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Speaker 1: Welcome to had a Money. I'm Joel in that and

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Speaker 1: today we're talking about how taxes rule your life with

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Speaker 1: Scott Hodge.

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Speaker 2: So the reason there are so many hard Seltzers on

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Speaker 2: the market, or maybe the type of car that you're

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Speaker 2: looking to buy, even why women wear children's clothing. Our

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Speaker 2: guest today he's going to share why taxes are what's

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Speaker 2: behind nearly every aspect of our lives.

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Speaker 1: Those are just a few of the anecdotes that we

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Speaker 1: hope to get to today.

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Speaker 2: But we're joined by Scott Hodge, and Scott has over

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Speaker 2: thirty five years of tax policy experience. More recently he

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Speaker 2: led the Tax Foundation, which is a DC based think tank,

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Speaker 2: as president for over two decades, and then most recently

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Speaker 2: he published the book Taxocracy, which is just full of

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Speaker 2: examples of how misguided tax policy has led to the

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Speaker 2: world that we live in today. And honestly, I think

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Speaker 2: most people they think of taxes as like a necessary evil.

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Speaker 2: It's just like sort of this annoying aspect of life.

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Speaker 2: But I think our conversation today might reframe how we

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Speaker 2: view taxes and might get us thinking about them a

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Speaker 2: little bit more. Scott, thank you so much for talking

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Speaker 2: with us.

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Speaker 3: Today, Oh, Matt grad be with you and Joel thank.

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Speaker 1: You of course. Yeah. Like reading your book, I was like,

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Speaker 1: I think of myself as a person who makes individual choices,

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Speaker 1: but maybe it's the underlying taxation realities that are undergirting

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Speaker 1: everything I do. I don't know what we'll get to

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Speaker 1: a bunch of examples that you shows like is it

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Speaker 1: free will or is it just tax policy exactly? But

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Speaker 1: the first question we ask everyone who comes on the show, Scott,

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Speaker 1: is what do you like to splurge on? Matt and

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Speaker 1: I we like to drink nice beers. But what is

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Speaker 1: that for you that you're saving? You're investing for your future,

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Speaker 1: but hey, you're also splurging in the meantime.

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Speaker 3: Your hobby seems a whole lot cheaper than mine. Oh yeah, yeah.

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Speaker 4: I have a two thousand and eight bm W that

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Speaker 4: I like to take to the track, and this year alone,

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Speaker 4: I've had to replace the motor brakes and rotors and

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Speaker 4: on my second set of tires. Well it's pretty expensive,

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Speaker 4: and thank good to my wife is not listening, because

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Speaker 4: I probably spent enough to remodel our bathroom.

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Speaker 3: On this.

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Speaker 2: Thing.

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Speaker 3: No, I don't it just you know, it gets.

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Speaker 4: Old and the motor went and the brakes went everything.

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Speaker 2: Okay, yeah, this is a bathroom that your wife is

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Speaker 2: wanting to remodel since two thousand and seven, so you

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Speaker 2: actually she's been talking about this for longer than you've

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Speaker 2: actually had that car.

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Speaker 3: But it's it's fun. What can I say? No, it's

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Speaker 3: a blast. There's nothing like trying to go fast.

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Speaker 2: Are there so quick questions? So you mentioned all of

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Speaker 2: the costs associated with the beamer. Are there costs associating

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Speaker 2: with going to the track? Like?

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Speaker 1: Are there track fees if you just want to get

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Speaker 1: out there?

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Speaker 3: Yeah?

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Speaker 4: Okay, yeah, you take these are this is what's called

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Speaker 4: high Performance Driver Education and you sign up for them

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Speaker 4: over a weekend with various clubs. There's Sports Car Club

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Speaker 4: of America, the BMW Club, all these other organizations that

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Speaker 4: sponsor these events and it's really only it's not racing

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Speaker 4: per se, but you're learning to do performance driving on

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Speaker 4: a track, a closed circuit as we like to say.

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Speaker 4: And it's a blast. I've always wanted to do this

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Speaker 4: and it's the closest thing to truly racing.

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Speaker 3: But it is a very expensive hobby.

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Speaker 1: I believe. And you're in DC. You're not just going

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Speaker 1: pedal to the medal on Pennsylvania.

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Speaker 4: No, no, no, no, or even on the Beltway. No,

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Speaker 4: I confine it to the track. But and we are

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Speaker 4: very fortunate. We've got a series of tracks within an

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Speaker 4: hour and a half or so up in West Virginia,

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Speaker 4: and then.

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Speaker 3: There's one further down in Virginia.

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Speaker 4: So it's very convenient, a lot of fun, but a

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Speaker 4: very expensive hobby.

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Speaker 1: We're talking about taxas of course here today you're the

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Speaker 1: tax expert, and I think the average person who's list,

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Speaker 1: they're probably not thinking about taxes often, probably not coming

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Speaker 1: up in their dreams, maybe in their nightmares on occasion.

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Speaker 1: But you say that taxes rule our lives, and you

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Speaker 1: say that they make us do things we wouldn't normally do. Again,

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Speaker 1: it's that kind of invisible hand, but it's a different

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Speaker 1: kind that's moving us in a certain direction. Can you

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Speaker 1: explain that, Like, what does that look like in real life?

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Speaker 3: Yeah?

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Speaker 4: In real life, it means that taxes do two different

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Speaker 4: kinds of things. One, they're intended in some cases to

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Speaker 4: incentivize us to do things like things like the mortgage

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Speaker 4: interest deduction is there to incentivize us to buy a

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Speaker 4: home or at least make it a little more affordable.

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Speaker 4: The charitable deduction is there to make charitable giving a

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Speaker 4: little bit more affordable, or at least incentivize us to

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Speaker 4: give charitably. And then there's the punishing aspect of taxes.

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Speaker 4: Things that are meant to Taxes that are meant to

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Speaker 4: stop us from doing certain things, like oh, tobacco taxes

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Speaker 4: and taxes on beer are there as sort of syntax

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Speaker 4: is to discourage us from certain kinds of sort of

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Speaker 4: anti social behavior. But taxes make a bigger difference in

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Speaker 4: other things too, like work, where if you have tax

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Speaker 4: rates that are too high, they can disincentivize us or

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Speaker 4: incentivize us not to work as much because every dollar

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Speaker 4: we earn will be taxed at a higher rate, and therefore,

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Speaker 4: you know, it really discourages from trying to do more.

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Speaker 4: And the same thing goes with investing. So if you're

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Speaker 4: trying to invest in, you're faced with higher capital gains

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Speaker 4: rates for instance, it makes that less rewarding from an

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Speaker 4: investment perspective. And so we can kind of go through

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Speaker 4: the entire tax code like that and try to understand,

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Speaker 4: you know, what were members of Congress thinking when they

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Speaker 4: pass these things where they trying to incentivize us to

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Speaker 4: do things disincentivize us, or just trying to raise money

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Speaker 4: for the federal government. But either way, no matter what

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Speaker 4: the intent behind the tax policy was, it was there

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Speaker 4: are unintended consequences that often weren't thought about. And that's

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Speaker 4: what I've tried to do in the book is tell

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Speaker 4: a bunch of stories about the unintended consequences of tax policy,

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Speaker 4: what we can learn from that economically and from a

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Speaker 4: policy perspective, and then how we can change the tax

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Speaker 4: code in such a way to minimize both the impact

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Speaker 4: of the way we respond to taxes, but also the

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Speaker 4: political influence that comes in the tax code, because all

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Speaker 4: of these things that are in the tax code were

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Speaker 4: put there by politicians to get us to do things

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Speaker 4: they want us to do rather than what we would

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Speaker 4: rather do.

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Speaker 2: I feel like Scott could play this game where he

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Speaker 2: can basically point to any item in your house and

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Speaker 2: kind of come up with the tax disincentive or incentive

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Speaker 2: story behind it. But I think like one that comes

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Speaker 2: to mind. I'm thinking of like the ev tax credit,

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Speaker 2: for instance, because obviously that might cause people to buy

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Speaker 2: an electric car when otherwise they just would have opted

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Speaker 2: for an ice vehicle, what is it? Commustional internal combustion engine.

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Speaker 1: Just like Scott Scott.

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Speaker 2: But that's actually the point of this tax credit existing

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Speaker 2: right is in this case the policy, the idea was

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Speaker 2: to incentivize and push people towards driving more electric vehicles.

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Speaker 4: Yeah, that's the intent obviously, is to get people to

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Speaker 4: buy evs. But the really interesting question from an economic

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Speaker 4: perspective is who really benefits from the tax credit. Let's

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Speaker 4: say it's seventy five hundred dollars, which is the standard rate. Now,

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Speaker 4: if you buy an EEV, is it the customer that

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Speaker 4: benefits from that seventy five hundred dollars credit, or is

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Speaker 4: it the manufacturer who truly benefits because they are able

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Speaker 4: to at least set the price, the initial price at

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Speaker 4: the EV, such that when you apply that seventy five

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Speaker 4: hundred dollars, they've essentially captured it in the price. We

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Speaker 4: feel a little bit better because, oh my gosh, we

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Speaker 4: got a tax credit for buying that EV, but when

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Speaker 4: in act we probably overpaid or paid at least what

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Speaker 4: it should have been had the manufacturer not captured that.

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Speaker 4: We see the same kind of incentive with efforts to

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Speaker 4: try to make college education more affordable. You know, there

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Speaker 4: a lot of tax credits and deductions that are in

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Speaker 4: the code to try to make higher education more affordable.

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Speaker 4: And what universities have done very well is absorb those

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Speaker 4: tax credits through higher tuitions and fees and other things.

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Speaker 4: And you ever wonder why the fact the college becomes

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Speaker 4: less affordable with all this help, Well, it's because of that.

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Speaker 4: So oftentimes, the more government tries to do to incentivize something,

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Speaker 4: the more expensive it becomes because those incentives get built

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Speaker 4: into the price of the good.

