Epic Real Estate Investing - Powell's Spare Key: Warsh, Fed Regime Change, and the New Exit Taxes Coming for Your Home Equity

Episode Date: May 25, 2026

The episode argues that Jerome Powell's decision to remain a Fed governor and keep his vote through January 2028—breaking 78 years of precedent since Marriner Eccles—is a warning about Kevin Warsh's promised "regime change" at the Federal Reserve and growing political pressure on monetary policy. It connects this to historical parallels (the 1951 Treasury-Fed Accord and the Nixon–Burns era inflation) and claims JP Morgan's billionaire clients are shifting heavily into alternatives and underweighting the US dollar. The host outlines three suggested actions: move idle cash to high-yield savings, build defensive hedges (including precious metals and credit lines), or pursue inflation-arbitrage via fixed-rate leveraged rental real estate. The second half describes "exit tax" style policies targeting homeowners and movers in five states—New Jersey, Massachusetts, Washington, California, and New York—and says six more states are drafting similar measures.

was the first time a Fed chair has done it in 78 years. And what worse said the week before should have made every saver in this country sit up straight. This is the epic real estate podcast, contrarian takes on money, housing, and policy without the guru nonsense. Let's go, let's go, let's go, let's go, let's go, let's go, let's go. Let's go. And look, the financial press is calling it a routine personnel change at the Federal Reserve. Jerome Powell's term ends. Kevin Warsh, Trump's pick, takes over.

Move along. Nothing to see here. But I think we've been lied to about what just quietly happened between these two men. Because what Powell did on April 29th was the first time a Fed chair has done it in 78 years. And what Warsh said the week before should have made every saver in this country sit up straight. Three things hit on the same day. The Federal Reserve held rates at three and three quarter percent. Four committee members voted against the chair. The most dissents at a single meeting since October of 1992.

A time when achy-breaky heart was terrorizing the radio and we still collectively thought slap bracelets were a viable fashion choice. And in his press conference, Jerome Powell had one last thing to say before he leaves on May 15th. He announced he isn't leaving. He's keeping his vote through January of 2008. So let's read the box score on that one. The man who's supposed to walk out the door in just a few days isn't walking out the door.

And by staying, Powell is delivering a message to the man taking his job. And that message changes everything about what we were expecting to happen to our money over the next decade, let alone the next 12 months. Powell didn't ask for permission to stay. He doesn't need it. His chair term ends May 15th, but his governor term runs through January of 28. and by law, the president cannot fire a sitting fed governor over policy disagreements. Powell holds the keys. Trump can't take them. He can only wait Powell out or pressure him out,

both of which are happening right now in public. So here are the questions we need to answer to figure out what's really going on. First, why is a man who could walk into a corporate board seat and a quiet retirement choosing to stay and dissent? Who is Kevin Warsh actually? And what did he say in his confirmation hearing that made Powell decide 21 more months of votes was worth the fight. Has this ever happened before in American history? And when it did, what happened to the dollar? And the question that might matter the most, why is J.P. Morgan quietly telling its billionaire clients to move 60% of their portfolios out of the dollar in the same week?

Now these are the questions. There's no leaked memo with the answers. There's no transcript of a private conversation, but the actions are speaking so loudly. Does it matter what anyone says? I mean, I can show you what I'm seeing, and then you can decide for yourself. Because what's happening isn't so much about a Fed personnel change as it is about whether the firewall that protects your dollar from politicians still works, and what to do with your money while we find out.

And whether Powell's stand holds or fails decides whether the dollars sitting in your savings account today by the same groceries next year or half as many if you're lucky so let's start with the first question what did Powell actually see well on May 15th the man who's been running the most powerful institution in your financial life Jerome Powell packs up his office and moves down the hall and the man Kevin Warsh walking in taking his seat just told the United States Senate on tape that he wants to do something to the dollar that hasn't been attempted in 78 years So here's what Powell saw, a president who'd spent two years trying to fire him, a DOJ probe that tried to use a building renovation as a removal pretext, a Treasury Secretary openly demanding loyalty, and now a successor walking in promising regime change at the institution that anchors your dollar.

