Transcript of Ray Madoff (on how billionaires avoid taxes & threaten capitalism)

Welcome, welcome, welcome to Armchair Expert, Experts on Expert. My name is Daniel Shepherd and I'm joined by Monica Badman.

Wow.

What if your name was Daniel? You would be so different.

I would be a claims adjuster. Yeah.

And you'd be still wearing those glasses though.

I would. Well, I'd only have these glasses on because I'd have to look at a lot of claims and I can't see anything anymore. Okay. Our guest today, and this was, if people listen to the Ezra Klein episode, she was suggested to us by Ezra and boy was he right.

Great lead.

I'll take more. suggestions from here.

Send them over, Ezra.

Our guest today is Rae Madoff, and she is a professor at Boston College Law School where she teaches in rights and tax law and policy, wills and trusts law and estate planning. She is co-founder and director of the Boston College Law School Forum on Philanthropy and the Public Good. Now hold on though, guys, don't run. It's not a tax law session.

No, it's so interesting.

It's one of the most interesting guests we've ever had. Her book is called The Second Estate: How the Tax Code Made an American Aristocracy. So everyone's very understandable frustration with the huge income inequality. You know, one guy's got $1 trillion and we find out what these people pay in taxes. It's infuriating. Well, we find out how that's happening.

Yes. It's like, it's really necessary 'cause she breaks it all down, how this, what the loopholes are, how this happened.

And if you like capitalism, some of you don't, that's fine. I happen to like it. Um, this is an enormous threat to capitalism.

The billionaires not paying is unraveling the trust.

Yes. It makes capitalism not work as a system and our system has to work for everybody. So anyways, this is fascinating. The numbers in this are going to absolutely make your head spin. Please enjoy Ray Madoff. Welcome!

Thank you!

Oh, and you too are in uniform, Granddad!

I can't tell you how many outfits I tried before I got—

Oh!

Very casual t-shirt. Nobody wears sandals. Nobody wears sandals.

You haven't seen me on the show?

I've only seen sneakers.

Oh!

Believe me, I went and tried on 50 pairs of sneakers.

Okay.

I just look like a man.

You look super cute.

Your sandals are great though. Let's just start there. Thank you.

That's the most And you have a savage tan. Has the summer been treating you—

I was on Martha's Vineyard. Okay, and here is the conversation that I didn't hear myself, but a good friend of mine heard at the Beach Plum Inn. I grew up going there my whole life. A friend of mine was eating breakfast at the Beach Plum Inn, and she heard somebody say to the guy that was running the breakfast, you look just like Dax Shepard. And he goes, oh my God, that's a huge compliment.

Oh, wow.

He's my favorite actor. Podcaster.

No!

I'm so delighted.

That's so nice.

I know it. Isn't that nice? Is there anything better than a compliment heard behind your back?

Wait, how come you've been going there since you were young? Are you from Boston or something?

I'm from Boston.

Wow. So you're from Boston, you teach in Boston.

And even worse, I'm from Newton. I teach in Newton and I live in Newton. Really make me like the guy that, you know, is working at the gas station, never left. Yeah, yeah, yeah, yeah.

How do you end up with Ray? Disclosure, we have a historically male name given to our daughter. So I love that.

You do?

Lincoln. Our firstborn is Lincoln.

Wow.

Okay. Here's the weird thing about Ray. So I was actually named after my grandmother, who was a sort of a huge figure in our family writ large. And she came to this country and she was like Rivki or Rishki or something like that. But everyone called her Ray. And then she spelled it R-A-Y. The weird thing is, I have yet to meet a single Ray in my whole life, spelled R-A-Y, as a woman. And it's weird because women are named everything. Women are named Joseph. Women are named Frank. No women are named R-A-Y. You'd think it would be a good name.

They name it R-A-E.

R-A-E. Or it's like, you know, Norma Rae, like a second one. Oh, yeah, yeah.

Yeah. Issa Rae.

And here's the really weird thing. So, there was a movie. It was one of these really lame rom-coms where somebody had to go into the Witness Protection Program. A couple had to go to the Witness Protection Program.

Okay.

They were about to get adopted. and they witnessed a crime together. They had to go to the Witness Protection Program.

Great premise.

And they went to Rey, Wyoming.

Okay.

Okay. Spelled R-E-Y. The penultimate line in the movie, 'cause of course they end up getting together.

Obviously.

And obviously they have a baby. Obviously they have a little girl. And the penultimate line is, and we'll call her Rey. And the ultimate line? will spell it R-A-E, literally, as if, like, it would be too implausible. Everything else was very plausible. But the idea that they'd name a girl R-A-Y, that was just too much beyond the limits.

That is so funny.

Yeah. Willful suspension of disbelief would have been violated. So even though the town was spelled presumably R-A-Y. Yes.

They could have changed the name of the town. I mean, it's probably a fictional town. Somebody obviously swept in last minute and said, whoa, this cannot be.

No one will believe this.

No one will believe it. It'll be an outrage.

Before everyone totally believed it. Exactly!

Believed it all.

Do you walk into a lot of rooms and people expect to see a male?

Yes. Well, here's the problem. So originally, of course, and I think you're being very deft about this and nothing I wouldn't accept.

I'm positive I know the definition of deft.

Okay. But well, you'll get there with the story.

There we go. Context clues.

You're like, wow, your name. Tell me about Ray and not your name. Are you related to the biggest crook in the history of the world?

That's too pedestrian for me. That's on a silver platter. Madoff. I mean, that's what everyone is going to say.

Of course, that's what everyone's thinking. No, no, they don't say it. They just think it. So let me just clear it up. So the Medyevs and the Megadowskys all came through Ellis Island, and they gave us both the name M-A-D-O-F-F. We have always been Madoff. We then found out back in the day when we wanted to be related to them because my uncle wanted to get Madoff.com, Madoff.org. Remember, early in the internet, you could get them. And they said, this guy from New York has hoovered up all of the M-A-D-O-F-F. Yes. But we didn't know who he was.

Interesting.

And then, yes, the plot thickens.

So, it's Madoff.

We're Madoff. Yes. But the problem is this. When I say it's Madoff, not Madoff, basically, it sounds like I'm saying, that's Frankenstein. Like, literally, I'm definitely trying—

What would be great is if I had dug up an interview from the early '90s of you where you were saying Madoff.

Yeah, that's exactly— I can't even correct people because I just sound like I'm being a big jerk and trying to be like, no, that's not us. We're Madoff, not Madoff.

Okay. My first question is, I would say it's kind of unconventional for you to be drawn to the field that you're in. You're a law professor and you specialize in tax law and estate law. How do we explain that interest?

Yeah, I know it. First of all, let me just say I am a proud member of the highly mediocre high school Ooh, good for you.

Congratulations.

Thank you.

Yeah, same.

Thank you. Yes. Super proud.

Are you ADHD, do you think?

I think I probably am because all of the things like I do better if I'm doing 2 activities at once and that type of thing. Okay, so I was a highly mediocre high school student, barely in the top half of my public school class. Mediocre scores. I somehow thought that the SATs were sort of like a blood test. And I thought, well, I'm smart and it tests smart. Therefore, like any piece of crap animal, I give must be the right answer because that's what it's testing.

Yeah.

I was really out of it. And so I started at UMass, which was the best thing that ever happened to me because I found this philosophy class with this professor who was just tremendously influential in my life. And all of a sudden, I found this area that really spoke to me. I loved it. I loved everything about philosophy. I then had an identity. I became a really— good college student because I, like, totally was into the subject.

You were on fire for it.

I was, yeah, loved it. And I had an identity and it was great. And I eventually graduated college with a degree in philosophy and wanted to go on in philosophy and be a philosophy professor. But it was the era where somebody said to me, like, you're insane. If you're lucky, you'll get a 2-year position in no place, nowhere.

So lots of competition, few slots for philosophy.

No slots for philosophy professors when I graduated college. And so I did what I think probably 50% of my college class did, which is I went to law school after a year of like, I don't want to go. I'm not going to go to law school. I'm not going to be pre-professional. I'm not going to— anyway, I went to law school, which I shockingly loved. It was actually super interesting.

I would imagine it was appealing because I think on the surface, when people think of law, they think of their interaction with jurisprudence as opposed to like law is all about thinking.

Yes.

It's all about structuring language. Right. It's very philosophical.

Very much so. And I loved it. I loved— It was so fun for me, particularly 'cause I had worked a year, and I could see what types of jobs were available, which were things like a note from my supervisor who said, please call information and get the phone number for this person. It's like, okay, you could have done this in the time that you told me to do this stupid task. Anyway, but law school, very intellectually engaging. But the thing is, I thought that the value of law school for me was I would be able to do good. Because philosophy I liked, but I also had that— of like, I should do good in the world.

Yeah.

Also, the questions, even in philosophy, were like, does redness exist?

Yeah, it's not solving anything.

You're not solving any problems. Exactly. And so then I went to law school. I thought, I'm gonna like— and the issues back in the day were like saving the whales and battered women. I'm like, that's what I'm gonna do. I'm gonna be like a hip litigator. I'm gonna be so hip in law school, applying my analytic philosophical skills and fighting the good fight. And in my second year of law school, I did a litigation clinic. and I also took corporate tax. I took it because it was in the '80s, and I was in— at NYU Law School, where everybody was doing, like, a one-head, two-head test for the big law firms. Very easy to walk into the big law firms.

Yeah.

And they were like, just take corporate. Anyway, so I took corporate tax, and I was shocked to find that I had no feel for litigation because you couldn't just think your way through. My husband's a litigator. You have to— get a deposition that has someone say it. Then you have to get a case that says it. Then you have to do something else. It's so much forms.

Red tape.

And for somebody who's like a little—

Did it feel tedious?

It felt tedious and like I did not have the patience for that type of thing. Yeah, yeah, yeah.

Tedium tamiza. That's my kryptonite.

No, no. Absolutely. My bête noire, being bored. I cannot tolerate it.

I mean, come on. I've diagnosed you. This is great.

I didn't even realize. I should never have gone to anybody else but you. So, are you also on the same personality type?

I mean, at this point, it seems like every single person has. Of course, we've all become that way with our phones. Yes, we all have it.

I was actually thinking that one of the things I was looking forward to is I'm getting like a 2-hour break from my phone here, which I think is huge.

I don't know if it's age or I think it's just the times. We can't focus. None of us can focus.

It's very hard.

Our brains have been hacked with stimuli.

Yeah.

And they're responding accordingly.

It's hard to know what's in you and what's not. Yeah, exactly.

And I didn't like litigation, but what was particularly destabilizing was I found that I loved corporate tax. Now, one thing is I had a woman professor in corporate tax, so that does, I think, make a difference. She made me think like, okay, this is for you. You could do this.

Yeah.

But also, it turns out that it's really very similar questions. So like a big question in corporate tax is what's debt and what's equity? That's a lot like what is redness? Does redness exist?

Sure. Because it depends, right, where you're viewing that from. It can change on a dime.

What are the parameters? How do we conceptualize the world is a lot of what tax law is about. And I went off to Wall Street because that's That's sort of what everybody did. Super easy at the time. And I was probably one of the worst tax lawyers ever. I could do it, but I could not care less if my clients paid taxes or didn't pay taxes. Like, you know, what you want as a tax lawyer is somebody really— they treat your money like their money, their way. And for me, it was like a little intellectual exercise. Super interesting. And I definitely didn't have a preference one way or the other.

Partly interested in the outcome.

Not at all.

Is that what you want from your lawyer?

Exactly. Someone who finds it an intellectual engagement.

I see that you're having fun, but do you have any sense of how this is gonna end? No.

Exactly. Nor do I care. You may owe $10 million. I don't care. But very, very luckily, I got a position in teaching, which I had long wanted to do. If you remember back in philosophy, I love school. I love fall in New England. I love that you put on your plaids, you go back to school. The whole thing about it, I love. I love students. Campus. Campus. Now it's coffee. Now you walk around with your coffee all day long. What's not to like? It's the best.

Yeah, yeah, it's dreamy. Okay, so we must get into your book. I'm gonna start with the title because my first question has to do with the title. The Second Estate: How the Tax Code Made an American Aristocracy. So I think my first question for you is, can you tell us a little bit about pre-Revolution France where this term originates? What the heck is the Second Estate? The Second Estate.

Can I tell you a little bit about how— what the book was supposed to be called in my dreams originally?

Yes, they always make you change the name, right?

Yes. So when I put in my proposal for the book, it was called Why You Pay More Taxes Than Billionaires.

Cut straight to the chase.

That's what I thought.

Yeah.

And my editor, the person who would become my editor, he said, love the book, but if you insist on this title, I will not use it. And so I'm like, all right, I want to publish with you.

Was he himself a billionaire and he felt offended?

He felt— I don't think so. No, he didn't really give me a reason, but he did say, I think you should call it this. The Second Estate: How the Tax Code Made an American Aristocracy. This was like in our original correspondence. And I thought to myself, there is no way I am calling it that. Like, I'm gonna yes him to death and say, yeah, sounds great.

Kick it down the road.

Exactly. But I was thinking, forget it. It's bad enough that it's a book about taxes. And now I'm gonna layer on that it is a title that you don't understand at all. So now you'll be confused, then you'll find out it's taxes. Like, none of this was seeming to be work for me. But what happened was, I began to look more and more into this whole thing about the Second Estate. And I realized how unbelievably apt it was. And it actually came to me to be, like, one of my favorite things because he liked the idea that the title was a bit of a mystery.

Uh-huh.

And in fact, I think if it had been, Why You Pay More Taxes, taxes than billionaires, it just would have looked like every other book on this subject.

We're going to get into it towards the end of this, but yeah, there is a climate right now and people, a lot of people hate billionaires.

Yes.

Across the board, they're the villains. So this book is more substantive than that. If I'm looking and I'm like, oh, here we go, there's another let's kill all billionaires.

Exactly.

I'm off-put by that.

Exactly.

It doesn't feel thorough.

That's right. So the Second Estate, let me go back to that for people who don't know, because I myself, and the most often thing people will say to me is, Second Estate. Like, the Fourth Estate is the journalists. That's all anyone knows.

Yeah.

The Fourth Estate is the journalists. And that's true. The Fourth Estate here in the United States are the journalists. But basically, in France, in pre-revolutionary France, the First Estate was the clergy. The Second Estate was the aristocracy. And the Third Estate was pretty much everyone else, right? Your bourgeoisie, your peasants, all of those people. And what was interesting about it was that the clergy, of course, didn't pay taxes and owned a whole bunch of land. But also, under the explicit French rules, the aristocracy had these special privileges, like they were the only ones who could carry swords, and they were the only ones that could hunt in certain places. And their best privilege was they were explicitly written out of the tax system.

Wow.

So they didn't have to pay taxes just because they were aristocracy. And what's interesting is that you didn't have to be born into into an aristocracy. You could actually buy your way into an aristocracy because people would sell their title. And so basically, there was this guy named DuPont who was an economist in France, and he said the only way to avoid taxes is to become very rich. And I thought, ding, ding, ding, ding, ding, ding, ding, because that is exactly the situation here in the United States. And I think what makes this a very good title, if I may, Yeah. is because the public doesn't really know this. The public doesn't know that the rich have been written out of the tax system.