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Speaker 1: It's almost like, if I know Matt has a dollar

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Speaker 1: coupon for something that I'm selling, and I'm selling it

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Speaker 1: for a buck fifty, I'm like, well, he's got a

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Speaker 1: dollar he could he was probably on paid a buck fifty,

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Speaker 1: more like two fifty. Right, maybe I'll both have a

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Speaker 1: price on that. I mean, I think it makes a

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Speaker 1: lot of sense. And also, you know, you point out

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Speaker 1: what we're incentivizing here. I think the incentive has become

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Speaker 1: even more apparent when we figure out what's happening to

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Speaker 1: like the prevention of the sale of Chinese electric vehicles

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Speaker 1: in the country. Right, It's like, is the goal actually

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Speaker 1: more evs on the road or is it something else?

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Speaker 1: And I feel like that at least raises more questions.

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Speaker 1: What are the things that you mentioned in the book too?

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Speaker 1: You talk about why women's clothing costs more of the

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Speaker 1: pink tax is something that's been written about for many

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Speaker 1: years now, but it's true, like it's for real, right,

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Speaker 1: women pay more for a lot of goods indeed.

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Speaker 4: And you know it's interesting is because tariffs which are

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Speaker 4: applied to imported goods were never really intended to be

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Speaker 4: sexist or discriminatory, but over time they end up being

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Speaker 4: discriminatory in various ways. Sometimes it just happenstance. Other times

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Speaker 4: it's just the process of where things are imported from

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Speaker 4: that can determine the cost of them. And oftentimes a

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Speaker 4: lot of women's clothing is one. It's more detailed, oftentimes

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Speaker 4: more hand crafted, and then it comes from countries in

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Speaker 4: which these tariffs are applied more onerously than some other

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Speaker 4: types of products. As a result, women pay as much

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Speaker 4: as two to five billion dollars a year more for

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Speaker 4: their clothing than men do because of these higher tariffs,

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Speaker 4: and that all gets baked into the price. And what's

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Speaker 4: really I think troubling about many of us that are

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Speaker 4: watching the presidential campaign right now is this talk about

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Speaker 4: applying a nationwide ten percent or twenty percent tarify on

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Speaker 4: all imported goods, because we know, one it's going to

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Speaker 4: raise the price of everything. It's going to raise the

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Speaker 4: price level because everything that will be imported will be

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Speaker 4: going up by ten or twenty percent. But what's interesting

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Speaker 4: is that oftentimes it's the domestic manufacturers that also raise

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Speaker 4: their price to match the price of the imported good

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Speaker 4: with the teriff on it. So ultimately consumers end up

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Speaker 4: pain much more for those things, both domestic and in

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Speaker 4: imported goods, because of the tariffs.

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Speaker 1: That's always been I feel, like Scott, the understood economic

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Speaker 1: reality is that tariffs act as attacks on all Americans.

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Speaker 3: Right indeed, indeed, yeah.

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Speaker 1: But then it's so fascinating that it's become this bipartisan

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Speaker 1: tariff fest essentially that both parties are behind increased tariffs.

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Speaker 1: Do you have any idea why that is? Do you

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Speaker 1: have any insight?

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Speaker 4: There is a sort of new form of protectionism or

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Speaker 4: populism that seems to be rearing up, and it seems

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Speaker 4: to happen in the United States periodically every couple generations.

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Speaker 4: We saw it during the early part of the nineteen hundreds.

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Speaker 4: We've seen it at other times, and it takes a

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Speaker 4: lot of us to stand up to that, because those

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Speaker 4: things begin to build momentum, and then you can get.

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Speaker 3: Bad policy as a result.

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Speaker 4: And of course, you know, we all know about the

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Speaker 4: tariffs during the nineteen twenties and thirties that brought down

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Speaker 4: the really in some cases caused.

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Speaker 3: The Great Depression.

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Speaker 4: A colleague mine just on earthed a interesting article from

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Speaker 4: the New York Times, I think it was in nineteen

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Speaker 4: in eighteen eighty six, talking about how the McKinley tariffs

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Speaker 4: were going to raise the price of all imported goods.

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Speaker 4: And so it's not like this is a new thing

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Speaker 4: that people understand how tariffs raise prices. It's always been understood,

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Speaker 4: but sometimes gets forgotten.

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Speaker 2: Well, earlier you mentioned taxes, for instance, on tobacco, So

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Speaker 2: let's talk.

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Speaker 1: About those in beer.

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Speaker 3: Which beer, that's what.

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Speaker 2: We've got a harder problem with that. But these syntaxes,

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Speaker 2: you know, they might direct our behavior in a certain way,

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Speaker 2: or maybe it's even a tax, like even on a

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Speaker 2: high corn beverage in a particular city.

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Speaker 1: But at the same time.

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Speaker 2: I can understand why there are certain incentives that are

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Speaker 2: out there to kind of society a certain way, because

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Speaker 2: it might be good for the overall societal health, maybe

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Speaker 2: even the cost of healthcare overall. But what's your take

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Speaker 2: on some of those different syntaxes that exists.

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Speaker 4: They've been used for literally centuries to try to discourage

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Speaker 4: sort of anti social behavior like drinking and so forth.

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Speaker 4: And there's a story that even Cleopatra had imposed a

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Speaker 4: tax on beer in order for some sort of you know,

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Speaker 4: temperance kind of movement. Unfortunately, it was actually really to

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Speaker 4: raise revenues for her war, and we've seen that throughout time,

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Speaker 4: and we had a little thing here in the United

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Speaker 4: States called the Whiskey Rebellion, which was also because you know,

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Speaker 4: the tax on whiskey was justified for temperance, but it

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Speaker 4: was really to fund or actually payback some of the

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Speaker 4: war bonds that we had created during the Revolutionary War.

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Speaker 4: So you kind of have to just disentangle the motivations

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Speaker 4: behind some of these things. But ultimately, what's really something

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Speaker 4: to pay attention to with these kinds of syntaxes is

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Speaker 4: how they are applied differently to different types of products

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Speaker 4: and the incentives that that can create for manufacturers to

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Speaker 4: kind of get around them, if you will. And you

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Speaker 4: mentioned it at the outset about hard seltzers.

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Speaker 3: Well, hard seltzers are taxed like.

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Speaker 4: Beer rather than some of the more alcoholic things like

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Speaker 4: the Johnny Walker lemonade or something like that, which is

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Speaker 4: taxed as a liquor, and those differentials can create the

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Speaker 4: opportunity for companies to step in create hard seltzers which

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Speaker 4: are taxed at a lower rate and can make them

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Speaker 4: a little bit more affordable for some folks, or at

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Speaker 4: least at a lower cost, and make them a little

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Speaker 4: bit more attractive. And it's interesting to see how companies

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Speaker 4: respond to changes in tax policy, because anytime there is

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Speaker 4: a differential between how certain things are taxed, you're going

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Speaker 4: to get companies to try to manipulate that. A great example,

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Speaker 4: and speaking of syntaxes, is the tax on candy, and

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Speaker 4: in many states the sales tax is applied to candy

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Speaker 4: but not on food. And so you have a Kurshey

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Speaker 4: bar which is taxed like candy, but a Twix bar

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Speaker 4: which has cake in the middle, is considered food and

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Speaker 4: therefore the sales tax is not applied to it.

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Speaker 1: I know what I'm handing out for Halloween now, Scott.

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Speaker 1: So that's right.

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Speaker 4: You get these crazy differentials, and you know, you can

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Speaker 4: just see the lobbyists going in, Well, you know, this

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Speaker 4: candy bar is much better for you because it has

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Speaker 4: flour in it, and therefore it should be treated like food.

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Speaker 1: Yeah, it's okay. So on that note, you talk about

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Speaker 1: different things being taxed differently, Banks and credit unions have

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Speaker 1: different kind of tag goodiness, tax statuses, right, tax preferred

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Speaker 1: status that credit unions enjoy. They're able to pass some

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Speaker 1: of those savings onto their customers at times, but the banks,

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Speaker 1: they don't love it, and credit unis are starting to

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Speaker 1: look a lot more like banks these days too, Right, credit.

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Speaker 4: Unions look a lot like banks now, except they get

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Speaker 4: the advantage of not paying taxes and excuse me, and

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Speaker 4: they're not profit as well, so they get really two

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Speaker 4: kinds of government subsidies as a result, which can make

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Speaker 4: them in some cases much more competitive, offering lower rates

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Speaker 4: on things like credit cards and loans and higher rates

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Speaker 4: on savings and so forth.

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Speaker 3: And then they get to accumulate these.

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Speaker 4: Tax free after tax, well tax free profits if you will.

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Speaker 4: And now we're seeing credit unions buy commercial banks or

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Speaker 4: community banks in order to expand their field of membership

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Speaker 4: or acquire certain types of business like business lending and

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Speaker 4: so forth. We're also seeing credit unions sponsor sports stadiums,

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Speaker 4: like here in Washington, d C. Where Northwest Federal Credit

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Speaker 4: Union is paid seven million dollars a year to sponsor

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Speaker 4: the Commander's Stadium. And you know, these are not just

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Speaker 4: little credit unions you kind of think about as being

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Speaker 4: your community lending association. These are big commercial institutions that

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Speaker 4: happen to have a basic tax subsidy that gives them

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Speaker 4: a leg up on their tax pain private sector compatriot competitors.

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Speaker 2: All right, And you write about in the book too

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Speaker 2: some of the negative outcomes of these different taxes as well,

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Speaker 2: and how it has an impact on design. I went

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Speaker 2: to school at the University of Georgia, Scott and I

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Speaker 2: remember walking getting my first tour and they point out

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Speaker 2: something that's real peculiar there on some of the buildings

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Speaker 2: that are in Old College, which is at the doorway

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Speaker 2: of the entries, are made up of one and a

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Speaker 2: half doors, and the legend goes that there is a

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Speaker 2: tax i was levied on the doors, and so Therefore

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Speaker 2: the architects were like, hey, there is some value engineering

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Speaker 2: that we can do here save the college some money.

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Speaker 2: And so there are these one and a half doors.

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Speaker 2: Is this an example of how taxes have swayed not

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Speaker 2: only the design but maybe even the functionality of those

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Speaker 2: buildings of architecture.

