Video summary
The podcast features a discussion regarding California's deteriorating economic and political landscape, described as a fundamental sinkhole where prosperity is unraveling since the 1800s. The host notes that approximately one-third of people he has spoken with have already left the state, while informal surveys suggest nearly 87% of core tech leaders intend to depart. This exodus includes emerging technology CEOs and startups seeking stability elsewhere; for instance, a company planning an expansion from Southern California is now considering moving to Nevada due to uncertainty about future conditions. The speaker attributes this chaos to politicians making unsustainable promises during election cycles that they cannot fulfill once in office, noting that no politician has ever been elected by promising reduced government intervention or taking away resources. A central argument focuses on the state's massive financial liabilities resulting from broken fiscal promises and excessive spending. California established a system with some of the highest tax rates in the nation to fund projects like the high-cost bullet train, which cost roughly 30 billion dollars for limited utility, alongside other failed initiatives such as rural broadband programs where funds could have been better utilized by federal solutions like Starlink. The speaker highlights that public pension guarantees created over the last decade and a half now represent an unfunded liability estimated between 600 billion to one trillion dollars. Additionally, promised healthcare benefits for union workers remain underfunded, creating a situation where the state faces insurmountable debt while simultaneously facing rising costs in essential services like health care. The conversation shifts to the implications of new tax legislation, specifically the Billionaire Tax Act proposed by unions such as SEIU-UHW, which targets individuals with net worths over one billion dollars. While initially pitched as a temporary 5% levy on billionaires, the speaker warns that this mechanism allows legislators to adjust thresholds and rates in future years, potentially expanding taxation from billionaires to millionaires and eventually affecting lower-income earners. This approach fundamentally alters private property rights by allowing the government to assess all assets—including real estate, art, and vehicles—and theoretically seize them based on a majority vote. The speaker argues that this precedent degrades the foundational American principle of limited government intervention in personal wealth, moving toward a system where 51% of voters could effectively confiscate the resources of the remaining 49%. Historical context is provided regarding the evolution of income taxation in the United States, which began as a temporary wartime measure during World War II with rates reaching up to 94% before settling into lower permanent structures. The speaker contrasts this historical progression with current proposals for a wealth tax, emphasizing that while free energy and technological advancements like AI promise an era of abundance where robots handle labor and humans enjoy longer lives, political narratives are steering society toward control systems rather than liberation. He points out that despite the potential for happiness through innovation, public sentiment remains highly unfavorable toward technologies like artificial intelligence compared to other issues or even Donald Trump. Ultimately, the speaker frames the choice facing America as a dichotomy between embracing an optimistic future of abundance and retreating into dystopian fear-mongering fueled by specific political agendas. He suggests that if the United States adopts these expansive control systems, it risks falling behind nations like China, which may not follow such restrictive paths. The discussion concludes with a strong assertion that while technological progress offers unprecedented opportunities for human flourishing, allowing government overreach through wealth taxes and eroded property rights will lock society into a pessimistic trajectory where innovation is stifled by fear rather than embraced as a means to solve global challenges.
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What's happening with this California
flight stuff? Cuz I was with Palmer over
Christmas and I a bunch of other guys
from that side and um
I didn't know about it. I knew that it
was going to be brought in before the
end of the year. It's this sort of
sticky thing that seems to be following
people around, but it's also going to
get worse over time. It seems like
there's more and more rumblings that
stuff's going to keep on
This feels like the sort of core engine
of California's prosperity since the
1800s is now unraveling. Yeah.
Uh I'm in a bunch of group chats. I
talked to a lot of people. I would say
probably a third of people I talked to
have already left.
Uh you're asking about people leaving,
right? And I would say um like a survey
we did informally in a group which has
been published uh talked about is close
to 87% of people are going to leave.
Um these are the core leaders in tech.
And the other thing is I talked to a lot
of emerging tech CEOs of startups that
are doing really well, that are growing.
