Welcome back to Episode 44 of the Meet: Kevin Report: We've got a lot to talk about today. First things first, apparently 99.82 of global land area is exposed to particulate matter above 2.5 parts per million which is linked with lung cancer and heart disease and it's worst in Australia and Asia that's not that great since 99.82 is pretty much everywhere. And afterwards I tried to do a little just Googling on it and typed in air quality based on zip codes and you kind of look at the globe pretty much all of the sources with the exception of if you were saying don't worry, it's fine, air quality is fine. So I'm starting to wonder.

Well, who's right, these studies or what? Google is telling you? who knows anymore these days? But what we do know is according to: Bloomberg Fast Money Stocks Quote Unquote Fast Money Uh, quants that is quants that invest in stocks related to Fast Money Stocks or stocks that are are pretty, uh, technically versed. In other words, they follow technical, broader market trends. Quants are apparently drawing trend lines and algorithms and rules that are saying right now the best thing to do is buy, which creates this sort of self-fulfilling uptrend that maybe we've been seeing that is quants that are using algorithmic trading data are basically saying it's my time. We have no idea whether that buy time is actually guiding Us in the right direction.

They're simply looking at technicals which we've regularly been talking about on the channel, sitting on top of Fibonacci support or sitting on top of the 200-day moving average. And so what's interesting here is Bloomberg's actually suggesting that if a stock benchmarks rally another two percent, you could end up seeing 80 billion dollars of equities get bought in the matter of a day or two thanks to the way the algorithms are programmed. So in a weird way it makes you wonder was last year's sell-off worse because the technicals were pointing straight down. Same thing goes: four potentially uptrends are uptrends exaggerated by technical trading.

It's an interesting idea, and in fact, if you look at for example, Weeble and you zoom out on the day chart, what do you end up getting? Well, if you zoom out on the day chart, you see the most obvious trend ever in 2022 and that trend is straight down. I Mean quite frankly, you don't need to know anything about fundamental analysis, anything about what the market is doing. You don't have to care about anything other than say see this one line right here. We'll even make the line a little bit bigger.

There we go. One line says down and sure enough, everything Trends down. Now obviously I'm oversimplifying this, but I think it's very interesting that quants are now suggesting. Well, since we have now broken that trend line and we're bouncing off the 200-day moving average and we're bouncing off the Phoebe and we continue to reiterate that bounce, maybe if we see as much of another two percent movement, it's time to unlock potentially 80 billion dollars of equity and inflows.

Now, Usually when I talk about inflows, you get a lot of people who go. Oh, but Kevin that's barely a fraction of the daily stock market volume for a particular indices of stocks or whatever. It's really important to remember that buy and huddle inflows are vastly different from trading. People who go in and out is very different from people who buy and hold Buy and Hold creates a foundation under stocks and valuations.

which means you can actually support a higher Trend thereafter. So I find it very interesting that Bloomberg's talking about this because it's potentially self-fulfilling. It's a way of suggesting that hey, maybe things aren't as bad. In fact, if you keep searching on Bloomberg what you find is now they're talking about this idea that the stock market is starting to unprice.

The worst case scenario: Now, they don't actually use this phrase. but I Think that worst case scenario they're referring to is a Paul Volcker. So if the stock market starts unpricing, the worst case scenario, it kind of makes you wonder. hmm.

is there potentially then an opportunity to hop on the trend and buy? And does that mean maybe we take advantage of a potential dip that we get right before Jobs data on the 10th or CPI data we get on the 14th or Powell Uh, dips That we get either today because we've you know Jerome Powell testifying before Congress today or more importantly, before the 22nd when we have the next Fomc meeting. Who knows. But it's interesting to think about what Fast Money is up to. According to Bloomberg, fast Money is up to buying.

Okay, next we got to talk about Biden's tax hike. Now this is an interesting one because apparently you've got a Biden considering more tax increases now. Nobody actually knows uh, if, uh, if this is going to go through. but I want you to see some of the proposal in Biden's budget? That's just out.

Let's get into it. Uh, okay, here we go here it is: Joe Biden is now proposing hiking payroll taxes on Americans making over four hundred thousand dollars if you remember back to the campaign days. Joe Biden No, not my campaign for governor in California but Joe Biden's campaign. Uh, where Joe Biden pitched the idea of nobody making under, uh, four hundred thousand dollars is going to see any kind of tax increases of course.

Then we had some beautiful inflation which a lot of people are saying oh, it's Biden's fault and they'll always say no. It's equally Trump's fault and everybody's basically pointing the fingers and angry at what's happening at the economy, Suggesting inflation is really just a fantastic way to tax people. So that way we can inflate away the government's insane debt. But Joe Biden is now proposing hiking payroll taxes on Americans making over four hundred thousand dollars per year.

Apparently this would also then allow the government new power and negotiating prices for Medicare Joe Biden says here: quote the budget I am releasing this week will make the Medicare trust fund solvent Beyond 2050 without out cutting a penny in taxes. Now this is actually very interesting because if you look at the U.S Treasury's forecast for what our debt is going to look like, it's absolutely horrible. It could not be worse. I'm going to show you a really scary chart and it's straight up from the U.S Treasury Department Uh.

Summary: Financial Report of the U.S government's finances. It's called the Executive Summary from 2022 And what we end up finding is if we zoom in over to one of the last pages in the report, it's the seventh page in this report. This is a the Executive Summary. The actual report is hundreds of pages long, but if we look at this report, take a look at what it says here.

an unsustainable fiscal path and the purpose of this report is to give people an understanding of how crappy things are today. This is not to say this is what is going to happen in the future. it's basically just a to say if we continue spending like we are today. Uh, things gonna be real bad.

Okay, and so what do you have over here? Well take a look at this receipts, spending and debt. So I want you to understand this chart because it's really important and ignore this little commentary that I made over here. Uh, we'll explain that in just a moment. So what this chart shows is as a percentage of GDP what are our expenses And the chart basically says well, let's assume defense spending stays stable as a percentage of GDP.

Let's assume Medicare Medicaid spending and Medicare spending stay stable as a percentage of GDP. Remember, Medicaid is for poor Medicare is for older. Get it? Aid Poor Care Old Anyway, Social Security Obviously a very large entitlement program. Some people take offense to the idea that this is called an entitlement program, but that is what it is.