Four moves, two years, all in one direction. Powell saw a Federal Reserve being slowly captured, and he understood that walking out the door meant handing over the law. last line of defense. So we made a choice. On April 29th at his press conference, Powell looked at the cameras and said, and I'm quoting directly, I had long planned to be retiring. The things that have happened really in the last three months have, I think, left me no choice but to stay. For 75 years, every Fed chair has done the same thing on their last day, cleaned out the office, handed over the gavel and left the building. Powell isn't doing any of that. He's keeping a voting seat on the board of governors through January of 28.

21 more months of votes. 21 more months of public dissents if he wants them. And look, this isn't a small move. The last Fed chair who refused to leave the board after his term ended was Mariner Eccles, 1948, 78 years ago. Truman pushed Eccles out as chair, and Echle said, fine, I'll stop being chair,

but I'm not leaving. He kept his seat, he kept his vote, and he kept a spare key to the dollar. That's exactly what Powell just did. But why would he do that? What is Powell afraid the new chair will do? Who is Warsh, really? Kevin Warsh has been packaged on the news recently

as a serious institutionalist. Stanford, Harvard Law, former Fed Governor, Financial Crisis Veteran, the official story. But there's a different story buried in his actual statements on the record. April 21st, Senate Banking Committee, Warsh's confirmation hearing.

He's asked about inflation. He answers, and I'm quoting again. I think that means a regime change in the conduct of policy. I think that means a different new inflation framework. Regime change, not policy adjustment. Regime change, that is not a phrase you want to hear applied to the institution anchoring your money. You want to hear regime change applied to the Hollywood Forum Press Association, or perhaps a problematic local HOA. Not the U.S. dollar. This is the man who's about to take over the institution that decides what your dollar is worth. And he's not coming from.

from a university. He's a partner at Stanley Druckenmiller's hedge fund, one of the most powerful macro investors alive. The man about to lead the Federal Reserve has spent the last 15 years thinking about how to profit from Fed decisions, not how to make them. And here's the part nobody mentioned. In 2018, long before any of this,

Warsh was asked by Politico whether Trump understood the historical importance of Fed independence. In his exact words, this might be a good time for a no comment. Now you can read that two ways. Either Warsh knew Trump didn't respect Fed independence and took the job anyway, or Trump knew Warsh had set it on the record and picked him anyway. Both reads are uncomfortable. Both reads end with the same Fed chair walking into the building on May 16th.

It's tough to tell what this means explicitly unless you have precedent. Has this happened before? Because that would be our biggest clue. Well, fortunately, there is a playbook that decides whether your dollar makes it through. and the man who wrote it did exactly what Powell just did. It was back in 1951. Picture this. Mariner Eccles, three years removed from being chair,

sitting on the board as regular governor, gets called to the White House. Truman's there. The entire federal open market committee is there. The president wants the Fed to keep interest rates pegged low to finance the Korean War. Inflation is running at 21%. Eccles knows the Fed can't manage both.

So the meeting ends. And Truman walks to the press and says the Federal Open Market Committee, or FOMC, this is the Federal Reserve's monetary policymaking body, they pledged its support. And it was a total fabrication. The committee made no such pledge. So Echols does something nobody expected. He releases the committee's own version of the meeting without consulting the rest of the committee. So basically he blows up the lie. And the standoff that follows produces the March 14, 1951 Treasury Fed,

Accord, the agreement that built the firewall between political pressure and monetary policy. 75 years of dollar stability came from that one act of insurgency. The chair who got installed after the accord, William Machesney Martin, kept the firewall standing for 19 years, and Truman never forgave him. Years later, the two of them happened to cross pass on Fifth Avenue in New York. Truman looked at Martin and said one word, traitor. That's how the political class talks about the people who, actually saved the dollar. Eccles used his spare key. The system worked and the man who did

the right thing got called a trader on a Manhattan sidewalk. So will history repeat itself? Is Powell doing the right thing? What if Powell didn't stay? Because 20 years later the opposite took place. It's a Wednesday afternoon in October. Richard Nixon is in the Oval Office now. And he's had it with Martin, the man who's been keeping the inflation lid on for 19 years. The man Truman called a trader. So Martin's term is ending and Nixon picks Arthur Burns to replace him. He picks Burns specifically because he thinks Burns will be loyal. He thinks Burns will give him cheap money before the 1972 election. Burns gets sworn in. He doesn't keep a spare key and he hands Nixon the master. Now watch what happens. CPI inflation in 1969 is running about 5% bad

