On one hand we are talking about AI fliping economy upside down in 5 years and people being unemployable and on the other hand we are worried about wealthy families. Guess what if economy changes companies go bankrupt and wealthy people don't stay wealthy
You can take out loans as long as people are willing to lend you the money. As you get more and more in debt, you become riskier and riskier to lend to, and banks are only going to lend to you if you're taking on a higher and higher interest rates on those loans to compensate for that risk. This is what's encapsulated in your credit score. For the USA it is similar. The USA has to sell bonds in order to increase the debt. If the debt gets high enough and there's low interest, people will refuse to buy the bonds because they're seen as too risky relative to the payoff. So then the fed would need to raise rates to sell bonds, which would increase debt in the long term and create a vicious cycle. As for literally printing money, the simple reality is that if you do that at a massive scale and inflation doesn't result, its likely because the economy is dying.
@@TheStrangeBloke but we’ve had this experiment through Covid, trillions in deficit spending ending with mostly transient supply chain inflation and now sticky but very tame service sector inflation. Do selling bonds even required to raise money? If banks fail, does FDIC insurance raises bonds? I believe they just “tap enter” and voila there’s money. At least that’s the MMT position, that as long as you are an economy with your own currency you can pay all debts
Hello, my question is, How come Russia economy is doing so well even though they are in a war? Can they sustain it? and does America have a switch where they could instantly increase worker median wages? I honestly thought war was something detrimental to economies.
Russia had half a trillion in cash reserves that they are spending down to keep the economy running. This, in combination with rising oil prices have kept them afloat for now but they could be toast in a year depending on what oil prices do.
Listen to Doomberg, Russia sell oil, oil price is high. Do you wanna bankrupt Russia? Make oil cheap. Start mining oil in California, France, help Venezuela flood the market with cheap oil
I am a farmer and all of my college friends have large farms that they will inherit I mean farms worth $20-45 million. These have been in their families for 4 or 5 generations and they always pass it all down and if you really steped up capital gains and the estate tax most commercial farms wouldnt be able to be taken over by their kid's. These are by and large not lazy trust fund kids but people who work 70 hours a week for their whole lives and pay themselves a small salary so they can pass on the farm better than they got it. There are many other family businesses that are in the same boat. My preference by far is to drastically cut spending, start first with all farm subsidies. These are not at all needed.
killing step up basis wouldn't impact small independent family farming businesses that much unless I'm missing something. Step up basis only matters if the property has massively increased in value. That's pretty rare for a family farm. You might have a farm going from 10 million in value to 13 million over the course of 40 years. So there will be some tax on that but its not totally backbreaking.
@@TheStrangeBloke Actually where I am at farmland costs have gone from $500 ish acre in 1980 to $4000 plus in 2024 in northern NY and where I am from in Massachusetts farm land is now worth about $25000 an acre or more because of development potential. One of my friends owns about 10000 acres they are in western NY and their basis on that land is about $1500 and it's now worth about $6000 per acre. That's definitely not your average situation but I don't think most people realize that 90% of our food comes from the largest 10% of large commercial family farms like my friends that would be seriously effected by that. Small farmers now a days largely are either Amish, Mennonite or do it as a hobby/tax write off and have off farm income. There really aren't any small family farms left.
@@Ryanrobi Well, most family farms tend to get heavily indebted while their land gains value so the net ends up not being that significant. In a real sense there are a lot of farmers who would make more money if they did less farming. My own family realized the farm was a lost nearly 30 years ago and has basically left it fallow, but is trying to hang onto the land anyway out of sentimental value and I just think this whole situation is absurd. It's all well and good to valorize the family farm but at some point.... you won. Sell the land and enjoy being wealthy. If you want to be self-employed, start a different kind of small business that isn't going to be a giant lossmaker.
Idk i lnow both me and my brother and sister stopped working jobs paying $150k plus cuz i paid so much in tax. I never want another w2 job that pays much over $65k. Currently i work a seasonal job in the winter that makes $45k and I run my farm and an excavation business the rest of the year that has plenty of depreciation and pay myself $15k and I actually do alot of barter locally. The hughest taxed person in the economy is a very high w2 wage, anyone wealthy knows this and doesn't make their money through a wage. I know nany many people who qualify for food stamps but are worth $10 million plus, its a pretty silly system really.
you don't understand how tax brackets work. No matter how many raises you get, you will always come out ahead. Tax brackets are marginal. If the rate over 100k is higher, then only money made over 100k is taxed more. But also, yeah, W2 wage is taxed highly. That's why Noah is advocating for taxing investments more.
I understand how margin tax's work lol I don't like to spend $52k on taxes to net $98k when I can work for myself pay myself 45% pay $8k in tax's and buy the stuff I want pre tax with my business. I have more purchasing power and pay way less in tax and invest that in equipment and land that I used to buy after tax. Of course you are further ahead at $200k vrs 50k but you pay higher and higher rates and I just has a viseral negative reaction to be forced to pay taxes for stuff I do not want and never voted for. If you can't buy what you want with a business pre tax than you won't be ahead. That's why W2 work is a suckers game you need to work for yourself.
I love this show. Thanks dudes.
Thanks for answering my Germany question, really appreciate it :)
Let’s all have a momentary pause in honor of Biden’s toughness on Israel.
Would you considering property taxes a for of tax on unrealized gains?