It's something you pay into and then you get back in the future anyway. So if we keep those stable as a percentage of GDP which means even as our economy grows, the percentage that goes to Social Security can remain stable. In this case, it sits just under five percent. So we assume that Social Security spending stays at that level.

Well, what ends up happening is take a look at this: total spending on interest skyrockets. Uh, and that's because total? Well, all of these government expenditures might stay flat as a percentage of GDP. We'll actually see total spending increase on almost this. uh, this slope that's extremely unsustainable.

And the difference between that slope that's unsustainable and the flat spending as a percentage of GDP All of this orange and I'm drawing it in the Triangle right here. All of that is actually net interest spending right there. That's because basically the government's debt is just going to continue to grow and then we'll continue to monetize the debt. In other words, print more money, then pay more interest on the money that we've printed.

And then all of a sudden we're basically in potentially 2090 where we're spending 50 percent of our GDP on government expenses and debt, 25-ish percent for government spending and 25 on debt. That would be really terrible. Now, yesterday, we're looking at this: I wrote down that this assumes that we have zero austerity, which we don't want, zero contribution changes, zero tax changes. And of course, it also assumes that we wouldn't have this massively profitable uh, tax revenue from a a quickly increasing GDP Uh, through, let's say new Innovations Like let's say, artificial intelligence helps us 10x our GDP Well, then obviously the debt we have today would be easy to pay off because our economy would be so much larger, right? And so what's very interesting is that very much the next day after, uh, I'm looking at this sort of data with our team.

What do we have here? We have Joe Biden basically talking about contribution changes and tax changes. That's because we are on an unsustainable path and so it's no surprise that you have two things here. You're basically talking about increasing taxes and decreasing expenses for Medicare This only helps with Medicare because Medicare and Social Security are widely expected to be insolvent. In other words, not able to pay 100 of promised benefits anymore somewhere by 2030 to 2033.

Uh, and so over here. Joe Biden's suggesting hey, well, if we just increase taxes, we'll be able to fund Medicare all the way through 2050 without cutting a penny in benefits. That's actually a key line because some people say or suggest, oh no, Medicare and Social Security will never go and solve it. We'll just end up paying less money out, but that's not what people want to hear.

Nobody wants to hear them. The programs they're paying into might not be able to fully make their payments anymore anyway. So the President's budget, which will be released on Thursday proposes raising Medicare taxes from 3.8 to 5 on annual incomes over 400 000. Now keep in mind that is a 1.2 percent increase for people making over 400k.

That does not mean if you make 400 or 1 000, you have to pay another 1.2 percent on everything below that. It's literally just on the amount above 400k. So if you make 420 000, you're paying 1.2 percent more on twenty thousand dollars anyway. But it will also eliminate a loophole business owners and how income earners can exploit to avoid additional taxes.

Now I'd like to know a little bit more detail on this because you know sometimes what what Biden calls an exploit is actually a feature of the system. So we'll see if we can get a little bit more detail on this Medicare portion of the budget uh, will be uh, more publicly announced later today. move comes ahead of negotiations on on the debt ceiling and that's obviously very important because we expect that since Republicans have taken control of the house, it's going to be a lot harder to get things passed. Most uh, Americans are kind of under the impression that yeah, nothing's going to get passed this year, but budgets have to get passed, right? Debt ceilings have to get passed.

So obviously there are going to be areas where negotiations need to occur. Uh, tax increases though probably not something Republicans are going to go for, especially an increase of 1.2 percent on those making over four hundred thousand dollars. Now, even though that sounds reasonable because potentially you're only taxing those at the top, you know, half of one percent, it's still going to be seen as a tax increase, especially once we get more details on maybe some of these business loopholes. Ah, here it is okay here we go: in addition to higher Medicare tax rate on an income above 400k.

See, it's in addition to Biden's plan would eliminate a loophole that allows certain business owners who receive income through an S corporation, a limited liability company, or limited partnership ship to avoid paying taxes on Medicare taxes. to avoid paying Medicare taxes on some of their income. Wow, that's actually a very big deal. So in case you don't know, a lot of business owners use S corporations, not just people over four hundred thousand dollars.

In fact, I would venture to say the vast majority of business owners or contractors who make as much as a hundred thousand dollars of income or should I say as low as a hundred thousand dollars of income, it would make sense for them to have an S corporate structure. The reason for that is if let's say you have a hundred thousand dollars of income and you create an S corporation, you could pay yourself a salary of, let's say fifty thousand dollars and then save taxes on the other fifty thousand dollars to the tune of potentially uh, up to a hundred thirty three thousand dollars to the tune of somewhere around 12.4 ish percent. none of the exact percentages right now. Uh, because we're all putting this together with breaking news here.

But the idea is that hey, if let's say ordinarily on a hundred thousand dollars, you pay, let's say 12.4 in uh, Social Security Medicare and otherwise taxes, That's twelve thousand, four hundred dollars. Well, if you open an S corporation, you can all. you could basically pay yourself a salary of 50k and then take distributions of the other half the other 50k. And now you're only paying that 12.4 on your earned income.

Which is that fifty thousand dollar salary you pay yourself. As long as that salary is deemed to be reasonable for somebody who would have to take over your job not necessarily including things like brand value or a reputation you've created, but just actually doing your job, then you could save 12.4 on. let's say that other 50k that works out to about six thousand two hundred dollars in savings, which is more than enough to pay another thousand to two thousand dollars to a CPA to file an S corporate tax return or some sort of, uh, additional tax filing, right? It's a way A More compensates you to have an S Corp because you're saving so much more money basically pays for itself. Now there's a limit because some of these taxes fall off anyway once you get to about a hundred thirty three thousand dollars of income.

So the S corporate benefit really helps people in that range of somewhere between probably 50k of contract or income to maybe 130 140 000 of income. And and that's a lot of people. And so now, while not necessarily the entire 12.4 percent is is going to be uh, impacted here because let's see Medicare I Think this is they're only saying this is Medicare Medicare tax rate. So that gives you an idea of how much how the S Corp structure works, right? So the Medicare tax rate is only 2.9 Okay, perfect.

so that's both the employer and the self-employed So and now to make this very specific to Biden's plan, it says here: Biden's plan would eliminate a loophole that allows certain business owners who receive income through an S corporation or particular partnership to avoid paying Medicare taxes on some of their income. Okay, so that's only 2.9 percent. So in other words, if you were an S corporate owner and you're making a hundred thousand dollars, you're paying yourself a salary of 50k. The difference in tax to you would actually be about one thousand, Four Hundred and fifty dollars more that you would have to pay on every fifty thousand dollars of income.