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Speaker 4: Oh yeah, there's a long history throughout really human history

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Speaker 4: of how taxes have impact our architecture. This interesting story

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Speaker 4: about the land taxes or the building taxes in France

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Speaker 4: during the Middle Ages, and properties were taxed or the

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Speaker 4: houses were taxed on the size.

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Speaker 3: Of the lot.

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Speaker 4: Well, what they would do is build the second story

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Speaker 4: with a cantilever so that the second story was bigger

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Speaker 4: than the first story, so that you actually got that

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Speaker 4: tax free space that you could avoid the lower the

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Speaker 4: higher tax. And the same thing goes in France. If

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Speaker 4: you go to Paris and you see the Mansard roofs,

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Speaker 4: although those were designed to avoid a tax on the

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Speaker 4: first couple floors of a building, and so they created

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Speaker 4: these setback addicts, if you will, that became tax free

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Speaker 4: rooms because it was above where the end of the.

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Speaker 3: Of the tax line was.

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Speaker 4: And you see this, you know, all over the place

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Speaker 4: now There are a lot of stories, however, about how

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Speaker 4: taxes impacted, say the Shotgun Shacks and the South or

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Speaker 4: in what is it to North Carolina? South Carolina where

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Speaker 4: you have some of these homes with the porches on

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Speaker 4: the side, and actually those were more for design purposes

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Speaker 4: and weather purposes.

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Speaker 3: Than tax policy.

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Speaker 4: But it gives you an idea of how people kind

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Speaker 4: of see this and understand that even when it comes

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Speaker 4: to architecture, people will design things in a way to

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Speaker 4: avoid that higher tax.

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Speaker 1: Yeah. I had an old neighbor who had rebuilt his

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Speaker 1: house lived next door to me, and he refused to

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Speaker 1: finish out the upper section of the home until he

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Speaker 1: knew it because it was if it was, it was finished.

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Speaker 1: I think he had the money to be able to

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Speaker 1: finish the upper It was just to avoid taxation on

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Speaker 1: more habitable square footage. And so that's another case in

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Speaker 1: which tax policy see influences the liveability of your home.

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Speaker 3: Yeah.

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Speaker 4: And if you go to places in I'll say Greece

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Speaker 4: or Egypt or so forth, you'll see a lot of

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Speaker 4: unfinished buildings and it's because of that where there their

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Speaker 4: tax at a lower rate for being unfinished than finished.

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Speaker 2: Yeah, amazing, cool, all right, Well, we've talked through some

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Speaker 2: specific examples from history of how tax policy has impacted

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Speaker 2: how it is that we live, Scott, but we've got

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Speaker 2: more deigits that we're going to talk about how taxes

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Speaker 2: impacts our day to day spending and some wide ranging

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Speaker 2: sectors of our life.

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Speaker 1: Will get to that and more. Right after this we're

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Speaker 1: back from the break. We're still talking with Scott Hodge.

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Speaker 1: We're talking about taxes, how they're kind of the water

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Speaker 1: that we swim in so many ways and tax Scott.

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Speaker 1: There's this old saying, then when you tax something, you

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Speaker 1: get less of it, and so talk to us about that.

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Speaker 1: I mean, that seems like an eternal truism. And so

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Speaker 1: what's the impact that essentially some of these tax policy

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Speaker 1: these have on the ability of markets to function efficiently?

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Speaker 3: Yeah, you know, it's.

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Speaker 4: Kind of interesting. Politicians kind of intuitively understand that when

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Speaker 4: you tax something, you get less of it. You know,

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Speaker 4: That's why they invented syntaxes. They wanted us to drink

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Speaker 4: less or smoke less or.

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Speaker 3: What have you.

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Speaker 4: But they don't seem to understand that the same incentives

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Speaker 4: apply when it comes to things like, oh, say, work

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Speaker 4: and investment and savings, and that creates a real problem

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Speaker 4: for the economy because the more that we tax things

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Speaker 4: like work, savings and investment, the less economic growth we get.

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Speaker 4: And we see this throughout history with things like wealth taxes.

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Speaker 4: For instance, Norway is a great example recently. It's one

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Speaker 4: of the last remaining countries that has a true wealth tax,

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Speaker 4: and they raise that tax rate back in twenty twenty

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Speaker 4: two and saw an exodus of millionaires and billionaires fleeing

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Speaker 4: the country and going to places like Switzerland and where

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Speaker 4: and other low tax trees to avoid that tax. And

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Speaker 4: it had a devastating impact on their public finances, as

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Speaker 4: you could imagine, but also on their economy because the

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Speaker 4: rich people not only took their taxes with them, but

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Speaker 4: they took their investments with them as well. And so

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Speaker 4: we see this with other things, whether it's capital gains.

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Speaker 4: There's a lot of talk now among the presidential candidates

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Speaker 4: about taxing capital gains, either unrealized capital gains or realized

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Speaker 4: capital gains.

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Speaker 3: And what we've seen in the past.

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Speaker 4: That every time the rate goes up on capital gains,

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Speaker 4: realizations go down and revenues go down. They're very, very

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Speaker 4: sensitive to high tax rates, but wages and income is

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Speaker 4: also very sensitive to high taxes. In fact, the OECD,

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Speaker 4: the Organization for Economic Cooperation Development in Paris, economists there

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Speaker 4: a couple of years ago, came up with a ranking,

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Speaker 4: if you will, of tax harm They found that the

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Speaker 4: corporate income tax is the most harmful tax for economic

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Speaker 4: growth because capital is the most sensitive tax sensitive factor

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Speaker 4: in the economy to high tax rates. Income they found

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Speaker 4: was second most harmful taxes, because hey, we can decide

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Speaker 4: not to work if taxes get too high, or we

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Speaker 4: can simply move somewhere else to find a lower tax

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Speaker 4: place to live. And so we have to be very

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Speaker 4: cognitive of the sensitivity of the things that we tax,

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Speaker 4: because harmful things will come of it.

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Speaker 1: And did we see something similar You're talking about Norway,

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Speaker 1: but we saw something pretty similar in this country too,

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Speaker 1: with the cap on deductions for salt and how people

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Speaker 1: leaving states like New York moving to Florida and taking

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Speaker 1: their money, their investment dollars, and sometimes their businesses with them.

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Speaker 4: Yeah, oh yes, indeed, And you know, the salt deduction

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Speaker 4: was a way for high tax states to simply transfer

441
00:23:55,600 --> 00:23:58,880
Speaker 4: or shift some of that economic burden of their state

442
00:23:58,960 --> 00:24:03,679
Speaker 4: and local taxes to Uncle Sam and essentially socializing, if

443
00:24:03,720 --> 00:24:08,280
Speaker 4: you will, the cost of their high taxes. And it

444
00:24:08,320 --> 00:24:10,960
Speaker 4: gave high income people a big benefit to live in

445
00:24:10,960 --> 00:24:13,160
Speaker 4: these high tax places because they knew that they could

446
00:24:13,200 --> 00:24:16,320
Speaker 4: write off a lot of that tax to Uncle Sam. Well,

447
00:24:16,359 --> 00:24:18,800
Speaker 4: you can't do that anymore, at least only up to

448
00:24:18,880 --> 00:24:22,760
Speaker 4: ten thousand dollars. And that's made states much more cognizant

449
00:24:22,800 --> 00:24:27,600
Speaker 4: of how they compete or compare to their neighbors. And

450
00:24:28,240 --> 00:24:32,280
Speaker 4: it's also made residents much more sensitive to these high

451
00:24:32,280 --> 00:24:35,560
Speaker 4: tax states, and you've seen a lot of migration as

452
00:24:35,600 --> 00:24:39,840
Speaker 4: a result. Texas, Florida elsewhere have benefited greatly because of

453
00:24:39,880 --> 00:24:42,040
Speaker 4: that lowering of the salt deduction.

454
00:24:42,880 --> 00:24:46,720
Speaker 2: Speaking of income and policy changes that impact everyone, the

455
00:24:46,800 --> 00:24:49,520
Speaker 2: Tax Cuts and Jobs Act that was a major one.

456
00:24:49,680 --> 00:24:54,520
Speaker 2: How have you seen that law exert influence on individuals.

457
00:24:53,920 --> 00:24:55,400
Speaker 1: As well as businesses out there?

458
00:24:55,520 --> 00:24:58,639
Speaker 4: The Tax Cuts and Jobs Act was a big change. Obviously,

459
00:24:58,680 --> 00:25:01,840
Speaker 4: it was the biggest change in tax policy since nineteen

460
00:25:01,880 --> 00:25:05,639
Speaker 4: eighty seven, and so it lowered individual tax rates across

461
00:25:05,680 --> 00:25:10,040
Speaker 4: the board. It changed some things like the personal exemptions

462
00:25:10,080 --> 00:25:14,440
Speaker 4: were eliminated, but they increased or doubled the child tax credit,

463
00:25:14,480 --> 00:25:17,520
Speaker 4: from one thousand to two thousand dollars, so families with

464
00:25:17,600 --> 00:25:20,120
Speaker 4: kids got a big tax cut for that.

465
00:25:20,880 --> 00:25:22,280
Speaker 3: There was some of.

466
00:25:22,240 --> 00:25:24,600
Speaker 4: The biggest changes were on the business side of the

467
00:25:25,200 --> 00:25:29,679
Speaker 4: tax ledger. The corporate rate was reduced from a globally

468
00:25:29,760 --> 00:25:33,200
Speaker 4: high thirty five percent to a much more competitive rate

469
00:25:33,240 --> 00:25:35,880
Speaker 4: of twenty one percent. They made a lot of changes

470
00:25:35,920 --> 00:25:39,000
Speaker 4: in the corporate structure of the corporate tax system to

471
00:25:39,080 --> 00:25:41,879
Speaker 4: make it more advantageous to invest here in the United

472
00:25:41,920 --> 00:25:44,160
Speaker 4: States and not park your money abroad.

473
00:25:44,480 --> 00:25:45,400
Speaker 3: That was a good thing.