Yeah.

Because by its appearances, it seems to be heavily burdening the rich because it's heavily burdening a portion of the rich. But the real rich, it's giving a free pass.

Yeah. And I think even in your book, interchangeably, and I think we could use it going forward, is like there's rich and then there's wealth. Often what we're talking about is like wealth. Being exempt from taxes.

Exactly. And I think that one problem that we've had is that there has been a conflation of high-income earners and high-wealth owners. And this has been caused by a lot of different people. In part, Democrats had a role to play in it. I think what they were trying to say was, we're not going to raise taxes for people who earn less than $400 million. But people heard it as, if you earn $400 million, you're the problem. And that is not the problem. People who have high incomes are paying lots and lots of taxes.

Yeah.

And it's politically, I think, been a big mistake not to recognize the high burden carried by high earners.

I agree.

What do we qualify then as wealth versus high earners?

Right. So basically the issue is that if you earn money through work, you have a podcast, you do— you're an actor, you know, no matter what you do, when you earn money, you pay a lot of taxes. And it used to be the case prior to 1986 that there were all sorts of ways that people with high income could avoid taxes because we had tax shelters. Remember, there was a lot of talk about tax shelters. You might be too—

you're giving me the fake nod of like, yeah, well, she was born in '87.

Yeah. And this is 1986.

No.

Yeah.

Yeah.

One year. Did you hear your grandparents talk about back in the day?

She was born into a tax shelter-free America.

Exactly.

I remember quite well. I was 11 watching 60 Minutes with my grandparents every weekend. And yeah, that was a regular topic.

Yes, they actually— and this was under Reagan— closed the loophole that allowed high-income earners to reduce their tax liability. My father was a doctor, so he was always being told to go into tax shelters. In any event, all that came to a crashing stop in 1986 because they closed that loophole. They said you can't offset your work income with what they called passive losses. So that closed that loophole, and it has been closed. So right now, you have lots of people who have high incomes, and they're paying all the taxes.

As I like to say, I work for free until July 1st.

Ah, yes.

Exactly.

I start getting paid July 1st.

Yeah.

Right? So yeah, I give away half of what I make across the board.

Yeah.

I'd like to go through it chronologically. So I think let's first talk about when we get a tax code in 1909.

No. So the first tax code is earlier during the Civil War era. It has a very expansive definition of income. It has lots of really interesting stuff to it. But we have a very conservative Supreme Court, and they find the whole tax unconstitutional.

So it's gone.

It's gone. And so the country is entirely relying on tariffs.

Tariffs, yeah.

Tariffs. So the early part of the 20th century. So let's place ourselves where the world is, right? We're post-Civil War, and then we have the rise of the Industrial Age. And with the rise of the Industrial Age, we all of a sudden have these super rich people that we didn't have before. We have Vanderbilt, we have Carnegie.

Yeah.

And then their kids are getting the money and they are acting like royalty. They're building mansions all over Newport, New York.

This is really relevant, right? Because that was this unheard of explosion of wealth that the common people got to witness. And they're like, hold on, what's going on? And that's currently happening again.

Yes, exactly.

In a very dramatic way.

Exactly.

So these are very parallel.

That was the time you might have heard the phrase, conspicuous consumption because there was a book written by Veblen called The Theory of the Leisure Class, and it described about how they proved their worth in the social world by showing off their wealth. And they had these extraordinarily lavish parties. They had elephants serving champagne. They had cigars. They'd give you, as a little party gift, a cigar that's wrapped in a $100 bill. And so you had this lavish lifestyle. But at the time, people were saying, this is very un-American. America is a place of equality, and America is a place without dynastic wealth. It's a meritocracy. And Jefferson wrote about his concern about this false aristocracy of wealth. We should have an aristocracy of merit, not an aristocracy of wealth. And yet, the country had become a place where we had this massive accumulation of wealth, of people who were running around wearing crowns. It also was the time where, under our Constitution, you can't have a title of aristocracy. But what they would do is, 'cause they so loved aristocratic life, is they'd sell off their daughters, right? Downton Abbey, all these other shows.

They were going to England, and they were marrying off their daughters so they could bring royal titles to their family. And Cornelia Vanderbilt wore a crown around New York City.

Wow.

Okay, so, the problem is that there came to be a concern about the stability of the country. and about capitalism itself surviving. And if you remember, McKinley was assassinated by an anarchist, right? There was real concern that the country would be thrown over because socialism was so big, right? Socialism was running through Europe and Russia, and leaders were being overthrown. What was this country gonna do? And because of that, there was a big push to, let's make sure we don't have this aristocracy anymore. Let's bring taxes into the picture. Because the other thing is, is that tariffs are an interesting type of tax because tariffs, what they do is they raise prices. And so they really affect— back in the day, they really affected farmers and regular consumers, both because of things that were imported, but also because of things in the United States that were produced in the United States. Now they could raise their rates because their competition was knocked out by the tariffs.

And it's asymmetrically painful for lower-class people. This is my issue with the gas tax in California. I'm like, this is a liberal state. Why are all of our taxes punishing the people that it affects the most?

Yeah, exactly.

Like, get rid of this frickin' gas tax.

Exactly. Okay, so that was the mess we were in. You had Carnegie writing in The Gospel of Wealth, we've got to do something because we need to maintain the alliance between rich and poor. Everybody has to be in this thing together. And he said, what we need to do is we need to have really, really heavy taxes on transfers at death to make sure that we don't have a bunch of rich people running around and not taking, not contributing to the public.

Well, it starts to threaten the core of capitalism.

Exactly.

Because we're all playing Monopoly. Anyone who's played knows once you have Boardwalk and these other ones, the game can't be played. So if someone's starting life owning Boardwalk, how is this now capitalism?

Exactly.

Yeah. So it's an effort to save capitalism, ironically.

It was an effort to save capitalism. And that's why Teddy Roosevelt also advocated for tax because he was worried that capitalism would crumble.

I think we're in a— back to the parallel.

You believe me. Exactly.

Yeah. Scary.

And so, you know what? I think what we have had until now is scary. I think that this might be a solution, but I don't want to—

I don't want to give it away.

Yeah, that's the end. Spoiler alert.

That's the end.

That's the end.

But right now, you have all these people very concerned. And even the Wall Street Journal wrote, we got to do something about taxes here. We have to because we have all these rich people and they're an affront to what it means to be an American. Because what it means to be an American is to work hard. Even de Tocqueville, who was that, you know, famously reflected us about what the American culture was, said, like, what makes America America is that everybody values work. Now we got a bunch of rich kids sitting around and they're showing off their money, and this is very destabilizing. So the answer, even though Teddy Roosevelt was a big advocate for it, he never got it through. It wasn't until 1913 that we got first the constitutional amendment that allowed the new income tax, and then 3 years later, the estate tax, And then in 2024, the gift tax to back up the estate tax. So now we had a way that we were actually going to tax rich people. You have to realize that they had all these investments and the investments produced dividends. And so they were taxed on their investments during their life and they also produced interest.

So like the 2 ways of profiting from your investments were to get interest and dividends. And then on top of it, there was this additional tax that was imposed whenever the property was transferred. And together, these taxes were designed to impose taxes on the richest Americans based on their capacity to pay.

And was it always progressive? When did it become progressive?

Well, originally, it was just a tax that only applied to the richest 5% of Americans.

Oh, okay.

So 95% of Americans were completely exempt. Then when it came time to funding World War II, we had to do another round of tax raising. And so they say it changed from a class tax to a mass tax. But then we had to keep it progressive. that it was based on capacity to pay. We had these progressive rates, which meant that the later dollars that you earned, the higher dollars were taxed at a higher rate than the earlier dollars.

So this was working pretty well, right? We had kind of a golden era between World War II and the '70s, and then things start to change in the '80s.

Yeah, they start to change.

Yeah.

Stay tuned for more Armchair Expert, if you dare.

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So, but I just want to say one other thing about this period that was sort of relevant. So there were a couple of things that were going on that helped fortify this system. One of them is the fact, as I said, that there was a threat of socialism. And then in the 1940s, like when FDR was doing it, there's now a threat of communism.

Yeah, even scarier.

Yeah, and it was scary. And so there was a real understanding. If we want to have a capitalist country, capitalism has to prove that it serves the country as a whole. And the way that it serves the country as a whole is that when somebody makes a load of money, they share the wealth through taxes.

Mm-hmm.

And so that's the legitimacy. Taxes serve to legitimate a capitalist system when it's working right. And that's why it is so disturbing and concerning what's going on now.

Yeah.

It's very much threatening capitalism.

Yes. And in a way, this threat to capitalism, I think, is going to be the thing that saves us. Because without a threat to capitalism, you're not going to get the broad public support to actually impose meaningful taxes. People are going to grab as much as they can get away with. We've seen this over the past 40 years. This is what's happened. So what happened? Why did this change? The system worked well enough, right? We had high taxes on income and we had taxes on estates and gifts.

Like estate, meaning you've accumulated all these assets and wealth. When you die, that's getting passed on. That's the estate. So at that point, the government would like to take 40% of that.

This only applies to like the richest 1 to 2% of Americans. So a small slice of the country.

Yeah. Even currently you can give away up to $15 million. So this all is active after $15 million.

Exactly. Right. The current estate tax, $30 million per person. But we'll see how it's not even active for that.

And sorry, gift is just giving any amount?

Yeah, except for there's a bunch of exceptions. So you can give— this is a subject I teach, so now I'm all excited. I get to explain to you estate and gift tax in just 3 minutes. So basically, it applies to all transfers at a 40% rate, right, with a $15 million exemption. But there's a bunch of things that it doesn't apply to. So, for example, you can make unlimited transfers to a spouse Unlimited transfers to charity.

Mm-hmm.

And then you can give to as many people as you want every year, $19,000 per person per year. So the idea of it is to keep it out of regular people's lives. So regular people can live their lives, but when we start talking about transferring massive amounts of wealth, we're gonna have this system. And the important thing to be aware of that I want to say upfront, because I think the public has been duped about some of these things, is that the income tax system entirely exempts all money received by gift, inheritance, and life insurance. Life insurance is the biggest scam going.

Yeah.

So, for example, we'll just say somebody earns like, you know, $200,000 or $100,000. They pay about $30,000 in tax. Okay, between payroll and income taxes. Somebody else is handed $100 million out of a life insurance policy. That person doesn't even have to tell anyone.

Yeah.

They pay no taxes. They don't report it to anybody. It is entirely free. This is your business.

Wow.

So the system is so unfair on the income tax side. Because the other thing is, if somebody fires you, $100 on the street, they're supposed to pay taxes.

That's interesting. So if you find money, like treasure or whatnot, you're supposed to—

Yes.

Or you have a gold mine, you find the gold, you have to pay.

Treasure trove, we call it in the law. If you win a prize, if you win the lottery, if you get unemployment insurance, Social Security, right? You're forced to pay taxes on every way. If you do a barter exchange, if a plumber does plumbing for a web developer and a web developer creates a webpage for the plumber, they are both supposed to report taxes income on their tax returns. And the IRS has all sorts of like, here's how you do the barter exchange information.

They have a table you can go to? Yeah, exactly.

You know, one area it's like, we're closing every single loophole, and another one, right this way, tax-free, no worries, right? It's the real velvet rope world for the people who are lucky enough to get gifts, inheritance, and life insurance. And like, who are those people? Those are the super rich. Those are not regular And there has been a big duping of the public about this. They have not been educated about— which is sort of why I'm a little bit of a crazy zealot these days, because I do think that when the public knows, then they see how unfair it is and they're less likely to be duped.

Yeah.

Back to your question. So we're in the period where we have this system, where we have this estate and gift tax system. The income tax system gives a free pass because we count on this estate tax system to do a good enough job with the richest Americans. Right. We carve out 99% of the public and then we say, here's the rich. here's where you're going to be paying the tax. We'll collect it at the person who's transferring it.

Mm-hmm.

Now, I think the reason for that is because back in the day, the way people transferred property— when they transferred property at death, it went through probate court. It was kind of an easy, convenient time to collect this information, right? We weren't living in the modern information age where we track everything. And so it kind of made sense to impose it on the person who But I think that that had a little bit of an Achilles heel in it. Because then, as we'll see in the 1990s, as we're coming up to this point, it made it vulnerable because you're, like, taxing dead people. For some people, they'll already have paid a lot of taxes on it, right? So if you think of, like, Paul McCartney, he's probably a billionaire, but he's probably paid taxes along the way on the royalties and on all the things that he gets.

Right.

And they really marketed it very successfully. So basically, let's talk about what happened, right?

Yeah.

What happened to make this thing fall apart? And it's a couple of different things. I would say the most significant thing was the attack on the estate tax. So here's what's interesting is that the estate tax was very noncontroversial, and Congress used to do its job keeping it up. So in 1976 and 1986, one of the problems with the estate tax was that people could avoid it by creating multigenerational trusts, and that would go from generation to generation. And so Congress enacted a new tax called the Generation-Skipping Transfer Tax that was designed to impose a tax at each generation. 1986. 1990, Congress was at it again, and they enacted a tax because people were finding a way to squeeze the value of their assets, so they were hiding value. Congress said, we can fix it. And they enacted something called special valuation rules. And what's interesting is both of these things happened under Republican presidents. This was not a political issue. This was a— this is a tax.

We got to fund this enormous government of ours. We have to fund the government.

It's pragmatic. Exactly. And it's appropriate to have this tax and to maintain it. In 1990, what happened was a group of 18 of the country's richest families, the Waltons, the Moores, the Kochs, right? All of the favorites. The Waltons. They're all around still today. They funded this campaign to turn the public against the estate tax. Because if you think about it, they were already able to avoid the income tax by avoiding salaries. So one way people avoid is salaries are for suckers. You don't want a salary. And then the other way was through investments, which we'll talk about. They avoided— they stopped getting dividends and they started to do stock buybacks, all of this type of stuff.

They've gamed all the other—

This was the last stubborn one. And so they started a campaign.

What was the man's name?

Chester Thigpen.

What a name.

What a—

yeah. Chester Thigpen.

Chester Thigpen. A grandson of slaves who had a Christmas tree farm. Kids would come play in the farm, and the neighbors would hunt. And as my son said to me, I hope not at the same time. But in any event, he was this very idyllic figure. Very sympathetic.

He testified in Congress.

Matter of fact, he testified many, many times in Congress because he was a favorite. And he said, I have worked my whole life for this Christmas tree farm, and it's beautiful, and I love it. I want to pass it on. pass it to my family and I'm going to be hit with the estate tax. It's going to become timber. It's going to— the whole farm is going to be destroyed. And this was tremendously effective.

I mean, just also just picking that farming is so manipulative. Yeah.

Yeah.

Yeah.

And I want to get back to that point because it's really important by focusing on family farms and businesses. If we think back to this whole thing, remember when I said that in the early part of the 20th century, there was a concern because we had all these rich people running around and people thought of Americans as being people who had family farms and businesses. That's what it meant. But it was because it supported a livelihood. People would work on the farm and then their kid would work on the farm, right?

Yeah.

But what's happened is, is that the Mars, the Cokes, all of these people, they're trying to say that their companies— they're not saying it directly because they know it won't sell— is like a family farm and business. We're just a family business, right? It would be like Carnegie saying that U.S. Steel is just a family business. You know, it's crazy. But this is what they have pulled over the American public's eye.

