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The Heartland Institute’s Donald Kendal, Jim Lakely, Justin Haskins, and Chris Talgo present episode 462 of the In The Tank Podcast. Over the past few weeks, Vice President and presidential candidate Kamala Harris has outlined a number of economic policy proposals her potential administration would enact. Some of these policies include price controls, subsidies for first-time-homebuyers, increases to the corporate income tax, and increases to the capital gains tax. How would these economic policies affect the economy? What do these proposals reveal about the Democratic presidential candidate?
PRIMARY TOPIC - COMMIE-LA'S BASKET OF DEPLORABLE ECONOMIC POLICIES
ATR - $5 Trillion List of Tax Hikes Kamala Harris Just Endorsed
The Federalist - How Kamala’s Economic Plans Would Send ‘Bidenflation’ Into Overdrive
Fox Business - Harris proposes $25,000 down payment assistance for first-time homebuyers — is it a good idea?
National Review - Yes, Harris Is Proposing Price Controls
USA Today - Trump’s ‘Comrade Kamala’ insult is a bit much, but price controls really are an awful idea
WSJ - Kamala Harris Backs 28% Corporate Tax Rate
WSJ - Harris Calls for No Taxes on Tips, Borrowing a Trump Idea
ATR - Biden-Harris IRS Targeted Tipped Workers with Heightened Scrutiny
Creators & Guests
What is Heartland Daily Podcast?
The “fire hose” of all podcasts produced by The Heartland Institute, a national free-market think tank.
Alright, folks. We are live. So over the past few weeks, vice president and presidential candidate Kamala Harris has outlined a number of economic policy proposals her potential administration would enact. Some of these policies include price controls, subsidies for first time homebuyers, increases to the corporate income tax, increases the capital gains tax. How are these economic policies going to affect the economy, and what do these policies reveal about the democratic presidential candidate?
Donald Kendal:We're gonna be talking about all this and more in episode 462 of the in the tank podcast.
Jim Lakely:I don't know what's wrong with you young people. You think you just fell out of a coconut tree?
Donald Kendal:Welcome to the podcast. As always, I'm your host, Donald Kendall. And joining me today, I've got a couple people. I've got Jim Lakeley, VP of the Heartland Institute. How are you doing today, sir?
Jim Lakely:I'm doing great. I am officially actually on, vacation, personal time off, PTO. But I love this show, and I love our audience. And I have some likeness for you, Donnie. So I thought I would take some time out of my vacation to, to join the show.
Jim Lakely:So I have not done my usual show prep, which probably means I'll be on a hair trigger in anger. So, that's to look forward to.
Donald Kendal:Oh, fantastic. I did plenty of show prep this time. Also joining us, fresh out of the coconut tree, Chris Talgo, editorial director here at the Heartland Institute. How are you doing today, good sir?
Chris Talgo:I'm hanging in. Just hanging in. Just hanging in.
Donald Kendal:Chris Chris over the weekend, he wasn't gonna gloat about this, but I'll do it for him. Came within an inch of getting his first hole in one at the golf course.
Chris Talgo:2nd hole in 1.
Donald Kendal:2nd hole in 1. Okay. Well, there you go. Within an inch. So send all your praise in the private chat to Chris Talgo.
Donald Kendal:Gentlemen, we got a plenty to talk about. I want to dedicate you know, sometimes we do, like, kind of more political angles, you know, over the past several couple of months. There's been a lot of political stuff going down, and, you know, I've always said that, like, I care less about politics and more about policy. This is gonna be a policy heavy episode because like I said in the intro, there's been a lot of economic policy proposals out of Kamala Harris over the past couple of weeks, and I wanted to spend the lion's share of this episode breaking those things down. But, we have a lot to talk about.
Donald Kendal:There's a number of those policies out there. But before we do, I, have to put that message out there that I put at the beginning of all of these episodes. That's asking, you know, those audio only listeners that are probably catching the show on a Friday or later. Leave a review for us on iTunes. That would be greatly appreciated.
Donald Kendal:And consider joining us a day earlier, Thursdays at noon CST where we are live streaming this on Facebook and YouTube and Rumble and x and all of those things. You can join the conversation, throw your comments and questions in the chat. Maybe we'll address your questions on the fly. Maybe we'll show your comments on the screen, all of that good stuff. You could support the show by, no not super chatting on YouTube because they demonetized us.
Donald Kendal:So if you'd like, you could support the show by going to heartland.org/inthetank and donate directly to the show. And that way, the donations come straight to this show, and they don't get, taxed by YouTube at a 30% clip there. And you could also help the show up by hitting that like button, sharing this content, subscribing if you haven't already, or just leaving a comment under the video. All those things help break those big tech algorithms that prevent content like this from being shown to more people. But before we get into all of the, policy proposals that I've, I'm promising you, we gotta talk about what's going on at the DNC.
Donald Kendal:So I have not been I'll admit, I have not been, paying much much attention to the, the Democratic National Convention. I can only take so much propaganda. Chris, you are more well equipped to, withstand the onslaught of propaganda than I am being our resident listener of CNN and MSNBC and all of that. So my knowledge of what's going on at the DNC mostly just comes from stuff that either you've talked to me about or things that people shared with me or some posts that I've seen on Twitter. But how's it going over there?
Donald Kendal:I think today, Thursday, is the is the last day. Right? This is the the time for Kamala to do her big speech and all of that?
Chris Talgo:Well, today's gonna be the grand finale, and, we can expect a a glorious speech from Kamala Harris about how, the economy is in great shape and how we all are more prosperous, more wealthy than we've ever been, but we just don't know that. So I'm looking forward to that. But, Donnie, as I told you yesterday, the highlight for me so far has been Lil Jon's performance. I think he did a great job really, you know, revving up the crowd. During the roll call vote, he was a participant in Georgia's, roll call vote.
Chris Talgo:So that that was pretty entertaining. You know, kind of took me back to the early 2000, you know, back in college. So, man, that was just a very nice little nostalgic journey I went on.
Donald Kendal:Oh, good.
Chris Talgo:Other than that, it's just been total lie, lie, lie. It's really been about, the main theme has been abortion. You know, they're also giving away free abortions and free, vasectomies, so that's that that that's great. We got that going for for them. And it's just been about, you know, making fun of Donald Trump, ad hominem attacks, nothing of substance, of course, because they can't.
Chris Talgo:And, that's pretty much how it's been so far. So, yeah, I mean, you haven't really missed much unless you're a pretend of Will John like myself. So
Donald Kendal:Well, both conventions had throwbacks to the early 2000 then with the Kid Rock being at the the RNC. So that that's good. The political parties have their finger right on the pulse there. So, Yeah. Okay.
Donald Kendal:So you mentioned the abortion thing. Okay. I I I wasn't even sure that that was real. Okay? Like, I had heard, like, like I said, my news of the DNC just comes from random stuff that I see on Twitter, stuff that people share with me.
Donald Kendal:And I had seen, like, a headline suggesting that outside the DNC, outside the United Center, it's taking place in Chicago here, they are giving out free abortions and free vasectomies. So you are confirming that that is in fact true because I wasn't sure.
Chris Talgo:That is in fact true. That is not that is not fake news.
Donald Kendal:That is
Jim Lakely:So I
Donald Kendal:mean, Jim, Jim, you you could pop in on this too because, I mean, like, I understand, I under let me let me be careful how I phrase this. I understand the abortion thing going on, like I don't agree with it and I think it's entirely like weird and inappropriate to have like at your party's convention and all of that. But I get it from, like, the narrative perspective where they've been trying to paint this picture for years years years that Republicans wanna control women's reproductive rights. So let's give a middle finger to that straw man by allowing abortions to take place outside our political party's celebration. Again, weird, gross, but, like, I get it from, like, that narrative perspective.
Donald Kendal:But vasectomies, are there any republicans out there that are proposing bans on vasectomies? Because I've never heard of that. So, Jim, is this just like are they just leaning into the anti human aspects of the of the democratic party? What do
Chris Talgo:you think?
Jim Lakely:Well, this is the same party that at the same time will say that they're the pro family party. And from both ends, they are trying to prevent as many families as being created as possible. Actually, I think it's every time you think, that some kind of stunt or policy position, by the left is too wacky, they out wacky themselves over and over again. Okay. You you have to understand, this is what equity looks like.