Mhm. And they're all looking to leave.
Like there's one company I was talking
to they're going to move up to Northern
California from Southern and they're
like, "Now I'm going to move to Nevada."
And that's because they're worried about
what's next. So California's in this
fundamental like sinkhole right now. Um
it goes back to my point about people
making promises.
In order to get elected, politicians
promise people something that they don't
have today. That's how you get elected.
>> Mhm. Mhm. You don't get elected by
saying, "I'm going to take stuff away
from you. The government's going to do
less for you." Show me one politician in
the last 100 years who's been elected
saying that. Mhm.
So in order and and the there's a
fundamental kind of like moment this
come-to-Jesus moment. Can you keep doing
these promises? Can you even meet the
promises you've already made? And in
California, the answer is no.
California set up a system um
where
we created the highest tax rate in the
country
because of all the success in Silicon
Valley, all the income that's being
generated, all the success and capital
gains and whatnot.
And use that to fund a bunch of
nonsense.
The the
bullet train to nowhere.
You know, [laughter] freaking like 30
billion dollars in nothing. Like the How
much is it? 30 billion. Um
And they've had six CEOs, by the way,
that have all been fired. And one guy
just got arrested. It's insane.
There's um got It was just published
that this this homeless program, 220
million dollars was spent on it.
Six homeless people got themselves out
of the cycle of uh poverty that they
were in.
Um You go down the list.
>> What was it sorry, just what was that
thing about the affordable internet? Oh,
bill. Rural broadband.
>> That was it. And for the same amount of
money that was spent, I think every
American citizen could have got
Starlink.
>> Yeah. That And that one I That's a
federal problem. I mean, don't
>> Yeah. Yeah. Yeah. Yeah. But You're going
to get me very emotional. I've been I've
been [laughter] very like You seem You
seem like an emotional
>> very like unemotional during our uh talk
about science in the future. And then
this is the opposite. Okay, this is the
the opposite that happens when
social systems become manifest like
um
rotten.
It's a system where people lie to each
other in order to keep themselves in
power, in order to keep their money
flowing, in order to keep this nonsense
up and running. People lie to
themselves, they lie to their
constituents, and the democracy starts
to become like, what's the point? Like,
does this even work? California in
particular,
um we made a bunch of uh changes to the
pension system. So, we have public
pensions for public employees in
California.
And over the past um
uh
12 to 15 years,
um those changes have resulted in a
bunch of guarantees to people on their
future retirement benefits that the
state simply cannot afford to meet.
>> Mhm.
The estimate currently is that there's
600 billion to a trillion dollars in the
hole.
Okay?
The state then has a question, how are
we going to like pay for all these
people, all the stuff that we promised
them?
And that's a big part of And then
there's also all the near-term stuff
like health care costs. Hey, we promised
them health care. We promised our union
workers health care. We've got to figure
out a way to fund the health care
because the promises were made.
But the promises were never funded.
The promises were never possible to be
funded. And then suddenly it all comes
to roost and everyone's like, well, how
are we going to make the payments now?
How are we going to fill the hole?
That's the situation California's in.
California has such a heaping liability
problem that it's now you're seeing like
all the rats jumping, you know, off the
ship or they're burning the ship or the
people are leaving the ship. I don't
know what the right analogy to use is.
But that's the chaos that's ensuing in
California in this very moment. And
that's And And so we talk a lot about
the billionaire tax.
The billionaire tax came about because
of one union, one guy, one union called
SEIU-UHW,
who set up a a scheme where they would
tax you 5% of your net worth if your net
worth is over a billion dollars, which
everyone in this audience like, who
cares? Screw the billionaires.
But what it does is it gives the state
assembly, the legislature, the ability
to in the future change the threshold
and the amount.
So theoretically you could take the 5%
on billionaires one time and make it 1%
on billionaires every year. Wasn't this
the case with the original income tax?
1930,
it was 1%.