And as it turns out, Thigpen would have not been affected at all because the estate tax already preempted that.

Yes. When he died, he was not subject to the tax.

'Cause he didn't make enough money?

'Cause it was under the threshold.

'Cause he had a Christmas tree farm. Exactly!

Exactly!

The exemption was big.

It was wholesome.

Yeah.

Down-homey.

And also, we have all sorts of protections for family farms and businesses in the tax code, for real family farms and businesses that provide low interest rates and special valuation. And we could easily exempt real family farms and businesses. And back in the day, I testified in Congress. It was obviously a Republican Congress at the time because it was called the Impact of the Death Tax on Family Farms and Businesses. Anyway, and I got a call from some Democrats like, will you go testify in this thing? And it was like, it was ugly.

Also, they've They've now rebranded it as death tax as opposed to estate tax.

Yeah. So they called it the death tax and they basically made it seem— they ran such an effective campaign that even today, a huge portion of the public believes it primarily hurts low and middle income people. I mean, it's crazy. It was a tremendously effective campaign. So when we look at what happened since this campaign in 1990, right, one thing that happened was— so Bush was the big leader. of repeal the death tax. I hear his voice in my head. H. W. Bush? No, George W. Bush.

Oh.

Yeah.

H.W. Bush.

H.W. Bush actually was the one under who we had the special valuation actually fortifying the estate tax, right? But George W. Bush, he was part of this campaign. It was the era of government is bad. Let's get government off our back. Like, you know, it was all sorts of things that gave rise to all this stuff. But when George W. Bush enacted this thing. What he did was he said, okay, let's have a gradual increase of the exemption amount and a decrease in the tax rate, and in one year, we're gonna have no estate tax at all.

This is bizarre. I mean, I don't even really know functionally how this happened.

Yeah, yeah.

That it just went away for one year.

Because he didn't have the votes to have permanent repeal. Because we have these rules that anything that costs the government money has to be resolved within 10 years. This would have cost the a lot of money. And so you had to fit it within the 10 years. So we had one year, and we called it the Jubilee year for rich people to die.

Wow.

Yeah. And rich people—

Some people got lucky.

Yeah, some people— Steinbrenner got lucky.

One of them had $20 billion or something.

Yeah, Steinbrenner had a load of money.

God bless those kids, man. They just got the whole lot.

Did anyone kill themselves?

No, it was— that was a year, by the way, there was a lot of humor amongst the estate planners of like things to get your relatives in that year, which were like, you know, warm chicken salad, hang gliding lessons. You know, it was, uh, we sort of had our day. The estate planners had their day briefly.

Let's get Grandpa some hang gliding lessons. Also, Granddad, have you ever tried heroin? You shouldn't leave the planet without trying that one time.

Exactly.

But then next year, Obama was in office. The estate tax was scheduled to revert to its $1 million exemption. and like a 60% tax, right? But Obama, he ended up just kind of continuing. He made a $5 million exemption. He continued it 'cause he knew the public had been turned against the estate tax.

Mm-hmm.

But then, of course, Trump came in and he doubled it to $10 million, and now it's $15 million. But that's not the real issue. And this is a super interesting part of the story, which is that the real way that they succeeded was that Congress stopped closing loopholes. The last time Congress has closed a loophole in the estate and gift tax was 1990.

36 years ago.

George H.W. Bush. And so the thing is, the way tax rules work is you count on Congress. Basically, Congress provides rules. Taxpayers find their way around rules. Congress is supposed to close the loopholes. Tax, right? It's a dance between taxpayers and Congress. the IRS.

Cat and mouse.

Yes, but all of a sudden Congress has engaged in quiet quitting. They are doing nothing. And so as a result, there has been an explosion. And so what's happened to the estate tax is instead of it being a well-maintained tax, it in fact has become a tax that is a tax in name only. And I'm going to give you 2 reasons why we know this is the case. One of it is because it raises basically I'll just hit you with those numbers.

In 2000, there was 122,000 estate tax returns. In 2010, there was 47,000. In 2013, there was 32,000. And in 2021, there was only 2,584.

Yeah. So the number has gone way, way down of estate tax returns. But even more concerning is the tiny, tiny amount it raises. It raises hardly anything now. Only $28 billion. $28 billion, an amount that Elon Musk easily gains and loses in a single day. Yeah.

Multiple days. It's nothing.

But here is the biggest, in case you need any further proof that the estate tax now works for the benefit of the rich people rather than as a harm, is the fact that in 2025, when Trump is in office, he has the capacity to have whatever tax bill he wants.

Because he has the Senate, the House, and he is in the executive. So they can pass anything they want.

They can pass anything. He says in his campaign he's opposed to the death tax, the immoral double death tax. But guess what? Doesn't even mention it.

He doesn't get rid of it.

He keeps it in the books.

So crazy.

And the reason is, by keeping the estate tax— believe me, if rich people had wanted it repealed, it would've been repealed. But what happened is, is that rich people realize they benefit because if you actually repeal the estate tax, people would wonder, wait, wait, I don't understand. You can get $100 billion tax-free, never pay anything on it?

Yeah.

It's only because they're pretending they're subject to the estate tax.

Yeah.

It provides cover. for the rich, no real tax burden.

Blinding state tax.

Yeah, look, I'm counting 14%.

Yeah.

And that's sort of the tricky, super interesting part of the story.

Okay, so this is what I think the headline of all of it is. So in 2021, ProPublica published leaked IRS returns.

Yeah, by Charles Littlejohn.

Who is now—

These names are great.

In prison. I know it. You'd think I'd made it up, but if I was like a fiction writer, I'd be so proud.

It's very Charles Dickens, all of it.

Yeah.

So in this article, what was revealed is that the true tax rate that Warren Buffett was paying— remember, the highest rate on income is 37%. Yeah, he was paying 0.1%. Bezos was paying 0.98%. Michael Bloomberg was paying 1.3%, and Elon Musk was paying 3.27%. And now this is my favorite part of the book is how the mechanics work of them not paying any taxes.

Somebody who earns $60,000 a year pays in just federal taxes $14,000 in taxes. Okay. Can you imagine that? You're getting by on $60,000 a year. That can be the difference between having a car or paying your rent or buying food or health.

I mean, it's not negotiable. Less than $1,000 a week to live.

You can't live like that.

No, you absolutely can't. And yet these people with their massive wealth are like, we're doing such good for society. I mean, or what they say is, I don't know if you saw the recent interview with Bezos where he was interviewed by Andrew Ross Sorkin. And there's a lot of perpetrating of this baloney. And they go, look, the top 1% are already paying 40% of the taxes, right? You hear this all the time. Which is true. Which is true. But they're not talking about that.

No, they're talking about everyone in Beverly Hills, all these neighbors here.

They're talking about people with high income.

Yes.

The high wealth owners hide behind the high-income earners and make it seem like they're paying taxes when they're not.

So I think we should go slow here and lay out some terms. But you have a couple different kinds of taxes. One of them is income tax. Everyone listening virtually will be paying income tax. You receive a check on Friday, they've withheld money, that is your taxes. The other kind of tax is capital gains.

Oh, I thought you're going to talk about the other very important tax, the hidden tax for the person who earns—

The payroll tax. Yeah, which is 15%.

15.3%.

Right.

It's a significant— when I talk about our person who earns $60,000, most of those taxes are payroll taxes. Payroll taxes start at $1. They're really burdensome and they're entirely hidden from the public because if you look on your pay stub, they're called like contributions. Have you ever been confused by that?

Yeah. And then Social Security's in there. Don't they even break down?

They call them FICA, FUTA.

Yeah, they break it into a few categories.

Yeah. They put them in different pockets. You don't know what the heck they are, but they make it sound like, because they call it contributions, and then you get from Social Security, sometimes they'll send you these periodic statements. This is how much you have. They make you feel like you've somehow set this money aside for your own savings. And now when they're going, we gotta cut Social Security, hey, all these people that are paying Social Security now for current retirees, you're saying like, we're gonna screw these people after they've paid for everybody else? It is so unfair.

Yeah.

So anyway, payroll taxes, I just wanna make sure that we mention those Those are very burdensome. And as you might recall, when Mitt Romney said, 47% of Americans, they're takers, not makers, and they're gonna vote for Obama no matter what because they're not giving to society. And they were not paying income taxes, but almost all of them were paying payroll taxes. And payroll taxes are so burdensome. When you actually look at the figure of non-payers including payroll taxes, the number is like 16% of non-payers, which is basically the same number of people we have over the age of 70. So this story about the non-payers— and Republicans love the story, we have to have a skin-in-the-game tax— I mean, these are the people who are actually paying taxes. These are the people who are actually paying double taxes, not the inherited wealth people who are paying no taxes. And that's the thing that the public, again, is being misled about.

Okay, so you have ceiling of 37% federal income tax, and then you have the payroll payroll tax. And then you also have capital gains tax, and that is set at 20% plus 3.5%. I'm not sure.

3.8.

Yeah, 3.8. And that is if you've sold a house, you might have dealt with capital gains. You bought a house for $100 grand, you sold for $150, you have $50,000 of income, but that's capital gains tax.

Yeah.

And then the other place capital gains applies is investments. So I bought Nvidia, I 10x my money, I'm gonna pay on that 90% of, you know, and that's set at the 20%, and 3%. We could debate all day long why that is capped at 20%. You're gonna find that I'll dance. I'm not full alignment with you. I do think there's a global thing where we do need to protect people, but we'll get to that.

You might think you're not in alignment with me, but—

But maybe, maybe, maybe.

Yeah, you are. Okay.

So at any rate, now there are incredible ways that are so inventive to get around these, which is why we're seeing someone like Buffett pay 0.1%. So if you never sell the stock, you've never realized the gain. There's nothing to apply the 20% tax to. So anyone whose livelihood comes from ownership of a company, ownership of all these different stocks, as long as they don't sell it, they're not gonna be taxed on it. Which again, I can make a great argument for them. We'll get to that down the road, but explain how people are living. How does Bezos have a yacht and many, many homes?

Yeah, how do they have any liquid money if it's all in there?

This is incredible.

Let's talk about Larry Ellison because he's been spending like crazy.

$30 billion he has in loans or something like that?

Maybe more because he actually had to incur another $40 billion on his purchase of Paramount, which he's also been backing. So Larry Ellison is somebody who spends a lot. He bought the island of Lanai in Hawaii just for fun. By the way, on the island of Lanai, he bought all the businesses on the island and he also owns all the property. And he put into his condo If you get fired from your job, I am throwing you out of your house.

Oh my God.

Yeah, that's the kind of nice guy he is. Anyway, so he runs this island, right? Like a fiefdom.

How is this legal to— I can't. I know.

Anyway.

On the plus side, there's 2 Four Seasons on that island.

There's 2 Four Seasons.

That he owns now?

Yes, he owns them both. He owns Four Seasons and the Hyatt.

'Cause they're just a management company.

Yes, exactly. He owns it all. Anyway, it's interesting actually, 'cause I met somebody from Molokai, and they said, that a rich person tried to acquire Molokai in a similar way, and the island of Molokai fought against it. And they're getting back at them by leaving everything just to be like waste. They're not taking care of the property there. They've bought it all. They have abandoned theaters and everything else, and they won't sell it back. Sort of like, nice island you got here. You better— you know, it would be a shame if we didn't keep it up.

Yeah.

Anyway, so that's just another story of billionaires run amok.

And he owns Oracle.

He owns Oracle.

A big chunk of Oracle. Yeah, he owns about 30%. And he's always in the top 10 richest people in the world.

Yes, exactly. Super rich. He owns tons of Oracle. He buys tons of stuff. He never sells his Oracle stock. But what he does is he uses his Oracle stock as collateral and enables him to buy loans. And because it enables him to get money to buy everything he wants to buy—

I want everyone to go step by step. So Larry Ellison walks into a bank and he says to them, hey, I'd like $1 billion and I will secure it with $1 billion of equity, or my stock.

Yeah, or $1.5 billion of my securities.

Yeah, so a bank's primary mission is to loan out money. The risk they incur is what if the people don't pay? How do we get the money back? And that's all done with collateral. When you buy a house, the house is theirs, right? So he says, let me just put this stock up as the collateral. I'm gonna borrow $1 billion. And then what happens? So he starts receiving, does he get it all in one chunk? Right up front? Whatever he needs.

Whatever.

You know, I'm sure whatever he needs, because remember, people are in the business of lending money.

The banks.

The banks or private lenders. You don't have to be a bank. You know, all sorts of people, they lend and that's what their business model is. And they want to lend to Larry Ellison.

It's risk-free.

It's risk-free.

Well, is it though?

Because even the collateral isn't an asset, isn't a tangible asset if the stock market crashes.

So what happens is they retain the right. And this has happened with some other owners of companies. And Oracle, by the way, it's gone down about 50% in value, in part because of overleveraging of Oracle. And then add on to it, Ellison's extreme leverage. The lender holds the stock. And so then they're going to make a margin call if it falls in value. They're going to be like, give us more stock or sell your stock, or we're going to sell your stock because we're going to—

So they're able to sell it? Yes.

They can sell it. Got it.

Yeah. So the bank can sell the stock?

The bank can sell it. He doesn't return it. The bank can sell the stock.

Got it.

Got it. Got it.

Okay. secured, they're very well protected, and they get more stock than they need to cover their debt.

So step by step, he goes into the bank, I want $1 billion. Great, here's this amount of— here it is, here's this amount of stock as collateral. He gets $1 billion, he spends it. Now he's on some schedule. What's the average terms of these loans? Are they 1-year loans, 5-year loans, 20-year loans?

Well, I think that the point is that they can be demand loans. So most Americans think about loans in connection with their mortgages, right, or their student loans. Okay, we're lending you money for some set period of time, then we want to get our money back. But there's another way of lending money, which is called a demand loan, which is like, we're giving you money, no set time, you just pay the interest, and that's fine with us.

Great. So he borrows $1 billion, it's at 3%, so every year he's got to give them $30 million back of this billion dollars. Now, at some point, he can then go to Bank B B and say, hey, I owe this bank $1 billion. I need $1.5 billion. I pay off that loan. He gets his securities back. He gives them now to this bank. He can just leapfrog endlessly.

And he doesn't need to leapfrog endlessly. 'Cause if you think about it, you're in the business of lending money. Who would you rather lend money to that you don't want it back? If you get it back, you gotta find another rich person to lend it to.

You said this on Ezra Klein's podcast. Like they don't want the money back.

Keep going back to the bank and asking for more money.

Exactly. They love you to do that.

So my question in all this was, I am unclear. Eventually the bill comes due.

Says you.

Well, at some point either the bank's going to have to sell those securities. I'm saying when he dies.

Why?

I mean, the point is this: you're living in a world where you are imagining that this amount that he's borrowing is like bumping up against the total money that he owns. I think a more accurate way to think is like, imagine you needed $10, and you need to borrow $10, and you needed to be able to pay back $10, and then maybe you needed to increase it to $80. There would be no difficulty with you paying it back, or passing that loan on and having your kids take over the loan, right? You have to realize the amount— as much as they borrow— I mean, this is crazy because, of course, he's borrowing enough literally to buy Paramount, islands, everything.