474
00:25:46,200 --> 00:25:50,920
Speaker 4: They allowed companies to write off their capital investments in

475
00:25:50,960 --> 00:25:53,440
Speaker 4: the year that they made them, rather than having to

476
00:25:53,480 --> 00:25:57,080
Speaker 4: depreciate or admortise those costs over many years, and that

477
00:25:57,119 --> 00:26:00,800
Speaker 4: made the cost actually drove down the cost of investment,

478
00:26:01,080 --> 00:26:04,000
Speaker 4: which made companies a lot more productive, made their employees

479
00:26:04,040 --> 00:26:07,880
Speaker 4: more productive. And then we saw some changes for past

480
00:26:07,960 --> 00:26:12,280
Speaker 4: their businesses like LLCs, s, corps, and sole proprietors, where

481
00:26:12,320 --> 00:26:15,800
Speaker 4: they were given a special twenty percent deduction for certain

482
00:26:15,840 --> 00:26:20,320
Speaker 4: types of business income, which kind of brought down the

483
00:26:21,480 --> 00:26:26,080
Speaker 4: difference between how these individually owned businesses or tax and

484
00:26:26,119 --> 00:26:30,399
Speaker 4: the way publicly traded corporations or tax. And so there

485
00:26:30,400 --> 00:26:32,520
Speaker 4: are a lot of big changes in the tax code.

486
00:26:32,560 --> 00:26:38,120
Speaker 4: As a result, Unfortunately, because of some rather obscure, arcane

487
00:26:38,160 --> 00:26:41,200
Speaker 4: budget rules, a lot of the Tax Custom Jobs Act

488
00:26:41,240 --> 00:26:43,719
Speaker 4: will expire at the end of next year. All the

489
00:26:43,720 --> 00:26:47,440
Speaker 4: individual provisions will expire, and the only thing that won't

490
00:26:47,440 --> 00:26:49,720
Speaker 4: expire is the twenty one percent corporate tax rate.

491
00:26:50,000 --> 00:26:51,080
Speaker 3: So next year is.

492
00:26:51,040 --> 00:26:55,560
Speaker 4: Going to be a monumental year in tax policy. Is

493
00:26:55,600 --> 00:26:57,960
Speaker 4: Congress is going to have to debate how do we

494
00:26:58,320 --> 00:27:01,480
Speaker 4: extend these tax cuts? Do we extend these do we

495
00:27:01,680 --> 00:27:03,920
Speaker 4: extend only some of them but not all of them?

496
00:27:04,640 --> 00:27:07,719
Speaker 4: Big big choices ahead of us, And I wish that

497
00:27:07,760 --> 00:27:10,480
Speaker 4: the presidential candidates would be a little bit more explicit

498
00:27:10,480 --> 00:27:12,640
Speaker 4: about how they're going to deal with it, because it's

499
00:27:12,680 --> 00:27:13,800
Speaker 4: going to impact all of us.

500
00:27:13,880 --> 00:27:17,040
Speaker 1: Yeah, it's amazing how that that issue just has almost

501
00:27:17,440 --> 00:27:20,399
Speaker 1: been completely swept under the rug when it is this

502
00:27:20,560 --> 00:27:25,840
Speaker 1: looming and uncertainty impacts how people start businesses, invest in businesses,

503
00:27:26,200 --> 00:27:29,359
Speaker 1: the way that they plan for the future, and the

504
00:27:29,480 --> 00:27:31,800
Speaker 1: unknowability of what's going to happen with this, I think

505
00:27:31,880 --> 00:27:33,479
Speaker 1: is going to impact how people invest too.

506
00:27:33,480 --> 00:27:37,680
Speaker 2: Nobody seems concerned with fiscal responsibility in Washington, and actually

507
00:27:37,760 --> 00:27:39,320
Speaker 2: Scott like, what do you think about that, right, I

508
00:27:39,320 --> 00:27:43,120
Speaker 2: mean the fact that neither party seems at all concerned

509
00:27:43,119 --> 00:27:44,200
Speaker 2: about government spending.

510
00:27:44,520 --> 00:27:48,200
Speaker 4: Yeah, there's an economic principle or theory but called tragedy

511
00:27:48,320 --> 00:27:51,639
Speaker 4: the commons, and that is, if there's no ownership over something,

512
00:27:51,960 --> 00:27:57,159
Speaker 4: then everybody will just use it up and deplete something

513
00:27:57,240 --> 00:27:59,240
Speaker 4: like you know, natural resources or something.

514
00:27:59,240 --> 00:28:01,880
Speaker 3: Well, the fact or budgets of tragedy of the commons.

515
00:28:02,119 --> 00:28:05,480
Speaker 4: Everybody in Washington is responsible for spending our tax dollars,

516
00:28:05,640 --> 00:28:08,520
Speaker 4: but no one is responsible for how it's spent or

517
00:28:08,560 --> 00:28:12,320
Speaker 4: how little it's spent. And there's no benefit or seemingly

518
00:28:12,359 --> 00:28:16,119
Speaker 4: politically for not spending our tax dollars or spending it

519
00:28:16,160 --> 00:28:19,040
Speaker 4: more wisely. And until we can change some of these

520
00:28:19,040 --> 00:28:24,440
Speaker 4: incentives to try to get members of Congress and people

521
00:28:24,440 --> 00:28:27,640
Speaker 4: in the bureaucracy for that matter, to be more responsible

522
00:28:27,640 --> 00:28:30,480
Speaker 4: with our tax dollars, we're going to keep having these

523
00:28:30,520 --> 00:28:35,120
Speaker 4: cycles of higher deficits and higher national debt, and at

524
00:28:35,200 --> 00:28:38,479
Speaker 4: some point we're going to reach that tipping point and

525
00:28:39,600 --> 00:28:43,440
Speaker 4: it's going to have serious economic consequences and I think

526
00:28:43,480 --> 00:28:47,600
Speaker 4: it's really troubling. We need a national conversation for getting

527
00:28:47,600 --> 00:28:49,160
Speaker 4: the debt and the deficit down.

528
00:28:49,480 --> 00:28:50,560
Speaker 1: Yeah, Mum's the word on that.

529
00:28:50,680 --> 00:28:53,920
Speaker 2: Everyone's interested in spending, nobody's interested in tending. Scott, you

530
00:28:53,920 --> 00:28:56,959
Speaker 2: can use that with Matt likes rhyming phrases.

531
00:28:58,200 --> 00:29:01,800
Speaker 1: You're a consulting. That's a good one, buddy, you spend

532
00:29:01,800 --> 00:29:04,239
Speaker 1: a whole chapter. Let's talk about kind of on an

533
00:29:04,240 --> 00:29:09,160
Speaker 1: individual level, people waste a lot of time complying with

534
00:29:09,320 --> 00:29:13,080
Speaker 1: different tax rules and regulations. I'm glad Matt Hadle's that

535
00:29:13,200 --> 00:29:14,959
Speaker 1: for our business. I hate that side of things, Like

536
00:29:15,160 --> 00:29:17,960
Speaker 1: I'm not super detail oriented. How big of a problem

537
00:29:18,040 --> 00:29:21,440
Speaker 1: is that, because it certainly feels like every April I'm

538
00:29:21,440 --> 00:29:23,440
Speaker 1: sweating bullets. I think most of the people around me are.

539
00:29:23,480 --> 00:29:26,560
Speaker 1: Even if I don't, you have to hire somebody, pay

540
00:29:26,560 --> 00:29:29,400
Speaker 1: that person money, oftentimes to make sure that you're complying

541
00:29:29,400 --> 00:29:31,120
Speaker 1: with the tax code. There's a lot of money in

542
00:29:31,160 --> 00:29:32,120
Speaker 1: time tied up in that too.

543
00:29:32,440 --> 00:29:34,880
Speaker 4: Yeah, raise your hand if you do your taxes on

544
00:29:34,920 --> 00:29:37,480
Speaker 4: your own with a pencil.

545
00:29:37,960 --> 00:29:40,080
Speaker 1: My dad used to. But that was like probably twenty

546
00:29:40,160 --> 00:29:40,760
Speaker 1: years ago.

547
00:29:40,720 --> 00:29:44,000
Speaker 3: In a simpler time. But it's no longer like that.

548
00:29:44,520 --> 00:29:48,400
Speaker 4: Sadly, tax complexity is at its high point, and the

549
00:29:48,480 --> 00:29:52,400
Speaker 4: cost of complying with our tax code is at a

550
00:29:52,440 --> 00:29:54,840
Speaker 4: high point. I just did a study recently looking at

551
00:29:55,120 --> 00:29:59,280
Speaker 4: trying to measure the total cost between the time, the

552
00:30:00,320 --> 00:30:04,160
Speaker 4: eight billion hours that we put into complying with the

553
00:30:04,200 --> 00:30:06,880
Speaker 4: tax code, and then the out of pocket costs. And

554
00:30:06,920 --> 00:30:09,400
Speaker 4: when you add up the value of our time with

555
00:30:09,480 --> 00:30:12,800
Speaker 4: those out of hocket costs, we're looking at about five

556
00:30:12,880 --> 00:30:16,320
Speaker 4: hundred and thirty six billion dollars a year worth of

557
00:30:16,400 --> 00:30:20,200
Speaker 4: our economy that essentially goes into complying with the tax code.

558
00:30:20,280 --> 00:30:20,440
Speaker 3: Yeah.

559
00:30:20,480 --> 00:30:22,760
Speaker 1: Think about how much more money Netflix would have if

560
00:30:22,800 --> 00:30:24,880
Speaker 1: we spend all that time watching shows on their platform,

561
00:30:24,920 --> 00:30:25,160
Speaker 1: you know.

562
00:30:25,320 --> 00:30:27,360
Speaker 3: Or how much money I can have for my BMW

563
00:30:27,520 --> 00:30:28,160
Speaker 3: right exactly.

564
00:30:28,960 --> 00:30:32,720
Speaker 4: Yeah, And that doesn't even count the cost to the

565
00:30:32,760 --> 00:30:37,360
Speaker 4: irs or the tax courts or all the other things

566
00:30:37,400 --> 00:30:39,560
Speaker 4: that go into complying with the tax code.

567
00:30:39,960 --> 00:30:41,240
Speaker 3: So it's a huge.