Uh, that? Uh, that. basically you're paying yourself through an S corporation. Uh, so that is. that is actually a tax increase on people under four hundred thousand dollars.

That's going to get a lot of blowback from people in the Biden camp. Now, of course A lot of people are going to look at that and go, hey, why is that whole s corporate loophole? Fair Anyway, Well, there are counter arguments. Some of the arguments are that Well, if you're an employee at a company, half of your, uh, payroll taxes are being paid for by the employer anyway. And so by incentivizing entrepreneurs and small businesses, maybe you could actually increase GDP.

Maybe you could increase spending, right? That's the idea. That's why there are business tax write-offs is because the government wants to incentivize spend ending in GDP growth. There's a reason you get tax benefits When You spend money. It's actually stuff we talk about pretty regularly in the Elite Hustlers course which is a course I have on helping people make more money whether they're employed or or self-employed In fact, somebody who's self-employed for example, could have a side hustle that as long as it's making money, start opening themselves up to tax benefits that are much larger than would ordinarily be afforded to just employ.

Those are things we talk about in the Elite Hustles course down below next to the link for all of the other programs on building your wealth like the zero to millionaire real estate investing group uh, the Stocks and Site group where we have course member live streams every day. uh, Elite Hustlers has its own live streams as well as well as access to the Uh course member live streams. But anyway, this is interesting because that plan from Joe Biden is actually an increase on people making less uh, than four hundred thousand dollars. That could, somebody making a hundred grand might be paying around fifteen hundred dollars more in taxes if this Biden plan goes through through.

If they use an S corporation, the plan would also dedicate proceeds from the Obama tax uh to a specific Hospital Insurance Trust fund doesn't necessarily impact the funding or taxes. Obama Taxes is a tax that you have to pay over a certain number of amount of income anyway. I Think it's like one or two percent above over 200. Let me see here: Obama Tax Uh Obama Income Investment Income tax.

Uh, what is it? 3.8 on net investment income, but that is only above a certain uh, a certain income. A net investment income? Here it is. Mary Finally, jointly 250 000. So any income over 250 000 that's investment income gets a three point eight percent additional tax.

So what's really interesting is if you live in a state like California you know once you start adding in all of these additional taxes, you're getting less than half of your money, right? So you you look at uh, top rate of federal taxes somewhere around 39 California Around like 13.9 percent. Right now you're sitting at somewhere around. uh, let's see 39 Uh, plus 13 I mean you're already over over 50 percent? Uh, alone? You know you're somewhere around. uh, uh, 52.

Add the investment tax right here. Three point eight percent you're knocking on the door of California taxes, fed taxes, and net investment income with somewhere around 55 percent of taxes. It's wild now. I Get it? A lot of people like we'll just move out of California but then you're still paying like 43 44 uh of of your your income and taxes.

In certain cases, if your income is high enough, so uh, you know. But then again, you know Biden's argument here as well. everybody's got to pay their fair share. and I I suppose if more than 50 of your income going to the government is considered Fair Uh, okay, I think it's somewhere around the top.

One percent of taxpayers pay somewhere around 40 of all of the government's income tax revenue. It's It's pretty insane. Uh, anyway, so that gives you some insight into Biden's new income tax hike, which will affect people making under 400 000 a year. I Will particularly argue it will most affect entrepreneurs making somewhere between 80 to 140 000.

That's kind of that hit Zone where you're gonna get slapped in the face the most. Uh, However, it will also of course affect people making between 140 to 200 to 300 000 because they too will have to pay that increase to tax between. let's say the salary they pay themselves to say 50 and around 133-ish thousand dollars for that. Medicare Uh, tax goes away.

Anyway, let me see here. Uh Medicare Let's see here: Medicare Tax limit S Corp Let's go take a look at that. So in Excel let's say as an employer must withhold additional Medicare tax on over to it. That's fine.

What income is subject to the 3.8 Medicare tax? Let's see here: 3.8 percent Medical talks? Ah, interesting. Uh, so there's a surtax. they're called good Lord tax. Somebody in the comments here writes uh, the tax code is an Abomination You're not wrong about that.

It's super insane. So let's see here uh, in total FICA tax 15.3 percent and let's see the social Security base of 12.4 percent plus 2.9 percent Medicare Taxes good Lord Okay, and then a sir tax pass to order that. All right. So here we go: So S corporation wages are subject to FICA taxes.

Uh, but dividend distributions are not FICA Taxes include 12.4 percent of Social Security Plus 2.9 percent of Medicare taxes, right? Social Security Uh, those are the taxes that go up to that 133-ish thousand dollar range plus another 2.9 Medicare taxes for an unlimited amount of income. Good Lord Okay, so let's clarify the numbers here a little bit and let me look at the actual 2023. Uh, Social Security limit S Corp Because the numbers are crazy. Oh good Lord.

Okay, okay okay, the numbers have changed. This is actually really interesting. Wow. Okay, all right, let's let's catch up on some of these numbers.

Wow. Okay, all right. I'm gonna clarify all all of that in in sort of a a more clear manner because I have some more detail and I think it's going to make a lot more sense if I just clarify it all. So let's clarify that.

All Okay, let's let's repeat some of this, but just clarify it. So Joe Biden is officially planning on raising taxes on people who do indeed make less than four hundred thousand dollars, which is in contrast to his original campaign promise to not increase taxes On people making under four hundred thousand dollars now. Joe Biden's plan initially will seem like that is not true he's only increasing taxes on people making over 400k, but this information just out actually goes a lot deeper than that. Let's take a look at this in detail.

So Joe Biden is suggesting increasing the contribution of Medicare taxes from 3.8 on income above 400k to five percent. Now initially. first things first. we look at this and we go okay.