Jim Lakely:See, Kamala Harris speaks a lot about equity, not equality under the law. Not all men and women are created peep not all people, I suppose. Let's let's be correct here. Not all people are created equal. Nothing like that.
Jim Lakely:Equity. And so, to have an equitable, reproductive healthcare center, you must also offer free vasectomies. And besides, you know, if if all men, all Democratic men get vasectomies, and I really do hope that this is, well trafficked by the, beta males that are showing up at the Democratic National Convention in, in Chicago and especially the protesters outside. I hope there is a long queue outside that, whatever whatever wherever they're doing the, vasectomy. What is it?
Jim Lakely:In a trailer or something? Maybe in the back of a a a box truck or something? Yeah. Everybody, go ahead. Everybody that's at this commission, go ahead.
Jim Lakely:Queue up. Line up. Get your vasectomy. And, I think in about 10 to 15 years, the world the next generation might be a better generation to hand over a country that's supposed to be founded in freedom.
Donald Kendal:It it's it's just see, it's great. It's just crazy, Chris. I mean, come on. Vasectomies and abortions outside the DNC. I mean, that's like a, like a Babylon b headline.
Donald Kendal:Like, that's why I didn't believe it. I was like,
Jim Lakely:I'm just
Chris Talgo:I gotta say, I'm I mean, I'm I'm surprised that you guys are surprised because this to me is just par for the course, for the DNC and for the Democrat party, in the year of 2024. This is what they stand for. They stand for abortions. They they stand for, lying about, Donald Trump's record and lying about what he will do. I watched a little bit of Tim Walz's, speech last night, and Tim Walz said that Donald Trump will ban abortions even without Congress's approval.
Chris Talgo:So, I mean, I guess he's just gonna declare by fiat that abortions are no longer allowed. What did he also do? He also, claimed that, Donald Trump I mean, it was just, like like, everything he said was was completely dishonest, you know, and untrue. But that's what they do. And, unfortunately, you know, when I do watch the mainstream media, coverage of this, they just, you know, they they refuse to fact check.
Chris Talgo:They refuse to, question, these disingenuous, you know, statements made by all these democrats. So, you know, whatever.
Donald Kendal:Yeah. I think, the only the only addition that they can make maybe for maybe they can consider this for the 2028 convention is, they should have, like, mobile euthanasia pods or something like that. If if, you know, people's just you know, it's life is too much for them. Go join one of our pods. It's right next to the vasectomy, mobile vasectomy clinic.
Chris Talgo:Real quick. The other thing that Tim Walz said that just, you know, made my blood boil was Donald Trump wants to, you know, basically, eliminate Social Security. That's just completely not true. Donald Trump had on several occasions has said, no. I don't.
Chris Talgo:I never wanted to do that. I've never said I wanted to do that. If anything, I wanna actually protect Social Security. And, hey, Democrats, you guys are the ones who are bankrupting Social Security, Medicare, and Medicaid. So, you know, we this just
Donald Kendal:No. I I I I can't listen to it. I'm sorry. Jim, I actually saw one tiny little like, literally, like, 15 seconds of Michelle Obama, speaking the other day. And you reminded me of it, I think, this morning, where you're saying how she was, like, making a big deal about, you know, her, like, mother or something like that, instilling these values that, like, you have to be skeptical of people that take too much or something like that.
Donald Kendal:Right? Take too much. And it's like, this is coming from the the, you know, the the couple that's got mansions all over the place, you know, like multimillionaires, if not like billionaires at this point. I don't know. So, yeah, it's the the lack of kind of self, identification there is just kinda stunning.
Donald Kendal:But but, again, I don't know. Maybe I shouldn't be stunned by this stuff anymore. But
Jim Lakely:Yeah. Well, yeah, when Michelle Obama says that, you know, people that take too much, you know, she's talking about the rich, excluding herself, of course. But that's it. There's all sorts of little I have watched very little of this. I've seen clips on social media.
Jim Lakely:I pretty much unplugged from all all stuff, while my family was here visiting me. Has we had a great time. So, you you know, and part of that is making sure I'm not polluting my brain with all of this nonsense. But I did see that clip of Michelle Obama saying that the people who take too much, those those are people that are, to be skeptical of and to look down upon. And it's the mentality that the government owns everything and that other people are taking it.
Jim Lakely:So, if you're successful, if you earn a good salary, if you start a small business and create employment for dozens of other people, or if you start a big business and create employment opportunities for thousands of people, you are taking something from everybody else, apparently, in this mindset. And so, when you know, the wonderful this is a top 10 thumbnail for this for this podcast today, Donnie, you know, Kamila, which is my favorite nickname for her. I I yeah. So that's I love that. But it's that it's it really is a communist and socialist mentality that everything belongs to the state, and people are just taking from it, taking from the people.
Jim Lakely:It's completely reversed and backwards in the way a a a, a successful and prosperous society is created and prospers. One last thing is, like, Phil Donahue people, viewers, and listeners of a certain age remember Phil Donahue. He was very popular. He was Oprah before there was Oprah. He, so he had his talk show, and so he passed away.
Jim Lakely:I think he was 89, just just recently. He's always been a liberal, to a leftist his his whole life. His his show would sometimes be kind of obnoxious as he would be pushing his liberal mindset on middle American housewives all across the country afternoon after afternoon during the eighties. Well, one day, he had Milton Friedman on, the great, free market economist, Nobel Prize winning Milton Friedman on. And he was trying to corner Milton Friedman on the idea, or at least Bill Donahue's perspective, that capitalism rewards greed, and greed is not good, and greed is evil, and greed is harmful.
Jim Lakely:And you should look this up on YouTube. It's very easy to find. Just just put in or you could just Google Phil Donahue, Milton Friedman, and the video will come up. It is a master class in explaining how the left and, well, the Democratic Party today and liberals have for decades always had it completely backwards. Milton Friedman explained that, you know, it's not greed to pursue your own self interests.
Jim Lakely:It is actually a system in which individuals have the freedom to pursue their own self interests, and that of their family is the only system that has ever created prosperity in human, in human existence. It's proven fact that that's how it works. And the idea that a government bureaucrat is not greedy, that the Soviet commissar is not greedy, but only a, businessman in the United States who, is trying to maximize profit is greedy. It's it's amazing. It's been that clip must have been from 30 years ago, 40 years ago.
Jim Lakely:And the left, we we are still having to have these conversations. And that, it's sad that so many voters, apparently, will still buy the hokum that socialism is kindness and sharing and goodness and capitalism and freedom are evil. But, that looks to be what's on the election or, on the ballot in this election.
Donald Kendal:Well, Tim Tim Walz, you know, once said, you know, one man's socialism, another one's being neighborly.
Jim Lakely:That's right. That's right. That's right. I mean, exactly that. It's it's it's insane.
Donald Kendal:Alright. Let's jump into our primary topic because we have, like, 4 or 5 specific policies that I wanna, like, drill down into here. So Kamala Harris is the candidate. Joe Biden has been kicked to the curb. So now even though she's part of that same administration, the messaging has gone from the economy is good.
Donald Kendal:You can't even tell. You know? That's, you think the economy is floundering? No. It's actually great.
Donald Kendal:But with Kamala in, now the message has shifted to, don't worry about the floundering economy. Once I get in office, I'm going to fix it. So, how is Kamala gonna do this? Well, she's been throwing out a number of economic policy proposals, so I wanna go through a bunch of these one at a time. So, I don't have these in any particular order.
Donald Kendal:I'm just gonna go into the ones that I think are more interesting first. So the first one I wanna talk about is the idea of $25,000 credit to new home buyers. So this policy solution is predicated on the reality that home prices have been skyrocketing. According to data from the St. Louis Fed, in just the past 10 years, the average, housing prices in the country has gone up roughly 50%.
Donald Kendal:And since the middle of 2020, the average housing prices has gone up basically 40%, just 4 years. On top of that, in the effort to cool off the massive run of inflation that we've been suffering with, over the past couple of years, the fed has jacked up the interest rates. So the cost of financing a house has also massively increased. So these realities has, have, basically, I don't know, helped put home ownership increasingly out of reach for millions of Americans. But don't worry everybody, we have the brightest minds.
