Transcript
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As I said before, we're a financial literacy podcast and we do our best to provide you with non-biased, accurate information so that can help you improve your financial life and, like I said, with the upcoming election, you know, look at these economic plans and see which ones you know you align a little bit more with and do your own research.
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You know, don't necessarily just rely upon our podcast.
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We gave you a starting point, but you can go to each of their websites and see more details about what their platform is that they're running on.
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Hey babe, what are we talking about today?
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Well, with the presidential election right around the corner the presidential election right around the corner we are going to do our best to provide a non-biased overview of the two economic plans being proposed by Kamala Harris and Donald Trump.
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Yay.
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Well, by the time you listen to this, there will be 34 days until the election, which is not very much.
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So make sure that, if you have not registered to vote, that you are registered, that you are checking your voter registration.
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Do not be that person that doesn't know where you're voting If your registration is up to date.
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Did your precinct change all those things?
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Go ahead and look at that.
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Now you can go to voteorg and you can also see who is on your ballot, because we know that there's so much more at stake than quote unquote, just the presidency.
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So we need to make sure that we understand who is up for election re-election in our state and local governments as well.
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So make sure that you check out all of those resources.
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Voteorg will get you where you need to go, yeah we over here are voters.
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We vote in every election.
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So we're not going to tell you who to vote for, but we do encourage you to vote because I think a lot of people actually don't realize that, up until this last election, the largest demographic of you know groups that affect the electoral outcome, was actually people who didn't vote.
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I believe in the like not this last election, but the previous one before that it was almost 40% of people that are eligible to vote in the United States did not vote.
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So yeah, that's this is our duty, this is what democracy is, and be an educated and informed voter.
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You know, if you're listening to the news, to podcasts, you're doing your own reading, you're doing your own research Great, but please don't be that person that is just listening to Bob on Facebook.
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You know rant about whatever people rant about, and that is how you're making your decision for who's going to be president, who's going to be governor, senator.
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I mean, like you know, read through lots of different articles and lots of different news sources so that you're not just getting a one sided view.
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For example, we, you know we'll watch CNN, but then we will also turn to Fox and see what they're saying.
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We read the Wall Street Journal and the New York Times and, again, we're trying to get information from lots of different places, not just one single source, because we know that media is media is media and we want to be informed.
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Voters and ladies, for anybody listening, listen, please don't be that person that is voting like my husband votes and just being uninformed, or being that person that says, well, my husband told me to vote for so-and-so, so that's what I'm going to do.
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Don't be that person.
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Do better, we deserve better than that, and also remember your vote is private.
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So if your husband is voting one way and that does not serve you in your female body, then guess what.
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He doesn't need to know how you voted.
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And, like I said, once again, you need to vote, especially when it comes to demographics that have not always had the right to vote.
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You know, as a black man, my ancestors fought and died for my right to vote.
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I will always exercise my right to vote and I don't think there's anything I should expect less from my peers also that look like myself yeah, get out there and vote, and not voting is a vote, like brandon said at the beginning of this and not voting because you don't want to pick the lesser of two evils or whatever.
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It is that people say, no, don't be that person someone's going to be elected, regardless of you participating in the process or not.
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They're not going to be like oh, you're not voting, so we're just going to put the election on pause.
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That's not how that works, so you need to pick at least the person that you can agree with the most.
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Yeah.
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Whoever that may be.
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Or that doesn't terrify you potentially.
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Yes, you have to vote because, like I said, someone is still going to be elected, regardless of you participating in the process or not and, honestly, certain signs are hoping that you don't participate in the process.
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Yes.
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Because it's in their favor, because I can tell you people who always vote old white men.
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they always vote.
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That's so true.
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It's so true, yeah.
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So get to the polls, vote early, do your absentee ballot, do whatever you need to do to make sure that your voice is heard.
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That is literally what democracy is all about.
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So now we're going to get down into some of the details.
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So a lot of the talking points revolve around, you know, a few of their most talked about economic plans, the ideas that they're proposing as far as their platform if they were to be elected as president.
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So I'm start out with Kamala Harris as far as some of the main ones that people are talking about.
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First one I'm going to talk about is a they want to.
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She wants to increase the long term capital gains tax on anyone who has an income of a million dollars or more annually.