Got it. So more Medicare taxes for people making over four hundred thousand dollars. So if you make over 400k, only the amount over 400k gets an additional 1.2 percent tax, right? So if you make four hundred twenty thousand dollars, twenty thousand times 1.2 percent means you're paying an extra two hundred forty dollars on every twenty thousand dollars. Over four hundred thousand dollars.

That seems fair, right? I Mean yes, After all, that's Joe Biden's idea is that hey, you know we just want people to pay their fair share even though those in the top one percent pay about forty percent of all of the government's revenue. and some people, especially, uh, those making over four hundred thousand dollars pay somewhere between forty four to fifty five percent of taxes depending on what state they live in. Which means, in some cases, you're paying more than half of, uh, your entire earned income to the government. Let's just focus on where does this actually increase taxes for people making less than four hundred thousand dollars? Because that's pretty important, right? And after all, why is Joe Biden Thinking about making these changes? Well, mostly why Joe Biden is thinking about making these changes is because we if we jump into the U.S Treasury's sort of guidance on where we're going to be if we follow this unsustainable fiscal path of basically spending the way we are today on programs like Medicaid Medicare Social Security Defense spending.

Well, if we stay on this path, eventually the amount of Interest we're going to pay as a percentage of GDP is going to potentially go from maybe just paying three percent interest to potentially 25 interest, basically burying Us in so much debt because we're spending too much money as a country. The Treasury Department themselves is saying we're basically screwed if we stay on this path, and the only way to fix that path is basically by contributing less or taxing more. right? Or just spending less money via like austerity, Which is kind of like what the European Union did. So if we jump over to this, what's really remarkable is over here.

This is the loophole and it's probably going to hit limitations from Republicans I think Republicans are going to push back really, really hard on this, especially since they control the house. This is part of a budget negotiation though. it's going to come up with the negotiations of the debt limit personally. I Think this is probably a political Ploy This is probably Joe Biden Throwing this in here purposefully to piss off Republicans To make Republicans go.

Okay, Okay, okay, we'll We'll let you tax that one and a half percent more on people making more than four hundred thousand dollars. But you need to kill this loophole. This ending of the loophole. So what is the loophole? In simple English Well, in simple: English There is a loophole that if you are self-employed you could structure your income through an S corporation.

You don't have to worry about the name or the phrase or whatever. Basically, you call up a Cpea and you go yo make my taxes better. Okay, and what they can do is the following: They could jump over and say okay, let's look at your income. Let's say you and your spouse make a hundred and fifty thousand dollars As self-employed people, Let's now go in and say we're going to pay both of you a forty thousand dollar salary.

So we're going to divide up this 50k income in three ways. We're going to say 70k of it is a dividend and we're going to say 40K and 40K are salaries. now. What we're going to do is we're going to be able to change the way we pay taxes.

See, ordinarily, if you make a hundred fifty thousand dollars of income the normal way, you're going to pay somewhere around, uh, 12.4 percent in Social Security taxes plus about 3.88 3.9 Let's say in Medicare time, oh no, sorry. 3.8 in Medicare you're going to pay somewhere around. Uh, is that right? Is it 12.2 Maybe it's about 12.2 puts you somewhere around 16.2 percent in taxes. So ordinarily, at 16.2 percent in employment taxes, you're looking at paying just employment taxes of somewhere around twenty four thousand three hundred dollars.

That's what they're showing here. And this is for someone making under 400k, right? This is 150k. Well, if we change it to you getting a salary of 40, a salary of 40, and a 70k dividend. Now what we could do is we could avoid paying that 16.2 percent on 70k.

So what we're going to do is we're going to save you 11 340. That's what we're going to save you. Joe Biden is now saying hey, you know what? We're going to remove your ability to exclude that 3.8 percent from over here. So in other words, it's going to be an additional tax on people making 150 000 with this structure of somewhere around 2 660.

So in this example, simply put, if you're a self-employed person making 150 gram and you're using an S corporation, you might have to pay two thousand, six hundred sixty dollars more in taxes because of Joe Biden Ending that Medicare loophole. That's the bottom line. So think about that. The Treasury Department says we're on an unsustainable fiscal path.

Social Security and Medicare are probably going to run out of money by 2033-ish Joe Biden Here in this sort of breaking news from today in his budget reveal is suggesting, hey, don't worry, we're going to cover some of that problem by making sure we tax people more and this is going to make sure we can actually get to 2050 without cutting a penny in benefits. That's Joe Biden's argument. Now will it actually go through with a Republican-controlled house? Probably not. Now a lot of people make the argument that, hey, well, this loophole isn't fair.

Anyway, why is it that self-employed people get to do this well? One of the reasons self-employed people get to do this is because these are known as payroll taxes. and when you're an employee, this burden is split. So when you're an employee, 50 is paid by your employer and 50 is paid by you. When you're self-employed you're responsible for paying all of it.

And in order to incentivize people to pay business or to create businesses and go spend more money on computers, equipment, and take more risk, the government has come up with this idea that, hey, well, let's give entrepreneurs a tax break. Now that's the way they paint it, But the reality is, it's probably the accounting Lobby That's like, hey, how can we complicate the tax code some more and basically sell more corporate tax returns? Because if you think about it, if you don't have an S corporation, you could just pay, do your regular 1040 personal income tax return, and declare your self-employment income on Schedule C I Believe it is. Uh, now that is one tax return. If you want to take advantage of this tax loophole and save you know 11 Grand or whatever in that example.

Well, now you have to pay a CPA to do your corporate tax return and they might charge you a couple Grand a year to do that. So now you've generated a couple Grand a year in recurring revenue. For accountants, you save nine thousand dollars net net in taxes. Now the government is out eleven thousand dollars.

so it's probably the accounting Lobby that's pushed some of that. and that's probably why the tax code remains as complicated as it is. But it's very interesting to see Joe Biden create this potentially two-pronged attack I'm gonna raise taxes on those making over 400k, which is his campaign promise, but in the same vein, he's actually increasing taxes for a lot of self-employed entrepreneurs, especially those making under 150 160 000 dollars. A lot of those S corporation benefits start getting limited once you go above the Social Security limits of about 160 000 for 2023.