On one hand we are talking about AI fliping economy upside down in 5 years and people being unemployable and on the other hand we are worried about wealthy families. Guess what if economy changes companies go bankrupt and wealthy people don't stay wealthy
What’s with all the MMT talks about, trying to figure out how it fits the framework. I.e if there’s no inflation, why can’t we print to pay our debts?
You can take out loans as long as people are willing to lend you the money. As you get more and more in debt, you become riskier and riskier to lend to, and banks are only going to lend to you if you're taking on a higher and higher interest rates on those loans to compensate for that risk.
This is what's encapsulated in your credit score.
For the USA it is similar. The USA has to sell bonds in order to increase the debt. If the debt gets high enough and there's low interest, people will refuse to buy the bonds because they're seen as too risky relative to the payoff. So then the fed would need to raise rates to sell bonds, which would increase debt in the long term and create a vicious cycle.
As for literally printing money, the simple reality is that if you do that at a massive scale and inflation doesn't result, its likely because the economy is dying.
@@TheStrangeBloke but we’ve had this experiment through Covid, trillions in deficit spending ending with mostly transient supply chain inflation and now sticky but very tame service sector inflation.
Do selling bonds even required to raise money? If banks fail, does FDIC insurance raises bonds? I believe they just “tap enter” and voila there’s money.
At least that’s the MMT position, that as long as you are an economy with your own currency you can pay all debts
Hello, my question is, How come Russia economy is doing so well even though they are in a war? Can they sustain it? and does America have a switch where they could instantly increase worker median wages? I honestly thought war was something detrimental to economies.
Russia had half a trillion in cash reserves that they are spending down to keep the economy running. This, in combination with rising oil prices have kept them afloat for now but they could be toast in a year depending on what oil prices do.
Listen to Doomberg, Russia sell oil, oil price is high. Do you wanna bankrupt Russia? Make oil cheap. Start mining oil in California, France, help Venezuela flood the market with cheap oil
@@mbican That's.... what Biden has been doing.
Get a Mohawk next time Noah. Be Ungovernable
I am a farmer and all of my college friends have large farms that they will inherit I mean farms worth $20-45 million. These have been in their families for 4 or 5 generations and they always pass it all down and if you really steped up capital gains and the estate tax most commercial farms wouldnt be able to be taken over by their kid's. These are by and large not lazy trust fund kids but people who work 70 hours a week for their whole lives and pay themselves a small salary so they can pass on the farm better than they got it. There are many other family businesses that are in the same boat. My preference by far is to drastically cut spending, start first with all farm subsidies. These are not at all needed.
killing step up basis wouldn't impact small independent family farming businesses that much unless I'm missing something. Step up basis only matters if the property has massively increased in value. That's pretty rare for a family farm. You might have a farm going from 10 million in value to 13 million over the course of 40 years. So there will be some tax on that but its not totally backbreaking.
@@TheStrangeBloke Actually where I am at farmland costs have gone from $500 ish acre in 1980 to $4000 plus in 2024 in northern NY and where I am from in Massachusetts farm land is now worth about $25000 an acre or more because of development potential. One of my friends owns about 10000 acres they are in western NY and their basis on that land is about $1500 and it's now worth about $6000 per acre. That's definitely not your average situation but I don't think most people realize that 90% of our food comes from the largest 10% of large commercial family farms like my friends that would be seriously effected by that. Small farmers now a days largely are either Amish, Mennonite or do it as a hobby/tax write off and have off farm income. There really aren't any small family farms left.
@@Ryanrobi Well, most family farms tend to get heavily indebted while their land gains value so the net ends up not being that significant. In a real sense there are a lot of farmers who would make more money if they did less farming.
My own family realized the farm was a lost nearly 30 years ago and has basically left it fallow, but is trying to hang onto the land anyway out of sentimental value and I just think this whole situation is absurd. It's all well and good to valorize the family farm but at some point.... you won. Sell the land and enjoy being wealthy. If you want to be self-employed, start a different kind of small business that isn't going to be a giant lossmaker.
First comment
Idk i lnow both me and my brother and sister stopped working jobs paying $150k plus cuz i paid so much in tax. I never want another w2 job that pays much over $65k. Currently i work a seasonal job in the winter that makes $45k and I run my farm and an excavation business the rest of the year that has plenty of depreciation and pay myself $15k and I actually do alot of barter locally. The hughest taxed person in the economy is a very high w2 wage, anyone wealthy knows this and doesn't make their money through a wage. I know nany many people who qualify for food stamps but are worth $10 million plus, its a pretty silly system really.
you don't understand how tax brackets work. No matter how many raises you get, you will always come out ahead. Tax brackets are marginal. If the rate over 100k is higher, then only money made over 100k is taxed more.
But also, yeah, W2 wage is taxed highly. That's why Noah is advocating for taxing investments more.
I understand how margin tax's work lol I don't like to spend $52k on taxes to net $98k when I can work for myself pay myself 45% pay $8k in tax's and buy the stuff I want pre tax with my business. I have more purchasing power and pay way less in tax and invest that in equipment and land that I used to buy after tax. Of course you are further ahead at $200k vrs 50k but you pay higher and higher rates and I just has a viseral negative reaction to be forced to pay taxes for stuff I do not want and never voted for. If you can't buy what you want with a business pre tax than you won't be ahead. That's why W2 work is a suckers game you need to work for yourself.