Grubstakers - Episode 62: Scott Cook

Episode Date: April 16, 2019

On this episode you’ll learn about how Scott Cook intuition on his company Intuit let taxes in American become a turbo tax of income Learn how complicating the tax system benefit the cook family to be accomplished equestrian family. Because owning animals to compete for societal status, is the true way of capitalism. My name is Rohan you all know how we are compensated but what you don’t know is the need for toilets all around the world. I hope one day when I use the bathroom it doesn’t hurt but I worry that day may never come. Subscribe rate and review and if you mention my name at McDonald in Kashmir you’ll get a beating!

Hey everyone, welcome to Grubstakers, the podcast about billionaires. This week we're talking about Scott Cook. He is the founder of Intuit, the man behind TurboTax. Find out about how he borrowed money from his father to create his company, how he believes that the countries using return-free tax filing are crazy, and why his entire family is equestrians. All that and more this week on Grubstakers. First they think you're crazy, then they fight you, and then

all of a sudden you change the world. Berlusconi flatly denies that any mafia money helped him begin a start to this. I've always had a thing for black people. I like black people. These stories are funnier than the jokes you can tell.

I said, what the fuck is a brain scientist? I was like, that's not a real job. Tell me the truth. But anyway. Five, four, three, two. Good evening. good afternoon, good morning. Welcome to Grubstakers, the podcast about billionaires. I am Sean P. McCarthy and I'm joined by my friends.

Yogi Poliwal. Steve Jeffries. And this week we're talking about Scott Cook, billionaire founder of Intuit, TurboTax, all that. We're going to get right into. But first, up top, we just want to say we heard your feedback about the crosstalk. That's right. So we fired Andy Palmer. And we tricked him into signing an agreement diluting his shares in the podcast by saying it was a purchase order for a Mustang guitar. We said that economist David Harvey needs us to sign this before he'll agree to come on the podcast.

He completely cut himself out of the podcast and we have now only got to split the Patreon three ways. I mean, the drops were fine, but when he brings his guitar in, it's like, come on, man. You know, you went through the subway with a guitar just so you could play this song on the show? He also agreed to mandatory arbitration.

Yeah. So we protect ourselves. Yes. We also heard the feedback about the mispronunciations, but firing Andy won't do anything about that. No, no. We can't do anything about that. It's here to stay. But I did just want to say, like, essentially, up top, before we get into this, the mission of this podcast,

we have the tradeoff between the actual week we get into this the mission of this podcast we have the trade-off between the actual week-to-week grind of making this podcast about billionaires but then there is also the long-term goal in my head and i think in all our heads is we want to create essentially an audio archive of billionaires the idea is that when we're when we're done with this i would like it for 20 years from now for historians to be able to go through a database of billionaires and say why are they playing so many fucking drops 20 years why why can't this guy pronounce a spirit decor oh he just did it again 20 years you think the world's gonna be around 20 years and people will still be listening to this show it is gonna going to be awkward when we go from 2,000 billionaires that we got to get done

to the hyperinflation hits. And suddenly we've got 100,000 people on the docket. Yeah, right, right. The show that keeps growing. Guys, we're doing 20 episodes a day going through the phone book to cover all of the billionaires in the post societal currency collapse. Which billionaire is starving this week?

Our special on Zimbabwe and billionaires. We just started doing people that bully us that happen to also be billionaires. Yo, fuck Broccoli Rob. He farted last night at the party. He ruined everything. He's not worth his eight bill.

But this week, we... I don't know. Maybe our episode last week was a little slow because we were talking about 401ks. But this week, it's going to be different because we're talking about taxes. That's right. We're releasing this April 15, 2019.