The now you're really only saving about that 3.8 percent. But what's really remarkable is: think about this example. This is where it gets a little bit crazier as well. Let's say you're making 250 000, right? That 3.8 and you're paying yourself maybe an 80k salary, right? Well, technically, you might be saving 3.8 percent on all of that difference, right? That's a lot because that's a hundred seventy thousand dollars times 3.8 percent.

Well, if Biden closes that loophole, it's actually going to cost somebody in this situation 6460. So in other words, if you're self-employed and you have an S corp, you're looking at this going. Dude, What the hell Man, You said no Tax increases on people making under 400k. This is clearly a tax increase on those making under 400k.

Closing that loophole is just sort of the media way to cast it aside and say yeah, Well, it was just loophole anyway. But it's been in existence for a very, very long period of time and a lot of people use it and rely on that and created s corporations because of that benefit. so it'll be very interesting. But it's just another example of politicians on one hand saying oh no, we're not raising your taxes, but on the other hand, raising their taxes.

Uh, and this is why I have programs on building your wealth specifically on how to maximize your tax benefits. Uh, whether you're an entrepreneur, whether you're an employee, the Elite Hustle's course is great for them. stocks and psychology of Money and zero to million are real estate investing. Those are some of the most popular, but those are.

Uh, that gives you a little bit of insight into what's actually going on with Biden over here. Okay, enough abiding tax stuff. We got a lot to cover here, so that's a Biden tax now. Uh, there's another update.

Uh, quite a few other updates today. So Gavin news apparently says he doesn't want to do business with Walgreens anymore because Walgreens is now suggesting hey, we're not going to sell birth control pills or rather, even abortion pills in about 20 States That's because about 20 Republican states have said look, we are going to find uh, or basically legally Sue companies like Walgreens if they sell abortion pills in 20 States because voters in those 20 states have said look, we don't want abortion pills to be sold and look, I'm not going to take a stand on whether abortion is is what you should believe in or it's not something you should believe in. That's not important here. What's important in this particular update here is for you to know that because 20 states are making it a crime to sell abortion pills now, you have the Governor of California trying to make a political Point suggesting you know what we're not going to do what we're going to do we're not going to do anymore is we're no longer going to do business with Walgreens So the Governor of California now to make a political statement is literally quote unquote reviewing all Medi-Cal and Covered California those are like California public health insurance plans Medi-Cal Uh, being you know, basically the the California's version of Medicaid Medicare uh And then you also have uh, the um uh at the uh California oh gosh, what's it called um California Covered California which is basically the California Marketplace for assigning you to Private health cares.

Uh, But anyway, Governor of California is now literally reviewing all of the California government's expenses to see where do they have deals with Walgreens and they're basically trying to cut Walgreens out of all of the Uh the deals that California has with Walgreens solely to make a political statement because California is upset that other states have voted to make abortion pills illegal. Now, in my opinion, that is a classic example of weaponizing your government to make a political point for the benefit of yourself, but to the detriment of society. Let's think about it and this happens on both sides. This is super super normal.

On one side, you've got Gavin Newsom now driving up costs in California so he can make a political point about abortion in other states and abortion laws in other states so we can set himself up on a pedestal for a democratic uh, a campaign for president. That's what he's doing. So he's increasing costs in California to set himself up for a presidential campaign. It's the same reason he sent stimulus checks in October of last year to people making up to five hundred thousand dollars, to buy votes and to prep for a presidential run.

It's kind of the same reason why in Florida you've got DeSantis slamming and essentially censoring Disney by making the argument that hey, if you speak out against my government, I'm going to be a thorn in your side now. whether or not you believe in the Florida don't say gay Bill does not matter like I I personally I Actually thought it was a pretty decent bill that that was my opinion, right? I Don't want my five or seven year olds talking about gender identity or or whatever or sexual identity or any of that. It's too young. That's just my opinion.

Okay, but my opinion doesn't really matter. The point is, you're having Governors on both sides of the country weaponizing their own States and potentially hurting massive Industries within their own states that generate tax revenues for their state and reduce costs for their citizens for the benefit of propping up their own presidential campaigns. now. I Mean that's just probably classic politics because that's just the way the world in America works these days.

But it's pretty wild. Pretty wild to see this happen. and uh, Bloomberg is calling this his national attention seeking campaign. Pretty wild.

Pretty wild. So anyway, that's uh. that's uh, how uh. politicians once again are weaponizing their own State budgets uh to set themselves up on presidential campaigns.

Okay, next? uh, apparently Elon uh or on Twitter is uh oh yeah, look at that. Twitter is now firing thousands of people as soon as this week. We've got to also talk. We've got some Financial.

We've got a lot of financial stuff to cover. Okay, let's jump into some of this, um, these topics. So the next topic that we're going to cover is we've got to cover what's going on with Tesla and Twitter. So first we'll start Tesla Then we'll we'll dive into Twitter.

So we'll go ahead and call it the uh Tesla and Twitter Uh, craziness. Last part we'll say was uh, Governor Insanity Uh, there we go. Okay, good. so Tesla on Twitter Craziness.

Oh man. Okay, so uh. next thing we have is yes, Here we go. All right now.

we gotta talk Tesla and Twitter and some of the craziness that's happening out there. So Tesla just slashed the prices of the model S and X by five thousand dollars and ten thousand dollars respectively. So that means 5K on the S and 10K on the X uh, the model S and X. And and keep in mind, there's a lot here.

We're going to talk about Byd and we're also going to talk about some Insanity happening in Twitter. But you've got the Tesla, Model, S and X now receiving the best resale value. Uh, within a group of 28 Us 2023 models receiving the best resale value award, Uh, that's fantastic for Tesla Some of those that ranked in the high rankings were number one, the Toyota Tundra number two uh, the Toyota Tacoma which tied and then I suppose second or third place with the model X. Then you add other models like the Ford Bronco the Corvette the Toyota 4Runner Honda Civic Ford Maverick Subaru uh Gore stay I don't know what that is and the Jeep Gladiator uh Anyway, the top 28 models pretty pretty broad I mean I think it's pretty easy to fall into the top 28 models.

so I'm not like super jazzed about Kelly blue Books uh argument here that hey, these are cars with the best resale value. but it is cool that the model S and X were featured in it notably the model 3 and why were not now I Find that interesting because at the same time as uh, these these ratings are coming out and you're seeing these price Cuts over at Tesla You also have Tesla in talks still with Indonesia about potentially building a factory. uh in Indonesia Now this is according to Reuters Reuters just reporting that EV production incentives are being increased in Indonesia They're not spending it terribly a lot of money on sort of these incentives, so it's probably just politically motivated to try to encourage other manufacturers to come to. Indonesia For example, Reuters is talking about how up to 200 000 motorcycles and 35 900 electric vehicles are going to get small incentives to Inc increase EV adoption.