but manageable. By 1974, it's 11%. By 1980, 11 years after Burns walked in, it's 13.5%. The savings accounts that anchored every retirees plan in 1969 are paying out half the purchasing power they started with by 1980. The savers who followed conventional wisdom, pay off the house, keep cash in the bank, trust the system, they got destroyed. Their solvency evaporated. The people who got rich in that decade did one thing. They borrowed money at fixed rates, and they bought hard assets. Real estate, gold, anything tangible. While the cash savers watched their solvency evaporate,

the real estate operators watched their mortgages shrink in real terms while their rents and home values inflated. Inflation arbitrage, the textbook play. It built fortunes that decade. And here's the part that should cause you to pause and evaluate your next move. Same setup is loading right now. Trump Warsh isn't a metaphor for Nixon Burns. No, it's the same architecture.

A president who wants cheap money. A new chair who's been promising regime change out loud. And an ongoing chair who's seen the movie before and won't leave the theater because he knows how it ends. Now, I can't prove what comes next, but J.P. Morgan can. And they're publishing it for the people who can afford to read their report. 333 families. average net worth $1.6 billion. Here's what they're actually doing with their money right now.

The J.P. Morgan Private Bank Global Family Office report came out in February, and 64% of those families named interest rates as the biggest risk to their portfolio. 61% named inflation. These are the people the system actually tells the truth to. So what are they doing? Well, they're not staying the course. They're not in the 0.38% savings account that the FDIC, says is the national average. They're running 60% of their portfolios in alternatives, twice the

average exposure to real estate and hedge funds. And Cambridge Associates, the institutional consulting firm, the ultra-wealthy use, tells its clients flat out, investors should remain underweight the U.S. dollar. In other words, they're telling the rich to get out of dollars, and they're telling them quietly. You see, your fee-based advisor reads the same Cambridge report. He just doesn't tell you. And there's three. reasons why. First, liability. If he tells you to act on Fed policy speculation and he's wrong, he gets sued. Two, the business model. Defensive moves mean liquidating positions, which means smaller paychecks. And three, the blind spot. Most advisors were trained in the 1990s in the

2010s era of Fed credibility. They've never operated in a politicized Fed environment. They literally don't know what to tell you. And look, I'm just a guy who buys houses for a living. I have I never thought I'd be on YouTube reading from the J.P. Morgan Family Office report. I didn't even know the thing existed 24 months ago. But the data is the data. While you're being told to stay calm, the people who can afford to be calm are quietly moving 60% of their money out of the dollar and into hard assets.

That's not paranoia. That's the playbook. Which means the question isn't whether to act. The question is which one of the three specific moves you make this week before Powell hands over the building on May 15th, before Warsh's first meeting on June 16th, before the window closes. Well, there's three moves. Pick one.

Move number one, tighten the basics. This is the version for the retiree who doesn't want to make any major moves but wants to stop bleeding from the obvious leaks. Pull your most recent bank statement out of the kitchen drawer right now. Look at the savings interest rate printed on the page. If it says anything under 1%, you're in that 0.38% crowd.

So open a new tab. Search top high yield savings May 2006. Pick one, paying 4% or better. Move the money. Same FDIC protection, 10 times the return. I mean, on $50,000 of idle cash, that single 15-minute move recovers about $2,000 a year. Liquidity restored, done. I posted the three accounts that I use at stack my banks.com. Move two, defensive structuring. This is the war chest move. A portion of your liquid assets converted to physical precious metals as a hedge against the Fed losing credibility. There's a link in the description for hedgedafed.com, because it's easy to make mistakes buying precious metals, and that resource will help you make smarter decisions. Look into a helock or a fallback line of credit to set up now, while underwriting is still normal, before Warsh era volatility tightens lending.

And I'll put some links for those resources below for you also. in case you need them. And for substantial home equity, protecting the deed inside an LLC or trust structure so a politicized environment doesn't expose your fortress to lawsuit risk. Active defense, got to layer it. Move three, strategic offense. Now, this is inflation arbitrage in textbook form. Consider using existing home equity to acquire cash flowing rental real estate with fixed rate leverage. Consider it because the debt shrinks in real terms while the asset and the rents inflate. If you don't like it, I get it. But it is the same place. the family offices are running at twice the average exposure right now.