It's Tax Day in the United States of America. Topical. Yeah. If you're listening, you haven't done your taxes, well... Reply for that extension. And for international listeners, feel free to ignore this entire episode. If you're in one of the 36 countries that um has just pays you earn you don't file a tax return um props yeah let us know that your country is

better at taxes than our country for some reason yeah i mean when we talk about scott cook and intuit we're basically going to be telling you why the tax code is all fucked up in the united states for anyone thinking to move to the uS. that previously lives in one of those countries, listen to this episode. Trust us, you're going to learn a lot. Yeah, and actually,

if you wait for us to put up our paywall episode, we're going to teach you how to do tax fraud. The free shit is going to be the legal stuff, but we got to paywall

the part where we tell you to go into a museum and ask for a receipt and then write it off as a business expense. But I guess like just to kind of start with a quick overview of taxes and then we'll get into the biography of Scott Cook, the billionaire founder of Intuit, which makes TurboTax, QuickBooks. They do the Mint financing software as well. Before we get into that,

I think we did just want to kind of mention what we said there about taxes. And I think it's something that I've noticed doing this podcast is that theft or rent seeking or whatever you want to call it, it's generally hidden in complication. If you look at what's complicated, like healthcare, banking, real estate, taxes, all these things that are complicated are that way for a reason. So that you can't really notice that people are just like taking your money to either solve the complication for you or at various steps along the way. You know, you're just losing money at different points. I mean, and so things that are simple are generally not very profitable. No, no. And the more complicated, the more corruption is involved in it, most likely to benefit those that have enough capital to misuse the system for their own good.

And Steve was mentioning there are 36 countries that do what's called return-free tax filing. And among them is a ProPublica story, among them include Denmark, Sweden, Spain, I believe Australia as well. Japan. Japan. And so essentially what this is is the idea that if you say in the United States you get a W-2, the government already withholds taxes from that. So the government already has an estimate of what you make. So the government could just send you a tax bill or a tax refund estimate, and then you would just sign it, and then you'd be done. It would take less than five minutes.

But TurboTax, Intuit, as well as H&R Block and other companies have lobbied against this very heavily. And more than 95% of Intuit's revenue comes from the United States, according to ProPublica. TurboTax products made up 35% of Intuit's $ comes from the United States. According to ProPublica, TurboTax products made up 35% of Intuit's $4.2 billion revenues. So essentially keeping taxes complicated is a very profitable thing for Intuit and TurboTax to do. It's lucrative.

And even like most common filing is 1W2. Yes. So like most households are going to be 1W2 source of income. And for those people, well, especially starting next year with the tax changes, they're probably just going to end up taking the standard deduction. In other words, they could try to itemize some deductions,

but it would probably come up to be less than the standard, so it would make it pointless. Right, right. And for those households, the taxes should be really easy but it isn't because of all the bureaucratization of turbo tax and into it and all the h&r block type groups and because all of scott cook's kids need to be equestrians all of them need to have enough money to ride horses whenever they'd like when you're going through your schedule a schedule b schedule c you're going through your Schedule A, Schedule B, Schedule C, you're looking at your 1099s, just think about how much fun Scott Cook's daughter is having on her horse

right now. Scott Cook's son, Scott Cook's daughter-in-law, they need their horses. I mean, sure, you get the benefit of knowing that Scott Cook's family is fine, but you also have the cost of all of these hoops you got to jump through on their online tax filing services. Yeah, it's crazy, though, because even the amount of hoops that are put into it make it seem like it's easier than the alternative for some reason. The hoops that his daughter-in-law's horse jumps through?

Yes. Yeah, yeah. Flaming hoops. She's really good, guys. If they had to perform to us, perform for us, you know? Yeah. Like, if, you know,

America gets to see the Cook family circus, it might be actually, you know, all right, this is, you know, trade-offs. I mean, our taxes are paying for it. I don't know why we don't get a show, you know what I mean? Like, they have to jump through a flaming hoop.

Yeah, I think that'd be fun. Into a pool filled with gasoline. We hold up the card. I give that a 10 out of 99. But yeah, and so just to close this out before we get into the biography of Scott Cook and why things are the way they are, ProPublica, they cite a study that estimates essentially 40% of

filers or more qualify for this return-free filing. Because again, if you're working as an independent contractor or you make a lot of money, your return might be too complicated for this. But essentially, like Steve was saying, if you're just getting one W-2 from one job, the government already has an estimate of what you make, and they already check it when you submit your return to them. So they could just send you that in advance and say this is our estimate is it right and then you go yes or no and you're done you know so uh for you know so again 40 of filers or more might just be able to file online with the irs for free and the only reason that doesn't happen is because in 2002 the irs went into an agreement with uh turbo tax h&r