568
00:30:41,000 --> 00:30:44,560
Speaker 4: Drain on both our time and our money. But also

569
00:30:44,600 --> 00:30:48,240
Speaker 4: there's the stress. I mean, the fact that people with

570
00:30:48,840 --> 00:30:52,400
Speaker 4: the simplest tax forms will pay someone else to do

571
00:30:52,440 --> 00:30:56,560
Speaker 4: their their forms is a testament to how people feel

572
00:30:57,000 --> 00:31:00,680
Speaker 4: fear making a mistake and the consequence is that we'll

573
00:31:00,720 --> 00:31:03,080
Speaker 4: have and I think that's a big part of it too,

574
00:31:03,200 --> 00:31:05,840
Speaker 4: is that when you have something that's so complicated, you

575
00:31:05,920 --> 00:31:11,160
Speaker 4: generate fear among people, and then that leads to economic

576
00:31:11,200 --> 00:31:11,920
Speaker 4: harm as well.

577
00:31:12,680 --> 00:31:15,320
Speaker 2: So, Scott, I've gathered that you're not a fan of

578
00:31:15,360 --> 00:31:17,680
Speaker 2: the child tax credits. I don't think it's that you.

579
00:31:18,200 --> 00:31:20,080
Speaker 2: I don't think it's that you hate children or anything

580
00:31:20,120 --> 00:31:22,560
Speaker 2: like that. But why are you not a fan of

581
00:31:22,600 --> 00:31:23,600
Speaker 2: that policy?

582
00:31:23,920 --> 00:31:27,320
Speaker 4: And I am an empty nester now so my son

583
00:31:27,440 --> 00:31:32,400
Speaker 4: is now thirty, But well, I was actually a part

584
00:31:32,400 --> 00:31:35,920
Speaker 4: of a group that was one of the initial advocates

585
00:31:35,920 --> 00:31:38,640
Speaker 4: of the child tax credit. We thought it would help

586
00:31:39,440 --> 00:31:42,320
Speaker 4: families with children, give them a little bit more cash

587
00:31:42,360 --> 00:31:45,000
Speaker 4: flow so they can handle some of the expenses. But

588
00:31:45,040 --> 00:31:48,360
Speaker 4: it's turned out what's happened now is that the child

589
00:31:48,400 --> 00:31:51,240
Speaker 4: credit went from five hundred dollars per child and it's

590
00:31:51,280 --> 00:31:54,480
Speaker 4: now two thousand dollars per child. And it's gotten even

591
00:31:54,480 --> 00:31:56,880
Speaker 4: more generous because if you don't pay taxes, you can

592
00:31:56,920 --> 00:31:59,560
Speaker 4: still get the tax credit in this what we call

593
00:31:59,680 --> 00:32:03,240
Speaker 4: refine tax credit. And so what we've seen is that

594
00:32:03,360 --> 00:32:07,080
Speaker 4: now about one third of all Americans pay no income

595
00:32:07,160 --> 00:32:10,600
Speaker 4: taxes because of the generosity of things like the child

596
00:32:10,680 --> 00:32:14,400
Speaker 4: tax credit, and many of these people are getting checks

597
00:32:14,440 --> 00:32:17,760
Speaker 4: back because of the refundable nature of these tax credits,

598
00:32:17,800 --> 00:32:21,000
Speaker 4: so they're looking at April fifteenth as payday and not

599
00:32:21,200 --> 00:32:24,480
Speaker 4: tax day, and so I think it's caused a lot

600
00:32:24,520 --> 00:32:27,000
Speaker 4: of problems from that standpoint. There's also a lot of

601
00:32:27,040 --> 00:32:31,680
Speaker 4: fraud and abuse and right confusion sometimes with the child

602
00:32:31,720 --> 00:32:36,240
Speaker 4: tax credit, so it's one of the more troublesome credits

603
00:32:36,280 --> 00:32:39,720
Speaker 4: for the IRS to administer. That and the Earned Income

604
00:32:39,800 --> 00:32:42,440
Speaker 4: Tax Credit, which is meant for the working poort have

605
00:32:42,600 --> 00:32:46,320
Speaker 4: some of the highest error in fraud rates of any

606
00:32:46,360 --> 00:32:49,520
Speaker 4: of the tax credits, and so even the IRS IS

607
00:32:49,560 --> 00:32:52,720
Speaker 4: have a difficult time try to administer this, let alone

608
00:32:52,720 --> 00:32:55,680
Speaker 4: people trying to actually comply with it or take advantage

609
00:32:55,680 --> 00:32:58,760
Speaker 4: of it when they file their tax returns.

610
00:32:58,920 --> 00:33:01,560
Speaker 1: By the way, I think what it's doing, I'm going

611
00:33:01,640 --> 00:33:03,080
Speaker 1: to go have a few more kids just to get

612
00:33:03,080 --> 00:33:05,080
Speaker 1: the extra tax credit. Scott. That's just wes one way

613
00:33:05,120 --> 00:33:07,680
Speaker 1: to approach it, which makes me think that and this

614
00:33:07,800 --> 00:33:10,440
Speaker 1: might sound a little exploitative or something like this, but

615
00:33:10,520 --> 00:33:13,120
Speaker 1: everyone does this right because, like you're saying, the tax

616
00:33:13,160 --> 00:33:16,280
Speaker 1: code is influencing our actions, how we invest, how we save,

617
00:33:16,640 --> 00:33:18,960
Speaker 1: how know where we even spend our money, how we

618
00:33:18,960 --> 00:33:21,840
Speaker 1: spend our money, How can we take advantage of a

619
00:33:21,880 --> 00:33:25,360
Speaker 1: tax code that is somewhat skewed. And just because the

620
00:33:25,440 --> 00:33:27,840
Speaker 1: tax code maybe isn't ideal, it's not how we would

621
00:33:27,920 --> 00:33:29,800
Speaker 1: draw it up from scratch, it doesn't mean that we

622
00:33:29,800 --> 00:33:32,520
Speaker 1: shouldn't be using the tax code to our advantage.

623
00:33:32,560 --> 00:33:34,000
Speaker 3: Right, we have to.

624
00:33:33,960 --> 00:33:38,120
Speaker 4: Be really careful about how we approach using the tax code,

625
00:33:39,280 --> 00:33:45,520
Speaker 4: either for economic reasons like trying to incentivize manufacturing or

626
00:33:47,280 --> 00:33:49,600
Speaker 4: R and D or those kind of things, or for

627
00:33:49,720 --> 00:33:53,760
Speaker 4: social purposes like trying to encourage adoption, trying to encourage

628
00:33:53,760 --> 00:33:57,440
Speaker 4: people to have children, et cetera. All of these things

629
00:33:57,480 --> 00:34:01,560
Speaker 4: come with unintended consequences, and I've try to outline those

630
00:34:01,640 --> 00:34:06,720
Speaker 4: unintended consequences in taxocracy to give people an understanding that, look,

631
00:34:06,800 --> 00:34:11,799
Speaker 4: even the most well intentioned tax policies can have harmful

632
00:34:12,880 --> 00:34:16,480
Speaker 4: outcomes or consequences. We have to be mindful of that,

633
00:34:16,760 --> 00:34:19,760
Speaker 4: and we have to try to minimize those things because

634
00:34:22,800 --> 00:34:26,439
Speaker 4: of both the economic but also sometimes the social harm

635
00:34:26,480 --> 00:34:27,479
Speaker 4: that could come from them.

636
00:34:28,440 --> 00:34:30,279
Speaker 1: On a specific note of though, on that front, I

637
00:34:30,280 --> 00:34:32,360
Speaker 1: guess like, for instance, when we're talking about investing, you

638
00:34:32,960 --> 00:34:35,120
Speaker 1: put money in a traditional IRA right now, you get

639
00:34:35,120 --> 00:34:36,880
Speaker 1: a tax break, you put it in the wroth you

640
00:34:36,920 --> 00:34:40,120
Speaker 1: pay tax and then you don't pay tax while you

641
00:34:40,160 --> 00:34:42,320
Speaker 1: take money out further down the road. How do you

642
00:34:42,360 --> 00:34:45,319
Speaker 1: think of those sorts of things that are baked into

643
00:34:45,320 --> 00:34:49,040
Speaker 1: the tax code? How should we perceive those? And yeah,

644
00:34:49,080 --> 00:34:51,600
Speaker 1: I guess some people sometimes complain about the way the

645
00:34:51,600 --> 00:34:54,600
Speaker 1: tax code is structured, but nobody is necessarily out there

646
00:34:54,600 --> 00:34:56,200
Speaker 1: forgoing the benefits that are due to them.

647
00:34:56,480 --> 00:35:01,880
Speaker 4: Well, a good tax code should not do a couple

648
00:35:01,880 --> 00:35:07,879
Speaker 4: of things. It should not tax our piggybanks, our savings,

649
00:35:08,560 --> 00:35:10,479
Speaker 4: or the investments that we make with.

650
00:35:10,520 --> 00:35:14,800
Speaker 3: After tax dollars. So first and fo foremost.

651
00:35:14,520 --> 00:35:19,000
Speaker 4: It should do no harm to our ability to retain

652
00:35:19,640 --> 00:35:20,680
Speaker 4: income so that.

653
00:35:20,600 --> 00:35:23,080
Speaker 3: We can do more with it in the future.

654
00:35:23,800 --> 00:35:26,600
Speaker 4: And it also in the same thing applies to companies,

655
00:35:26,640 --> 00:35:30,160
Speaker 4: and so companies should be taxed on their cash flow

656
00:35:30,680 --> 00:35:35,520
Speaker 4: rather than having to advertize or depreciate their capital expenses

657
00:35:35,520 --> 00:35:40,880
Speaker 4: over many years, which essentially erods the long term value

658
00:35:40,880 --> 00:35:45,000
Speaker 4: of those deductions and makes capital investments more expensive. And

659
00:35:45,040 --> 00:35:47,640
Speaker 4: so those two things alone move is toward what we

660
00:35:47,719 --> 00:35:53,600
Speaker 4: call a cash flow tax or a consumption based tax,

661
00:35:54,080 --> 00:35:56,960
Speaker 4: and that way we're essentially taxing our consumption, but we're

662
00:35:57,000 --> 00:36:03,400
Speaker 4: not taxing our true income, our investments or the capital

663
00:36:03,440 --> 00:36:06,000
Speaker 4: investments that we make for the long term.