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So currently, long term capital gains gains, the highest tax you would pay on that is 20% and she's looking to increase it to 28%.
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All right, I think the key, though, that people need to zoom in on is how much was it that people need to make in order to get this additional taxation?
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Let's take a step back, because I'm not going to assume that everyone knows what capital gains tax is to begin with.
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Okay.
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Or that there's a difference between short-term and long-term capital gains tax.
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Okay.
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All right.
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So capital gains tax is the tax that is paid by individuals based upon the gains on stocks that they sell in a given year.
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All right, now there are two different types of capital gains tax.
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There's a short-term capital gains tax and a long-term capital gains tax.
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So for the short-term capital gains, if you were to purchase a stock and then sell it in less than a year, then you would pay short-term capital gains and what that tax is then, basically whatever gain you have, is taxed as your ordinary income tax rate.
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So you know, for example, we're talking about wealthy people, so let's use their income taxes.
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The highest current federal tax rate is 37%.
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So if I was to buy a stock and sell it in less than a year, it would count as ordinary income tax for me and more than likely be taxed at that 37%.
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All right, okay, now if I was to buy a stock and I hold it for a year in one day, and then after that I sell it, then that's long-term capital gains and with long-term capital gains you could be taxed at zero, 15, 20%.
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Big differences is that for wealthy people, you know, the most they would be taxed on, that is 20%.
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So you're looking at the difference of ordinary income, the most they would be taxed on.
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That is 20%.
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So you're looking at the difference of ordinary income tax rate, where they can be taxed as high as 37% compared to that as high as they can with capital gains being 20%.
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That's a 17% difference.
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Yeah, that makes a difference.
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So they were looking to you know you always hear from you know the left saying that you know wealthy people don't pay their fair share.
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I'm not here to debate whether they do or they don't, that's just the verbiage that they use.
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All right, so I still look at it this way.
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Either way, even if they were to potentially raise it to 28%, that's still less than what you'd be paying in ordinary income tax rate.
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So you're still a win technically, but you would still be increasing what you currently pay in taxes.
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Because I could tell you one thing the way that the wealthy receive their income is completely different than the way that you know us ordinary people do.
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All right, so, for example, a lot of people obviously have businesses, so they're taxed a little bit differently when it comes to that.
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But we're just going to stick to people.
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For example, wealthy CEOs.
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All right, you might have a CEO of a fortune 100 company that makes a total compensation in a given year of $30 million, but their actual W-2 income salary is less than 2 million and the remaining amount of that is made up in stock shares that are given to them.
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All right, so let's just make it easy.
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If it's $2 million, they received an income, that's going to be taxes or near income tax rate.
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The other twenty eight million that's going to be taxed on some form of capital gains and more than likely they're going to hold it for at least a year and a day and then sell it.
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That's what they're going to do and the max they would be taxed on that is 20 percent.
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And that's the issue that people kind of have is saying that wealthy people don't pay their fair share.
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Have you been listening to our podcast and wondering how am I really doing with my money?
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Am I doing the right things with my investments?
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Am I on track to reach my financial goals?
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What could I be doing better?
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If you answered yes to any of these questions, then it's time for you to reach out to Brandon to schedule your free yes, I said free 30-minute introduction conversation to see how his services could help make you the more confident moneymaker we know you could be.
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What are you waiting for?
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It's literally free and, at the very least, you'll walk away feeling more empowered and confident about your financial future.
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Link is in our show notes.
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Go, schedule your call today.
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Yeah, but we already know that the rules were not made for normal people, right?
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The wealthy made the rules and they are going to utilize the rules, and it's a matter of understanding them and utilizing them to your benefit.
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So, whether we agree or disagree, it really does sometimes feel like a game, and if you don't know the rules, then you're never going to win.
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And the thing is, too, is that this plan affects only people who make an income of $1 million or more a year $1 million or more a year.
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So, but this brings us to really to the people who are like on TikTok and on social media, that are like, oh, she wants to raise capital gains and da, da, da, da da.
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And listen, are you making a million dollars a year?
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Well, here's the thing is that that proposed idea itself would not directly affect individuals, because majority of people don't obviously make a million dollars or more a year.