block among others which essentially said that the irs would not develop its own free filing program as long as these providers offered free filing to at least 60 of taxpayers oh wow and they've taken that and essentially used free filing as a way to upsell people. Yeah, yeah. And say like, hey, you can get it for free. Oh, by the way, when you click on our product, you can't find the free filing anywhere. So less than 3% of filers take advantage of it. It's like the Nathan For You, the free TV if you wear a formal outfit and you have to go through a small door and there's an alligator in the room. Like it's still like a dollar or some shit,

but you have to go through all these goddamn hoops. There's a free option, but that's how they brand themselves. They say, hey, we're free, and then you click in and it's $40. Yeah, I remember those ads where they just say, it's free, free, free, free, free, free. And there's actually no asterisks or anything.

Yeah. Of course there isn't. By the way, check out our paid episodes of the podcast. We're here to upsell you. I learned that this is the episode that we're going to get sued on. I'm pretty sure that our critique of the tax system will lead us to have our IRS filings all foiled. Everybody on this podcast will immediately be seeing an accountant to make sure we're ready to get audited. Hi. Yeah, nothing's wrong, but I'm pretty sure I'm going to be sued pretty soon.

But so I guess we can go through the biography of Scott Cook and, you know, again, how things got to be the way they are. And my main source for this is this book called Inside Into It by Suzanne Taylor and Kathy Schroeder. And, um, it's just kind of, uh, general, uh, authorized business biography where, uh, they don't really give you much dirt. They just give you the general history. And importantly, they don't really tell you the actual equity structure, which I think is always interesting. And one of these startup companies is like how much the people who did the programming or the grunts actually got out of it. But we do know Scott Cook is worth, according to Forbes, about $4 billion. He's born in 1952, grows up middle-class suburb of Los Angeles. His father, a guy named Chester Cook, was a Navy lieutenant, former Navy lieutenant, and he was a construction equipment sales manager.

So he was traveling often. Right. And Scott Cook, you know, grew up a lot of times with his dad out of the house. Right, like most people in L.A. with a hole in his heart. And that's why he vowed to make families spend time doing their taxes together. At the end, it's about family. Yeah. Make people spend several hours every year

screaming at each other about where the fuck is my schedule being um but so his father's eventually the president of what's apparently called crook company heavy equipment dealership which sounds legit. Yeah. Crook Heavy? His father was the president of Totally Legitimate Business Operation Heavy Equipment Company. No, no, my dad, he's just the CEO of Don'tAskAnyMoreQuestions.net. My dad was a team leader of all of these unions. I regularly saw him speaking with people who seemed very intimidated by him. A lot of my dad's former colleagues have broken knees now.

He was often testing the equipment on people I had seen him lending money to earlier in the week. Heavy machinery. Yeah, we always had bats at our house, but they ended up broken for some reason. Yeah, my father was a terrible baseball player, but man, did he collect those things. Yeah, he could not hit, but man, we just had so many baseball bats. He kept getting rid of them, getting new ones.

Go M's. But so Scott Cook, again, born 1952 middle class suburb los angeles and he grows up kind of a smart kid um and again i listened to a couple talks with the guy he's clearly a smart individual um he taught himself according to this book he taught himself how to program from different guidebooks he wrote his first computer program at age 15. He learned to code? Yes, he did learn to code. That's how you become worth $4 billion. Initially, he went into coal mining. He got laid off.

Realized there's no money there. But so he wrote this computer program age 15 in 1967, and then apparently they went to the basement of a school two towns away so that he could run it on an IBM 1620 computer at that time that was in the basement, one of those giant 1967 computers. So he's a smart kid. He's accepted to both USC and Stanford University, and they go to USC because they get a better scholarship offer.

His parents didn't pay his way into USC. It's not one of those situations. Well, again, in this book and his talks, he's very cagey about finance. I think he pretty clearly grows up upper middle class. But regardless, he graduates from USC with with economics and math double major 1974 he gets a mba from harvard with a focus on marketing nice um and then he joins procter and gamble and at procter and gamble he's the guy who decides hey let's put fluoride in the toothpaste you know what would get people really calm

to fill out 20 pages of tax returns? What's that, Scott? If we put fluoride into products that they have to use every day. He tried to get them to put fluoride into TurboTax. We could make the population docile. You open the TurboTax box and it sprays fluoride on you.