Different link in the description for the turnkey real estate side of that. In fact, you know what, I'll just put it all into one checklist to make it easy for you. But pick one of the three, at least one. Take one action this week. The information, it's on the table. And look, Powell didn't refuse to leave because of an investigation. He refused to leave because he saw Warsh promise to reopen the 1951 accord, the document that protects your dollar from political interference.

and he understood that the only way to defend it was to stay in the building and keep a spare key. So you have two paths you could follow. Path A, do nothing. Leave your savings where it is. Trust your advisor. Wait and see what happens after May 15th. I mean, if history rhymes with 1969, you'll have less buying power every year for the next 10. Or path B, take action.

Pick one of the three moves I just laid out, at least one. The checklist is in the description below for you. Do it this week, before May 15th, while the rule. rules are still the ones you know. Here's the thing though, even if you do everything right this week, move the cash, build the war chest, lock in the fortress, there's still the biggest part of your money that I haven't talked about yet. What this means for your home. Because while we've been watching Powell and war fight over the value of the dollar at the top of the system, inflation has been doing something to the dollar at the bottom of it, specifically the dollar

sitting inside your home equity. And it's more than just inflation that's stealing your equity faster than your home value is growing. If you've been grinding for deals and coming up empty, you're not alone. That's why we created a way for frustrated investors to finally get cash flowing income property without the hassle. Go to frustratedinvestor.com. And now, back to the show. Three weeks ago, a state governor quietly signed a new tax into law that functions exactly

like an exit tax on homeowners trying to leave. Except they didn't call it an exit tax. They never do. Calling it an exit tax sounds like a toll booth run by the mafia. Instead, they do it quietly, using terms that sound like they were focused grouped by a sleepy accountant. An unrealized gains tax becomes a wealth assessment. An equity tax becomes a mansion tax. And an exit tax, oh, that's just withholding at closing,

or a fair share amendment, or a continuing residency obligation. Different label, same bill. Because what they've built and what they're building in five states right now is a toll booth on the way out, and it might as well be run by the mafia. One just got signed into law 22 days ago. Another's on the November of ballot with a retroactive trigger that's already behind us. A third is cutting a homeowner exemption by 89%. A fourth's been quietly running this play for 22 years, and the fifth generated 5.7.7.000. billion dollars in three years. The blueprint, every other state is copying right now. I'm going to

walk you through all five. I'll show you the sixth that are now drafting their version, and I'll show you what the smart money is already doing about it. Before these become permanent, before they're official. State number one, New Jersey. Now they don't call it an exit tax. They call it GIT, REP-3 withholding, which sounds less like a tax form and more like a rejected droid from the Star Wars prequels. Here's how the New Jersey toll booth works. If you used to live in New Jersey and you sell your New Jersey home after you moved out of state, the title company at closing is required to withhold 10.75% of your estimated gain or 2% of the gross sale price, whichever is bigger. So if you sell your New Jersey house for $800,000, whether that's a small gain or a big gain or

even a loss doesn't matter. The 2% floor kicks in. At the closing table, New Jersey walks away with $16,000 of your money, held in escrow, 12 to 18 months, interest free to the state, courtesy of you. Now, you get most of it back when you file the non-resident return, eventually, but let's talk about what $16,000 means when you're trying to start over in Florida. That's four months of rent. That's the down payment, first month, and deposit on a new place. That's the moving truck, plus closing costs, plus furniture for the rooms you couldn't pack, plus a cushion for everything you forgot. Utility deposits, cable insurance, the HOA welcome fee nobody told you about.

The New Jersey statute, 54A 8-9, has been on the book since 2004. 22 years, upheld in court, constitutional. Nobody sued it into oblivion. Nobody repealed it. And now, with blue states losing residents by the tens of thousands and their tax bases draining into Florida and Tennessee, every other state legislator in America is looking at New Jersey and thinking the same thing. They've been quietly pulling 2% off every non-resident home sale for 22 years. Why aren't we doing that?

Because here's the best part. If you're a state legislator, it's copy and pasteable. Any state that wants to replicate this needs one sentence in statute. No deed shall be recorded without proof of state withholding. That's it. That's the whole play. Four more states have already started writing their version. Let me show you the most profitable one.