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You know, it's less than 1% of the you know U S population that does that.
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All right, but we're going to get into the pros and cons of this proposed plan.
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Okay, so the idea behind, you know, one of the major pros of the plan is that it would ideally put more tax money into the U S system to be used be used for various US needs One mainly paying down the national debt that we have, but then also being able to hopefully fund other programs that are necessary for the United States and would definitely serve the more underprivileged individuals.
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That's the idea behind it.
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Is the United States actually trying to pay off its debts?
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I mean, I don't necessarily think so.
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I mean, there's nothing about the way our system operates that makes me think they're like oh, we got to get back in the black, we got to get in the green.
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I don't disagree with you because I they're out here.
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They don't ever balance a budget.
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Yeah, and their budgets are a hot mess.
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I mean the audacity.
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Now, from the economic standpoint of just like looking at it, this could potentially affect us in other ways, you know.
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So what ends up happening is is that if you were to increase the capital gains tax on the selling of stocks for the wealthy, they could potentially just sell less stocks and find another way to handle that income.
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So by selling less stocks, then you're not going to even get the 20% taxes that you were getting and that could potentially lead to less tax money.
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Because you're only getting taxed the 20% over the million.
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No, no, no.
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So I'll take it a step back.
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So currently the highest capital gains tax is 20%.
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If you were to raise that to 28%, then wealthy people will find another way to handle that income and not sell that stock.
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So therefore, instead of you know you getting the 20% that you would have gotten now, you're going to get zero.
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So that's going to lower the amount of tax money that we have to pay our national debt, handle all the various programs that the United States needs tax money to fund.
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Interesting.
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Because the reality, reality is is that wealthy people run the world.
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There's all, there's all types of ways for them to figure out, to navigate and circumvent these rules one way or another, to make it long or short.
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Part of your compensation package is stocks, and they've been awarded.
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What are you just going to let them sit there?
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yeah, you let them sit there and you borrow against them.
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That's another thing that people don't realize is that when you, you could put the stock up as collateral and borrow, borrow from banks.
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Yeah, because remember, when poor people borrow money aka have loans or credit cards, etc.
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Then it's, you know it's a negative thing, but when rich people borrow money, it's considered leverage and they give it a whole new word and they make it sound fancy and exclusive.
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But you're really doing the exact same thing You're borrowing money so that you don't have to use your own personal money.
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Yes, I mean, like I said, there's pros and cons.
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You know, we kind of just went through both of those.
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But at the end of the day, I think if you focus so much on trying to tax the wealthy more, they're probably going to focus just even more to find a way to circumvent it create new rules?
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yeah, because they're the ones that create the rule so you know.
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Also the reality is is that I mean, the probability of this passing congress is probably not high, because you remember the people in congress also, like you see the salaries that they make, you know as far as from being a congresswoman, person, man, whatever, but they make a lot more in other ways, so they're not.
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You know the poor people, so you know they don't actually make rules that um don't benefit them monetarily.
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Like regardless of what side of the aisle you're on.
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Let's be honest Now.
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One of the other part of Harris's economic plan is that she wants to tax unrealized gains on people who have a net worth of $100 million or more.
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So how many people is that?
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Even less than the previous number we spoke.
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It's not you listening?
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It's not you listening, okay, it's not us.
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It's not you listening.
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It's not you listening, okay.
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It's not us, it's not you, it ain't none of us Not yet we're just speaking into existence.
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Now, to clarify what an unrealized gain is, is that you have not.
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You have these stocks that you bought but you haven't sold them.
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So in the previous one we were talking about with the realized gains, you sold the stock.
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So now you have a quote unquote realized profit With unrealized gains.
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You sold the stock.
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So now you have a quote unquote realize profit With unrealized gains.
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Your stock might have increased in value from what you bought it at, but you haven't sold it.
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So, quote, unquote, it's not really actual cash in hand.
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All right, so there are actually, you know, the only pro to that would be more money supposedly being put into the tax system to help with, you know, government programs funding paying down national debt.
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That's really the main idea behind this.
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As far as a pro, now, as someone who works in finance, I could see a lot of negatives to it, although it's, you know, for most people, they probably don't think about these.
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All right.
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Well, in order to pay the taxes on unrealized gains, you're going to have to end up selling them.