They're also providing around 457.82 the stimulus money to individuals to convert gas vehicles to EV or hybrid I Have no idea how 457 dollars is going to do that, but in that same vein, a Reuters is reporting that Indonesia is still working on finalizing negotiations with Tesla to potentially build a factory in Indonesia There is a large amount of nickel in Indonesia so we know that Tesla wants to get closer to raw materials. But then again, we also know that Tesla is trying to stay away from nickel based batteries and believes that nickel-based batteries might only end up being important in the future. Uh, for a really long-range vehicles or even planes. and a potentially for cars.

We don't actually need nickel-based batteries so it'll be interesting to see if Tesla does end up manufacturing any kind of or building any kind of manufacturing plant in Indonesia Keep in mind Elon Musk is really anti the idea of copy and pasting factories. That is something that I've been calling for for over a year, but I'll take the L on that one. Elon Musk seems much more interested in what in basically doing customized style factories around the world. or maybe in Mexico and Northeast Mexico where we're still waiting on permits for that development to begin.

but the politicians are pretty much you know, like you know, like super excited about Tesla coming. You could say some, um, some inappropriate things about how excited they seem to be about Tesla coming. But let's just say they're rolling over to do whatever Tesla needs. So I expect Tesla will be getting those permits very quickly to manufacture a uh, potentially next-gen vehicle manufacturing facility in Northeast Texas Now what's also interesting is uh Elon Musk is uh, getting a little bit of heat hi Jack you want to come say hi Elon Musk is getting a little bit of heat for what's going on at a Twitter come on in here, say hi.

did you just wake up little guy? Oh you heard me because I left the door open I hope I didn't wake you sorry no I didn't All right Okay, you're gonna go over to Mom's that deal? Thanks dude for coming in. We'll see you later. you can hang out if you want anyway. So um, oh, another thing to know is I read uh sometimes I like to read the South China Post and oh careful clicking stuff.

uh what I really like about the South China Post is even though we know it's probably super biased because well, it's basically Chinese state-controlled media, right? One of the things that I think is really cool is take a look at this what they say in this potentially state-controlled media over here China's two sessions a 2023 Anyway, uh it says here: outgoing Premiere vows quote even greater business opportunities for foreign investment and what you see here is while acknowledging that external demand will remain relatively weak, China is signaling its intent to better integrate global trade and enhance China's appeal to foreign investors. And at the bottom of the article here, it talks about how they want to facilitate the launch of landmark foreign funded projects. Kind of like what happened with Tesla Giga Factory Shanghai which is one of Lee Kings major achievements during his term in Shanghai. Whether more projects like this will be launched is something we should look forward to.

So look at that. For example, you basically have the South China Post here. Uh, talking about how China wants to be more open economically to capitalism. It reiterates what president Aziz Jinping says about China that hey, we want more foreign direct investment in China And in the Chinese propaganda papers, they're basically saying hey, you know what a great example of foreign investment is Tesla So they're actually propping up Tesla A lot of Tesla investors have been concerned that there's a possibility Tesla might end up getting sort of restrictions placed onto Giga Shanghai because Xi Jinping is basically fighting the United States and there's some combativeness between the two countries here regard already sanctions or or trade restrictions, chip restrictions.

whatever. So a lot of Tesla investors are worried. crap. You know what does that mean for Tesla Uh, if if Xi Jinping could probably just flick his fingers or snap his fingers and put limitations on Giga Shanghai In fact, there are already some limitations on Giga Shanghai Giga Shanghai potentially wants to double from a million vehicles per year to potentially 2 million per vehicles per year.

but you're actually seeing some restrictions being placed on that expansion. so this could be China just talking out of both sides of its mouth. But let me put it this way out of a bottom line on China and Tesla I Actually think it's phenomenal that China is bragging about Giga Shanghai because it means that if Giga Shanghai ends up getting the middle finger from China, you're going to have even fewer American countries one or companies want to trust in China to invest in China And it's one of the reasons I Think you're seeing companies like Foxconn Apple and a lot of companies starting to invest in countries like India and Indonesia instead because they're worried about China. So China really has a lot of damage that they need to repair for their reputation if they really want to double down on this idea of let's get more foreign direct investment into uh into China And that's why you're seeing a lot of attention on Indonesia and India right now.

India Potentially being that place where people think that per capita income in India could 10x Thailand is also getting a massive boost 57 billion dollars going to EVs and smart Electronics by 2030. They believe they think in Thailand they're going to create 625 000 new EV jobs and boost productivity. Massive priorities. Byd is looking to also increase Manufacturing in Thailand On top of that, uh Traders Uh over at Byd are looking at Byd trying to diversify away from China especially since reports are now out that dealers are cutting prices at Byd after Tesla cut prices, then expanding Neo cut prices and now apparently Buid is cutting prices and their margins are already really tight.

They take maybe three percent to the bottom line and if they cut prices three percent. People like, how's Byd gonna make any money now Byd issued a statement on this and they say hey, look, those are Distributors promotional discounts those are not Official Cuts From Byd says Byd, the Chinese media is reporting that hey, you know what Byd is slashing prices so you're kind of seeing excessive price Cuts throughout the entire EV industry. Potentially to re-jigger demand, you're seeing a lot of fear right now in Byd pricing the stock pricing which is lagging Teslas particularly because people are worried about a lack of Pp or a lack of pricing power that Uh Byd might end up having. So you're seeing some massive movement over here at Uh Byd and how the stock is trading solely because of these price Cuts So and that's all thanks to Elon Musk right? Elon Musk Well, I mean it would have happened anyway, probably.

but Elon Musk starting potentially this price War Initially a lot of people thought oh, Byd will be insulated. Yeah, oops, Nope, not likely. Now who else is not insulated I Think this is really interesting is what's going on at Twitter Let's talk about some of the craziness that's going on at Twitter because there's talk about bodyguards going into Twitter bathrooms with Elon Musk Let's talk about Twitter's profitability still being a little bit of an issue. we're going to look at exactly that.