>> Tell people the story of how the
original income tax
>> the original income tax was pitched
because we did not have an income tax in
the United States.
And that was again why this country was
founded. It was set up as we no taxation
without representation. There was a huge
tax scheme to fund all of the,
you know, nonsense that was going on in
England.
Uh and
>> Careful. Careful now. I mean, at the
time, very different, um not to speak to
the people, but the uh let's call it the
aristocracy. And uh you know, what we
call the elites today. And By the way,
the I think about the term the elites,
it's sort of like that Spider-Man meme
where like everyone's you're the elite,
>> [laughter]
>> you're the elite, you're the elite. Like
the tech guy's the elite. Like that's
kind of the moment we're in right now.
It's like the tech guys are the elites,
but like the tech guys last year were
telling they were calling out the NGOs
as the elites and then the you know,
it's just like everyone's an elite.
>> Your privilege is more privileged than
my privilege.
>> this is all rooted in Marxist
philosophies by the way. It's all this
like oppressor oppressed stuff. Like
again,
but all of those philosophies
fundamentally distinguish people's
agency. Like this is so critical for
people to understand. When you give
people a bunch of stuff or you create a
governmental system or economic system
that says you do X, you get Y, you're
you're a slave to that system.
You are now oppressed, no matter what
anyone tells you. You are not getting
risen up and you're not and pulling
other people down doesn't solve any of
your problems.
Another conversation for another day.
But in California, so we started out as
a one So they they way they started the
income tax in the United States is
they're like, "Hey, we'll promise
everyone 1% on high on incomes over
whatever it was at the time." I think
$10,000 a year. You probably look it up.
And that was it. And then over time it's
like, "Wait, we have to fund a war." So
we And now we're like going to expand
the highway system.
>> original the original income tax was 1%?
>> 1% on high net worth people, on high
income earning people. And that's it.
Jared, Chad this and find out what how
the income tax progressed over time. I
want to see this.
>> Right. And you can look at this. And so
then it became like suddenly today
everyone pays an income tax. In
California, I pay 53% income tax. And
you know, most people pay an income tax.
That's And now they're like creating a
whole new tax regime. And I want to talk
about this importantly what they're
trying to do in California. Here you go.
It was a temporary wartime tax. And you
know, again, leading up to this we had
tariffs to fund the government. The
government was small. Like the
government wasn't meant to be this big
system that took care of everyone and
did all this stuff.
>> Mhm. Keep going. Coming Coming out of
World War II and here's the the income
tax started out as 1% on income over
$3,000 a year.
Okay? Yep.
>> And and then there was like a
progression. They added a 7% top rate
later. And then you can kind of see here
when the thing kind of expanded. Oh,
wow. 1944 to 1945 in World War II the
top rate was 94%.
>> took everyone's money to fund the war.
But but that set a precedent because
what happened at that point is after
they set the precedent and then we had
this kind of FDR kind of New Deal
expansionism, all this stuff that
happened post World War II in the United
States was like, "Holy crap, we can get
the government to do big stuff.
Let's do big stuff to make our lives
better." That you can see that that
sound principle like it makes sense. It
sounds good in principle. But this is
where it leads us to today because every
year once you start thinking about the
government as solving your problems and
doing things for you that becomes
something that only escalates up. It
never goes down. Think about if 51%
can vote themselves what the 49%
>> So this is the next thing that happens.
So now so so that's income.
Let's say you've paid your income tax
and you own a bunch of stuff. That's now
your private property. You own the
stuff. That's yours.
So now comes along the government or
this new bill, the Billionaire Tax Act
in California. And for the first time
ever in the United States we're trying
to create a wealth tax.
It doesn't matter that it's billionaires
and it doesn't matter that it's one time
or 5%. What you're saying is that the
stuff that you've already paid taxes on,
that you now own, that's in your
backyard, all your iron ore that you've
stored in the backyard
>> Correct. Get or yeah, or your cool you
know, podcast studio. You own these
things. You've paid taxes. You've earned
your money and you bought the stuff. But
now the government can come in and say,
"You know what, we want that lamp. We
want half your iron ore. We're going to
take all your private property for
Right, your iron ore."