Yeah.

But his wife, wealth is extraordinary.

Yes, but here's my only question. So he borrows a billion, eventually he goes through that, right? He borrows a billion and now he's got to borrow another billion. And that's fine because now he's just still making the interest payment on the original billion. And he's—

by not having sold his stock— Oracle's an interesting case because it did plummet in value.

That's why I like, like, Bezos as an example.

Right. Bezos prides himself. He wants to get all sorts of credit for not borrowing against his stock. He actually occasionally sells his stock. He thinks that he should get a big pat on the back. This is what he was telling Andrew Ross Sorkin. Me, I sold some stock.

I mean, I guess that is better than—

Yeah, but the point isn't whether people sometimes pay capital gains or not. The point is that we have people with multiple hundred billions of dollars and they are able to choose whether or not to pay taxes when nobody in this room can You know what? I don't feel like paying taxes.

There's no game for me to even play.

There's no game for you to play. Here's what I want to do. And actually, I have a little gift for you guys, even 2, if you'd like them.

Okay.

Oh, it's important to let people know from that original story we just told them about the borrowing that you pay no income on a loan.

Yes.

That's really important. So he gets $1 billion from the bank. That's a loan. Presumably he has to pay it back. So that's not income, right? Because we might have missed that. People might not have realized. Yeah, that billion dollars, he doesn't pay one penny.

Right. Your congresswoman actually is working on a bill right now to tax borrowings, to say that that should be taxed. Some people think that that's the way. I think there's other ways of solving it.

Okay.

Okay. But so we're talking about like debunking myths, right? One of the myths is like the top 1% are already paying 40%. No, that's high earners. And the other is 40% pay no taxes. No, they're paying payroll taxes. Okay. The third myth I'd like us to debunk today, here and now, is this idea that the rich don't have enough money to make a difference. We're gonna have to tax the middle class. You hear this all the time, right?

Yeah.

We have to go after the middle class because the rich simply don't have enough. So here I want to give some numbers. I'm gonna give broad general numbers. In 2025, the government took in about $5 trillion. They spent $6.9— actually $4.96 trillion. So they had to borrow $1.3 trillion. $1.8 trillion, add it to our debt. By the way, this year, today it just came out, I don't know if you saw this, the highest interest rates that the government has ever had to pay on 30-year loans, 5.2%. We are paying so much money. A trillion dollars a year just to maintain this debt. This is when we have $7 trillion of expenses, $5 trillion of income, right? We are spending a full trillion just to maintain this debt. And the other thing is, by the way, if we go back back in the day, you used to not be able to go to war and not raise taxes. In the 20th century, we raised taxes when we went to war. Now it's in the 21st century, oh, we're going to war, push it on to our kids, our grandkids, let them pay for it. We don't have to pay for it.

Yeah.

Okay, big problem. But so we had to borrow because we didn't raise enough money from the richest 1%. And as people like the Wall Street Journal and now the Washington Post like to say, and the economists to say that's because the rich people are already being heavily taxed. Not true. And in any event, they don't have enough money. You know this already, so I can't say. I'd like to say, guess how much?

Maybe I could put Monica on.

Guess how much we had to borrow? Just under $2 trillion. Guess how much the richest 1% owned at the end of 2025?

Guess how much the—

Richest 1% owned. So now you know the total revenue that the government took in was $5 $35 trillion, okay? From all sources. This is from corporations, payroll taxes, tariffs, estate and gift, the whole— this is so mean of you to put Monica on the spot.

The whole enchilada.

The whole enchilada. Okay, so how much wealth do you think the richest 1% owned? Nobody knows the answer to this, by the way, so don't feel bad.

I'm scared to answer.

But you say a reasonable number. What do you think's a reasonable— Oh, poor Monica.

This is mean.

It's not a trick, which is what do you think the total value of the assets of all 1% are.

But including the wealthy people?

Just the top 1%?

No, no, I'm sorry. The top 1% of wealth owners, not income earners. The top 1% of wealth owners.

Wealth owners.

Good. Okay, Monica, you are an A student.

Thank you.

Always has been. You do not have ADHD. No. You're like, I can already tell because you're paying very— you're not just jumping to some obvious answer. No offense. But yes, go ahead.

Okay, so 50—

You know what? Wow.

$50 trillion. $50 trillion.

Yeah.

Is it $47 or $50?

It was $47 when I wrote the book 'cause it was 2024.

Okay.

And now it's $50 trillion in 2025, $55 trillion now. Their wealth is growing astronomically. By the way, 50% of the country owns under $5 trillion.

So right out of the gates, you just say, a logical person would say, okay, with a 40% estate tax, if the youngest person in this lot is 40, in 40 years minimum, Minimally, we are going to get back $20 trillion in estate tax. That's what the number should be. If there's $50 trillion out there, we should get $20 trillion in the estate tax.

Or it should be subject to the income tax.

Yeah, but just alone, that, that could solve the gap for 10 years.

Stay tuned for more Armchair Expert, if you dare. The other thing is that's going on is there's been enormous gifting that's going on because that's where all the action is. And do you know how much the estate tax raised from this $50 trillion, now $55 trillion, but when it was $50 trillion, we had that number, $28 billion out of $50 trillion.

Oh my God.

A trillion is 1,000 billion.

Yes.

So the middle class is making up for that other Yes. $5 trillion.

I feel that this chart really shows it all.

Oh, that's great.

I have a little gift for you guys.

Thank you.

So this is this idea that it doesn't matter if these people pay taxes. We had to borrow $1.8 trillion, and we know that many people in the top 1% of wealth owners don't have to pay taxes because they don't have taxable income, which, by the way, is the reason why the Buffett Buffett Rule was such a snow job on the public.

What's that?

Yes. So back in the day, Warren Buffett said— when Obama's running, and even before then, Buffett says, this is so unfair. I pay taxes at such a lower rate than my secretary. My secretary pays payroll taxes, income taxes. I pay capital gains taxes. But he was hiding the lead when he said that, because the problem— well, yes, it's true, rates probably should be the We might disagree about that. But the bigger point is that he didn't have any taxable income because he only earned— his total salary was $100,000, including bonus. He would never take more than that. And he even reduced his salary for the private use of his office. He was like, I got to pay the company back for that. So we got like a $90,000 salary, right?

What was he living on?

Well, he had a little bit of side investments that were his own private things.

Outside Berkshire Hathaway. Yeah.

But, and then Berkshire Hathaway, he had as the policy of Berkshire Hathaway to never issue dividends. If he was issuing dividends, he would have had regular taxable income, but he knew not to issue dividends because just as salaries are for suckers, dividends, particularly in the 20th century when they were subject to tax like ordinary income were also for suckers. So now he didn't issue dividends and that's why he didn't have any taxable income. So a rate differential wouldn't have made any difference with him.

Yeah, so the 2 things that blew my mind about this book was A, how they function, learning about this borrowing against your money, never really paying, that was startling. But what's crazy is how the tentacles of this change everything about the whole financial sector, which is dividends, right? So you had an investment in a GE, they profited X amount of money. Well, they don't keep it, they distribute that to the shareholders in the form of dividends, which get taxed as income tax at the highest 37%. So slowly these companies decide, well, shit, our shareholders don't really wanna pay that income tax on these dividends. We don't wanna pay taxes on it. What if we take that profit, we buy back shares from people?

Well, let's just stop Up until 1982, the only way a company was allowed to share profits with its shareholders was to issue dividends. That was it. So a dividend is simply the way that the company earns money. They're worth 100, they earn 10, they distribute 10. And that was how companies worked. And then it was subject to taxes.

And when I was growing up, when you were buying a stock and you were a middle-class person, you were looking for a company that had a great dividend. That was the whole game.

That was the whole game. And in the 1970s, 70% of returns of stock value—

I think it was 74%.

74%.

74%.

Came from dividends. It was all dividends. And what's really interesting is what the stock market looked like. It looked like a jiggly, like a sine curve that went in a very narrow margin. So in 1982, the stock market was at about 3,000. It was also about 3,000 in the '70s, '60s, '50s, '40s, all the way back to the it had been 3,000. This is inflation adjusted. So the stock market just looked like a squiggly line. And that's because every time the company shared profits, it became profitable and their value went up. They shared the profits and the value went down because the money was sent out to people.

Yes.

Okay. But then in 1982, something happened, which is that under Reagan, he had a Dean Witter executive order executive be the head of the SEC. And one thing that companies were not allowed to do was to go out into the market and buy their own shares of stock. Because when they did, what that did was it boosted the price. And they said, this is price manipulation.

Yeah.

You can't just distort the value. But in 1982, pretty much on his own, this Dean Witter executive that became head of the SEC said, it's okay, we know it's price manipulation. We believe it's But we're just gonna let people do it because they want to do it. And as a result, since 1982, it has never been more than like 16%, maybe 17% of profits have been shared through dividends.

Wow.

Because instead, companies are buying back their own shares like crazy. And last year, more than $1 trillion was spent buying back your own shares. And when you buy back your own shares, rather than the stock price going down, the stock price stays up and maybe even goes up a little higher, right? Because you've reduced the total number of shares that are outstanding.

More demand, less supply.

And that's why one of my favorite charts in the book is this chart that shows the stock market from 1915 to 1982 looking like this squiggle line. And then in 1982, it takes off like a hockey stick because, of course, there's a lot of reasons. This is not the only reason. to get like—

No, we've had huge booms.

Booms.

Yeah, yeah, yeah.

But before, if you had booms, you'd be sharing profit.

Yeah.

You still had to share the profit somehow. And also executives began to be compensated with stock and based on the value of stock price. So a lot of things happened to cause stock prices to increase. But the point is that from tax worldview, that we used to have a system that taxed the big So that's the big theme. We used to have a system that taxed people according to their capacity to pay. Now we have written the rich out of the tax system. We've created our very own second estate.

Yeah.

Nice pivot back.

That's beautiful the way you wrapped it up. You took all the loose ends and braided it like Rapunzel. I wanna bring one more terrible thing that's happening into it. And then I wanna have some just fun questions and then maybe I'll— maybe it'll be pushback, maybe it won't be. But the other huge thing that has to be addressed is step-up in basis?

No, I don't think so.

Okay.

Isn't that what ultimately they're getting out of the estate tax with?

No. Step-up in basis is a super giveaway that we shouldn't have, but it's not the nature of the problem. It's just like the— what we call in Boston the jimmies on the ice cream. Jimmies are the chocolate sprinkles. It's the garnish. So you already have like all the benefits of capital gains. So I'm going to explain what step-up in basis People love to say the problem's step-up in basis, let's fix step-up in basis. That would be letting the biggest problems remain.

I got you.

So here's what— let me explain what step-up in basis is. And we also call it the angel of death loophole. Okay, so let's say bought Nvidia stock and it went up to $10 million. You bought it for like 50 cents and now it's worth $10 million. If you sell it, you'd have to pay this 23.8%. But instead, if you pass it on to your kids, kids at death, they're treated as if they bought it for $10 million, even though nobody's paying any taxes on it because we have an exemption amount. There's no estate taxes on it.

How is this not the most enormous— if I'm trying to get $50 billion out of this person and their $50 billion is solely held in stocks that have appreciated and they pass it on to their children, the children inherit it. They're not saying, oh, $40 billion of that is Am I misunderstanding that?

No, you're misunderstanding because the example that I gave was $10 million.

Okay, so let's do that.

This creates a problem because it creates this problem of lock-in effect. Nobody wants to sell anything. People don't want to sell their homes. They don't want to sell their stock. They want to pass it on to their kids because they can avoid taxes. The thing is, the cost of it is you have to pass it at death. And if you're passing property at death, it's much harder to avoid the estate tax. All of those things that arose— remember I said a whole bunch of loopholes and they're called like Kratz and Krutz and Gratz and Grutz and intentionally defective grantor trusts. And the flourishing of all of those things, they are all dependent on gifting. And gifting, when you give property, your kids get the same basis that you had or whoever you give it to.

Explain basis.

Yeah. So you bought your Nvidia stock for $50. It's now worth $10 million. If you make it as a gift to Monica, of course, just because you love her, she has your basis, which is the amount you paid for it. that you paid for it, $50. So when she sells it, she would have to pay gains based on subtracting $50 as the amount that she had invested. If instead you gave it to Monica when you died, she would get a $10 million basis, so she could sell it for $10 million and she'd have no taxes.

Yeah.

Okay. But when we're talking about where the real money is, which is our very rich people and all of our private equity people, we haven't even talked about them, right? They are all avoiding taxes because they're essentially creating zero-value gifts. They are doing zeroed-out GRATs and all these different things that'll be too boring to explain. But basically what they're doing is they're finding a way to transfer property, make it look like it's worth nothing, and then it pops up and the other person's worth all this money.

Mm-hmm.

But you can only do those during life. Very hard to do them at death. And that's And that's why the step-up in basis is something that people love to point to, like, because it's such an outrage. Where the real problem lay is in the fact that somebody can start a company or do something, they're worth nothing. They become worth several hundred billion dollars. They never pay taxes during their life. They give it away. They never pay taxes. They give it at death. They don't pay income taxes, right? There's never a tallying of the gains.

Mm-hmm.

the problem. It's not the step-up in basis, which is kind of— yes, that's so egregious. But the bigger problem is that we should be taxing those gains to the person who earned them. And this was proposed by both Richard Nixon and Barack Obama. That is how common sense—

Too common sense.

Bipartisan it is. Exactly. And it's the rule in Canada, right? When you transfer property, that's the person who enjoyed the gains. Mark Zuckerberg has enjoyed the gains. Larry Ellison has enjoyed enjoyed the gains. Let them pay the gains when they transfer the property, not just when they sell it. That's how we should be addressing that.

Okay, so here's my couple of questions, because I would say if I had to plant a flag, I would say I'm a centrist.

I'd say I'm a centrist.

Okay, great. So my fears are a couple things. So we've seen a huge impact on economies when they raise or lower business taxes, This is like pretty well established. England had a horrendous business tax for a while and then Thatcher, yes, slashed that and they kind of revitalized their financial sector. We are competing in a global economy with other countries that can host companies. I'm using just business taxes as an example because it's a global economy and because many of these multinational companies can put themselves anywhere. Countries have had to compete with business tax rates, right? What's the business tax rate, 15% or something or 20%?

Yeah. I don't know.

It's small, right? But it's small.

Corporate taxes raise their, their own complexity, and there's a lot of reasons why they're complex. One is this issue of competing, right? But there are movements that there would be a global agreement to have a minimum.

In the absence of that, though, we have to be competitive is the point I'm making.

Maybe. I'm going to leave that aside because the point is that when you're talking about an individual, I mean, do you want to move to Qatar because you'll get lower taxes there? I don't think we have to worry about Americans, first of all, we have a big exit tax for somebody who leaves the country. You can't just pack up all your stuff and go. Yeah, right, right.

And they track you down. They're good at that.

There's a big exit tax. And then you give up your U.S. citizenship. Is that really something somebody wants to do? That's a big move. So I don't think we have to compete globally when we talk about personal taxes.

But the reason I bring it up is we're now starting to see attempts at that within the country, right?

That's an entirely different story. So this is the big question. I'm glad we're turning to it because this is obviously the question of the day.