Donald Kendal:She's right there. He's right on the screen. Brightest minds out there working on these problems. So what do these bright minds come up with? Well, Kamala Harris has proposed having the government offer $25,000 in financial assistance to all first time homebuyers in the country.
Donald Kendal:Harris claims the assistance would be provided to more than 4,000,000 people over the 1st term in office. So boom, ladies and gentlemen, problem solved. Chris, I wanna start with you on this one. What's your problem with this great idea?
Chris Talgo:Where do I begin? I mean, there are so many problems with this idea. You also didn't mention that, it would actually increase the, down payment assistance if you are a, a newcomer to the United States.
Donald Kendal:Oh, good.
Chris Talgo:They haven't they haven't even actually, specified whether those newcomers would include illegal immigrants or just legal immigrants, but that is obviously unconstitutional on its face. So, you know, I mean, it it's hard for me to take this plan seriously because it's not gonna go anywhere. There's no way Congress is gonna approve this. It would actually make the situation far worse. It would basically increase the the price of every house by $25,000.
Chris Talgo:I mean, this is not that difficult to understand. I I just I I find it, you know, pretty pretty funny that, you know, that that she's doing this and thinking that most Americans are gonna be like, oh, yeah. That's great. Well, I think that most Americans are gonna, actually think to themselves, why would the government wanna be getting involved in the housing market in the first place? What happened the last time the the government really got involved in the housing market?
Chris Talgo:Oh, yeah. 2007, 2008. Big crash. Oh, yeah. So back then, the government and this goes back to the Community Reinvestment Act in the 19 seventies.
Chris Talgo:Jimmy Carter said, hey. Everybody in America, you should have a home. You that's American dream. You should just have a home. We're we're we're going to we, the government, are going to, make it easier for you to get get into a home.
Chris Talgo:But what happened? You gave people, mortgages who had no business getting a mortgage, the the notorious ninja, no income, no job, mortgage. And, eventually, you know what happened? They couldn't make those payments and the entire, housing system collapsed. Do we wanna do that again?
Chris Talgo:Because, you know, I'm still trying to get into a house. And, yeah, right now, it's totally unaffordable. But having the federal government get involved in building 3,000,000 homes and giving everyone $25,000 in helicopter money ain't gonna help the problem. It's gonna make it worse.
Donald Kendal:Yeah. You know what? So I wasn't sure. I mean, I've seen kind of conflicting things, but I had seen, Elizabeth Warren talking about this problem of housing prices. And I was actually surprised to see that her proposed solution or that at least a part of it that she was, like, talking about on Twitter, was based around the idea of, like, building millions of more homes.
Donald Kendal:So is that part of this of Kamala's plan as well is to build a bunch more homes in addition to giving them $25,000 system?
Chris Talgo:Yeah. Yeah. Yeah. Yeah. That's what she's saying.
Chris Talgo:But remember, you can't take these things seriously because they're just being floated out there like trial balloons. And once again, there's, like, I mean, the federal government should not be involved in the home building business. Okay? That should be done in the what's called the private sector. And you know what would actually I yeah.
Chris Talgo:I'm I'm well, you know, some people have some people haven't. You know what would actually really help this housing shortage? If a bunch of states and, local government said, you know what? We're finally, once and for all, gonna make it easier for you to build a new home. Because in my neck of the woods, the northern suburbs of, you know, Chicagoland, it is nearly impossible to build a new home because you have to get this permit.
Chris Talgo:You have to get this, this, and this, and the other thing. And I read all the time in the Daily Herald and the Chicago Tribune how blank blankety blank development in blankety blank suburb was rejected by this borough for this reason. That's why that's why there's a, a shortage of, houses going on right now. And just just, you know, to show how bad it is in the place where Kamala comes from, San Francisco. They've been doing this for decades.
Chris Talgo:They've already done all the, the rent controls and all that. Rent controls don't work because all it does is it's it it it helps those who are in the apartment at that point in time, but it it disincentivizes the construction of new apartments. Because why are you gonna build a new apartment if you know, beforehand that you can only charge such and such for rent? So these are all just, you know, pie in the sky, proposals that I think she hopes are going to resonate with misinformed, basically stupid voters who probably tend to vote, you know, for the Democrats on most things. So I just think that she's just doing this to try to just, like, you know, try to just gin up some support.
Chris Talgo:But, obviously, it's not gonna work. Obviously, it's not gonna actually happen.
Donald Kendal:Yeah. I mean, out of those 2 if those are 2 separate things, obviously, I'd be more in favor of the why don't you just build a whole bunch more homes? If these are part of the same package, I would be very hesitant. I think the kind of the market, manipulation of the $25,000 is just gonna inflate, the probably the inflate the price of homes by $25,000. And if the idea is to build a bunch of more homes as part of that plan, I wouldn't hold my breath.
Donald Kendal:I would assume that it would be far too slow and far too few homes to, like, really, drive, you know
Chris Talgo:Let me let me let me put this in yeah. Yeah. Yeah. But let's put this in in in the context real quick. So a couple of years ago, we did this thing called the bipartisan infrastructure law, which was, $1,200,000,000,000 in that the the federal government was supposed to, build, you know, all these charging stations.
Donald Kendal:Alright.
Chris Talgo:You've got 1,000,000,000 and 1,000,000,000 of dollars.
Donald Kendal:Yeah.
Chris Talgo:3 years later, guess how many have been built?
Donald Kendal:Like,
Chris Talgo:less than 10. Less than 10. Less than 10. So, I mean, this is just, you know, this is this is what happens. You know, the federal government just trying to tries to throw money at things, and it never works.
Chris Talgo:It it can't work. You know? This is this this is best solved by the private sector and unleashing the, indisputable laws of supply and demand and letting our free market economy just do its thing.
Donald Kendal:Jim, I mean, the idea this solution, would, on its face, like I said, probably just inflate the cost of housing by $25,000, while increasing government spending by, if you're taking her word that this is gonna be doled out to 4,000,000 people, a $100,000,000,000. So, are you signing on to this plan, Jim?
Jim Lakely:No. I mean, this is more of the same. I mean, Chris has said just about all the thoughts I had on this particular topic for the pod today, But this is exactly what got us into our inflationary mess to begin with. It was one of the main factors of it was printing money money and, shoveling it out the door, after COVID for for COVID recovery. Everybody was getting, what, a 1,000 or a $1200 check, and then the prices of of, new cars and used cars also went up about $1,200 at precisely the same time.
Jim Lakely:It, this is this is socialism. This is this is not going to work. And and if you thought the housing crisis of, 2008 was awesome and you would like to repeat that, then let's go ahead with policies like this. Because, of course, the first thing that will happen is that, all housing will increase by $25,000. So it so so it accomplishes nothing except for ballooning an already enormous deficit and, national debt for no, actual purpose.
Jim Lakely:And, yeah, I was going to bring up the idea that we've spent, I think, $20,000,000,000. Maybe somebody could look it up for me. But 1,000,000,000 of dollars to create all of these charging stations for electric vehicles for Joe Biden and Kamala Harris' electric vehicle future, and precisely 7 have been built. And I would actually like it if we had an operating press these days, they would actually go visit those 7 charging stations that we've paid 1,000,000,000 of dollars for
Donald Kendal:5 of them.
Jim Lakely:Actually work. If they're actually being used, where are these things located? Are they actually even being used, or are they already broken?
Donald Kendal:Right.
Jim Lakely:Because if there's one thing that government created, housing or, infrastructure is infamous for, it is for breaking and being absolute garbage. So, you know, a socialist housing program is what we can look forward to, if this election goes in a certain direction, I suppose.
Donald Kendal:Yeah. There there's a couple of other things that came to mind when, I was reading up about this $25,000 thing. Essentially, what's going on with college tuition is just resulting in an ever ever increasing tuition cost by subsidizing the consumer. You're you're taking out those the the the, innate price controls. We'll get into price controls that are built into that whole supply and demand thing.
Donald Kendal:You're just throwing that out the window. Right? I also had a couple of other fears, and one of them is that, let's let's say we start this $25,000 credit to new home buyers. Do you think that will ever go away? Because if you do, you're crazy.