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You have to sell some stock in order to handle these unrealized gains, because most people have a lot more unrealized gains than they have realized because they just have, you know, their money that they're piling up, piling up and you know it's not actual cash in hand.
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So in order to pay taxes on money that they quote, unquote, don't necessarily have, they're going to have to sell more stocks.
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So to kind of give you like an idea of some of the numbers here is that the individuals we're talking about you know that have a hundred million dollars in unrealized you know multimillionaires pushing into billionaires.
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Billionaires own approximately 7% of the stock market.
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7% of that is owned by billionaires.
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So that equates around $5 trillion.
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If you had to sell in order to pay taxes on these unrealized gains, that's hundreds of billions of dollars.
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That's going to be sold in stocks within the stock market and when you have a sell off that high, it actually takes the value of that stock.
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So by selling off that amount of money in the stock market, it is actually going to have a negative reaction for the stock market.
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It's going to cause everything to drop.
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Now, how does that affect the regular person we have?
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We may not be billionaires, we don't have $100 million plus net worth or whatever it may be, but we do have 401k plans, you do have 403bs, you do have IRAs, you do have pensions and other types of retirement plans that are all dependent upon the performance of the stock market.
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So if you have these billionaires having to sell off massive amounts of stocks in the stock market and that drives down the stock market, that's going to affect your 401k plan, it's going to affect your pension, it's going to decrease the values of those Could you imagine being so rich that you selling your stock could literally impact hundreds of millions of people?
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Well, that's how it works.
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That's insanity.
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Large money affects the stock market.
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Institutional moves by Vanguard BlackRock.
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The way that they move money affects how the market actually can perform.
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Yeah, and it's just wild though, just to think, I mean, how many billionaires are there in the United States and then them affecting what's happening in our 401ks and our IRAs.
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I mean, that's a lot of power.
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And that's the part of the plan that, like you know, most people don't think all the way through, and I think I'm hoping that she's thought about this aspect.
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But she's saying it in the sense that it sounds good to the common person who's her base, but she knows it's not going to actually happen.
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Well, that's the other thing, right, I think in both, whether there is a plan or not a plan, regardless of sides, all the things right.
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It's like, well, they can also say whatever they want and then get in office and be like, oh well, our priorities have shifted, or oh, we can't do that anymore.
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Or, you know, everybody's like.
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It feels very much like everybody's in bed together.
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You know, paying Peter, robbing Paul, like just to get done what people need to get done.
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And if you vote on somebody's plan thinking that that's going to be fully executed, you're probably going to get your feelings hurt, because, I mean, we've all been.
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You know, if you're in that elder, millennial, gen X type bracket, like, we've been voting long enough to know that there are absolutely false promises, there are things that don't get passed, there are.
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You know, do not put your eggs in in these baskets of what one person is saying they're going to do or try to do, because the reality is is they could flip on a dime, honestly.
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Yeah, I mean there's nothing, there's no law in place that requires them to follow through with the platforms that they ran.
00:19:50.901 --> 00:19:55.821
Mean there's nothing, there's no law in place that requires them to follow through with the platforms that they ran on and were potentially elected on.
00:19:56.210 --> 00:19:59.760
Yeah, which I think is also a problem, but we're not going to solve that in today's episode.
00:20:01.391 --> 00:20:02.733
I'm not an economist by any means.
00:20:02.733 --> 00:20:10.099
I work in financial services, but I understand this aspect, so I know they have to be speaking to other people that have said this to them.
00:20:10.099 --> 00:20:15.471
Yeah, hopefully they're speaking to really smart people I if they're, if they have not thought through this process.
00:20:15.471 --> 00:20:28.317
There's way more issues in this country than that because, like I said, I am not by no means the smartest person when it comes to this area, and I understand that this is a potential outcome of this plan let's keep going all.
00:20:28.958 --> 00:20:29.199
All right.
00:20:29.199 --> 00:20:42.060
So, hopping over to Donald Trump's plan and you know we lean a certain way, but I'm going to try to provide this information without any bias it's just basically looking off of the plan and giving the pros and cons of the plan.
00:20:42.060 --> 00:20:46.915
So the one thing you always hear Donald Trump talk about is tariffs, tariffs, tariffs, tariffs.