Right, yeah, yeah.

Is wealth taxes, both on the national level and on the state level. So we have talked about the fact that people are able to acquire $55 trillion of wealth and— Pay no tax. There are all sorts of ways to not pay any taxes on it.

Yeah, zero, yeah, yeah.

And so what are we going to do about it? And so a logical thing is let's have a wealth tax. And first we heard it on the national level. Bernie Sanders and Elizabeth Warren and other people are now pushing for a wealth tax on the national level. On a national level, the problem is there's a very real risk that the current Supreme Court would find it unconstitutional for some very boring reason.

And you're great at illustrating how almost impossible it would be to evaluate someone's total assets. What's that painting worth? What's that property worth? It's almost impossible.

It's very difficult to do it on an annual basis, and there'll be a lot of incentives for people to start hiding their value on an annual annual basis. If you have an annual tax on all the people's wealth, people might find it's invasive. People might move out of the stock market. There's all sorts of reasons that it's a problem on the national level. So now here comes California, and it is proposing this thing. And I think there's a really important piece that we've been talking about, but I want us to bring it back, which is that California is a hugely successful state.

4th biggest economy in the world.

Yes.

It's bigger than Japan.

Yes. Amazing, right? People forget that.

Why the hell are Well, that's a whole separate question.

But the point is that California should— it has a high income tax, right? It has a lot of rich people.

High property tax, high income tax, high sales tax, high gas tax. You would think that they should be able to raise a lot of money.

What we've been talking about here is all the ways the federal government has betrayed California and every other state. And some of them has been that they have allowed a corrosion of the income tax base so that, for example, we used to have a lot of dividends. Now we don't have taxable dividends. So the other thing that California used to be able to have was an estate tax, its own estate tax. And every state in the country had an estate tax. And the reason for it is because the federal tax allowed a credit allowing states to raise estate taxes and people's overall tax bill wouldn't increase. What's interesting is that the federal government used to care about having strong states, and it allowed strong states by giving credits for states to be able to raise taxes and not lose its citizens.

Mm-hmm.

And that is something that we've moved away from. And the estate tax allowed states to raise money from its wealthiest citizens because it had credit for every state. George W. Bush changed the credit to a deduction. And then as a result, all the states began to run away, including California, stopped having estate taxes. So now California doesn't have an estate or gift tax. The income tax, you get all these people— Mark Zuckerberg's not taking a big salary, Sergey Brin not taking— but none of these people are taking big salaries, right?

That's right.

So they're not getting money on their salaries. They're not selling their stock. And so what is California to do? Because we don't have the rule that whenever they transfer for the stock, they're subject to tax. We've really sold the states out because the federal government has allowed the corrosion of the base. And so California now, which has a massive amount of wealth held in publicly traded stock, which is very easy to value, and now, by the way, the feds have just thrown in and said, oh yeah, you know what, if that's not enough, we're taking your Medicaid too.

Yeah.

You know, we're not going to provide for anything. And so California has been backed into a corner. And even though I write about being opposed to wealth taxes as the answer for the federal government, and I recognize that states have this problem of people can always pick up and move to another state— I come from a high-tax state, Massachusetts, and I do think it's a problem. You know, we have this millionaire's tax now, and, you know, I'm a good lefty Democrat type, but I do worry that businesses are going to open in New Hampshire and not in Massachusetts. Yeah, you worry.

Of course you worry.

Yes.

We're taxing the income earners enough. For my money, as this centrist, we don't need to be raising the tax rates on people paying income.

Exactly. But so then what do you want California to do? They've got a big hole in their budget. They're not able to raise money with their high income taxes. If they continue to raise money, it's just like a leaky bucket. There's nothing that they're taxing. They're taxing the income enough. So then the wealth tax, it's all this sort of there to see for the public to see the wealth because it's all publicly traded companies. I'm quite sympathetic to it, even as I am opposed to wealth taxes generally.

Mm-hmm.

So I've gotten a lot of interest on the federal level on my tax proposals, particularly from moderate Democrats. And I think the reason for that is because of the pressure that's coming from the left. And if we go back to our story that we've been telling, it was the threat of socialism, it was the threat of communism. And what I worry about was that with capitalism reigning supreme, right, we no longer have real threats to capitalism. So this is something I talk about in the book. Branko Milanović has written about this, and Tony Judt has written about this. Capitalism no longer has to prove itself because there's nobody competing with capitalism. But now we have these democratic socialists, right?

Yeah.

And they're creating a little bit of a competition, tiny, with capitalism, and it's having an impact. And so that's why Even though I see the risks of the California wealth tax, I also see how we need to get a change of our federal system. We can't keep running up this debt for our kids and grandkids. It's so unfair. And so we've got to find a way of raising money, and we have to do that by fixing our tax system. And I think that we're only going to fix our tax system when people worry that there's something worse out there, and that something worse is wealth taxes.

Yeah. Okay, so I was on a hike with my wife and she was like, you know, yeah, why can't you just cap it at like a billion's the most someone can have? Which I think is a pretty common thought, especially for young people. And I was like, okay, but explain how that works mechanically to me because you're Jeff Bezos. You start this incredible company. Every time his value goes up, do we reduce his ownership? And should we make it so this person who started a company and is pretty responsible for it, success owns 0.01% of their own company so that they can be capped at $1 billion? Like, how mechanically does this work? Go ahead.

So I want to respond to that because I think that this is exactly why we have to be careful about what conversations we're having. And this is why I think conversations that, like, every billionaire's a problem, the problem's a billionaire, is misleading us because it makes it seem like these are people who are paying lots of taxes along the way, and now we're going to punish them because they have more than $1 billion. It's such a false narrative. If we start with the real narrative, which is these people have been able to acquire hundreds of billions of dollars and so far have contributed nothing— or at least if they have, they didn't have to— to all of our expenses, that's the system that we have. And so that's the system that we should be trying to fix.

I want to make one argument, and I just want to hear what you think about it. Amazon's worth $2.9 trillion.

Yeah.

He owns 8.2% of that stock, which means he has made other people $2.6 trillion.

Yeah.

So I think a lot of people are like, kill the billionaires. It's like, okay, you killed Jeff Bezos, but what you've also killed is $2.6 trillion that is in pension funds, retirement accounts. Other people have made $2.6 billion off this person. Sometimes you gotta step back, I think, and go like, okay, but what's the net result of this person we all hate? I'm answering the public right now, and I want your opinion on— what I hear is that everyone should hate Bezos and he shouldn't have this much money. But what I'm saying is, remember, 92% of the money generated by Jeff Bezos, other Americans have.

That's not what they're saying.

That's not what they're saying.

Yeah, they're saying that he He can make as much money, he can make all the money, but he has to give the money back, not just to other people who will make a lot of money and also not pay taxes.

Yeah, I'm not—

that's the issue.

I'm not done with my point at all. So he has made $2.6 trillion for other people.

Yeah.

And he's done so by having 10% of this company, being very invested in it and still leading it to make these other people $2.6 trillion. My question is like, what is the mechanism by which you're gonna get him to pay taxes without him selling his shares of his own company to get the money?

What do I think we should be doing?

How are we gonna get the money from Bezos without forcing him to sell?

We do 2 things. One is that whenever he gives away the property, yeah, he should tally the gains.

That I'm with you.

During life or at death. Okay, that's all that I want.

So I'm with you on all this. And the estate tax—

Then the estate tax. We have to get rid of the estate tax. So here's the thing about the estate tax. The estate tax is dead. Obviously, the fact that the Republicans kept the estate tax— it is dead.

And you don't think you can save it? It will not be saved.

It will not be saved because it has this Achilles heel. We are looking at the wrong person when we're looking at the dead person. The question is, if it's the case that anybody who gets rich money in any way gets it tax-free, how much of a preference do we want to give to money received by gifts, inheritances, and life insurance? And I think what we should decide is like, fine, people can inherit $1 million or $2 million, whatever you want to say tax-free.

Yeah.

Noting that it is a preference for inherited wealth. And then after that, they should pay taxes like anybody else.

Great. I'm with you. So would you not have a problem with Bezos having lived his whole life, accumulated $200 billion, never paid taxes on it while he was alive, so long as once that movie moved on. Okay, that's the solution. Yeah, but all these people who want to immediately see Elon Musk pay taxes, I don't think it's practical.

I don't understand though, this, this seems weird to me. We have the plumber and the web designer each paying taxes when they're doing barter exchanges, and You're like saying, like, I don't want Elon Musk to have to pay taxes. What do you care if Elon Musk has to pay taxes?

I want him to pay taxes if he borrows $2 billion to fund his lifestyle. I want that taxed.

Oh, you want to tax that?

But I don't want to force somebody to have their stock holdings evaluated on a given day at this stock price and say, you know what, you owe half of that money to the government.

But the thing is, and this is why I'm so glad you're asking these questions, right? These are the types of arguments that are such red herrings about the actual reality of the situation, right?

Yeah, I agree.

And they shift it.

But don't you think that's what America's demanding right now? No!

I think that the problem is the American public has been duped about the amount of taxes that are paid by the wealthy. Then they're thinking, okay, they're not paying taxes. How should we have them pay taxes? They're not tax lawyers. They don't know the details. And so they're, they're saying like, well, let's just do this because this sounds good. I think that people simply are like, I'm paying a load of taxes every year. I'm looking around. These people are not paying anything. What is up with that?

Agreed.

The fact that Jeff Bezos claimed the child tax credit, which is what it showed, feels wrong.

Yeah, yeah, yeah.

It feels wrong. That's why they work.

It's unfair.

I disagree with how ProPublica chose to do it by saying it's this small percentage. That isn't how I would choose to describe it. But the The point is, how is it that we are living in a world where all of the richest people have many, many years of no tax contributions?

And they're living luxuriously.

And they're living luxuriously.

There's one thing if they're living in a one-bedroom apartment like the other person and just keeping the money in stocks. Okay. But they're not. They have multiple houses. They're on yachts. They're spending money and they're not contributing it.

I agree.

That's a huge problem.

They should get taxed on that money they're spending. But to your point earlier, that money they're spending is such an insignificant piece of their wealth.

paying some. The point is, our system should be fixed.

This line of questioning was wonderfully revealing. We're in lockstep. You're not asking for them to be paying a significant portion of taxes year to year.

No, I'm not.

But you are probably asking for them to pay taxes on the money that they're spending year to year.

Well, you know, it's an issue because the problem is paying taxes on borrowing.

You can't have a law that applies to just them.

Fix that.

It's hard to fit it into the structure of the tax code.

Can it be if you borrow a certain amount you have to pay on it?

What I worry about is sometimes you get like a fetishistic response to a problem and then the actual problem doesn't get solved.

Yeah. Or it's like Pennywise gone foolish.

Yes. And so that's my concern. There's a lot of lack of information and lack of sophistication in the public for taxes. And you can't really blame them. Our system is really—

It's confusing.

Confusing. And it shouldn't be so confusing. We have to simplify it. I think that, yes, the public might be speaking in broad terms, but not because it's a fundamental problem that we need to be getting at. I guess that's what I'm I'm trying to say. No sensible person is saying that somebody should be subject to 50% tax every year and all of—

Okay, so we have the same thing, which is I want these people at the end of their life to have paid 50% of what they've made back to the government. That's what I want.

Yeah, good.

We both want that.

Yep.

And I just wanted to be clear on what mechanisms you think we're going to get that. I think it's counterproductive to try to do it along the ride.

And I totally agree.

Great. This is the point I'm making, is like, you can't really do it year to year, and you ask people to give up percentages of their company while they're running it.

But I don't think that they would actually have to give up percentages of their company. They have plenty of access. They can borrow money just as they borrow money to buy a superyacht. They can borrow money to pay for the taxes. So I don't think they would have to.

You don't think it's impossible? But I don't think it's very plausible.

I mean, it's certainly not with this 5% billionaires tax, which, as I say, I'm generally opposed to billionaires taxes, but I can understand how California has been backed into a corner. Yeah. And nobody's gonna have to give up anything.

Great. I'm just kind of saying, like, what's the mechanism everyone's proposing to get these people to pay today? And I just don't see how that can happen.

And you can't, because I do think, like we talked about with Oracle, it's lost 50% of its value. And I think the public is aware property goes up in value and down in value, and it's too complicated. That was the Biden proposal, a minimum tax on billionaires. It's hard. I think a lot of people had that type of of like, you're taking money, then you're giving a credit, and what are you doing? It feels kind of hard to do.

Yeah.

So in an ideal world, we would be able to do it, but we can't do it.

Yeah.

And I just think it's impractical.

Yeah, me too.

Yeah.

Okay. I love your book. I love your message. And we could probably do another 3 hours together on how neither party—

It would be so fun.

Neither party is gonna step up and do it.

It would be so fun.

It's hard though, because the people who are making $40,000 a year don't have time and energy to differentiate between in that 1%. Like, to them, all of those people are on a different level.

They're in a movie. Yeah.

Whether you're a billionaire or you're a millionaire.

Well, exactly. That's one of the things I talk about in my book is the difference. It's very hard for people to know.

And I'll tell you my own baggage and my own personal— the reason it's heated for me is like, people are angry at just money now. I find it very ironic. We live in a country where the promise is you can make yourself into anything, and regularly And regularly when we see people do that, everyone's mad about it.

Yeah.

Because they're conflating these classes that seem like the same from the outside that are dramatically different. Again, I pay 50%.

Exactly.

And so don't be mad at me.

Absolutely. And but the mistake that I think that people make, and this goes back to our earlier discussion, is when they say the problem is billionaires. No, the problem is how did you acquire your wealth? system, not the person.

Agreed.

Some people are bad people, some people are good people, all up and down the thing. But like, we don't say to Jonas Salk, you created the polio vaccine, therefore you never pay income taxes. No, you pay income taxes just like everybody else. Everybody should be paying taxes because that's how we have to support the country. It shouldn't matter. It's not about hating billionaires. It's about hating the system and having a fairer system.

I adore you.

So fun.

Yeah, I really hope you—

I'm sorry I don't get to see you guys every day.

I want to audit your class. We have lunch with you in Boston, and I hope you'll come back for your next book.

Definitely. So fun. Thank you so much. Here, I have this.

I can't wait. I'm a big coffee drinker.

For my answer being correct.

What's that?

Yeah, you nailed that, Monica.

Correct. Exactly.

I wouldn't have come close to that guess.

You were a star. Yeah, a star.

All right, well, be well. Everybody read The Second Estate: How the Tax Code Made an American Aristocracy.

All right, be well. Thank you so much.

Hi there, this is Hermium Hermium. If you like that, you're gonna love the fact check. Miss Monica, how do you feel about Diana Ross?

I feel good. I, I don't have too many opinions.

You don't?

I don't.

Ain't No Mountain High Enough.

Love that song.

It's a solid one, right?

Yep.

Uh, what else did we hear this morning, Aaron?

Um, I'm coming Oh, great song. Upside down, you're turning me.

Giving love instinctually.

I guess I love her.

Yeah, I just came to this conclusion, this realization too. Wow.

I've been waiting for Erin to join me on the '70s R&B train for 40 years.

Yeah, it's been revving up slowly over a lot of years.

Oh my gosh. Well, now that you're into astrology, it all makes sense.