Donald Kendal:I mean, you could think of a whole bunch of different subsidies out there. The first thing that came to my mind was, like, the corn subsidies and stuff for, like, ethanol. Like, we are still doing that, you know, because once, once subsidies are are, like, injected into the market, you can't get it out because the market kind of, incorporates it. Right? The other thing is that, I think now this is just speculation, me being cynical of big government operations like this.
Donald Kendal:I think that these subsidies will accrue attached strings. So, yeah, you can get your $25,000, but it's only towards housing that's considered green or something like that. Like, just just wait. Like, this is just another avenue for them to kind of push their agenda in different ways. So if you think that, like, they're just gonna hand out money, like, willy nilly to anybody, just give it a little bit of time.
Donald Kendal:They'll start attaching some strings to it and all of that sort of thing. So those are 2 other thoughts that I had in mind when talking about this. But any other any other thoughts about this, $25,000 for housing or we're gonna move on to the next one?
Jim Lakely:Well, I would just say, just to your point that, you know, if this was implemented and then somebody wanted to come along and, cut it and get rid of it because it's a terrible economic policy, they would be accused of trying to crush the American dream for millions of Americans.
Donald Kendal:Exactly.
Jim Lakely:And, you know, that that happens no matter what you try to do. And it but as you were talking about that, Donnie, made me think of, Javier Mille in Argentina, where he promised to cut out entire programs, like, Donald Trump has promised to just get rid of the federal Department of Education. And, of course, gloom and doom and panic, and you're going to crush people was were all the predictions, and he did not care at all about what people said about him. He just went ahead and did it. And what's happening in Argentina now?
Jim Lakely:They're probably they they probably have the healthiest economy, certainly, in all of South America and one of the healthiest and most, booming economies in the entire world, and it happened like that. It's amazing the power of the private sector when you can get as much government the hell out of the way as possible.
Donald Kendal:Right. Right. Alright. Let's move on to price controls. So, no.
Donald Kendal:You know what? I don't wanna phrase it that way. I wanna phrase it like this. Let's talk about sticking it to those price gouging greedy corporations. Am I right, comrades?
Donald Kendal:So, this this is the narrative of the left. Inflation is actually just the result of every business deciding to band together and raise prices out of this newfound greediness, just giving off the illusion of inflation. So what are the great minds proposing to deal with this phantom menace? Well, Harris is proposing new limits on raising costs, imposing harsh penalties on businesses that break new limits on price gouging. It's all very vague and undefined.
Donald Kendal:Her administration has released nothing official. No definitions of these new limits or penalties or even what price gouging is. But, if the proposals match the rhetoric, I think we're looking down the barrel of some big government price controls here. So, I mean, this is just basic economic stuff that they're trifling with here. You can't just, like, throw out the laws of supply and demand, on the altar of the greater good.
Donald Kendal:Chris, I've got some other things to say about this, but feel free to jump in. I mean, this is gonna have some pretty serious consequences, will it not?
Chris Talgo:Of course, it will. It's not even a question. But go ahead. I wanna hear what you think first more.
Donald Kendal:Well, I mean, we were talking about this a little bit. Yeah. What I was trying to tee you up for is just basically the premise that, you know, all of these businesses, these firms, these corporations, whatever, grocery stores even, I think when it comes to inflation, most people are, care more about their grocery bill than anything. They're out there just raking in the cash. Just you know what?
Donald Kendal:This bag of chips, $2 yesterday, I'm greedy today, it's gonna be $5. Like, that premise is super faulty, is it not?
Chris Talgo:Of course, it is super faulty. The the grocery store, operates on very, very thin margins. 1.6% is the average. That means that grocery store CEOs are not, you know, swimming in the $100 bills and just, oh, let's raise the price of Doritos
Jim Lakely:$10 and
Chris Talgo:just recoup all the all the profits. That's just not happening. And, I mean, it's it it is just so, like, superficial for her to think that we will buy the the, you know, this argument that, oh, it's these these greedy corporations who are somehow across the entire economic sector all cavorting together to to to do this because there are so many, like, just ways to, you know, to just poke a, you know, a needle in that balloon. Well, what why wouldn't one grocery store just chain say, hey. We wanna undercut everyone else and have all the people come here.
Chris Talgo:I mean, that's one thing to say. How about this? The fact that the the price of energy is up 30%, you know, since Biden Harris have come into office. Last time I checked, grocery stores have to pay to have things shipped to their stores. They also have to pay to have the lights on, the air conditioning when it's hot and the heat on when it's cold.
Chris Talgo:So these are all inputs that are increasing. The the wholesale price of most, you know, items, whether it's orange juice or anything, is through the roof. Eggs, you know, just across the board. And this is not just the grocery store. You know?
Chris Talgo:This is not just a situation of price inflation at the grocery stores. This is happening everywhere. It's happening in the car industry. It's happening in the school supply industry. It's happening everywhere because the inflationary pressures that were created when Kamala Harris never forget, she was the tie breaking vote on the, 1,900,000,000,000 American Rescue Plan and the 1,200,000,000,000, bipartisan infrastructure law.
Chris Talgo:That's 3 +1000000000 just being flooded into the economy. Mhmm. That is what is responsible for the vast majority of inflation. That coupled with the with the fact that they are artificially reducing the supply of natural gas and oil production here in the United States. Now I watch a lot of news, and I love when, Biden Harris, surrogates get up there and say, what are you talking about?
Chris Talgo:We have record oil and gas production. Sorry, but that is, you know, just so easily, you know, argued against. Yeah. We do have a record high. But you know what?
Chris Talgo:We could have 2,000,000 more, you know, barrels per day. We could have 5,000,000 more bare barrels per day if they would actually undo all the restrictions that they put in place on the oil and natural gas sector, coupled with all the subsidies and all the goodies that they're handing out for the green energy stuff. So I am just so sick and tired of hearing, what are you talking about? The United States is producing the most natural gas and oil ever. Yeah.
Chris Talgo:But we should be producing probably 20 or 30% more, which would make the price of it go down because the more you have is something, the less, you know, it costs. So there are just so many underlying factors that they are just ignoring and saying it's all about those greedy corporations. And if we just stick it to them and tell them, hey. You can't raise the price of bacon to this Mhmm. Then then that's just gonna somehow magically solve it.
Chris Talgo:And just think about how preposterous that is. So the federal government is gonna determine the price of an apple. Okay. Maybe 200 years ago when there was, like, one apple, like, you know, like, one one type of apple, like, maybe that's okay. Last time I went to the grocery store, there's, like, 80 different types of apple.
Chris Talgo:You got your organic this. You got your this that. You got your pesticide free this. So not all apples can be priced the same. That's just one product.
Chris Talgo:Grocery stores have tens, if not hundreds of thousands of products in there. How is the government gonna be able to come up with a calculation for the cost of every single one of those products? It's impossible. We've this has been tried time and time again. The Soviet Union tried this.
Chris Talgo:You know? Cuba's tried this. Venezuela has tried this. Every single time it's happened, every every single time price controls have even been, you know, introduced at all, it's the shortages. It's the shortages.
Chris Talgo:This is just like, you know, we we've got more than a 100 years of experience with these things, yet they're acting like this has never been tried before. This is a brand new policy that we just concocted, did, you know, and and we're gonna do it, and we're gonna do it right this time. No. You're not. And it's gonna it's gonna make things so much worse.
Chris Talgo:But I I I think I think maybe 20% of the American people just, like, buy this stuff like hook line and sinker. Just say, oh, yeah. Great. Of course. You know, the government says should set prices.
Chris Talgo:But I think 80% of the people know that this is going that that would actually make things 10 times worse just like her housing plan will make things worse and just like all of her economic plans are gonna make things worse. So Mhmm. You know, I I I don't think this is gonna resonate with most people. I really don't.
Donald Kendal:Well, it's the the the power of these all of these solutions that we're talking about. It's just like if you look at it for, like, one second, like, on its face, it's like, great. $25,000? Like, that'll help me buy a house. Oh, you don't wanna let, food costs go up?
