill die over that. And therefore, and we gave, I don't know what, three, $400,000 in more and campaign contributions to Senate Democrats. And all of them, including fucking Bernie told me like you know or told won't be there directly or indirectly. Okay, you got me. No problem. Every single one of the sold us out. And on the last holdout on the bill was Kyrson Sinema. And I remember talking to her the final day of it and saying to her, hey, you could be the hero here. She was someone who benefited from school meals when she was a kid. Because my view was if we can get $10 billion in there, pretty much every state, if you're now like, hey, it's free, you just gotta pass a law, we do it, maybe not all 50, but the vast majority. And she said, I only have the political capital do one thing. And she picked preserving the carrot interest people. So it's fucking shameful. So, so look, you know, as we've discussed, I think that the tax is a bad idea. I think it will lead to a significant long term California tax. I think it will be expanded categories by the legislature. I think it'll mean a lot of jobs go away. I think the startup world could go away. I think they're going to lose a lot of future revenue streams like capital gains tax from IPOs. I think it's a real erosion of privacy rights. I think it has potential bad ripple effects nationwide. I oppose it. You're still forward.

C (68:59)

I'm still for it.

A (69:00)

Okay, Hugo, you want your tiebreaker here?

B (69:02)

You know, I don't live in California, so.

A (69:04)

No, no, no, you gotta. No, no, no, you can answer.

B (69:07)

No, I'm against it because I think it will. I think it. Look, one of the big problems in the country is this sort of weird imbalance of taxes and spending, government spending, and it just creates more imbalance and more people gaming the system to find the.

C (69:24)

But the people gaming the system are the billionaires, just to be clear.

A (69:26)

No, I know, but they're.

B (69:28)

A lot of the billionaires aren't going to be affected by this. They're going to leave the state and they're going to go somewhere else. So I think the.

C (69:33)

But that's where I'm just saying you'll

B (69:37)

get one pass through the toll booth and then it'll sort of redo the playing board of the country again. And I just think that that's like there has to be a more equal system throughout the country that isn't just playing off jurisdictions against each other. And, and this will continue to do that. I don't think it'll break this California economy in the way that Bradley sort of has outlined, but I also don't think it'll help it. And people will vote for something that will have adverse effects.

A (70:07)

Okay. All right, we're gonna end it there. So it's been a long episode and our Uber is here. All right, see you guys. Thank you. Firewalls recorded at my bookstore, PNT Netware, located at 1180 Orchard street on the lower east side of Manhattan. We'd love to hear from you with questions, feedbacks or idea for a guest. Just email me at Bradley Firewall Media or find me on LinkedIn. And to keep up with what's on my mind and my latest writing, please follow my new substack@bradleytus.substack.com thanks again for listening.