Well, I know. I found myself dancing in the car the other day to Diana Ross.

That's fun.

My kids are even like, oh my God, what's happened to you? Yeah.

Speaking of legends, we brought it up a little bit yesterday, but Dolly passed away, and I thought it was so love— like, just everyone is so sad universally.

Yeah.

And I think that's like just a— what an indicator of a beautiful life.

Yeah, that's a good point.

I don't—

she might be one of the least polarizing people in Yes.

Everyone is very bereft, and I think— and she deserves that. But it's such a lovely, beautiful thing. And it was sim— this part's gonna seem off-color.

Oh, I have a few as well.

But I was at a store this weekend where they had vintage shirts. They have this very small collection of vintage shirts, so they're insanely overpriced, like crazy. So there was a Sinéad O'Connor shirt, that was $2,000. Oh my God. A t-shirt.

T-shirt.

That's crazy.

It's crazy.

I bet my brother probably still has his from that era. I should ask him. He might be sitting on $2K up there in Portland.

Seriously.

I'm gonna call him and go, good news for you, buddy. You're sitting on $2K.

You're set for life.

Okay, but there was a Dolly shirt.

Oh, okay.

And we were like, oh, this one's so cute. I was like, thank you too, this is so great. And then I was like, then I whatever, left. And then yesterday I was like, oh my God, that shirt's probably $10,000 today.

Oh yeah.

Yeah, probably skyrocketed. What was the price?

I don't know.

Okay, you weren't interested enough in it to—

No, because I didn't like love, love the shirt itself. Like, I think it was really big.

Okay. Are you looking for a thinner or a thicker material in a shirt?

Thin.

Same, same. I want cheese cloth.

You want it to be basically see-through.

That's right. Transparent.

And a couple holes if you can.

With a hint of the old screen print on there.

Yeah. That's nice.

Just a tiny hint.

The unfortunate part is I would splash grease on it immediately.

Yeah. Like cooking oil or some butter. Yeah, yeah, yeah.

Just, you know, some—

This shirt, this one in particular has been baking soda'd like 5 times. or 6 times.

Mine has too.

This shirt in particular loves to get oily stains.

It sure does. Yeah, I agree.

We should almost— I don't even think I went near the kitchen when I wore mine.

Oh no, that's bad, bad endorsement for our shirt.

Yeah, it's not great.

Oops.

This one, I don't find that to be the case with any of our other merch, but this one, it's like every time I put it on, I'm like, oh my God, I did it again. And then I do wonder, how many oil stains am I collecting on other things that are Yeah. That's what you gotta wonder.

You gotta.

You gotta sit there and wonder about it.

I haven't, unfortunately, haven't held on to anything from—

Our youth?

Yeah. I was very jealous when you were— when Lincoln started wearing the Exploited shirt.

And I was saved, 'cause I think I was getting rid of those. And I think Kristin was like, secretly, maybe was like, you can't be getting rid of these.

No.

But do you know the whole thing with us and our t-shirts? This was a great hack, though.

Oh, you wore tiny t-shirts?

I wore extra tiny t-shirts. tiny t-shirts, baby tees.

You did, didn't you? And you went to McDonald's and you had like tiny t-shirts.

Oh yes, yeah, horse, uh, Prince, Prince. And then Aaron had these baseball pants that were way too—

from when I was a little later.

No, but this was a great hack for my mom, who was of course on a huge budget, is that my brother and I love these punk rock t-shirts, and we would take a trip every year before school. Our school shopping was going to Yonge Street in Toronto.

Okay, that's great.

And we'd spent the whole day going into all these t-shirt shops.

Oh my God, this is so great.

Always in the basement. And they were all, um, what do you call them, fugazes? They were pirated, you know. They were— they weren't official merch from these bands. And so they were super cheap. All these shirts were like, I don't know, $8 or something. And I would come home with 6 Exploited shirts, GBH shirts, Dead Kennedys shirt, just all these cool shirts with all this. And of course everyone was so jealous because you can't buy them anywhere but Toronto. But then of course I would give Erin some.

Yes.

Oh, that's nice.

And it was really the uniform of junior high, all these cheap shirts.

The coolest shirts. For the most part, black and white.

Yep, yep. of red.

Yeah.

Um, but it was a hack for my mom because she could get our whole school clothes shopping done for like $90, you know?

That's so smart.

It made the trip to Toronto free.

Back to school shopping was really fun. I only got a—

You liked it, right?

Oh my God, of course! Who doesn't love it?

It gave me anxiety because you have one day to find every outfit you're gonna wear for a year.

It's not realistic.

And then you're also worried you're gonna bumping. I was worried. Look, this is all luxury, right? Erin, did you ever even go school clothes shop? I feel bad even complaining about those things.

I know.

Please. Yeah, no.

I'm not complaining. I'm saying I'm grateful.

No, she loved it, but I'm complaining because I would go there and it's like, generally I'm kind of picky, even though I— you wouldn't think it.

You are picky.

Yeah.

So it'd be like, I hope there's a bum equipment sweatshirt I like.

There's only 3 Is that a band?

No, that was like a popular brand in the early '90s, late '80s. But you don't remember Bum Equipment? B-U-M. These oversized sweatshirts. This is back in the Z Cavaricci's day.

I also miss that phase. I did yesterday.

You look great in a pair of Z's.

Oh, absolutely. You'd freak. Yeah. Because it's kind of what you're wearing.

Yeah, I love a big shirt.

Tons of pleats.

I love pleats.

The fact that I was like, loved a pair of jeans with tons of pleats is hysterical. I can't imagine getting into—

The power of trends.

And I got, one time I got the parachute pants.

That was great.

But anyways, I would go there and it was like, if you don't find your whole wardrobe today, then you're shit outta luck. And you go to my— there's only 3 stores I liked at the mall. And then you bumped up into your budget a lot. I just found it very stressful. Was yours protracted over like multiple days?

It was kind of— gosh, I mean, it depends on the age. Like, at some point back-to-school shopping was just me and Callie going to the mall.

And you got mom's credit card?

I had an allowance, $20 a week.

Wait, you were buying your own school clothes?

Yeah.

That can't be.

I was. No, I mean, I'm thinking more throughout the year. Like, we— maybe I bought like one. I don't think my mom and I went shopping for high school back-to-school. Like, I think at that point I was sort of on my own. own, buying my own stuff.

What about during high school or middle school?

I know. Well, yeah, Limited Too was the place. My mom never wanted to buy me anything from Limited Too. So I would be begging and pleading. Sometimes she would get me one shirt from there.

Okay.

That was it. Yeah. They didn't really, we didn't do a huge amount of back-to-school shopping, but she would, this is funny. We just had this conversation. Do you guys know Upton's? Did you have Upton's?

Upton Sinclair? No.

No, it was a store. And we spent all week trying to figure out Upton's, my parents, when I was home. 'Cause I told my mom she used to shop at Goody's. I brought up Goody's. Did you guys have Goody's?

These all sound very Southern, to be honest with you.

Sam Goody's?

Goody's in Uptown.

Sam Goody's. Goody's was a clothing store.

Winky's, Pinkley Wings, Piggly Wiggly.

Piggly Wiggly.

Wiggly Woggly's.

I have a Piggly Wiggly shirt that I do love. Um, anyway, yeah, I said something about Goody's because I vividly remember my mom bringing home leggings from Goody's for me.

Okay.

They had hearts on them.

Remind me on leggings again because I remember I got it wrong once.

Leggings.

Like, you wore like what you called leggings and I thought leggings were like pants.

pantyhose.

Right.

What do you think leggings are?

Well, I think I— it's different now, isn't it? Just yoga pants now. But I— but, um, back then I thought it was pantyhose.

Okay.

Pantyhose?

Do they call it that anymore?

Does anyone wear pantyhose?

I don't think people wear pantyhose.

What a terrible name for a product.

I know.

Pantyhose.

It's disgusting.

What does the hose mean?

Well, it is in the shape of a hose. Yeah.

I mean, it is— It's a panty and hoses.

It is sort of an extension of your panties, 'cause you're not supposed to know you're wearing those.

But you are also supposed to—

They're flat. They're nude.

Are you supposed— and they have a—

They're so tight.

They have a grundle in them too.

Yeah.

Are you not supposed to wear panties with them?

I think you are.

Okay, double up.

That would be bad.

They should be called second pantyhose.

I think they're sexy.

Sorry, we interrupted you.

Uptown.

Sure.

Well, everything is sexy.

I don't think you would. Have you ever seen a woman with only pantyhose on?

I think I have. I think I've, uh, you know, been getting down to business.

That's nice.

That was really popular in the '80s to have a woman— it was very common on the COVID of Playboys. It would be pantyhose, no top, looking over the shoulder. You couldn't show the boobs.

I feel like I've seen Cindy Crawford in that look.

It was a look in the '80s.

Yeah.

Black, just Generally, not like nude color. Yeah, 'cause panties—

Yeah, nude color, I think of your Nana.

Nude is—

Yeah, you think of your grandma and they're saggy.

Nude is the main color. They're invented because you weren't supposed to have your legs exposed. So women would wear it under their skirts and stuff for secretaries.

Also though, for chilliness in the winter. When you wanna wear your skirt to work, I think it was also supposed to be a little—

They added that, yeah.

Okay, the warmth.

Yeah, and also it's supposed to make your skin look smooth and stuff. It does. Anyway, um, my— no, leggings in this case were like '80s leggings. Like, they're like thicker, they're pants basically. And then they had stirrups.

Oh yeah, yeah, yeah.

You know?

Sure, sure.

Okay, nice.

They're really cool. Anyway, my mom brought me home some from, um, from Goody's, and I brought this up for some reason, and she was like, no, I've never shopped at Goody's. And I said, well, you did. I know for sure. I remember you bringing the bag, and I was so excited. Sometimes my mom would go shopping on her way home from work, bring me items.

She had a time crunch. She was a career woman.

Yeah, exactly. But she wanted to shop. Then she said, no, there— I used to go to that one store a lot. And I was like, what? And we like couldn't figure it out. Couldn't figure it out. I was asking Chat.

Oh, sure.

So many questions I was asking Chat. And my dad then got very demoralized by AI. He was like, yeah, no, we're not in any trouble here. 'Cause it couldn't figure it out. It could not figure it out. And then I just went to straight up Google. I asked it a few questions and it got it.

Ah, now what's your dad's general feeling on AI? Does he have a take?

Mm-hmm.

I'm sure he does. He has thoughts.

Is he using it?

My dad's back to work.

Oh, he's—

oh.

Do you know the whole story of this? I do.

Yeah, yeah.

Yeah.

He had his retirement party last week.

The last time I was even in here was when this was happening.

He had his retirement party and then he was at work Monday as a consultant.

Exactly. And now he's like picking up more hours.

Oh my God.

I'm so happy for him though.

Some overtime.

He's gotta get that mind.

Signing up for OT. So you figured out it was Uptons with Google?

Uptons.

Uptons.

Very specific. It's U-P-T-O-N.

How do you write Kate Upton?

U-P-T-O-N.

That's uptown, no?

No, uptown would be U-P-T-O-W-N.

Oh, okay. We're missing a W.

Yeah.

Okay then.

Upton's. Shout out Upton's. I mean, it was a great place. It was like Kohl's before Kohl's.

Okay. I mostly only know Ross and TJ Maxx.

Love TJ Maxx.

Is the other one you just said in that category?

Upton's? No.

Not Upton's. Kohl's. Is Kohl's like a good luck to everyone? When you walk into Ross, it's like the greeter should say, good luck. Yeah.

No, Kohl's is much better.

Yes.

Okay.

It's like department store?

It is. It's like a standalone department store. It doesn't have— 'cause TJ Maxx and Ross are all resale or things that didn't make it.

Odd lots.

Yeah, exactly. Oh, my dad. My dad, he's not that worried about it.

Okay.

He just thinks this is what happens. Everyone was worried with the computer and everyone, and then you figure it out. So he's not too worried.

Okay, now this is probably too nosy about his finances, but I imagine when he I wonder if when he retired, he got a— he has a retirement package.

Yeah, probably.

Yeah. So this— no wonder people go back to work as a consultant, 'cause he's probably getting some percentage of his original income, and then he gets to go in there as a consultant and also get wages there. So he's kind of like doubled his salary.

Hmm.

I don't know.

Let's talk. Let's get him on the phone. Let's ask him how much he's making.

I don't think he wants to share. They notoriously never, ever, ever will share their finances with anybody.

What's your take on that?

That was a huge part of growing up. I would ask all the time, how much money do you make if everything's so— if we're tough to be so scared of money?

Yeah. How fucked are we? Yeah.

And they would just say, that's none of my business.

Really? My mother very much was like, I have to turn them out into the world with some financial literacy. So they should know what I'm bringing in, what our expenses are, how this is No, the literacy was just, you should always be scared. Paranoid.

Put a ton of it, all of it away. Maybe like $1 you can keep. And that's what you should do.

But if you were to ask them now, would they tell you?

Maybe. Like how much they made?

How much they have saved?

Oh, I think they have alluded to the number, but they wouldn't want me to say it on here. Okay, I have a question.

Yeah, yeah.

For both of you, you both have children. Let's say one of your children— this is like a Jonathan Haidt sort of— let's say one of your children makes just a lot of money, is gonna be totally fine on their own and independent of you, right? And then Your other child, one of your other children, does not. Now, when you're doing your will—

This is Davis Adairis.

He didn't get any money.

He's not getting a penny.

So yeah, so when you're doing your will, are you guys— you're just even stevens, or are you thinking it like, well, this person is—

For sure.

For sure what? Even Stevens? No.

Oh no. If one kid's struggling, the other one is totally financially set. I will tell the one financially set, like, hey, when I die, I'm gonna leave your sister more money because she needs more help than you do.

Wow.

And it's not because it's not any reflection on what I think you deserve, but it is a reflection of how well you've done and that I wanna make sure you're both safe. Like, that, that's easy, I think. And even I've told my mother. Like, you know, I bought half my mom's house at one point, like one of the houses ago, a couple houses ago. And I even said like, so hey, when you pass, I just want my half back. You can give David and Carly the other half. You don't have to like try to divide that half into thirds so that I then get 66% of it. Oh, I see. Like, I just want my money Mm-hmm. And then I even changed that and I was like, you know, whatever you have, give to those 2. It would be insane to give me more money.

Mm-hmm.

Um, so hopefully your children would just offer if they're financially sound.

Yeah. I mean, I guess it, okay.

Why? Because are you expecting a 50/50 split?

I, yeah.

You are.

And they are going to do that. Like they are. And so that's an interesting, for me it is, has zero to do with the money. Yeah. Whatever money I get, probably will give it to me.

To your brother.

Uh, depends on where he is. This is the other thing. It's like you don't know what's gonna happen to people.

Life is long. It's twisty-turvy.

Very. And if, and if something like, if, what if the rich sister lost all their money and then you've given away—

Well, ideally they have a good enough relationship that she goes, hey, I know dad gave you all the money 'cause you didn't have any, but now I don't have any.

I think, well, your children are different. but not necessarily different, but they're— this thing with money breaks up so many families.

Posthumously, yeah.

Exactly. It causes so much damage. And so—

That's why you gotta do a will, because you're just— you're ensuring that they'll be fighting each other.