State number two, Massachusetts. They don't call it an exit tax. Nope. They call it the Fair Share Amendment. A name so wholesome, it sounds like a PBS fundraising pledge drive. November 22, Massachusetts voters passed a constitutional amendment. 4% surtax on any income over. one million dollars in a single year sold as the millionaire's tax only affects the rich right now

here's what nobody tells you the massachusetts department of revenue has officially confirmed this surtax applies to one-time income events which includes and i want you to sit with this for a second the sale of your home let me show you this math married couple in cambridge bought their house in 1995 for two hundred and eighty thousand dollars today because it's Cambridge, it's worth 1.8 million. They sell to retire to Florida. Their gain $1,520,000. Federal exclusion for married filers,

that's $500,000, so their taxable federal gain is over a million box. That one-time home sale pushes them over the $1,083,150, Massachusetts threshold for the surtax. On top of every other tax they owe, an extra $40,000 to $60,000, on their house sale. And that doesn't count the Realtors Commission. It doesn't count the transfer tax.

It doesn't count the general sales tax. 40 to 60,000 dollars on top of that. Since 2022, Massachusetts has pulled in $5.7 billion from this tax. They projected half that. The money more than doubled expectations. That's the Massachusetts toll booth. It doesn't charge you at the gate, it charges you at the tax return. Same result, bigger bill. NYC Mayor Mamdani has openly cited Massachusetts as the template for his proposed 2% surtax on New York millionaires. The Washington Millionaire's Tax? Same blueprint. You see, when the money works, the model, it spreads. Yeah, but Matt, I'm not a millionaire. And what's wrong with the rich paying more? I've done three videos on this in the last 45 days, so I'm not going to get

into it other than to say that's what they want you to think if you approve of taxing the rich it lets them in the back door to tax you later that's how the income tax started you know that right it was only meant for the one percent and fast forward to today everybody pays same toll booth different sign out front and it's crazy because you did everything right you bought the house you paid it off you mowed the lawn you fixed the gutters when they broke and now when you finally want to do the thing they told you to do sell and retire somewhere cheaper they've set up a toll booth between you and the off ramp I mean it's the Dave Ramsey playbook sell your house bank the tax-free gain moved to Florida that was the retirement plan for 30 years it's broken in

2025 2.1 million Americans over 65 moved California lost a net of almost 13,000 retirees New York lost nearly 9,000 they went to South Carolina, Texas, Tennessee, North Carolina, Florida. Same list every year. The average departing retiree takes $600,000 to $1.5 million in home equity out the door with them, plus the 401K, plus the savings account. That money leaves the state tax base forever. So legislators in Sacramento, Albany and Olympia have two choices.

Shrink the government to match the shrinking tax base. They never do that. Or we tax the people on the way out. Government doesn't shrink, so they tax. Five states built the toll booths. Six more are pouring concrete. State number three, Washington. They don't call it an exit tax there either.

They call it the millionaire's tax until you read the residency rules. March 30th, 2006. That was like what, three weeks, four weeks ago? Governor Bob Ferguson picks up a pen, signed Senate bill 6346, and with that signature, Washington State, a state famous for having no income

tax just got its first state income tax since 1932, 94 years ago. For nearly a century, the last time Washington tried to pass an income tax, the Washington Supreme Court struck it down. This is one of the main reasons tech executives and retirees migrated to Seattle in the first place. That seal just got broken. One governor, one signature, 32 days ago. Starting January 1, 2008, there's a 9.9% state income tax on any household income. come over $1 million. That's the sticker. But here's the kicker. This tax applies to former Washington residents too. Retired from Microsoft five years ago, moved to Idaho, still collecting a pension that vested while you lived in Washington, they want 9.9% of it on any amount over a million dollars. Bob Ferguson apparently looked at the word non-resident and decided it sounded like a suggestion.

The toll booth follows you. And here's the part nobody's connecting yet. Washington is the third, state to formally pass a mechanism like this in the last 42 months. Massachusetts, November 2022, Connecticut, 2022, Washington, March, 26. And the pattern isn't slowing down. It's accelerating. The dominoes aren't falling one at a time anymore. They're falling in clusters. And here's what I think is actually happening. And I can't prove this part, so take it for what it's worth. I think the Washington Supreme Court challenge was already drafted before the ink dried on Ferguson's signature. I think they know it'll get struck down, probably in 2007. And I think they don't care, because the mechanism is on the books

and the next budget crisis that hits Olympia, and it will. They'll pass a tweaked version with the same mechanism, until one of them sticks. That's the playbook. You're watching it in real time. State number four, California. They don't call it an exit tax. No. They call it a continuing residency taxation. November of 2006 this year, seven months from now or so, California voters will likely see the billionaire tax act

on their ballot. Proponents need a certain number of signatures by June 24th this year. And that's why I'm making this video right now, before the signature drive closes, and this thing hits the ballot for real. You see on paper, this one only hits billionaires, one time five percent tax on net worth over $1 billion.