00:20:46.915 --> 00:20:49.637
So, first and foremost, what is a tariff?
00:20:49.637 --> 00:20:53.319
A tariff is a tax on an import, all right.
00:20:53.549 --> 00:20:54.778
And we import a lot.
00:20:55.019 --> 00:20:56.853
We do import a lot and you always hear, you know.
00:20:56.853 --> 00:21:05.419
The main thing he talks about is the tariffs that he puts on China, china, and just simply walk around your house and look at where the things are made.
00:21:05.640 --> 00:21:06.141
China.
00:21:06.141 --> 00:21:07.242
They're made in China.
00:21:07.529 --> 00:21:09.750
We import a lot of things from China, all right.
00:21:09.750 --> 00:21:14.213
So what a tariff does is that it puts it like I said.
00:21:14.213 --> 00:21:18.376
It puts a tax on that country in regards to us importing goods from that country.
00:21:18.376 --> 00:21:22.558
So therefore, the country that we're importing it from pays more to send the goods here.
00:21:22.558 --> 00:21:32.744
All right, now the idea behind this, from a pro standpoint, would be that this would promote growth from within the US.
00:21:32.744 --> 00:21:47.789
So the idea behind this is that if we're putting tariffs on other countries to import stuff, then that's going to be the fire that fuels the United States to start producing these things themselves, so that we don't have to import these things from other countries.
00:21:48.309 --> 00:21:52.949
But there's a reason that we import things from other countries we're going to get to that.
00:21:53.371 --> 00:21:54.696
That's the idea behind it.
00:21:54.696 --> 00:22:02.179
So the idea is that you stimulate, you know, business growth and job growth within the US to create these products within the United States.
00:22:02.179 --> 00:22:02.861
All right.
00:22:02.861 --> 00:22:13.438
Now the con is is that when you put a tax on a tariff, a tax on imported goods, that increase is just simply passed down to the consumer.
00:22:13.458 --> 00:22:17.961
AKA we are going to pay more if we are charging more.
00:22:17.961 --> 00:22:23.815
It's like that quid pro quo, like tit for tat, like well, if you're going to screw me, I'm going to screw you.
00:22:24.155 --> 00:22:25.575
Yeah, think about anything that's made.
00:22:25.575 --> 00:22:42.097
For example, like you know, when there was a lumber shortage and people were looking to maybe build a fence, the people that were building the fence had to pay more for the materials to build the fence and that cost that increase in materials was simply passed down to the person having the fence built.
00:22:43.046 --> 00:22:47.978
Which is crazy because we were having a deck built during COVID.
00:22:47.978 --> 00:23:00.473
The cost we ended up doing a Trex deck, which normally would have been way out of our price range, but it ended up being the same price as wood and so it's like you don't have to stain it, it's practically indestructible.
00:23:00.473 --> 00:23:05.747
You know it has all these benefits, and so we just went with the track stacking because the wood was so expensive at that time.
00:23:05.747 --> 00:23:13.871
But same, yeah, same concept of like oh now this wood is the same price as this other product that normally would have cost us 30% more.
00:23:14.291 --> 00:23:19.190
Yeah, so the price is passed on to the consumer and we're already struggling y'all.
00:23:19.330 --> 00:23:20.314
We're already struggling.
00:23:20.314 --> 00:23:21.811
Life is so expensive.
00:23:21.811 --> 00:23:27.175
It doesn't matter if you're a high earner, if you're making $100,000, $200,000, $300,000 a year.
00:23:27.175 --> 00:23:35.871
When you go to the grocery store, when you fill up for gas, you are seeing the increase of what life is costing us these days.
00:23:36.031 --> 00:23:43.045
Yeah, seeing the increase of what life is costing us these days, yeah, if you think inflation is bad now, increasing the tariffs is just going to make it worse, because currently the United States imports more than we export.
00:23:43.525 --> 00:23:47.757
Well, and we also know that it's not actually inflation, it's corporate greed.
00:23:47.984 --> 00:23:49.109
There's also price gouging there.
00:23:49.109 --> 00:24:00.049
Exactly so it's hard for us to determine which is which, but I can assure you that if the goods that we import increase from tariffs, then that price is going to be.