Scott, come on, man. Listen, it'll be like glitter. It'll be a glitter of fluoride and the moment you open the box... His first job was just generating right-wing conspiracies. That was like representing most of his income.

The day TurboTax became a downloadable software was the worst most of his income the day turbo tax became a downloadable software was the worst day in his life but my fluoride that would actually be a good strategy for procter and gamble would just be like putting out uh fluoride is bad for you rumors so nobody notices that they're putting like fucking asbestos in the product People are really not going to pay attention to this shit if we just convince them the fluoride is bad. I mean, yeah, it sounds like a good strategy. So what he's actually doing there, he's hired as an assistant brand manager for Crisco Shortening.

I don't know if you guys ever use that stuff. Yeah, I've used it to season cast iron pans and stuff well he's you can thank scott cook for that thanks scott he's like without you i wouldn't have the worst cooking oil his suggestions were all like what if we make the manual 400 pages long okay hear me out i know you can bake a cake in like an hour. Yes, of course. But what if it took three days? Wait a second.

And you had to pay us $50, and we tell you we'll help you do it for free, but then once you fill out all the applications, we will give you an immediate bill, and you will not see the free option. I mean, it sounds like the rebate offers you see in like coupon books you know we'll help you deduct on fuel right uh but so he's the assistant uh brand manager for crisco then he's promoted to the brand manager for crisco and he in various talks he gives he always credits his time at procter and gamble is like

teaching him about you know research and customer data and all that kind of stuff, product development. His wife was also in marketing, I believe. Right. He meets another brand manager that, if you don't like how we pronounce things on the podcast, get ready. His wife's name is Signe Ostby. Oh, man, that hurt. So I... Go ahead. What's your guess? I already looked it up.

Signy Ostby. How's that worse than mine? No, that I think is right. Really? I played it before we started. Oh, I didn't hear it. Signy. Like any of it with an S. Sean has always been worse than me. Oh, I didn't hear it. Senya. Senya. Like Enya, but with an S.

Sean has always been worse than me when it comes to pronouncing. You sounded like a fucking anime character. Yeah, it sounds like a person from not the US, Sean. I thought that was like a fucking monster from Evangelion when you said it. Yeah, it was. Shinji has to get in a mech. Yeah, her name is Shinji Akari. Shinji has to get in a mech and defeat Scott Cook's wife.

But regardless, he meets a brand manager. They get married. They've been married ever since. And their son and now daughter-in-law have horses, which we'll get to. We'll talk about that in a moment. Yeah. But regardless, and so he's working in Cincinnati for Procter & Gamble, but eventually he convinces his wife in 1980 to leave Cincinnati,

and they both move to California. And he wants to get a job, or he does get a job, with Bain & Company. And Bain & Company, you might know, we talked about this on the private equity episode. It actually wasn't at this time in private equity, but this was Mitt Romney's private equity firm where uh he destroyed the livelihoods of tens of thousands but uh his work for bain is just kind of business consulting like mckinsey does you know where you come in and you say hey here's what your business can do to be more efficient uh i love consulting it's just like

what the fuck do they do yeah and just say you see the part of this ledger that says pensions? Let's just put an X through that. What is this? Compensation? So if we could move this a little lower, I think we could get the numbers much better. But yeah, so regardless, from 1980 to 1983 he has uh what he describes or no what the book describes is a quote high-paying consulting job at bain and company in california and so he works on a few different things apparently he consults for an import car

rental uh firm he does some consulting for a windsurfing vacation adventure business he does consulting for wells fargo home banking which involved telling them to open fake accounts in their customers name when in doubt open the account a later inspiration for turbo tax course. To process fraudulent returns. But yeah, so he does consulting for Wells Fargo. And according to the book, eventually in 1983, he leaves Bain because Scott Cook courts a Cali computer component company, which was called Western Digital. It was a California computer component company. Excuse me.