Donald Kendal:That's fantastic. But it's like, what what, like, Milton Friedman and all of these, like, free market economists have, like, shown. You know? It's just like, you look just one layer deeper, and all of these things have these unintended consequences and all of these, you know, the complications of these, just like on its face solutions. So this one this this was a this was a great thread that I saw, on Twitter where this guy, Robert Sterling, was breaking down basically step by step of what you should expect if this kind of Kamala Harris style kind of price control system, was kind of unleashed on the American economy.
Donald Kendal:And And he goes through, like, 15 different steps of what's gonna happen or what would theoretically happen. And it's I won't read through the whole thing, but it just basically shows, a lot of the stuff, it highlights a lot of the stuff Chris was just talking about, the wholesale prices, all that sort of things. But just the pressure, the negative pressure that, it would have on these grocery stores. And it talks about how not all grocery stores are created equal and how certain stores that are in certain areas of the country are gonna be strained even more by this type of, regulations and all of that. And what you're gonna see is like a, what you would see play out over a number of years is basically like an at Atlas Shrugged type situation where the entire industry just starts to crumble.
Donald Kendal:And then what's that gonna result in? Is the government gonna have, like, a realization? Like, oh, we're actually screwing up the, you know, the industry that we're trying to solve. Let's undo it. No.
Donald Kendal:They're just gonna double down on even more, stuff and and and just try to bail out failing stores. And what you're gonna see is just like a slide towards larger government. Jim, I mean, the media treatment of this plan has actually been a little interesting. I mean, some of it I'll get to a little bit on a on a different topic where they just kind of give cover for whatever solutions come from people with a d in front of their name. But with this one, even, like, the Washington Post and, like, USA Today, we're like, yeah, this solution, it's not great, guys.
Donald Kendal:So is this just, like, one of the dumbest things that, like, a presidential candidate's come out with, or what do you think?
Jim Lakely:I mean, well, the media is gonna continue to to run cover for for Kamala Harris, of course, all the way through to the election. But, even the even the Washington Post, had a, had an op ed or a column by Katharine Rampell. Headline was, when your opponent calls you communist, maybe don't propose, price controls, and especially on groceries. So when The Washington Post is, there there it is, Donnie or, Andy. Thank you.
Jim Lakely:When The Washington Post is is like, I don't know about that, then maybe you should, back off of that a little bit. But, of course, if you're a leftist, you just lean into the bad, so they continue moving forward with this sort of thing. I mean, Chris, just on price controls and and so called price gouging real quick here. Chris is correct that, under this plan, under under price controls, it will be it will be up to government bureaucrats to determine what is the proper price that consumers should pay for literally 1,000 in innumerable, really. Just think of it that way.
Jim Lakely:Innumerable products, that it's impossible for any, army of bureaucrats, let alone a handful or even just one, to just determine on their own on a national scale what the price of, a pound of peaches should be or a sack of potatoes should be. And every single time price controls are imposed, on food especially, you end up with starvation. You end up with, bread lines every time. And for a an American major party candidate to be proposing with a smile on her face and a and a and a thumbs up the idea of price controls on groceries, it's and for people to not not and for the entire country not to be laughing their heads off at such an absurd thing is an indictment, really, on maybe our whole public education system in this country because it is so absurd. Now on and and again, as Chris pointed out, the price gouging that she is accusing, grocery chains, for instance, of engaging in.
Jim Lakely:And groceries, as everybody should know, are on very, very small margins, as you mentioned as was mentioned in that tweet that you brought up, Donnie. 1 to 2% margins. And so, you know, they they have to they depend on volume. Right? And it's a very hard business to be in and to succeed in.
Jim Lakely:All of them all the grocery chains have to have gotten together to collude, to raise the prices of eggs exactly the same percent all the way across the board. Right. Or else, if they didn't do that, then you would just go to the to the grocery store half a mile down the road in your suburb and get your eggs over there for a dollar 50 less, a dozen. And so but so if it if it unless they are all colluding together, price gouging can't happen, which means price gouging doesn't really exist, except in certain cases. And I saw this on X.
Jim Lakely:I didn't share the link with, producer Andy, but I will summarize it. And this is a it was it was making the case that sometimes price gouging in certain situations is a good thing. And say, for instance, you're fleeing a hurricane in Florida. Right. And you're trying to get out of the of the storm damage zone, and you come across a hotel.
Jim Lakely:And you and your family of 4, or you and your family of 6 pull in, you got grandma and grandpa with you too, and your 2 kids, and, husband and wife, you go to the front desk and they say, we need a hotel room, because of the hurricane's coming. And, they say, okay, it's gonna be $600 a night. Oh, actually, yeah. We want we want 2 hotel rooms and it's gonna be $600 for each room. And you say, I, we can't afford that.
Jim Lakely:They say, Well, it's $600 a night. And you say, But on the sign, it says it's $99 a night. It's like, Well, tonight it's $600 a night. So, that family has to decide, Well, we can't afford $1200, for 2 hotel rooms. It might not be as comfortable as we would like, but we're going to cram all 6 of us into this one hotel room for the night just until the storm passes and then we can go home.
Jim Lakely:Now, you may think that that is an evil, terrible thing to do. But what it actually does is that a second family coming up, another family of 6, instead of having an entire hotel filled with people paying $99 a night or even $300 a night, instead of it being full, there are rooms available if you can pay $600. So, instead of having to travel another, you know, who knows how many 100 of miles or maybe not even getting out of the storm zone, you're that other family is also able to find, a hotel, a room in that hotel. Mhmm. So that is one of those case and I never really thought of it that way until it it makes logical sense until I saw that, thread, tweet thread from an economist on Twitter.
Jim Lakely:And it's like, yes. The the price of things are related to the need, the it's like basic supply and demand.
Donald Kendal:Well, I
Jim Lakely:There's, like, a limited number of hotel rooms if you're trying to flee a storm zone in Florida. So the way to most effectively manage its, those hotel rooms so that as many people can get to them as possible in that area, price, there are price adjustments to make that happen. That's that's called economics.
Donald Kendal:Wait. I got a better
Jim Lakely:called socialism and and politics and b s.
Donald Kendal:Yeah. I got a I got a better example of that, because there there is actually another strain of kind of narrative in the media when it comes to this price control idea where they're like, oh, this isn't anything new. There's actually 37 states out there that have price control things, and it's specifically in regards to this. The idea that, like, a hurricane comes through, and there's restrictions on, businesses like jacking up the price of, like, water bottles or something like that. Right?
Donald Kendal:So they're like, oh, this is essentially the same thing, which to me it's not because it's like that's under, like, some declaration of emergency or something. So that there's a big difference there. Like, is Kamala Harris' plan based on, like, a declaration of emergency? I would think not. And even if it did, that scares me in its own right.
Donald Kendal:But to your point of that price gouging thing, my favorite example is the, the idea of, like, the, like, gas generators or something where a storm comes through, everyone loses power, whatever, and the cost of gas generators skyrockets in the area. And when the government comes in and says, no, you can't sell a gas generator for more than what the price was before the storm, that is removing the price signal that's out there that would encourage other people from outside the affected area to bring in gas generators to try to make a little bit of profit off of that. If they're not allowed to, sell a gas generator, at a higher rate, There's no incentive for that. So what are you gonna have? Less gas generators in the area.
Donald Kendal:It's absolutely ridiculous. But, again, it's like if you look at it just on its face, we don't wanna price gouge people. It makes sense. If you dig one layer deeper, it falls apart.
Jim Lakely:Yeah. I mean, even with the water bottle example, it's like, so if you can't raise the price of water, what you're gonna do is if you're the first one there at the store to get, bottled water, what are you gonna do? You're gonna overbuy bottled water. You don't need 7 cases of bottled water. Come on.
Jim Lakely:Let's be real. You need 2. But you're gonna buy 7 just in case. That's just kinda human nature because it's so cheap, because it's the regular price. If it's if it's 300% higher, guess what?
Jim Lakely:You'll actually end up just buying the 2 you need. And you'll get by. And what that does is it allows other people to get access to those resources to bring home. The same thing with power generators. It doesn't just disincentivize people bringing them in.
Jim Lakely:You're gonna run out of power generators in about 20 minutes at, every Home Depot within 10 miles of your store. But if they if the price is actually if the pricing if the price is signaling, the price signal is reactive to the demand, then it's actually more efficiently and better distributed among among the people who really need that power generator.