It targets 213 Californians, projected 100 billion, billion dollars in revenue. And you hear that and you think, Matt, good. They need to pay their fair share finally. I told you that's exactly what they want you to think. Here's why. Buried in the measure is language that doesn't just create

a one-time tax on billionaires. No, it rewrites California's constitution. Until right now, California had a rule on the books, a 0.4% cap on taxing things like stocks, bonds, and business interests. That cap is the only reason a broad wealth tax on ordinary Californians has been legally impossible for decades. This ballot measure carves a permanent exception

into that cap and then writes explicit language giving the state legislature authority to amend the act in ways that further its purposes. Further its purposes. Those are scary words from your government. I mean, that's the legal crowbar. That's the phrase the lawyers fought over before the ink dried. Because once the door is cracked open, once the constitutional infrastructure exists,

the legislature doesn't need to come back to you and ask for permission. They just need to argue that lowering the threshold from $1 billion to $100 million furthers the purpose. That dropping it to $10 million furthers the purpose. That a 2% annual wealth tax on anyone over $1.1.1%. million dollars further the purpose. Anyone making a hundred thousand dollars a year you get the point. A think tank called the Tax Foundation. They called this and I'm quoting directly a permanent unassailable state constitutional infrastructure upon which this and potentially future wealth taxes can be

legally anchored. Translation the 5% on billionaires isn't the tax. It's the foundation the real tax gets built on. Nurses, teachers, firefighters, the retired couple in Fresno sitting on a paid off house and a rollover IRA. That's who the fair share tax eventually hits. Not the 213 names on the Forbes list. Those 213 can afford tax attorneys in Wyoming trusts and a six-month move to Nevada. Most can't. They ran the exact playbook in 1913 with income tax. They're doing it in 2026. What's old is new again. But here's where California goes from regular wealth tax to full-blown exit tax. And this is the part that makes this measure unlike anything any other state has tried.

The measurement date, the date that determines if you owe, is January 1st, 2026, a date that is three and a half months or so in the past. Which means if you are a California resident on New Year's Day, even if you move to Nevada on January 2nd, even if you've already sold your house, even if you've been in the U-Haul driving east for three months. They're claiming the right to tax you. You cannot outrun a retroactive trigger date. It's the fiscal equivalent of getting a parking ticket for a spot you parked in last Tuesday, before the meter was even installed. And this isn't California's first time running this play. In 2020, Assembly Bill 2088 would have imposed a wealth tax on California residents, plus a sliding scale

continuation of that tax for 10 years after they moved out of state. 10 years. I mean imagine selling your house in San Diego moving to Texas and watching Sacramento send you a tax bill every April through 2036. The Socialist Republic of California wants your money and they're throwing massive amounts of spaghetti at the wall to see what sticks. Fortunately, AB 2088 didn't stick. But the billionaire tax act borrows the same DNA and the Union Coalition funding the measure SCIU United Healthcare Workers West set it out loud. Here's the quote.

Their spokesman said the measurement date was designed specifically so that billionaires can't avoid responsibility by moving their assets or claiming residency elsewhere. Translation, we designed this thing to be inescapable. And I ask, I mean, who made you the hall monitors for responsibility? But that's the California toll booth. It charges you on the way out.

And if the 10-year tank provision ever gets revived, which based on how many times they've tried, It's a matter of when, not if it charges you for 10 years after you've left. State number five, New York. Now, they don't call it an exit tax. No, they call it an estate tax modernization. Now, that phrase right there, estate tax modernization, sounds like a neighborhood zoning committee trying to add sidewalks.