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But let's jump into this over here. This is Twitter's Revenue adjusted earnings apparently fell 40 in December according into the Wall Street Journal This is an update in an update to investors: Twitter Reported a decline of 40 percent year-over-year Revenue Now this is different from in November when we were looking at year-over-year numbers. it was potentially as bad as a 90 decline in advertisers actually spending money at Twitter. So it seems like things are getting a little bit better at Twitter but you're still having some insane firings happening at Twitter which is creating a lot of fear over at Twitter that the worst is not over yet.

What you've got over here is Musk purchase of the company with annual interest payments estimated at more than one billion dollars in just interest payments. Now they did make their first interest payment already, but what's worth noting is that the company is saying some advertisers are reporting to the platform and the company expects to break even in 2023. but the interest payment at Twitter is probably hitting a rate of somewhere around 15 for the interest paid over at Twitter. You also have a company that's gone from about 8 000 employees to about 2 000 employees.

So massive massive Cuts over at Twitter. Now on one hand, more cuts that Twitter is good for Tesla investors because obviously Tesla stock was the Piggy Bank that led to the acquisition of Twitter for Elon Musk The Piggy Bank continued to be broken to be able to fund losses at Twitter according to the Wall Street Journal more losses are occurring, especially since revenue is Uh has is basically down 40 percent. Now that's a problem. now.

if expenses can be cut substantially, that's fantastic because a Twitter wasn't even profitable before Elon Musk took over, which is a problem. but let's just say if we can get a decline in advertising from somewhere around maybe 80 to 90 percent when Elon Musk first took over in October to just a 40 Decline and staff is cut somewhere around 70 to 80 percent. Maybe maybe we can indeed get to that path to profitability now. remember Elon Musk promises.

Uh, and it's just a promise so he could u-turn on it that he should not have to sell more Tesla stock in 2023. Hopefully he doesn't have to sell more Tesla stock in 2024. Uh, but you know he's leaving open the idea of having to sell Tesla stock again in 2025.. that has also led to a massive increase in the number of people who are actually uh buying.

especially retail investors who are buying Tesla stock. The number of retail investors buying Dazzle stock has exploded. Last year, we put in about 15 to 17 billion dollars of huddle stock as retail investors This year, to date, by March 7th, we've already put in about 13 billion dollars of huddle money. It's in.

Insane. Absolutely insane. Another thing that is insane is take a look at some of these reports that we're seeing, uh, going on, uh, over at Twitter. So first thing we're going to do is look at this tweet storm over here here.

you've got somebody writing dear Elon Musk Nine days ago, the access to my work computer was cut along with 200 other Twitter employees. By the way, one of those other 200 Twitter employees in 2020 beat me on buying one of those Full House homes in San Francisco If you actually type into YouTube meet Kevin Full House home Painted Lady you'll see me walking through and analyzing the deal. I'm really glad I didn't buy it because I would have gotten sandbagged with it during Covid and run through all the San Francisco politics that go into Renovations But one of the Twitter employees who sold her company to Twitter ended up also being part of these 200 employees that just had their access to their computers turned off on Saturday and just this week or finding out that they got fired. Now what's really interesting is this tweet storm and the way it sort of breaks down.

Look at this: nine days ago, access to my work computer was cut along with 200 other Twitter employees. However, your head of HR has not been able to confirm whether I'm an employee or not you've not answered my emails. Maybe if enough people retweet, you'll be able to answer me here. Well, this kid ended up getting like 15 000 retweets and this person ends up trying to tag Jack and other people.

Elon Musk ends up replying, listen to this Elon Musk replies with what work have you been doing and he replies, hey, well I'll need to break confidentiality to break that question or to basically tell you what I've been doing here and Elon replies it's approved You go ahead and so the individual replies, uh, among other things, let an effort to save about 500 000 on one SAS contract supported by close supported closing down many others Really sounds like a lot of cost cutting going on. Led the prioritization of design projects across the country to make sure we were able to deliver with a small team. Okay, so you prioritize what you were working on? Okay, got it. Lead Design Crits to help level up design across the country or that's our country company.

Okay I don't personally know what that means Design Crits but then again, I'm not in that world. Was a hiring manager for all design roles. Okay, well I don't think Twitter's hiring right now, so that's probably not a good thing. Worked on efforts to steer the company away from focusing power on users uh, focusing on power users and onto younger users because our user base is aging and I thought that was really interesting suggesting that the Twitter user base is getting older.

so let's move away from Power users and focus more on younger Twitter people. Okay, uh, I could go on Am I allowed to talk about how the company has operated since you took over. Now this is kind of like dangerous and risky to say that because you're kind of like talking to the boss like hey, can I like basically publicly potentially talk about how you suck as a boss? uh and then also the original question: can we talk about that as to whether I'm not I'm still employed and then he actually updates his tweet to say uh, the HR manager actually did just miraculously reply. So I finally have confirmation that I no longer work at Twitter The next question is how you will make sure I get paid for what I'm owed per my contract.

Okay, let me first say if you're going to try to publicly out your boss about how you're upset that your access has been disabled and you're complaining about how basically your job was hiring people and leading teams that potentially don't exist anymore and you're curious about whether your job still exists I Understand, maybe some more clear-cut communication on Saturday would have been nice rather than your computer just getting shut off. but uh, what's pretty remarkable here is this Con this suggestion that okay, well how are you gonna make sure I still get paid per my contract like if I was somebody looking to hire someone in the world of tech and I'm like hey, maybe you're a great worker at Twitter but you're no longer needed I guarantee you I would not hire or this person for the attitude here like look the first one the first one I don't blame you Okay, you didn't hear back so it's like hey man like maybe people can help me out on Twitter totally fair game like that one fair game. Okay, this one like going into describing about what you're doing. Fair game.

Fine, You know what. you're either not needed anymore or you need what's up Jack YouTube Like that. there you go. Jack's replying to people in the comments.

go ahead. So anyway. Uh so so you know that that fair game. But as soon as you get into this, this threat of hey, can I talk about how the company has operated since he took over and my original question how can we haven't replied yet? Oh now I'm miraculously getting a reply from HR How convenient now that I'm getting views on Twitter Oh and can you make sure I get paid? It's like, ah, like not not the way in my opinion to try to set yourself up to getting a job somewhere else.