Donald Kendal:So, you know The
Chris Talgo:the the difference is very simple. I mean, you you guys you guys are spot on with the, with the with the situation in an emergency. But just just in terms of the overall, you know, structure of the economy, Adam Smith determined that this thing called the invisible hand determines prices. Kamala Harris and Tim Walz think that the government should determine prices. 300 years of experience shows that when you let the free market left to its own devices, the prices are stable.
Chris Talgo:They they reflect accurately the demand for said product at said point in time. But the more you the more you try to, you know, micromanage the economy, the more you, you know, cloud price signals, the more you're gonna have shortages, the more you're gonna have rationing, the more you're just gonna have economic upheaval. And it is a very simple argument to make.
Donald Kendal:Yeah. No. Absolutely. It's just no. Let's just throw it all out out just for the greater good, you know, and then call it a day.
Donald Kendal:Alright. Let's move on to the next thing. So Harris wants to hike the corporate tax rate back up to 28%. So this is actually an issue that we spent a fair amount of time on in past episodes talking about the corporate income tax. This was particularly a topic of discussion back when Trump was busy pushing the Tax Cuts and Jobs Act.
Donald Kendal:That legislation cut the corporate tax rate back from a staggering 35% to a far more reasonable 21%. And just for context, out of the the OECD countries, the pre tax, Tax Cuts and Jobs Act corporate tax rate in America was the highest of all of the OECD countries. And the 35% tax rate is a little misleading because, you also have to factor in the state corporate tax rate as well. And depending on the state, this could be an additional 0% if you're in, like, Texas or something like that, or it could be as high as 12% additional corporate tax. So averaged together, and I think we have a, a chart here if you could share that link that I sent in the private chat.
Donald Kendal:Yeah. Right here. This is from the tax foundation. So averaged together the pre tax cuts and jobs act corporate tax rate in the United States was 37 point 5% right there at the at the very tippy top, that big old scary red line at the top there. After the tax cuts and jobs act, the reduced rate was down to, 21%.
Donald Kendal:If you include the states and all of that, whatever, then it equates to 24.6%, which still puts the United States in kind of the upper middle of the pack of these, list of countries here. Harris's proposal to increase the tax rate back to 28% on that federal level We'll likely place the averaged rate around 32 ish percent, which again puts us right back on top of this entire list here. So, again, we've talked about this in past episodes, but a high corporate income tax rate would likely discourage business investment. It would encourage companies to move operations overseas. It would, reduce international competitiveness.
Donald Kendal:It would likely lead to higher consumer prices as the cost of the tax compliance is factored into the price of goods. Additionally, the tax foundation did some analysis on this proposal when it was originally talked about in the by the Biden administration, and their analysis show that it would reduce long run economic output, eliminate a 159,000 jobs, and reduce average wages just by a little bit. So, Jim, I I guess I'll go to you first on this one. This is just one out of several tax increases that, Kamala is proposing, and I'll get to those, towards the end of the episode. This one might be the kind of the the one with the largest implications.
Donald Kendal:What are your thoughts when you hear her wanting to increase that tax rate back up?
Jim Lakely:Well, yeah. I mean, she just wants the economy. The economy is already struggling to get back on its feet, and this would actually just, basically kneecap it, before it can actually get going. And listeners to this podcast, and, smart people, understand that corporations don't pay taxes. Individuals pay taxes.
Jim Lakely:The corporate the tax rate is baked into, the services they provide you, and, you end up paying that for them, not them, not not the corporation. So this idea that the corporate corporations are are getting a free ride, there is no free ride. We we end up paying that, ourselves. And so the, we could talk about the corporate tax rate, but just the idea of this goes back to where we kinda started, you know, quoting Michelle Obama saying that, you know, people who take too much are the problem in this country. And I agree with that, actually.
Jim Lakely:But the people who take too much are the government, not individuals in the private sector, not individuals as as us, but and also not corporations in the private sector. They're not taking too much. They are the providers of everything. It is the government that is always taking. And, in this case, we want, Kamala Harris and, Tim Walz want to go back to where, in the United States, the government is taking more money from the private sector and through its, you know, the productive private sector than any other country in the, in in with modern economies.
Jim Lakely:And so, again, that's on the ballot. And people, I hope, understand that one of the reasons that the economy was better than most people could remember in their lifetimes during Donald Trump's brief 4 years in office was because of the tax cuts that he implemented, including the corporate tax rate. There is no reason whatsoever that, a country founded on freedom and free market capitalism and the free markets, and free markets should have the highest corporate tax rate in the world. And it's not as it's not as if Donald Trump cut it down to nothing or cut it to, you know, 4%. He just wanted to get us somewhere in the middle of the pack with the other countries that we've been dealing with internationally.
Jim Lakely:And and that that apparently is too much for the for the the communists, the for Kamala Harris and and the Democrat party. That's just we we can't even be they're they're always pointing to Europe as the example to follow, except here, I suppose.
Donald Kendal:Yeah. I mean, Chris, we've done work on the supposed socialist, you know, Nordic states or whatever that aren't actually really socialist. But, one of the one of the sections I remember when we did that booklet all those years ago was showing the kind of the the corporate tax rate of, you know, Sweden and and these places. And if I recall correctly, it was in, like, kind of the lower twenties.
Chris Talgo:Far far lower than the current and extremely far lower than what the Harris administration wants to bring it back to.
Donald Kendal:Right. And and Europe, I read just in an article when I was doing prep for this. In Europe, the average corporate tax rate across the European, you know, Union is 21%, and communist China, 25%. So I'm like, we wanna make our corporate tax rate higher than China.
Chris Talgo:Well, I'm gonna go back to, my my old job where I actually did teach economics to high school school students. And I remember I taught macroeconomics, and one of the first things on day 1 was and this was how I, you know, usually framed it. Government can't create wealth. All government can do is take wealth from wealth creators. Who creates wealth?
Chris Talgo:Individuals and businesses, entrepreneurs, innovators, that's who create wealth. So do you wanna disincentivize more wealth creation and give it to the government so they can redistribute that or spend it on, you know, frivolous things? Most of the students would put their hand up and say, no. Of course not. I wanna keep most of my money.
Chris Talgo:And I would ask them, like, hey. Those of you who have a job, do you think you should actually pay more taxes to the government so the government can do more things? Or would you rather keep more of your money and have the government do less? Almost 90% of them. Of course, I wanna keep more and let the government do less.
Chris Talgo:But, you know, it it it becomes, I guess, more of an abstract concept when you talk about corporate taxes. And I think most people just think, yeah, of course. Corporations have all this money on the side. Yeah. They can they can, you know, afford it.
Chris Talgo:Yeah. But like Jim said, guess what? That's gonna get passed on to the consumer somehow, some way. It has to. It always will.
Chris Talgo:And, you know, really, what I think this is about is the Kamala Harris, you know, administration, you know, if they if she wins. She wants to increase government spending big time. And in order to increase government spending, what does she have to do? Raise more taxes. So she's out of the mindset, well, if we just raise tax rates, we'll get more tax revenue.
Chris Talgo:Uh-uh. There's this thing called the Laffer curve. And guess what happens? When you lower tax rates, you get more economic growth. When you get more economic growth, you get more revenue.
Chris Talgo:Donald Trump's 2017 Tax Cuts and Jobs Act proved that yet again. And just one other thing here. If we're gonna talk about tax cuts and the tax and jobs, you know, tax cuts and jobs act, which was actually gonna sunset fairly soon if if if, nothing's done to, you know, revive it. Guess what's gonna happen? We're gonna have humongous deficits.
Chris Talgo:Humongous. $2,000,000,000,000 plus for years to come, for decades to come. So, really, what the what what this really should spur is a a conversation long overdue, decades long overdue on government spending. And you know what? Unless and until and, I mean, I'll put the Trump administration in this boat too.
Chris Talgo:He did not do enough to cut government spending. Sure. And I really hope that if Donald Trump does win in 2024, that he actually puts forth a plan to at least curb government spending because we cannot keep spending. We have $35,000,000,000,000 in a national debt. Right.