664
00:36:06,280 --> 00:36:08,759
Speaker 2: All right, well, you brought up consumption based tax and

665
00:36:08,800 --> 00:36:11,759
Speaker 2: possibly some other models for us to pursue. We'll get

666
00:36:11,760 --> 00:36:13,879
Speaker 2: to that and more Scott right after this break.

667
00:36:22,080 --> 00:36:24,279
Speaker 1: Right, we're back. We're still talking with Scott Hodge. We're

668
00:36:24,280 --> 00:36:28,080
Speaker 1: talking about everybody's the favorite subject, the most fascinating subject

669
00:36:28,120 --> 00:36:31,239
Speaker 1: on Earth, taxes And actually, Scott, reading your book, it

670
00:36:31,520 --> 00:36:33,920
Speaker 1: made taxes way more fascinating than I thought, Like, it

671
00:36:34,040 --> 00:36:37,719
Speaker 1: seems like this super boring subject, and then you look

672
00:36:37,719 --> 00:36:39,799
Speaker 1: into these details and you're like, there's a lot of

673
00:36:39,800 --> 00:36:42,360
Speaker 1: fascinating stuff behind the curtain, Wizard of Ostin. Then you

674
00:36:42,440 --> 00:36:43,600
Speaker 1: realize it's just all around us.

675
00:36:43,680 --> 00:36:46,080
Speaker 2: Yeah, it's like discovering the law of gravity or something,

676
00:36:46,120 --> 00:36:48,279
Speaker 2: and be like, oh, yeah, okay, that actually impacts like

677
00:36:48,360 --> 00:36:50,759
Speaker 2: literally everything I touched and interact with on a daily base.

678
00:36:50,760 --> 00:36:52,239
Speaker 1: When I'm riding my bike, the acorn hits me in

679
00:36:52,280 --> 00:36:54,440
Speaker 1: the leg and I'm like, that's gravity at work. Right,

680
00:36:55,320 --> 00:36:58,360
Speaker 1: Let's talk about some solutions. And it feels like, I

681
00:36:58,400 --> 00:37:01,600
Speaker 1: guess sometimes in this hyper politicized environments, I don't know,

682
00:37:01,640 --> 00:37:05,800
Speaker 1: is that even possible to achieve solutions? That are mutually beneficial. Although,

683
00:37:05,920 --> 00:37:08,479
Speaker 1: like you said, that substantial piece of legislation that tax

684
00:37:08,520 --> 00:37:12,960
Speaker 1: cuts and jobbacked happened recently under the last administration. But

685
00:37:13,080 --> 00:37:15,879
Speaker 1: in your estimation, is this something that the tax code

686
00:37:15,920 --> 00:37:18,400
Speaker 1: feels so complex? Do we need to burn it all

687
00:37:18,440 --> 00:37:20,840
Speaker 1: down and start over or can we kind of redeem

688
00:37:21,280 --> 00:37:24,520
Speaker 1: and work within the measures of what currently exists.

689
00:37:25,120 --> 00:37:30,080
Speaker 4: Yeah, you know, fifty years ago then Treasury Secretary William

690
00:37:30,120 --> 00:37:33,160
Speaker 4: Simon said, you know, Americans deserve a tax code that

691
00:37:33,239 --> 00:37:36,840
Speaker 4: looks like somebody designed it on purpose, And we don't

692
00:37:36,840 --> 00:37:39,000
Speaker 4: have a tax code that looks like anybody designed it

693
00:37:39,040 --> 00:37:41,920
Speaker 4: on purpose, And we do need to start over at

694
00:37:41,920 --> 00:37:42,520
Speaker 4: some point.

695
00:37:42,719 --> 00:37:45,560
Speaker 3: However, there are steps that we can take to get.

696
00:37:45,440 --> 00:37:48,080
Speaker 4: Us in that direction, and as I mentioned, trying to

697
00:37:48,160 --> 00:37:53,880
Speaker 4: increase our ability to save and invest without multiple layers

698
00:37:53,880 --> 00:37:56,239
Speaker 4: of taxation would be a good start toward moving us

699
00:37:56,320 --> 00:38:00,319
Speaker 4: toward what we economists consider a consumption tax base. Way,

700
00:38:00,640 --> 00:38:05,040
Speaker 4: we're taxed on on what we consume, but not what

701
00:38:05,080 --> 00:38:08,440
Speaker 4: we earn or the income that we have, and that

702
00:38:08,480 --> 00:38:11,839
Speaker 4: makes a big difference in terms of economic output incentives

703
00:38:11,840 --> 00:38:15,759
Speaker 4: and everything else, and gets rid of the disincentives for

704
00:38:15,920 --> 00:38:21,000
Speaker 4: things like entrepreneurship, investment, saving for the long term. You know,

705
00:38:21,040 --> 00:38:24,600
Speaker 4: it's that that iconic piggy piggy bank that we try

706
00:38:24,640 --> 00:38:27,440
Speaker 4: to teach our kids, you know, to save their their

707
00:38:28,160 --> 00:38:32,880
Speaker 4: their lemonade money for the future. That makes a difference,

708
00:38:32,920 --> 00:38:36,800
Speaker 4: and we want to remove those political influences on those

709
00:38:36,840 --> 00:38:39,200
Speaker 4: types of things so that we can have a better

710
00:38:39,239 --> 00:38:40,360
Speaker 4: economy as a result.

711
00:38:41,280 --> 00:38:43,560
Speaker 2: Well, and as you mentioned, a tax model that's more

712
00:38:43,560 --> 00:38:46,640
Speaker 2: consumption based and much simpler. In the book, you talk

713
00:38:46,680 --> 00:38:50,400
Speaker 2: about models that we can even gather from other countries,

714
00:38:50,760 --> 00:38:53,800
Speaker 2: and this one totally caught me off guard. But Estonia,

715
00:38:54,400 --> 00:38:57,400
Speaker 2: can you explain their model and why it seems to

716
00:38:57,400 --> 00:38:58,160
Speaker 2: work so well for them?

717
00:38:58,760 --> 00:39:02,000
Speaker 4: Yeah, the Estonian model, it's actually a variant of the

718
00:39:02,000 --> 00:39:05,000
Speaker 4: flat tax. I think some of us who are old

719
00:39:05,080 --> 00:39:07,560
Speaker 4: enough may remember that the flat tax was very popular

720
00:39:07,600 --> 00:39:10,560
Speaker 4: for a while. It was popularized by people like Steve

721
00:39:10,640 --> 00:39:13,640
Speaker 4: Forbes and Dick Army and some others, and what they

722
00:39:13,640 --> 00:39:16,000
Speaker 4: were trying to do is flatten the tax base, get

723
00:39:16,080 --> 00:39:19,960
Speaker 4: rid of as many credits, deductions and distortions as possible,

724
00:39:19,960 --> 00:39:22,560
Speaker 4: but also the lower the rate so that it would

725
00:39:22,600 --> 00:39:25,920
Speaker 4: apply equally to everybody, and that way you have a better.

726
00:39:25,760 --> 00:39:26,560
Speaker 3: Sense of fairness.

727
00:39:26,600 --> 00:39:30,080
Speaker 4: Well, the Estonians took this concept of a flat tax

728
00:39:30,120 --> 00:39:33,160
Speaker 4: and made some changes to it which made it a

729
00:39:33,280 --> 00:39:37,480
Speaker 4: tremendously simple. In fact, their tax coat is only eighty

730
00:39:37,520 --> 00:39:41,400
Speaker 4: pages long. Wow, come on, the introduction to our tax

731
00:39:41,440 --> 00:39:43,080
Speaker 4: coat is eighty pages long.

732
00:39:45,360 --> 00:39:49,160
Speaker 3: But it's rivet so anyway, it's very simple.

733
00:39:49,960 --> 00:39:54,359
Speaker 4: It allows companies to retain earnings their profits as long

734
00:39:54,400 --> 00:39:57,480
Speaker 4: as they want reinvested into the company. They only pay

735
00:39:57,520 --> 00:40:00,839
Speaker 4: the corporate income tax of twenty percent when they distribute

736
00:40:00,840 --> 00:40:05,160
Speaker 4: those profits to their shareholders or their owners, and that

737
00:40:05,239 --> 00:40:07,799
Speaker 4: way it's only taxed once because there's no second layer

738
00:40:07,880 --> 00:40:11,719
Speaker 4: of tax on it. From the individual side. The personal

739
00:40:11,719 --> 00:40:15,640
Speaker 4: income tax rate is also twenty percent, their capital gains

740
00:40:15,719 --> 00:40:18,920
Speaker 4: rate is twenty percent. Their value added tax, which is

741
00:40:18,960 --> 00:40:21,360
Speaker 4: their national sales tax, is also twenty percent.

742
00:40:21,600 --> 00:40:23,120
Speaker 3: So you can see the pattern here.

743
00:40:23,840 --> 00:40:28,000
Speaker 4: But what they really try to do is enforce this

744
00:40:28,120 --> 00:40:32,560
Speaker 4: concept of economic neutrality or tax neutrality, so that you

745
00:40:32,640 --> 00:40:37,600
Speaker 4: don't have distortions between different types of behavior or products

746
00:40:37,719 --> 00:40:41,200
Speaker 4: or services, or what the way different things are taxed.

747
00:40:41,480 --> 00:40:44,799
Speaker 4: They want things to be as uniform and economically and

748
00:40:44,840 --> 00:40:49,800
Speaker 4: politically neutral as possible, and countries like Latvia now Poland

749
00:40:49,880 --> 00:40:55,640
Speaker 4: is adopting a variant of the Estonian system. Ukraine has

750
00:40:55,680 --> 00:40:59,319
Speaker 4: been looking at adopting the Estonian system. Georgia a lot

751
00:40:59,400 --> 00:41:03,880
Speaker 4: of these former Soviet countries are adopting these kind of

752
00:41:03,880 --> 00:41:07,960
Speaker 4: flat taxes because they're simple. They don't have all the

753
00:41:08,000 --> 00:41:13,239
Speaker 4: credits and deductions that lead to influence pedaling and lobbying

754
00:41:13,960 --> 00:41:19,160
Speaker 4: and corruption that you can see with more complicated tax systems,

755
00:41:19,440 --> 00:41:21,239
Speaker 4: and so they've found that this is one of the

756
00:41:21,239 --> 00:41:24,200
Speaker 4: ways that they can not only improve their competitiveness but

757
00:41:24,280 --> 00:41:27,880
Speaker 4: also minimize the amount of corruption in a country that

758
00:41:28,280 --> 00:41:33,120
Speaker 4: is often was very corrupt under the Soviet system.