Personally, that kind of discussion would not be getting hired by me. The first part was okay. the next part was ridiculous. Now it at the same time is leading to a lot of fear because look what you have here The Daily Beast is now reporting that bodyguards are following Elon Musk everywhere at Twitter even to the restroom billionaire Elon Musk is routinely followed around at Twitter headquarters by two bulky bodyguards even when he goes to the restroom.

According to a Twitter engineer, two bearded guards went viral back in January after they accompanied Musk at his Securities fraud trial and appeared to have accompanied him to Twitter after his 44 billion dollar purchase. A Twitter engineer engineer identified only as Sam says wherever he goes in the office, there are at least two bodyguards very bulky, tall Hollywood movie bodyguards even when he goes to the restroom. He said constant use of bodyguards suggested that Musk, who has sacked a huge number of Twitter staff including coders, does not trust his remaining staff. Uh yeah.

Anyway, pretty crazy. Pretty pretty wild stuff that's going on, so obviously still a lot of Twitter tensions. Those Twitter tensions have the real potential of Weighing on Tesla stock in the future because as we know, Tesla stock is Elon Musk's piggy bank. So drama going on at Twitter does matter for Tesla and anybody who tells you otherwise does not understand Finance Now look I think everybody still has a lot to learn in finance and I don't think that learning is the right idea.

everybody can learn more. But anybody who says that Elon Musk selling Tesla did not lead to the massive downtrend and massive ability to short Tesla to the dirt last year is out of their freaking mind. Tesla's massive collapse last year was primarily the responsibility of Elon Musk's selling shares to buy. Twitter Now yes, that led to a trend.

Yes, there was some other bad news that contributed to some decline, but not down to 100 bucks. That was insane. That was a fundamental deal of this century. and it was all a response or all a result of, in my opinion, the root Iraq So therefore some of the madness that's going on.

Twitter In my opinion, if you're a Tesla investor important to pay attention to uh Jack what's your favorite cereal Captain Crunchy says all right let's look at another one. Uh, what games do you play Jack Minecraft and Roblox Minecraft and Roblox got it? Okay, uh uh I can understand bodyguards at Walmart or bathroom is a very dangerous place somebody here calls you meet Jack What do you think about that? Yeah, somebody here says are you going to start an investment and finance channel so my son can watch you and learn about money? Probably you like. probably a game changer. probably a gaming channel is what you want to start with.

Okay, uh, but what about uh, your thoughts on the International Monetary Fund? the IMF It's basically they they print money for the world. What do you think about them cool he says very cool. okay Jack do you like gold or do you prefer diamonds? oh it's Steve Steve's asking about gold Jack's like yeah, there's Steve where does Steve live in Minecraft house? huh? uh Okay, all right. What? What? Oh good lord, there's so much to cover.

Okay, oh my goodness. all right now we gotta talk about excess savings and recession. All right here we go. Give me one sec.

Jack Let me grab that really quick. Uh uh yeah, of course. All right You want me to type it for you? There you go. Go ahead and push the button.

all right track. same bye see you later dude. You gonna have fun at school today? No. All right, thank you.

Now we got to talk about the disaster that could actually be facing us. And yeah, it is the recession because we've regularly been talking about excess savings and how excess savings or potentially the white knight in the No Landing fairy tale? Oh crap yeah, that's exactly what uh, analysts are now suggesting that this idea that we can keep flying uh in the economy without having to land either via a soft Landing or a hard Landing recession suggests that everybody's just going to keep spending through this recession and as long as inflation Trends down we're Gucci everything will be just fine. After all, Bank of America has widely told us that hey, look, people who used to have 2500 to 5 000 in our bank accounts now hold somewhere around 12 800 in their bank accounts and that has only been drawn down by about 4.4 percent over the last year. That really suggests that hey, if people have a lot of excess money, maybe they could keep spending, keep Doling it out and actually lead to a GDP increase Then that's very interesting because the GDP increase would obviously mean no recession, No recession and continued spending might mean that Consumer Staples which I personally think are going to get reamed in a recession, particularly companies like Procter Gamble Johnson and Johnson any kind of restaurant.

uh, Target Walmart Costco you name it. I Personally think they're all going to get reamed under substantially higher costs, They're all scrambling to find more productivity or ways to be productive. Even Tyson Foods is freaking out like we got enough employees. Now we got to figure out how to be more efficient because we're not hiring anymore because we got enough employees.

Okay, the excess savings though, is potentially dwindling away, but at what level. And that's what we want to pay attention to Because the only thing that, in my opinion, could potentially save the Staples and restaurants or the companies that I just mentioned or Xsa. But unfortunately, Jamie dimon. The CEO of JPMorgan Chase does not see inflation coming down fast enough.

certainly not by the fourth a quarter. In fact, He suggests that the Federal Reserve could end up being substantially more patient, rather than necessarily continue to hike, but just remain at a high level for substantially longer than the market is anticipating. Now By some accounts, it's entirely possible that the Federal Reserve needs to hike rates up to five and a half to six percent, hike rates up to five and a half to six percent before they're done. But they could actually potentially remain at those high levels for so long that once access savings are depleted and they have less liquidity or less access to credit, we can actually end up seeing the real pain from this recession now.

Bloomberg Economics believes that households today have at best 12 months of excess savings Runway At worst case scenario, six months left. That puts the recession in alignment with when excess savings run out of between September of 2023 and March of 2024. Bloomberg Economics suggests that excess savings are somewhere potentially as high as 1.7 trillion dollars. However, that 1.7 trillion dollars may not account for Capital losses that people have incurred due to Investments they've made over the last couple years losing value when you consider that excess savings might only be 1.4 trillion dollars.

And the uh, the the Bloomberg staff actually believes that a lot of that 1.4 trillion dollars might end up being really illiquid. So Bloomberg suggests what if only, or what if the excess savings we have are actually way smaller than the reality or than what we actually currently think there are. In other words, what if we run out of this excess savings way sooner than we think? Remember right now, we know that the excess savings or just the savings rate in America has fallen to ridiculously low levels, righ