Chris Talgo:Eventually, you know, eventually, our interest payments on the national debt are gonna be such a large line item in our budget that they're gonna dwarf everything else. They already dwarf how much we spend per year on our military. So this is something that is a macroeconomic problem of massive implications that really needs to be dealt with sooner rather than later. And Kamala Harris has kicked the can down the road of, well, we'll just raise, income tax rates and corporate tax rates and, you know, we'll it's you know, hopefully, the wealth will pay more. First of all, they're not gonna pay more.
Chris Talgo:You know why? Because the wealthy have really good tax lawyers, and they have, you know, lobbyists who work on their behalf to make sure that they don't have to pay those taxes. The average American is gonna be the one who's gonna be hit hardest by this. Just like the average American is the one who's been hit hardest by all the inflation of the past three and a half years under Joe Biden and Kamala Harris. So all this talk about because I hear this stuff just nonstop daily, just, you know, never ending.
Chris Talgo:Donald Trump is for the wealthy. Republicans wanna help all those, you know, those big corporations, and Democrats are for the the hardworking the hardworking, you know, middle class and lower class and, small business. Just not true. Just completely 1000% not true on its face. And I just hope and, you know, I saw some comments in here saying that I was way over exaggerating that 80% of American people see through this, you know, charade in these shenanigans.
Chris Talgo:I hope that it is 80% of the people because we need 80% of the people to just come in and have an overwhelming landslide victory to show once and for all that we need to deal with our economic problems that we've been kicking the you know, came down the road on for way too long. I remember back in the good old days of, you know, Barack Obama when, Paul Ryan was talking about a debt bomb, and, you know, they actually almost came close to a grand bargain. It was the Simpson Bowles commission, if if I remember correctly. And that was actually gonna cut spending. And what happened?
Chris Talgo:It it it it it it it didn't you know, they it it it didn't come to fruition. Didn't come fruition because, you know, apparently, Barack Obama kinda changed the goalpost at the last minute and said, no. We don't wanna do this. But we need we need something like that. We need a a 2024 Simpson Bowles commission to come in and say, guys, the federal government is involved in way too much stuff.
Chris Talgo:They're spending way too much money. They're taxing everything way too much. They're subsidizing things that have no business being subsidized. We need to get our economic house in order.
Donald Kendal:Well, this is what this is something that everyone has to understand. Okay? Because I think, like, your your average person or whatever, when they hear somebody pitching some specific number, you know, we wanna raise the corporate income tax to 28%. It's like, oh, 28%. Oh, that's that's interesting.
Donald Kendal:Like, I wonder how they came up with 28%. Must be a bunch of, economists back there, like, you know, doing some slide charts and figuring out what the optimal, you know, thing is, and it's not. It's not at all. The the reality is it's just politically advantageous. They think that, you know, we're gonna put this out there, you know, the the negative stigma against giant corporations.
Donald Kendal:People won't even flinch at the idea of raising taxes on them. So let's do that. People won't even flinch at the idea of raising taxes on them. So let's do that. That's as much thinking goes into these solutions.
Donald Kendal:That that's it. That's the limit. That's the that's the upper limit of how much thinking goes into these solutions.
Jim Lakely:Well, the thing the thing that kind of burns me is is the is the idea that the problem that we have in society right now in America is that we are not taxed enough. Right. That that is that is so absurd. I mean, you know, you're right. When you guys were talking, it reminded me, I think it was the season premiere way back in the nineties of the show Friends.
Jim Lakely:The character of Rachel came from, a very wealthy family, had never worked a day in her life, but she was forced to take a job at, Central Perk. And then, she gets her 1st paycheck, and she looks at it, and she says, Hey, who's this FICA guy? Why is he taking all my money?
Donald Kendal:Right.
Jim Lakely:You know, she had never had the concept of of working, you know, of being taxed for your labor, by the government. The the idea that you should be giving it should be a foundational principle. And this is really a humane attitude, I think, when it comes to tax policy. The idea that any human being, with the limited time they have on earth, and the limited time they have to produce, you know, to be a productive laborer, in however you wanna define that, in their society. And like I said, you're only on this earth for a short time.
Jim Lakely:The idea that government has, claim to 50% or more of your labor for your entire life is immoral. There is no in a in a sound, in a in a sane society, that that whole concept would be absolutely inconceivable. Nobody in their right mind would think that government has claimed to the to half the value of your labor for your entire life. You might even argue that 25%. Government taking you you being taxed 25% of your labor for your entire life to support society by giving it to government.
Jim Lakely:Even that is too high. God only asks for 10%. Government asks asks for 50% of your labor. And I and I shared a, you know, just with personal income taxes, I had shared with you, Donnie, this morning on, on Slack, a chart, that showed that, you know, this was the we haven't gotten into it. I guess we're gonna get into the unrealized gains tax, which is another fantastic idea from, from communists to basically tax money you haven't even earned yet.
Jim Lakely:That's a fantastic innovator innovation. But the marginal income tax brackets in 1913, when when we passed one of the worst amendments to the Constitution ever to, impose the income tax. It was a 1% marginal tax rate for anybody who made in $2015, so this is actually even higher now, you didn't pay a Senate income tax unless you made $480,000 in $2015, not a cent to the federal government. And then, in fact, you only, you paid as much as 5% if you made $6,000,000 a year. So, the income tax as implemented, like all of these taxes as implemented, promise only to, you know, we're only gonna go after the super rich.
Jim Lakely:It's only gonna affect these certain people. It's only gonna affect the price gougers. It's only gonna, you know, that that these are the arguments that that detestable Elizabeth Warren makes all the time. It may start that way, and it always ratchets ratchets up. So now, you know, we have an income tax rate, federal income tax that that only affected the tiniest z what was it?
Jim Lakely:It probably would have been 0.005% of the entire American population paid an income tax in 1913. Now, we all pay income taxes unless you're poor, and then the government pays you instead of you paying in income taxes. So But but This is where it always cut this is where it always goes. But the idea that government has any claim, let alone 50% claim, and I mean all levels of government, to your labor with your limited time on earth is an absolutely immoral argument. But that is the argument that, that the left and the Democrats and the communists make.
Chris Talgo:In 1913, the, size of the US government and its, you know, spending was so much smaller. So this so what they did was they passed the amendment, so that they could, you know, gradually, you know, increase the tax rate over time. And here we are a 110 years later, and now we're, you know, in a place where, you know, income taxes are just, you know, so high that they are, you know, just ridiculous. And, just a couple things. I'd, you know, just wrote a a quick op ed today about the the jobs revision.
Chris Talgo:So the, you know, Burger of Labor Statistics just, said, oh, whoops. We made a we made a mistake. 818,000 jobs were not created over the past year. But, I think that really is is just the harbinger of things to come because I did some research, and, unfortunately, small business bankruptcies and large corporate bankruptcies are at record levels. That means that the foundations of the economy are really unstable.
Chris Talgo:Raising taxes at a time right now where small businesses are struggling and even corporations are struggling. Oh, that is a recipe for a humongous disaster. And let's also remember that the backbone of the US economy is not big corporations. It's small businesses. Most small businesses pay income taxes.
Chris Talgo:So why would you want to disincentivize people from starting small businesses when small businesses are already struggling big time and have been struggling big time since the pandemic? This is all just gonna make things, you know, progressively worse.
Donald Kendal:Oh, yeah. Yeah. There's there's a a whole bunch of other, taxes that are being proposed or at least supported or endorsed, whatever, by Kamala Harris. So there's a link in the show notes, from Americans for Tax Reform, and it kinda goes through it. There's a whole laundry list.
Donald Kendal:We won't spend time on all of these, but, endorse the top marginal income tax rate of nearly 40%. This is the tax rate that, Chris was just referencing that small businesses pay. Capital gains tax increased to 44.6%, and that's not including state. If you include states in some places like California, that would mean the capital gains tax would be as high as 59%. Additional death taxes, a quadrupling of the tax of stock buybacks, 30% tax on electricity used in cryptocurrency mining, billions of new taxes on energy companies, but don't worry.
Donald Kendal:Just on the evil reliable ones. 32% increase in Medicare taxes, billions increase in taxes on retirement money. According to this document here, altogether, if you put all the taxes together, it's an additional $5,000,000,000,000 in taxes. So, yeah, sure, the economy will be doing just fine after that. But there's one other thing that I wanna talk about.