It sounds harmless, bureaucratic, like something you'd skim past in a newspaper. Read the actual proposal, and you'll want to throw the newspaper. Zohran Mamdani, the new mayor of New York. city whose name sounds like a benevolent sorcerer but whose tax policy reads like a ransom note put forward his fiscal year 2007 budget in February buried in the middle of it is a line item that should stop every new york homeowner watching this cold he wants to cut the new york state estate tax exemption from 7.35 million to 750 000 an 89.8 percent reduction and he wants to triple the top estate tax rate from 16% to 50%.

This is that again. 90% reduction in the exemption, triple the rate at the top. And so now we're no longer talking about the Rockefellers. This isn't about the Hamptons. This is about ordinary middle-class homeowners. He wasted no time. This is no longer a billionaire's problem.

That's a firefighter's widows problem. That's a teacher's family getting a bill from Albany for the crime of holding a piece of real estate for 37 years. years. That's the toll booth they're building for your kids. New Jersey, Massachusetts, Washington, California, New York. They'd rather take more of your money than fight fraud and waste. And it's not stopping with those five states either. Michigan is getting named in national coverage alongside California, New York, and Washington. Connecticut passed a similar surtax in 2022 and is considering expansion. Minnesota added a 1% tax on net investment income over $1 million in 2000.

Maryland is actively drafting, Oregon is considering, Illinois floats versions every legislative session. Different states, different bills, different labels, same toll booth. 11 states total, five built, six under construction. Now I would typically give you an action plan here. Three moves, pull your file, make the call, do the thing. Not this time. Because the honest truth about this one is, if your state wants your equity on the way out, they've built the legal infrastructure to take it the toll booths I just walked you

through aren't loopholes you can paperwork your way out of their architecture they're designed to be inescapable here's what I can say if you lean left if you hate Trump I get it he's not for everybody he's an acquired taste and if you're watching this thinking finally the rich are going to pay their fair share I get that too on paper it looks like a free lunch at the billionaires table it looks like justice. But here's the thing about tax policy in America. It has a very specific, very consistent pattern, and you don't have to take my word for it. History is talking over me anyway. 1913, the 16th Amendment, income tax, meant for the rich, now impacts everybody. 1937 Social Security tax,

a 2% tax on the first $3,000 of your income. Today it's 12.4% on the first $184,500 of your income. times the rate, over 50 times the wage base. 1969, the alternative minimum tax meant for just 155 wealthy families. Now it impacts 5.2 million middle class households. Three different taxes, three different generations, three different administrations, Democrat and Republican. Three different rationales, same pattern. Start at the top and sell it as fairness.

Expand it downward every single time. Now, if you lean right, I hear you too. You're probably watching this ready to blame Newsom or Mamdani or the squad and the progressive wing. And I'm not going to tell you that you're wrong about them. But they are all politicians, red and blue, left and right. And when it comes to politicians and them taking action, I mean, if it gets votes, they do it. If it generates revenue, they do it. If it consolidates power, they do it.

That's the job description. That's the incentive structure. I mean, the only reason red states haven't built these toll booths themselves yet is because their tax bases are growing. Florida, Tennessee, Texas. They're absorbing the migration, not hemorrhaging it. They don't need to build a toll booth on the way out because people are dying to get in. Give them a decade of reversed migration and we'll see how that goes or a budget crisis or a new generation of legislators and we'll see who they really are. But we've got who we've got today and telling you to vote,

It feels like the cheap answer, the cheesy Instagram infographic answer. Make your voice heard, I know. But when you're dealing with state legislatures writing constitutional amendments that carve permanent exemptions into their own tax codes, voting is the only tool we got. So, vote. But know what you're voting for, not just who you're voting against. Because here's what history tells us. The party promising you a free lunch on the back of someone else has always,

always come back for your lunch too. Not because they're evil, not because they're left or right, because they're politicians. And politicians do what politicians do. It's not insurmountable, but this particular fight is stacked. But here's the thing, the exit tax is just one crack in a much bigger wall. And while we can't do much about what your state legislature does next Tuesday, there are six other system-wide failures happening right now.

All compounding on each other, all landing on your front doorstep, where the moves you make in the next 30 days or so actually matter. And that wraps up the epic show. If you found this episode valuable, who else do you know that might too? There's a really good chance you know someone else who would. And when their name comes to mind, please share it with them and ask them to click the subscribe button when they get here, and we will take great care of them.

Yeah, yeah, we got the cash flow. We didn't know home world, we got the cash low.