Yeah. And so for me, I think it's just necessary to prevent a lot of that, But also, yeah, it's just, you gotta go even stevens. And my parents believe that too.

Well, definitely if you're divvying up the money on who you liked more, that's a no-no. But depending on who needs it more, I think that's really relevant and has to be taken into account.

But it's just in that moment and you just don't know.

I'm super envious of Aaron 'cause he just obviously will just give it all to his son. He has 2 daughters and a son and he'll give his whole estate to his son.

Well, what about the husband?

I wish I had a son to make it so clean.

Or the husbands of your daughters. Oh, you can trust the husbands of the daughters. Yeah.

Oh, yes.

They'll be getting some.

I've never thought about it besides being— everyone gets an even split. But if I run into some money and these kids start doing their— right now, they're teenagers.

Yeah, it's tricky.

Another thing you have to factor in is, is one of your children struggling with massive addiction? Yeah, that's the last thing you want to do is give them enough money to kill themselves. So there may be a situation where you have to say to the other sibling, look, I'm giving you all this money, but you got to take care of your sister.

That is, of course, a different situation. I mean, kind of just pending regular stuff. 50/50.

Stay tuned for more Armchair Expert, if you dare.

You know, my brother just had a baby. Cutest baby, Memphis. I love him. I bought him a quilt yesterday. Oh, I wanted to bring that up. Okay, so I bought him a quilt that was originally, ding, ding, ding, $1,000, but it was $100. It was on sale.

It was $900 all.

Mom.

No, I know. I kind of wonder if it was ever worth $1,000.

That's what I wanted to bring up. I was like, do you think that was like a trick?

Some moths got in there or something.

Although Aaron and I, if we owned a quilt that was $1,000, we would be selling it for $100,000. We just had this conversation that both of us are so bad at selling stuff. Like, virtually every time I sell something and I meet the person and I go like, God, they have less money than me. Like, I remember I sold my Harley. Remember that story?

Yes, I remember that. I thought of that story yesterday.

And the dude, like, I forget what I wanted. Maybe I wanted $10,000 for it. And he came and he had like $6,000 with him and he's like, okay, yeah, I really want it. I got to run to the bank and get a bunch Blah, blah, blah. And I go, just fucking take the fucking Mars bar.

Because he worked at a treatment center and I was like, oh yeah, in the program.

So it's like anything he would have shown up with, I probably would have said—

I agree. I'm more into the just giving.

Yeah. I just want you to leave me alone.

Exactly.

Whatever that was. So quickly.

How much you want to take it? Just fucking get out of here. How much is that?

Yeah.

But Monica, I'm so scared to make you mad, but I kind of think that they should give Neil a little more.

I know you think that, but I don't.

Okay.

I don't!

I know.

I understand your point of view.

It has nothing to do with the money. And it's one thing, you're like, we love you the most. We love you equally. But it's like, it's just hard. It's too hard.

That's how Sideris felt. He didn't like it.

Yeah, it's painful. I think I understand logically where you are coming from, but emotionally, I don't. I think that would just be very hard regardless.

There wouldn't be a world where you'd be Okay with like 60/40?

Again, it's, it's not even about—

it's not, it's not about the money at all.

It's, it's, it's actually just an indication of like, these are my children. They get, you know what I mean?

Like, they get—

Let's take you out of it. Do you, what do you think my mom should do between me, and Carlene?

I think she should split it evenly. And I think you will give it like, it's, again, it's not, I don't think then you're gonna be like, yeah, Hey, I got all this extra money.

All right, hey.

The only thing that's tricky though about that is your parents can pass on their money to you guys, but once you get it, you can't pass it to your brother without a tax penalty.

I know, I'm just not all about, we, you know, we have the tax—

Well, you'd have to make half of it disappear now. So basically of this pot that started, it could all go to you guys tax-free, but if you transfer it to him, now we've reduced the pot 25%. of the total pot. And then I was like, for why? So that everyone felt good? It should have just all gone to who needed it tax-free.

But need. Okay. Again. Okay. Let's— so the need is, I guess, relevant if someone's poor.

Yeah.

And someone's rich.

Yeah.

Yes. But also that's not right anyway. If like your sibling is poor and you have a ton of money.

Yeah.

That's already a little bit a little bit like, what are you doing?

Yeah.

Why aren't you helping out your sibling? But if your sibling, if they're fine. Uh-huh.

Okay.

I'm not talking billionaire obviously, but even, okay. That's a good thought. So is what if it was a billionaire?

Okay.

And then a, the brother is a lawyer.

Okay.

So does well.

Yeah.

Yeah.

But private practice.

Yeah.

Okay. Yeah.

Um, personal injury? No, he does, uh, IP law. Okay.

He's making $300,000 a year.

Yeah.

Good for him.

Yeah.

Yeah. Good job.

Um, should the parents—

What's the other brother?

A billionaire. Oh.

Oh yeah. Yeah.

See, so we got a billionaire and then a lawyer making $300,000.

No, the billionaire's—

you gotta give it all to the lawyer.

It's insane.

It makes no sense. It doesn't make— he's gonna have $1,000,000,001 to feel good. Like, he's gonna feel good versus this life-changing—

Listen, here's part of the thing. I, I know it. Listen, I— okay, in billionaire's situation, I guess I agree. But the—

But you know what's funny is I do think we all naturally go everything more than what we have is obscene. So if someone only has $20,000 to their— or $2,000 to their name.

Oh yeah.

And you have $2 million to your name, that is the exact same proportion as you having $2 million, someone having a billion.

No, totally. But $2 million is not enough to like never— to feel totally safe.

Depending on what age you are and where you live and how you manage the money.

Well, yeah, I guess if you have $2 million in your 'Cause you'll probably— you won't need it all.

Does remind me one of the funniest things Aaron said to me, and he actually relieved me of this terrible fear I have. We were watching one of the many sports documentaries that always give me financial anxiety, 'cause virtually every sports documentary you watch of a big hero in the '80s, you find out that the city was aghast that he got a million-dollar contract.

I know.

And then I'm sitting there with Aaron.

That was a long time ago.

And I go, that was like the most preposterous amount of money in 1986 when Isaiah Thomas got that. But dude, 1986 was 30 years ago, and there's no way he still has a million, right?

Yeah.

And I'm like, that's why no amount of money in 30 years— well, exactly. And then he goes, yeah, but you're not Isaiah Thomas's age. You're already 50. You're already at the finish line. And I was like, oh, yeah, that's super relevant.

Very relevant.

Trying to figure out how I'm gonna make money last another—

How to stretch it.

Yes, yes. He pointed out that I'm old and that was like, gave me great relief. It's rare that that being pointed out gives you a lot of relief.

That is true, yeah. Anyway, yeah, so I just think it's an interesting thought experiment. I'm definitely on the side—

How does your brother feel? Have you talked to him about it?

No, he doesn't get to decide.

Well, he gets to have an opinion. I'm curious what it is.

Okay.

Is this forever changing for the parents? Like, you're calling up your guy, Lincoln's not doing well.

Uh-huh.

Let's change the will.

Yeah.

Right.

That's a good question.

So I've done estate planning and it's a lengthy thing.

Yeah.

And then Kristen and I are just so lazy about it. We're like, we don't wanna— I'll tell you what happens in this estate planning. where it gets tricky is you go first things like, what happens if one of us dies? Okay, well, that's obvious what happens. And then it's, okay, what if both of you die? And then you go, okay, well, I want my sister Carly to take over.

Sure. Yeah.

And then you go, what happens if she dies? Right. And then now we're on a third tier. And now by the time you get to the fourth person, we're now arguing over who should get the responsibility. responsibility of our children. And then at that point, I go, this is fucking nuts. We're stressing ourselves out over something that literally, statistically could not happen, which is all 3 people now have taken charge of our children have all passed, and we're down to who I knew in 8th grade. What are we talking about?

The 3 of you could be in a car together. I hate that you said that. It's not that hard to do. Okay, where am I in line?

So we kind of tabled it over this one. Like, we couldn't decide on the fucking 4th person to get the kids. Yeah. And then we just like, fuck this thing, and we put it off for a while. And then of course we're getting urged, rightly so, by our financial advisor to finish this because we fly together, I race motorcycles, all this shit. Anyways, we I finally got through it, but it's like, it's, it's, you know, it's like 4 sessions sitting with this estate planner for hours and hours and hours. And you don't like thinking about it. A, it's like not a topic.

Horrible.

All you're talking about is like when you're dead and your kids are going to be without you and all that. And then you're also figuring out like, what age should they get? What, again, what happens if one of them's an addict? You need a lot of legal language to deal with that kind of situation. You're kind of trying I was trying to forecast every conceivable thing. And the only thing that I was just dead sure against is I was like, let's make this very clear. Nobody gets a fucking penny unless they sign a prenup. I do not want some deadbeat marrying my fucking daughters and then getting divorced and taking a quarter of the money I worked my whole life for. That to me was like, I'll come out of my grave and kill someone.

Oh, nice. Have you guys heard of doing a free— this is embarrassing, but I've, um, I don't have a will right now, right? And yes, and I, and I should, no matter—

No, that, that would mean you don't want him to get one.

No, I want him to not need it.

Okay, because I thought you knocked because you don't want the thing that was just said to happen.

No, I—

my knocks are that they No.

They have multiple purposes.

They're ambiguous.

Yeah. But this has come up a lot recently, and it's, yeah, it's out of laziness. What a lot of people do, I assume. Just so lazy. It never occurred to me 'cause I was like, whatever.

Your motorcycle collection.

Just give me this tiny bit of shit.

Each kid gets a motorcycle. Fight for it.

Yeah, they each get one motorcycle right now, which is pretty good.

That is good.

So we've been talking about it, but just haven't pulled the trigger. And I'm like, what do I do? Go to— because I'm a fucking jackass. I don't know how to do it. And I'm like, according to Chat, who I'm—

Yeah.

Yeah.

But you should have Chat make your will.

Yeah, you should.

Okay.

Yeah. It makes legal documents.

Yeah.

And yeah, so there is a way to do it without going to the lawyer.

Do my tattoo contract.

Okay.

Yeah, I had the whole contract made on chat, sent it to Eric, who's a lawyer, and he read it. He's like, this is bulletproof/aggressive.

Okay. Well, that answers that then. Yeah, we looked into it. I'm like, oh, that's why I don't have to— I just take this to a fucking notary.

Now, are you going to give yours? So is it— so, okay.

I like how you're whispering.

'Cause this gets tricky.

Tricky.

So are you gonna leave your money to Ruthie or your children?

That gets real tricky.

Too dangerous to answer on air.

I know, that's why I whispered it.

It even gets more dangerous, but there's this life insurance policy on me that I don't know what it is. And this was bought by my ex-wife. And with good reason. Yeah.

She had a pretty good chance of collecting on that.

Yes.

A long time ago.

Oh, God.

Yeah. Now, since I've got sober, there was this one— there was a moment early on where I start trying to do the right thing. I'm like, okay, I have to be responsible and pay these bills and these bills and these bills. And she's like, yeah, you gotta start paying this fucking life insurance policy. I've been paying it for years. And I'm like, cool. So I pay that, but I've never asked the question, like, does this go to you?

Yeah, probably. She's probably the beneficiary.

And then I'm like, wait, this is getting—

But again, in her mind, rightly so, she's like, yeah, if you die, like—

And the kids were all babies when this happened.

I still have to pay for half these kids. So yes, I should get it 'cause I'm the one I'm gonna now assume all the pain.

This is so confusing. Yeah, because when you remarry, what? Do you have 2? Can you get 2?

Double?

Yeah, so I don't know the answer to that.

You could certainly amend that policy to have multiple beneficiaries.

Yeah.

Yeah.

Which you'll never do, but you could.

Which I'll forget when I walk out of here. Yeah, I think, uh, sure, why wouldn't Ruthie get a piece?

A little round town money.

Yeah, she's not gonna be able to take care of herself without me.

I'm joking.

She does much better than me. I mean, this could be for 20 grand. I, I have no idea what it is. I've never seen details of it.

When my dad died, um, obviously he just mostly had a lot of debt. But I did get a call that was like, your father had a life insurance policy. And I'm like, first of all, how? And then how much? And it was like, it was $1,500.

Oh, wow.

Good job.

And I'm like, where did this come from? What kind of life insurance?

Going to your mom?

No, to David and I. But I was like, just saying. Send it to David. $1,500.

It's not a great—

I swear on the— 1 cent.

1 cent a year.

25 cents. Like, maybe he saw commercials like, for 25 cents a month, you could leave your loved ones $1,500.

He's like, it's something. It is something.

Sure.

I'm just like, where did this come from? I think he must have— like, it had to be a part of some other thing he got that just got lobbed onto the bill that you had to have if you had— I don't know.

Interesting.

Makes no sense. I joined AARP, and, um, because I thought this was fun.

Wait, wait, wait.

Isn't that for like 70-year-olds?

Retired people.

Yeah.

American Association of Retired Persons.

Yeah, well, listen.

You listen up.

This probably went into your junk mail, but I got it in the mail and saw that I was eligible to be a member of AARP, and I laughed really hard, and I, and I was reading reading through it for a very small fee of, like, $14.99 for an annual.

Oh, wow!

Anyway, so I was like, this can't be right. It was when I turned 50. Then it got better as I was reading, and it was like— so I'm like, okay, so the perks are you can get, like, a coffee at McDonald's.

Discount at Denny's, maybe.

Sure, sure, sure.

So, I mean, yeah, yeah, yeah, yeah. Okay.

Yes, we traveled.

Yeah.

Then I see you can order a second card for $7.99 to your— for your spouse, which Ruthie's 7 years younger than me. So I'm like, well, this is even funnier. This is worth $20 just for the laugh.

For the laugh.

Yeah. Yeah.

I wonder if that's part of their strategy when they totally do their marketing budget. They're like, a lot of people are going to buy this for Yes, it works.

So I order them and, um—

I was gonna say, it's not a huge mystery how sometimes you've had financial issues.

So now I'm like pounded with, um, mail and, um—

Yeah, they know you're a sucker now.

Notifications from AARP and, um— But one I've been seeing lately, and I've set a couple aside and haven't opened them, was life insurance. And I'm like, well, I mean, I'll look into this, but it might be one of those $1,500.

But your focus is more on the AARP right now. Yeah.

I really would love to go to a Holiday Inn out of town with my wife and we both have to present our cards to get the discount.

That is really fun. That sounds fun. You got a sticker for the back of your window on your car?

I got a lot of stickers.

You should put them all over your car.

It came with a lot of stickers.

I'm trying to think if I'm more courteous and forgiving of people when I see the sticker, or if I'm angry at them. Like, I can't remember if I'm forgiving or if the second I see it, I go, oh, they're gonna drive like shit.

Well, you wouldn't—

Both.

You wouldn't be forgiving if you pulled up and saw it was me.

I would be pissed.

What the fuck?

Yeah, I'd be pissed. It's like when you see a guy jump out of his car in the handicap and sprint into Subway.

I know.

And he's got the fucking license plate and everything.

But it's legit.

Wow. Congratulations.

Thank you.

That's amazing.