759
00:41:33,200 --> 00:41:36,480
Speaker 1: Yeah, that makes so much sense. I guess got I guess.

760
00:41:36,480 --> 00:41:38,839
Speaker 1: It cuts down on bureaucracy, It makes it simpler. Like

761
00:41:38,960 --> 00:41:41,239
Speaker 1: you mentioned the stress factor earlier, think about as an

762
00:41:41,239 --> 00:41:44,400
Speaker 1: individual paying taxes in that country. It destresses things. It

763
00:41:44,440 --> 00:41:48,400
Speaker 1: takes probably i'm sure, the time and fear out of

764
00:41:48,400 --> 00:41:52,040
Speaker 1: filing your taxes too, and talk about too like who

765
00:41:52,120 --> 00:41:54,480
Speaker 1: ultimately ends up paying some of these taxes that we've

766
00:41:54,480 --> 00:41:58,279
Speaker 1: talked about today. It feels like almost everything ends up

767
00:41:58,320 --> 00:42:01,000
Speaker 1: on the end consumer. In one chapter of the book,

768
00:42:01,000 --> 00:42:03,000
Speaker 1: you say that taxes on the rich often end up

769
00:42:03,040 --> 00:42:05,879
Speaker 1: hurting the poor. So it feels like, yeah, tax the rich,

770
00:42:07,200 --> 00:42:09,959
Speaker 1: let's wramp up taxes on the billionaire class or something

771
00:42:10,000 --> 00:42:13,000
Speaker 1: like that. But you say that that often gets passed down,

772
00:42:13,040 --> 00:42:14,440
Speaker 1: passed on to other people, Is that right?

773
00:42:15,120 --> 00:42:15,279
Speaker 3: Oh?

774
00:42:15,360 --> 00:42:18,120
Speaker 4: Yeah, in particular the corporate tax. You know, we talk,

775
00:42:18,280 --> 00:42:19,960
Speaker 4: we hear about this, or oh, we're going to make

776
00:42:20,000 --> 00:42:23,279
Speaker 4: those big corporations pay their fair share. Well, a lot

777
00:42:23,280 --> 00:42:28,719
Speaker 4: of economic research shows that the actual economic burden of

778
00:42:28,760 --> 00:42:34,239
Speaker 4: the corporate tax falls through, yes, on shareholders, but ultimately

779
00:42:34,360 --> 00:42:38,560
Speaker 4: it's passed along to workers in the form.

780
00:42:38,360 --> 00:42:39,320
Speaker 3: Of lower wages.

781
00:42:39,400 --> 00:42:43,160
Speaker 4: In fact, an interesting study done by some German economists

782
00:42:43,200 --> 00:42:46,120
Speaker 4: found that more than half of the economic burden of

783
00:42:46,120 --> 00:42:50,440
Speaker 4: the corporate tax falls through two workers through lower wages,

784
00:42:50,719 --> 00:42:54,040
Speaker 4: and in particular, they found that it was most harmful

785
00:42:54,080 --> 00:42:57,520
Speaker 4: for what they consider the marginal worker, like women or

786
00:42:57,600 --> 00:43:03,760
Speaker 4: low skilled workers or young younger workers who might otherwise

787
00:43:03,800 --> 00:43:07,480
Speaker 4: be in their first or second job, but because of

788
00:43:07,520 --> 00:43:11,680
Speaker 4: the higher tax or the higher taxes forces lower wages,

789
00:43:11,719 --> 00:43:14,600
Speaker 4: they're they're most impacted by that. And so I think

790
00:43:14,600 --> 00:43:17,880
Speaker 4: it's a lesson for us to understand that, yeah, you know,

791
00:43:17,960 --> 00:43:21,560
Speaker 4: we want to tax those big companies, but ultimately we're

792
00:43:21,600 --> 00:43:25,360
Speaker 4: taxing ourselves as the workers in those companies.

793
00:43:25,480 --> 00:43:27,920
Speaker 2: I think they maybe a small takeaway there can be

794
00:43:27,960 --> 00:43:30,520
Speaker 2: that even though we might be trying to keep things

795
00:43:30,560 --> 00:43:34,040
Speaker 2: as simple as possible, just the complex world that we

796
00:43:34,080 --> 00:43:37,040
Speaker 2: live in and just how connected we are as a

797
00:43:37,080 --> 00:43:40,279
Speaker 2: society like it. It has an impact on like all

798
00:43:40,320 --> 00:43:42,680
Speaker 2: the way down, as nothing can be done in isolation,

799
00:43:42,840 --> 00:43:45,680
Speaker 2: even though I think it is certainly admirable to try

800
00:43:45,719 --> 00:43:47,799
Speaker 2: to find ways to simplify things, to make it as

801
00:43:47,840 --> 00:43:50,080
Speaker 2: accessible and easy as possible for there to be fewer

802
00:43:50,120 --> 00:43:53,840
Speaker 2: nooks and crannies for certain folks who have the resources

803
00:43:53,920 --> 00:43:57,000
Speaker 2: to be able to take advantage of certain loopholes.

804
00:43:57,080 --> 00:43:59,879
Speaker 1: Yeah, high prist accountants to help them find those same

805
00:44:00,200 --> 00:44:02,440
Speaker 1: tax savings right like those fewer and farther between. But

806
00:44:02,560 --> 00:44:04,400
Speaker 1: normal people can't afford that stuff. Scott.

807
00:44:04,400 --> 00:44:06,440
Speaker 2: We really appreciate you taking the time to chat with

808
00:44:06,520 --> 00:44:09,600
Speaker 2: us today talking about taxes. Working folks learn more about you,

809
00:44:09,640 --> 00:44:11,200
Speaker 2: and working folks find your book.

810
00:44:11,080 --> 00:44:13,640
Speaker 4: Well, thanks Matt and Joel, I appreciate it. They can

811
00:44:13,640 --> 00:44:16,120
Speaker 4: come to the Tax Foundation dot org or then go

812
00:44:16,160 --> 00:44:19,680
Speaker 4: on Amazon and just look up Taxocracy and.

813
00:44:19,640 --> 00:44:21,319
Speaker 3: They'll take your right to the book and it's.

814
00:44:21,239 --> 00:44:27,400
Speaker 4: Available both in hard copy and now an audio book.

815
00:44:27,840 --> 00:44:30,279
Speaker 4: So if you are a commuter, this is a great

816
00:44:30,320 --> 00:44:31,360
Speaker 4: way to spend your time.

817
00:44:31,640 --> 00:44:34,040
Speaker 1: And of course Amazon's going to charge you sales tax

818
00:44:34,040 --> 00:44:36,480
Speaker 1: on that, Matt. You remember back when they didn't used

819
00:44:36,480 --> 00:44:38,480
Speaker 1: to have to charge sales taxes those couple of years

820
00:44:39,160 --> 00:44:42,080
Speaker 1: barely it felt like a sweet discount outing online. Scott,

821
00:44:42,120 --> 00:44:43,480
Speaker 1: thank you so much for joining us today.

822
00:44:43,560 --> 00:44:45,120
Speaker 3: Thank you both. Thanks appreciated.

823
00:44:45,719 --> 00:44:47,799
Speaker 2: All Right, Joel, how do you feel about talking with

824
00:44:47,880 --> 00:44:50,640
Speaker 2: somebody who is an expert when it comes to tax policy?

825
00:44:50,760 --> 00:44:52,560
Speaker 1: Well, I'm gonna do you think Scot will do my

826
00:44:52,560 --> 00:44:53,080
Speaker 1: taxes for me?

827
00:44:53,160 --> 00:44:54,800
Speaker 2: I guess that's the question I have to the that

828
00:44:54,840 --> 00:44:57,080
Speaker 2: it does individual tax He likes to look at taxes

829
00:44:57,120 --> 00:44:59,440
Speaker 2: from a very high, thirty thousand foot view.

830
00:44:59,480 --> 00:45:01,239
Speaker 1: Yeah, we know, which I appreciate. Like we, I feel

831
00:45:01,239 --> 00:45:03,319
Speaker 1: like we were kind of got a little theoretical with

832
00:45:03,360 --> 00:45:06,960
Speaker 1: this one. There's more story narrative driven. But like so,

833
00:45:07,080 --> 00:45:10,920
Speaker 1: I'm so fascinated and I think we all to know

834
00:45:10,960 --> 00:45:13,719
Speaker 1: how the sausage is made in regards to taxes. That

835
00:45:13,760 --> 00:45:14,920
Speaker 1: was kind of fun to experience.

836
00:45:14,960 --> 00:45:16,960
Speaker 2: It's good to step back, like a couple times a year.

837
00:45:17,000 --> 00:45:18,839
Speaker 2: We like to do an episode like this where we're

838
00:45:18,880 --> 00:45:20,680
Speaker 2: looking at how we got to the place that we

839
00:45:20,719 --> 00:45:21,920
Speaker 2: are now, and that's certainly.

840
00:45:21,680 --> 00:45:23,239
Speaker 1: What this episode was. But yeah, did you have a

841
00:45:23,239 --> 00:45:26,239
Speaker 1: big takeaway from our conversation with Scott god Man, Like

842
00:45:26,320 --> 00:45:28,440
Speaker 1: it's really hard to put my finger in just one thing,

843
00:45:28,640 --> 00:45:30,880
Speaker 1: just because so many enlightening things in the book and

844
00:45:30,880 --> 00:45:33,239
Speaker 1: then in this conversation. But yeah, going back to the

845
00:45:33,320 --> 00:45:35,879
Speaker 1: very beginning point, taxes direct everything we do. It makes

846
00:45:35,880 --> 00:45:37,279
Speaker 1: me think. One of the things he points out in

847
00:45:37,280 --> 00:45:39,279
Speaker 1: the book, people stay in a job for health care.