They're going to get all your private
property. That's what a wealth tax does
is it taxes people on post-tax earnings.
It takes away private property.
If you give the government the ability
to do that on even 1% of net worth
for billionaires
the next step is 5% of the billionaires
or maybe 2% of millionaires.
And then maybe it's
3% on people making that have a net
worth of 100 grand a year.
And by the way, to figure out how much
you have, what your assets are, you got
to send me a list every year of
everything you own. So now the
government gets to look into your house,
not just see what's in your bank
account, what stocks you own, but what
cars do you own? How What's the value of
those cars? How much is that art worth?
What's everything here worth? Private
property rights go out the window when
you institute a wealth tax cuz now the
government has the right to assess all
your value and to take anything they
want from you based on a vote where a
bunch of people raise their hand and
say, "We'll increase the tax rate to
this, 5%, 2%, 10%", whatever it is. And
here's the threshold and we'll take it
every year. And when you do that,
it eventually leads to 51% of people
voting to take everything from 49%.
That's That's the worst case. Like
that's the end state of this. Is it eats
itself and that's socialism.
And so I think that a wealth tax and I
look, I it's not going to affect me this
California tax. So like don't think that
I'm trying to like speak my book or
whatever the comments or bullshits are.
I think this is a fundamental principled
issue that by degrading private property
rights, we are setting a precedent in
the United States that is the foundation
of why the United States was set up in
the first place, which is for all of us
that came to this country to get away
from tyrannical governments outside the
United States that took all our and
controlled everything and told us what
to do all the time and we came here and
we get to have private property. Sure,
I'll pay my tax. Here's my 53%. Thank
you very much government for all the
great stuff you do, for all the services
you provide, but Now off. Now
off and leave me alone. And that's not
the case anymore when this passes.
Bernie Sanders, Ro Khanna, all these
national politicians, AOC, Elizabeth
Warren, they're all saying we need to
have a national wealth tax now.
So it's not just in California. This is
going to be the issue between 2026 and
2028.
The elites are the billionaires and the
tech people, they're coming after them
and the manifestation of that is to
create this wealth tax and that gives
the government the system by which
private property rights are gone and the
United States has a very questionable
future at that point. That's the thing I
worry about the most and and I just
oppose that with my optimism about the
future and this amazing
>> [laughter]
>> Like I mean think about it. Like this
amazing that's happening in the
world.
We're going to have free energy.
We're going to live forever. We're going
to have all of this insane stuff that we
never imagined abundance and resources
that we could never contemplate.
Happiness, spending time with family,
working less hours, robots that build
for us. Everything is going to get
better. Everything is getting better.
Everything is getting more amazing. And
then we're like let's ourselves.
Like
Why not? Cuz we'll just ourselves.
That's that and you know this is this
principle of like
I I I don't like using the term good
versus evil, but it's like are you
thinking about the future optimistically
or pessimistically? If you're thinking
about the future as these are control
system, this is these these tech guys
are crazy, this is dystopian, blah blah
blah. You know, the number one
most unfavorable thing in the United
States right now according to a recent
poll is AI. More unfavorable than Donald
Trump. More unfavorable than
uh everything. It's the most unfavorable
thing because it is this like I this
narrative that everyone's been
instituted in their minds that like this
is the thing that destroys us, yada
yada. And that's the choice we have.
That's the choice we have right now. Is
do we want to walk this path of
abundance
or do we want to lock ourselves up? And
I will say the counterbalancing force
and people won't like hearing this, but
the counterbalancing force in the world
will be a place like China. Because if
the United States walks this path, other
countries will not walk this path. And
it will glean the benefits therein.
And we have to recognize that.
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