Donald Kendal:I know we're already long on time here, but I wanna be fair and balanced. Right? So, yes, she's increasing the taxes and all of the stuff or wants to. Yes, she wants to do all of these big spending programs, but there is one little area where she wants to reduce taxes. I know.
Donald Kendal:I know. It's true, though. So, some of Kamala's economic policies are just directly lifted from her political opponent. Okay? So starting just a few months ago, Trump started campaigning on the, the idea of no tax on tips.
Donald Kendal:And, it must have been polling well because now Kamala Harris is echoing Trump's message on this idea. And at first, I just thought it was comical. Oh, he's saying service employees should be able to keep more of their money. That's polling well. Yeah.
Donald Kendal:Yeah. We're for that too. Yeah. Yeah. Absolutely.
Donald Kendal:But then I recently found out, and apparently, this was old news to Chris, but I didn't know this. Not only did Harrison Biden not support this position in the past. In fact, they marshaled the IRS to crack down on service employees' tip income. According to a different Americans for tax reform article, it says the, this IRS crackdown on tipped service industry workers was announced just months after the Biden Harris administration and congressional democrats spent $80,000,000,000 to increase the size and power of the IRS while including 0 new taxpayer protections. So, pretty pretty big about face on this issue.
Donald Kendal:But, Jim or Chris, do you have any comments on this on this one here?
Chris Talgo:As someone who has worked in the service industry for many years as a caddy and, you know, just other odd jobs here and there, I think this is just reprehensible. And, you know, one way to try to, avoid this, whenever you whenever you tip somebody, give them cash. Right. Give them cash. Don't put it on a credit card.
Chris Talgo:Give them cash because it's a lot easier for them to, I probably shouldn't be saying this on
Jim Lakely:on your
Chris Talgo:a lot easier for them to not report that to the,
Donald Kendal:Theoretically to
Chris Talgo:the you know who.
Donald Kendal:Theoretically, when you leave a tip on a on a card this is just what I've heard. I don't know if this is true. Then, the the system that it's all run through automatically, will tax on those tips. If you if if it's just in cash, the system just kind of assumes that it's somewhere in the 10% range, and the person might just keep the difference. So, yeah, that that does sound like good advice there, Chris.
Donald Kendal:But, hey, this is all just hypotheticals we're talking about. Jim, final thoughts on this topic in particular or anything else we've talked about on the show so far?
Jim Lakely:Well, I what just just kind of a a overall point. I mean, people think that, if they impose these sorts of tax policies, that there will not, it will not create underground economies or different ways for people to get around paying the tax. Speaking of, confessions, we've all worked in the service industry, all of us, you know, before you know, as as young people, which is where a lot of people get their start. I worked for a, a pizza place. So it was it was just a small pizza joint.
Jim Lakely:It wasn't a chain. It was owned by, you know, a man, you know, with a fa a young family. And small business is a hard thing to keep to keep afloat, if you're actually checking all of the tax boxes and all the boxes the government makes you wanna do. So, I worked for him and, I wasn't, let's just say I walked out with some cash in my pocket every day, and, I wasn't necessarily a full time employee over there. And so, and his father also worked for him, And he wasn't on the books.
Jim Lakely:He just worked to help out his son. It's actually quite common for, you know, immigrant families in United States to employ their kids as free labor because they can't afford, especially with the government mandated minimum wage hikes that we keep seeing over and over again, especially in places like California, they can't afford to run their business. With inflation running through the roof, they can't afford to pay all the labor, so they have their kids basically work for free, to keep the, to keep the business afloat. The, the, the system is, if you impose these sorts of costs, these, these burdens on free enterprise, free enterprise will find ways to go underground. They will find black markets will emerge.
Jim Lakely:And none of this is necessary. Again, the idea that the government of the United States is not taxing people enough, that it has a revenue problem instead of a spending problem, is absolutely absurd. And it it need this kind of stuff needs to be talked about from an economics, perspective by, frankly, by Donald Trump in the debate and on the campaign trail to show that how this these sorts of economic policies are horrible on the macro, and they are devastating in the micro when it comes to the small businesses that have to deal with these sorts of mandates and taxes, and they just can't stay afloat. They want to. They want to work.
Jim Lakely:They want a successful business. They want their family to thrive. But it's the government that is always getting in the way and making that almost impossible. So, if you, you know, the Democrats, I think they're trying to make the focus of like, you know, restoring the American dream. They're they're not doing that.
Jim Lakely:They're they're trying to impose a socialist communist nightmare on this country that has failed in every, in every country where it is tried. I I bet I bet, you know, like, we didn't get into it, but one of the things I really kind of prepared for and was happy to talk about was the the idea to maybe we'll do this next week, to tax unrealized gains
Donald Kendal:Mhmm.
Jim Lakely:On your investments. So, you know, not even Hugo Chavez, I think, we thought that, you know, hey. Let's tax let's tax people on before they've even made the money. We'll call it unrealized gains, and get money from them, collected from them, then as well. Not even the the great communist, commissars of the last of the 20th 21st century has ever thought of something as as, innovative that.
Jim Lakely:So you gotta come to America, apparently, for your communist innovations.
Chris Talgo:Quick question for Kamala on her unrealized capital gains, tax proposal. Do you think that is going to increase or decrease corporate investment? Just just throwing that out there.
Donald Kendal:Yeah. Well, so I like doing these kind of policy heavy episodes. I this is really where, like, kind of the rubber meets the road, and you kind of get out of those just the reality TV show aspects of politics. And what I want is that, this episode helped, people kind of gather the intellectual ammunition that's required to push back against this stuff. Because like I said, this is kind of the central takeaway from this, I think, this whole episode, is that when you hear some of these solutions on its face, just just right in its face, it's like, oh, that's that's that sounds reasonable.
Donald Kendal:That sounds sounds like a good idea. You just have to dig one step deeper into it and realize that these solutions have unattended consequences. They have market disruptions tied into it, and those things, those consequences could have more harm to the economy and harm those specifically that you're trying to help than the actual benefits, that are, you know, supposed to be seen on the face of these solutions. So that's what I'm hoping that this episode did for you all, but that's gonna do it for this episode. I wanna thank everyone for tuning in to this episode of in the tank podcast.
Donald Kendal:Join us every week for a new episode. For those audio only listeners that are probably catching the show on a Friday or later, leave a review for us on Itunes. That'd be greatly appreciated. And consider us consider joining us live a daily or earlier on Thursdays at noon CST where we are live streaming this on Facebook and YouTube and Rumble and x. You can join the conversations or your comments and questions in the chat.
Donald Kendal:Maybe we'll show your comments on the screen. Maybe we'll address your questions on the fly. You can't support the show via via, super chats anymore because YouTube demonetized us, but you can still support the show financially by going to heartland.org/inthetank, donating directly to the show. It's a better way to do it. That way YouTube doesn't take a 30% cut.
Donald Kendal:If you'd like, you can follow us on Twitter at in the tank pod. And if you have any comments, questions, or suggestions for the show, feel free to email us at in the tank podcast atgmail.com. Jim Lakeley, where can the find people find you?
Jim Lakely:You can find me on September 13th. That's a Friday at the Heartland Institute's 40th anniversary benefit dinner. So if you like this show and you'd like to meet me and like to meet Donnie and like to meet Andy, our producer, and, Chris and Justin, then you can come to our annual benefit dinner in Chicago at the Hilton Chicago, downtown. Go to heartland.org for tickets. And if you don't like us, I've also have still got good news for you.
Jim Lakely:Because you might like Larry Arnn, and you might like Nigel Farage, and those guys are going to be giving speeches at our, at our event. And we also just add added doctor Jay Bhattacharya, the, the inventor of the Great Barrington Declaration, who did, probably the most important work pushing back on, nonsense, lockdowns and and whatnot during the pandemic. So, please, September 13th in Chicago. Go to heartland.org for more details.
Donald Kendal:Fantastic. Chris Talgo, what do you have to pitch today?
Chris Talgo:Well, I'm gonna be on the golf course this weekend going for that 2nd hole in 1, Donnie.
Donald Kendal:That's that's where you can find me. Fantastic. Thank you, producer extraordinaire Andy in the background, and we will talk to you guys next week.
Chris Talgo:He's a lion dog faced pony soldier.