848
00:45:39,320 --> 00:45:42,799
Speaker 1: That is a tax specific rule where employers get a

849
00:45:42,840 --> 00:45:45,960
Speaker 1: benefit for offering a tax benefit for offering health insurance

850
00:45:45,960 --> 00:45:48,319
Speaker 1: instead of at a competition in the form of pay

851
00:45:48,760 --> 00:45:51,320
Speaker 1: And so that's a way in which tax policy directly

852
00:45:51,400 --> 00:45:55,480
Speaker 1: influences our lives. Directly influences somebody's ability or desire to

853
00:45:55,560 --> 00:45:57,759
Speaker 1: start a business, let's say, and leave their job because

854
00:45:57,760 --> 00:45:59,360
Speaker 1: of how expensive health care is and the fact that

855
00:45:59,400 --> 00:46:02,319
Speaker 1: it's quote a quote covered from their employer. And it also

856
00:46:02,320 --> 00:46:04,360
Speaker 1: made me think of the fact that the way we

857
00:46:04,400 --> 00:46:06,920
Speaker 1: get taxed and how let's say we make a paycheck.

858
00:46:07,120 --> 00:46:09,719
Speaker 1: W two, you're just used to getting your twenty nine

859
00:46:09,760 --> 00:46:12,359
Speaker 1: hundred dollars every two week check, or eighteen hundred dollars

860
00:46:12,360 --> 00:46:15,120
Speaker 1: every two week check. You barely look to see what

861
00:46:15,200 --> 00:46:17,759
Speaker 1: sort of taxation came out of there, And I just

862
00:46:17,840 --> 00:46:20,000
Speaker 1: gave you used to whatever your take home page. I

863
00:46:20,040 --> 00:46:21,600
Speaker 1: think if we actually had to we get the full

864
00:46:21,640 --> 00:46:23,560
Speaker 1: amount and then had to issue the payment to the

865
00:46:23,560 --> 00:46:25,120
Speaker 1: irs like you and I have to do a small business,

866
00:46:25,160 --> 00:46:26,600
Speaker 1: so like when you're self employed and you make your

867
00:46:26,640 --> 00:46:29,200
Speaker 1: quarterly estimates, we would probably all be paying more attention

868
00:46:29,239 --> 00:46:32,040
Speaker 1: to tax policy and holding our elected officials accountable. I think.

869
00:46:32,080 --> 00:46:35,080
Speaker 2: So yeah, uh okay, So I think my big takeaway

870
00:46:35,120 --> 00:46:37,800
Speaker 2: is going to be it's funny because like the takeaways

871
00:46:37,840 --> 00:46:40,720
Speaker 2: aren't necessarily for us as individuals, but more as like

872
00:46:40,719 --> 00:46:43,319
Speaker 2: like you said, for our elected officials as leaders of

873
00:46:43,320 --> 00:46:47,640
Speaker 2: this country, and so for those three people who are

874
00:46:47,640 --> 00:46:51,399
Speaker 2: listening what you I mean, going back to another one

875
00:46:51,400 --> 00:46:53,000
Speaker 2: of the points that we brought up, what you tax,

876
00:46:53,080 --> 00:46:55,080
Speaker 2: you're gonna get less of that when you are taxing

877
00:46:55,480 --> 00:46:57,759
Speaker 2: the work that you do, when you're taxing savings, when

878
00:46:57,760 --> 00:47:00,560
Speaker 2: you're taxing investments. Well, it should be no sub prize

879
00:47:00,560 --> 00:47:03,319
Speaker 2: that American citizens will do less of the thing that

880
00:47:03,400 --> 00:47:06,560
Speaker 2: is taxed more and again, as personal finance nerds, I

881
00:47:06,560 --> 00:47:08,439
Speaker 2: think we should be advocating. We should be rooting for

882
00:47:08,800 --> 00:47:11,239
Speaker 2: things that empower the individual to be able to take

883
00:47:11,239 --> 00:47:12,680
Speaker 2: care of themselves, to be able to saw away and

884
00:47:12,680 --> 00:47:15,200
Speaker 2: set aside more money for their own futures. Maybe even

885
00:47:15,200 --> 00:47:19,319
Speaker 2: following the likes of Estonia. How it is that they've

886
00:47:19,360 --> 00:47:21,680
Speaker 2: modeled the new Estonia was leading the way I did

887
00:47:21,680 --> 00:47:24,120
Speaker 2: not know me neither. We just need a nice hodgepodge

888
00:47:24,200 --> 00:47:26,560
Speaker 2: compilation of some of the best things from all over

889
00:47:26,560 --> 00:47:29,960
Speaker 2: the world, right, like maybe the cleanliness and politeness of

890
00:47:30,040 --> 00:47:33,959
Speaker 2: Japan mixed with like the entrepreneurship spirit that you find

891
00:47:33,960 --> 00:47:36,200
Speaker 2: here in the United States. Yeah, but maybe the tax

892
00:47:36,239 --> 00:47:38,240
Speaker 2: policy of Estonia.

893
00:47:38,360 --> 00:47:41,880
Speaker 1: You're creating the perfect country, a cyborg version. Yeah. No,

894
00:47:42,280 --> 00:47:44,440
Speaker 1: There's maybe not as much direct impact you can have

895
00:47:44,480 --> 00:47:47,120
Speaker 1: on your own personal finances from this episode, although hopefully

896
00:47:47,160 --> 00:47:50,280
Speaker 1: it gets you seeing the ways in which tax policy

897
00:47:50,480 --> 00:47:53,640
Speaker 1: is impacting your life and you can, instead of being

898
00:47:53,680 --> 00:47:56,200
Speaker 1: blind about it, react accordingly. So all right, Matt, let's

899
00:47:56,239 --> 00:47:57,560
Speaker 1: get back to the beer we had on this episode.

900
00:47:57,560 --> 00:48:01,480
Speaker 1: This one is called United. It's a murky India palelel

901
00:48:01,520 --> 00:48:03,880
Speaker 1: by pure Project United. I feel like that's such a

902
00:48:03,880 --> 00:48:05,600
Speaker 1: great Uh did you pick this one on purpose?

903
00:48:05,760 --> 00:48:08,040
Speaker 2: No? Isn't it so funny how the beers tend to

904
00:48:08,040 --> 00:48:09,560
Speaker 2: find the right episode to be a part of.

905
00:48:09,719 --> 00:48:12,920
Speaker 1: Yeah, the beer has chosen Hugel. But it's a red,

906
00:48:12,920 --> 00:48:15,280
Speaker 1: white and blue can of course. Yes, that's kind of purple.

907
00:48:15,320 --> 00:48:17,080
Speaker 1: It's totally going for the flat color. Is the real

908
00:48:17,520 --> 00:48:19,960
Speaker 1: you think about that? Yeah? I thought's so funny it is. Yeah,

909
00:48:20,280 --> 00:48:21,960
Speaker 1: it's called United, So this is this is a very

910
00:48:21,960 --> 00:48:24,840
Speaker 1: patriotic beer we're having on an episode dedicated to you

911
00:48:24,880 --> 00:48:26,719
Speaker 1: pick this one on park Country type. No, truly, you

912
00:48:26,760 --> 00:48:29,040
Speaker 1: really did? No snide it out of the fridge unknowingly?

913
00:48:29,080 --> 00:48:32,040
Speaker 1: Maybe subconscious? Yeah, I think it must have been. Yeah,

914
00:48:32,080 --> 00:48:33,440
Speaker 1: what'd you think about this beer? Though? I thought it

915
00:48:33,440 --> 00:48:35,640
Speaker 1: was great. I thought it was more citrus orange juice

916
00:48:35,680 --> 00:48:38,359
Speaker 1: kind of vibes in this one, which when you get

917
00:48:38,400 --> 00:48:42,080
Speaker 1: a beer that tastes like has this OJ notes going on,

918
00:48:42,480 --> 00:48:43,520
Speaker 1: I'm typically all about it.

919
00:48:43,600 --> 00:48:43,799
Speaker 3: Yeah.

920
00:48:43,840 --> 00:48:46,080
Speaker 2: Recently we had the Pure Project beer that I wasn't

921
00:48:46,080 --> 00:48:47,880
Speaker 2: a fan of. I am a fan of this one

922
00:48:47,920 --> 00:48:50,440
Speaker 2: because this one it's got brightness to it. Yeah, whereas

923
00:48:50,480 --> 00:48:52,040
Speaker 2: the other one, in my opinion, felt a little bit

924
00:48:52,080 --> 00:48:54,760
Speaker 2: of flat, a little bit flat. This one seemed bright

925
00:48:54,880 --> 00:48:58,240
Speaker 2: and crisp, while still maintaining some of those murky hop

926
00:48:58,400 --> 00:49:01,000
Speaker 2: flavor profiles that you can expect from from a hazy

927
00:49:01,120 --> 00:49:03,560
Speaker 2: East Coast I PA like this, but not a East

928
00:49:03,600 --> 00:49:06,000
Speaker 2: Coast but a New England I PA, I should say.

929
00:49:05,880 --> 00:49:08,319
Speaker 1: Yeah, but from a West Coast brewer. I believe so yeah,

930
00:49:08,360 --> 00:49:10,840
Speaker 1: good stuff. I like beer more than I like taxas

931
00:49:11,000 --> 00:49:13,839
Speaker 1: Matt's that's my takeaway from this episode. Every day other week.

932
00:49:14,200 --> 00:49:16,319
Speaker 1: All right, that's gonna do it for this one. If

933
00:49:16,360 --> 00:49:19,160
Speaker 1: you want more money information, we're constantly publishing new things

934
00:49:19,160 --> 00:49:21,560
Speaker 1: to help you in your personal finance journey up on

935
00:49:21,600 --> 00:49:24,560
Speaker 1: our website at howtomoney dot com. Go check it out, Matt.

936
00:49:24,640 --> 00:49:27,560
Speaker 1: Until next time, best Friends Out and best Friends Out