I told you, my father, like, he loved his placard so much that he traveled with it. And so often we would be like, we would pull up, there's nobody there. It's like we're going to Costco at 11 AM on a Wednesday.

weekday.

Yeah, he had his knee replaced and, you know, he was obese and stuff. And, uh, he did— the spot directly next to the handicap would be open and I would start pulling in. Whoa, what are you doing?

Pull—

go over one.

And it's like, oh my God, why? This is now a weird obsession. Like, you have to be in this spot. You can— we're going to walk all of Costco.

You couldn't be one spot away.

You walk right when you think there's, um, fucking samples at the Oh no.

Oh, I love him so much.

I love him the most.

He was great.

Oh man.

He was a great man.

Oh boy.

Backies?

Yeah, let's do— well, I do want to make one thing clear because people might think that I'm very greedy. Okay. Because I want half of my parents' money, but my money will go to my brother.

Which is all the more reason—

No, more reason that like, okay, so, so, okay.

I mean, all the more reason that you want 'em to have it all anyways.

No, I want my money from my parents because I earned that money from them. Listen, part of the reason—

You did?

I did. I did. Part of the reason I have this money is because I was trying to make them proud.

Uh-huh.

And I did it for them. Uh-huh.

And them only.

For them and them only.

No, for them alone too. I think for you too.

No, for me too. But it— that is real.

Like, they—

and, um, so I deserve that. I deserve to feel equally loved and cared for.

Yeah. Do you think they love you equally?

I'm starting to wonder now that we got a new baby in the mix.

Now that we have another.

Okay.

Okay. That's sort of how this started. I was like, oh, I wonder what's gonna— I wonder if this is gonna change.

What if they left it just all to the baby, not to you or Neil?

That baby didn't earn it.

Exactly. That baby earned money from my brother and Emily.

Well, he's made your grandparents— his grandparents extremely proud. They think he's a soccer star.

From just being born.

Yeah, yeah. He's got more than 3 weeks.

I was like, I had to do so much.

He's like a Marine. He gets more done in 3 weeks than most people do in a lifetime.

Here I am coming back with A after A after A. He didn't have to do shit. Anyway, well, it's gonna be great.

Yeah, yeah.

And it's not even gonna happen for like 100 years.

Yeah.

All right, let's do some facts. Yeah.

I love Ray Madoff.

Me too.

Yeah, I, uh, once in a while these, these come up. I don't know, every 15, 20 episodes where I repeat all the data I learned in the interview to every single person. I see for the next week.

Yeah.

And that was this interview.

Yeah. This is a fantastic, fantastic interview. Alarm bell. Great information. We all need to listen to this.

Alarm call's not a— alarm call's not a thing.

No, it's just an alarm bell.

An alarm bell.

Yeah. Okay.

Sound the alarm.

Sound the alarm. Also an option. Okay. Yep. Okay. She said women are named all kinds of male names, but not Ray.

Yeah.

Um, she said their name Joseph and Frank. I personally—

Frankie.

Frankie.

I know Frankie.

Frankie's short for Francis generally.

Is it?

Yes. Um, and I would say Joseph. I've never heard Joe, but that's for Josephine.

Josephine.

Yeah.

Yeah.

But that was just funny that she said that. But then it made me wanna look up girl names were once more common for boys.

Okay, great.

This is from—

Great prompt.

Nose.

Uh-oh.

Ding, ding, ding.

Nose.

That's from a previous—

Yeah.

Okay. Robin. That used to be a boy name.

Oh, really?

Mm-hmm.

Okay. Robin Hood. Sure.

Yeah.

I definitely think when I hear Robin, I definitely think female more than I think male.

No.

Yeah. Okay. Jocelyn was a boy name.

What?

I know. Medieval.

That's 1300s.

times. Kim. These are good. Good job, SheKnows.

Kim was a guy's name?

Yeah, it didn't even appear on the female name charts until 1944.

Whoa.

At which time it was far more popular for boys.

Well, Kimberly is Kim, right?

Yeah.

Was it Kimbo? The boys weren't named Kimberly.

They were just named Kim.

Darcy was a boy's name.

Yeah, and it's such a good name.

I could just be at home and make a list, you know. I could be like, Jennifer, Julie—

No, they have stats!

Oh my God, they have sources.

Yes. Okay, okay. If you live in the United States, you probably think of Darcy as a girl's name. It's firmly entrenched on the feminine side, consistently within the top 1,000 most popular girl names in the US from 1949 to 1994, peaking at number 349 in 1968. It was on the most popular male name list in this country too, fairly consistently from 1954 to 1970.

Wow.

Yeah.

I wonder what they went— they went by the full Jocelyn?

No, Darcy.

Oh, Darcy. Have you said Jocelyn?

Yeah.

Okay.

I did.

So it's not out of nowhere that I just said Jocelyn.

Okay.

I'm just a few behind.

Yeah.

Okay. Aubrey.

Kim.

Okay.

Aubrey. Was the dude's name?

Yeah.

Okay, when? 1810?

Um, it didn't even make the list for girls until 1973. Up until then, it was far more popular for boys, having been in the male top 1,000 names even prior to 1900.

1810, probably peaked.

Probably. Um, probably Dana. I know this one.

You knew that one?

Well, I know a male Dana.

You do?

He was my teacher, uh, AP history, US history, and he was awesome. Shout out Dana.

You liked all your teachers?

Yeah, I had a lot of teachers I liked. Yeah, I got a good—

That's where Lincoln and I really diverge, and I'm so grateful.

She likes her teachers.

She's a teacher's pet.

Yeah.

Yeah, I was like the bane of most teachers' existence, and I didn't like them and they didn't like me.

Yeah.

And what a terrible way to go through. And she loves her teachers so much, and I'm so happy and relieved.

It's so nice to be liked by your teachers.

It is.

Riley.

I had a male teacher, Mr. Shade, in 7th grade science. Aaron brings this up all the time. He grabbed one of those big metal heavy chairs, right? Like the whole base is metal, wood back. He grabbed it and he fucking swung it and threw it right at my head sitting at the desk. And I ducked and it hit the table behind me. Sent me to the hospital.

What'd you do? Do you remember?

Well, no, because then he immediately was sending me to the office.

No, I'm saying, what did you do to make him throw you?

Oh, I can't remember my infraction. I think I talked for the 5th time after he had warned me not to. But we got even. We got even.

You did? Yeah.

He, in the summertime, was a park ranger at Kensington State Park by our Oh no.

Like, I don't like that he threw a chair at you, but I'm nervous.

He deserves this. This motherfucker almost took my head off. You can't throw a chair at a 12-year-old.

I know, but you were probably being so—

I wasn't mean to him. I think I was talking to Aaron.

Okay. Um, park ranger.

Yeah.

And we kind of knew he couldn't fuck around at that job, and so Aaron and I found him a couple different times at that job and taunted him like crazy after we were out of high school.

Okay, Riley, we're like, where's your pistol?

Why don't you pull out your pistol? They give you a pistol.

Oh my God. All right, Mr.

Shade, if you're with us, I don't apologize. Most people I would.

Imagine his life.

He tried to assault a 12-year-old child. No, I'm fine with— don't. We're not even even yet.

You were a bad kid.

I wasn't a bad kid. I was an antsy ADHD kid who talked too much.

He though—

That's not bad.

Let's be— he— let's take you out of it. Pretend it's not you.

Okay.

And it's just a teacher who's dealing— who's not good at being a teacher and who has all these kids and doesn't know how to control them. And one will— is relentless and he lost his shit. And this is—

Wasn't the first time either. He had beat me in the head with a fucking eraser one time.

Okay.

He was unhinged.

And he doesn't have enough money, so he has to be a park ranger in the summer.

And—

Well, that you've added. Hold on, hold on, hold on.

What?

What do you mean he doesn't have enough money? He lived in my cheap-ass town. He was middle class in my town. He just had that job because he wanted to be a park ranger.

If you were interviewing— yeah, that's okay. You can't see within it.

Listen, if it's 12 years ago, Here's what you do. You stop. You go, let's go out into the hallway.

Of course.

Let's talk.

No one's saying he did a good thing.

Okay, great.

No one's saying his behavior was appropriate or right. But we can also have compassion for his circumstance, which is what we normally do. Always.

Yes. There are certain folks in my history that I have a hard time extending compassion to.

And that's okay. You've done— you have given— you have said that before. You have given some compassion. I mean, more than I would give.

All I've said, the most I can extend is in the game of life, he suffered the most.

Yeah.

Horrible. That I can give him.

I don't want to extend him any, but I do want to extend this teacher some compassion.

I don't know why.

I wish you would meet Mr. Shea.

Teachers are just—

it's so hard.

I get it.

It's so hard. It's too hard. But Monica, you cannot chuck metal chairs at kids.

I know, I know, I know.

And if that's your disposition, you cannot be a teacher in public school.

I agree.

Yeah, yeah.

But I don't think— I don't like that he got taunted.

Oh, I do. I wish we would have assaulted— I'm sorry.

Okay. Riley. Shannon.

Shannon.

Shannon. Carol.

There's a really tough hockey player named Shannon.

Yeah, Shannon is— I have I've heard it as wisdom.

Carol.

Carol.

We know that.

Do you know Carol? Girl. All these dads have these things. So Brie's father, Greg, would always call for the mom. Always. It'd be like, this is such a family thing to do, I think. Stand up and go into the bed.

Oh, no. Everyone's shouting.

Girl. So anyway, he always, girl. So I always just make fun of him, and I would just randomly yell Carol all the time. And then Kristen's dad has a great one. You've heard her imitate that one. Kelly. Kel. Colleen. There's a progression.

Yeah, yeah.

Oh, that's funny.

It's getting heated. It's so funny.

We all do it, right? Yeah, yeah, we all do it.

Yeah, it's very funny.

Carol. Morgan. We know a Morgan. Yeah, love him. Morgan Sackett, shout out. Hillary was a man's name. Yes.

Oh man, that's tough. If you're like a cowboy and you walk into the saloon—

I love it.

It's like, uh, oh, I want you to meet my friend Hillary.

I think they probably go by Old Hill. But Hillary. Yeah.

Okay.

Love it. That was also 19. Oh, no.

I would say that that's tied with Shel Silverstein and Johnny Cash's Boy Named Sue. Hillary is rough. If you name your son Hillary, you got to acknowledge you're setting him on a real—

I'm going to do it.

Oh, my God. I would fucking not allow it.

Courtney. I have heard that. Lauren. Lauren.

Lauren Michaels.

No, That's Lorne. You do often say Lorne, but it's Lorne. L-O-R-N-E.

Okay.

This is—

He's Canadian though, so maybe that's how they say it.

Maybe, maybe, maybe, maybe. Lorne.

Um, I mean, I don't hear the difference between what you're saying. Lorne, Lorne. Okay, so Lorne, Lorne.

No, Lorne. Lorne, 2 syllables. Lorne. Yeah, Lorne, 1 syllable. Lorne.

Okay.

I know it is hard.

Yeah.

Okay.

We're splitting hairs, but yeah.

We're really not. We're really, really not. Sydney.

I think it's because his last name was Michaels. They're like, let's soften it up.

Sure. Maybe.

Lorne Michaels.

Sydney. Sydney Poitier. Allison. I have heard this. I have heard this.

Allison Crawley.

Yeah.

Ballister Crawley.

Ballister. Yeah. But still.

Still.

Shelby.

Okay.

Shelby.

Shelby Silverstein?

Shelby from Peaky Blinders, but that's the last name.

Shelby Cobra.

Carol Shelby.

Carol.

Carol.

That's a man.

Yeah.

Carol.

And Carol, there's a big actor, Carol from All in the Family.

Yes. Yeah. Erbie Bunkett. What's his name? No, no.

Archie Bunker.

Archie Bunker. Was something Carol something.

What the fuck? Carol.

Carol Burnett. Carol Burnett. Carol Channing.

Carol O'Connor.

O'Connor.

Okay. Lindsay. Kelly.

Kelly.

Beverly.

Kelly Slater.

Beverly. I've heard it again.

Uh-oh.

Meredith.

Oh my God. All right, all right, all right, all right, all right, all right. We got a lot.

Vivian.

Okay, we got a lot.

We got a lot.

Okay, you're just naming every single girl's name.

There are a lot on this list. Okay, I will be done. Okay. Um, the rom—

Nancy, Cindy, the rom-com work.

What do you think is the most girly name?

Lily.

If you name a dude Lily, again, I hope he can fight. That's all I hope.

No, you better stick up for that guy.

I hope for his sake he can fight if he's named Lily. Like Boy Named Sue, you pray he can fight because he's going to be in a lot of them.

I think I have the girliest Yes. Wow.

Okay.

Um, the movie rom-com where a couple had to go into witness protection program and then they went to Wray, Wyoming. That was Did You Hear About the Morgans? It was in 2009.

Hmm.

Hugh Grant and Sarah Jessica Parker. Okay. I looked up what professors are the hardest to become. Like what subject of being a professor is the hardest? Because philosophy is how we got into this. Humanities and arts is extremely— it says extreme/brutal job market competitiveness. So that's philosophy, history, English. Then very high job market competitiveness, so one rung down, is pure basic sciences, biology, physics, chemistry. Then moderate accessible is professional schools, business, nursing, in computer science.

Is there anyone that says easy?

Nope.

I feel like physicist has got to be up there.

No, physics is in pure basic sciences. It's very high competitive.

Okay.

Okay.

I just feel like not a ton of people. Here's what I'm— just so you know how I'm doing this. Very few people major in physics. Everyone majors in communications. I'm just talking about how many people major in the thing. That feels like it'd be telling.

That might be additive because if not that many people are— well, first of all, though, everyone does kind of have to take it.

That's what I'm saying. Every college has a physics professor, yet not a lot of people major and get their graduate degree in physics. A ton of people get their law degree. A ton of people do communications. So that's that many people you'd be competing against versus you graduate in something that very few people graduate in that would have to increase your odds. Does that make sense?

I know, but also they just don't need as many professors in those then if not enough people are majoring in it.

That's a solid point. But there are certain things like they have to have a physics department, right? They got to have like—

But it might just be small. The physics department's probably smaller than— anyway, whatever. Is Paul McCartney a billionaire? Yes.

Yeah, that catalog is valuable.

Is California still the 4th biggest economy in the world? Yes, correct. If it—

I wish you could do your hair that way. You keep it exactly how it is. I'm gonna take a photo of you. This would be— you should figure out how to do this on Halloween.

Okay.

Yeah.

Hold on. Who will I be?

Marge Simpson. Oh yes. Um, a Lebanese Marge Simpson. All right, I'm gonna send this to you. That's a different episode. Okay, you now have it.

I mean, I could probably do a pipe cleaner or something.

You could figure it out. I could help with the physics. Ding, ding, ding.

Okay.

Um, yeah, gross domestic GDP surpassing $4.1 trillion.

I mean, it's just nuts that a state is higher than, uh, I know, than Japan.

Yep, narrowly ranking ahead of countries like Japan India and the UK. But still, yeah, I'm pretty proud of it.

I think it's US, China, Germany.

That is right. That is correct. That's what I just read.

You didn't read that.

I read it in my— I did. I just didn't say it out loud.

Okay, all right, that's it. That's a good distinction.

All right.

All right, love you.

Love you.