But it's called Western Digital. And he gets them to be a client for Bain. And as part of that, he was told he could be the manager of that account, but he brings the account in and they put someone else on as manager. So he's like, fuck this, I'm done. So that's what happened. Western Digital, the hardware company, they make like external hard drives and stuff? Or is it a different Western Digital? I don't know. It's probably the same one. Probably the same hardware company, they make like external hard drives and stuff? Or is it a different Western Digital? I don't know. It's probably the same one. Probably the same, yeah.

They make good external hard drives. Yeah. Well, so thank God Bain put someone else on that account. Right, right. Yeah. He would have fucked it up. Yeah, he would. But so he leaves Bain in 1983.

And like the way he tells it in these various talks that he gives is essentially like his wife would, he got this idea when his wife is complaining about doing the bills. You know, like she was doing the bills and she's like smart, but it's like a huge pain in the ass at this time, 1983. And also around this time is when the personal computer comes into play. You know, Apple II is released 1977. IBM 1981 releases their PC, you know, and then Compaq gets into this market

and stuff, and so the personal Macintosh is 1984, so, you know, this market really starts taking off. Early age of computers, but also a perfect time to create a software that would help people negotiate the tax system. Yeah, and so basically, like, his idea is like, okay, let's create some sort of software program that makes bill paying easier.

And so he goes to the Stanford campus, and he's looking for essentially an engineer. Because he's like, he wrote this program, but he doesn't really know how to, like, do in-depth programming, you know. So he needs a programmer he's an ideas man he needs an execution right right you need someone to do the work for yes he needs he needs somebody that he's later gonna fuck out of equity yes of course as as is the classic silicon valley store and apparently it reaches like notch levels yes yeah well of inequality yeah um and again like from this book it's hard to get an actual sense of the equity but there is like a minor screwing his co-founder out of

shares thing that'll go through briefly but essentially he walks onto the stanford campus and the way they they tell the story is he approaches a comp sci student and asks him where the engineering lab is because he wants to put up these flyers trying to hire a programmer right and then this guy is a guy named tom uh prulix which i'm told is how it's pronounced uh who told you that some website said it was pronounced like trulex or something like or rhymes with trulex i don't know. All right. But anyways. He has a brand name as his name. You're right. Tom Clorox. Tom Lysol here.

We bond it because of my work with Crisco. I really bond with brands. Part of the deal is Scott Cook gets to name him. That's part of the deal? You work for me, but I get to name you. Like a company ID situation? No, like your physical name will be changed. for me, but I get to name you. Like a company ID situation? No, like your physical name will be changed. Yeah, I'm just going to brand you.

Like, Scott, it's not legal. 60-40 split, and I'm in charge of marketing your life. I went to school over this, so. Yeah. Trust me, I know what I'm doing. I used to work at Bain. Yeah, but so 1983, Tom Prulix. So yeah, this computer-sized student that he meets on campus

shows him where the engineering lab is, but then he asks him, like, hey, why are you looking for a program? And he's like, I'm trying to build a personal finance software. And so he says, oh, I'd be interested in that. So apparently Scott Cook interviews some applicants, but actually this guy who ran into it first was the most qualified and uh the most enthusiastic so essentially they start um what's

called into it and the idea is that there are accounting softwares uh that are existing right now but they're all very complicated so they call it into it because it's intuitive you know i thought because he was into it but um interesting thing again from this book and from his uh personal stuff we don't know how much startup capital he is but he does give this talk where he kind of talks about where the initial money came from and he definitely had some money from Bain. He borrowed some money. And so he had a significant amount of startup capital one way or another. He was the one, Scott Cook was the one paying the bills.

While Tom Prulix kind of just worked for a salary and some equity. Literally, how are you making ends meet? How much total capital had you raised to work for those three years? Well, we went through lots of sources. Did your parents give you a loan? Yeah, I borrowed money from my parents. I used my profit sharing and retirement from Bain. I used my savings, these lines of credit.

So you really went all in. I mean, you took all your savings. You went into debt. Yeah, I borrowed from my dad's savings, his retirement fund. Then we went out to get venture capital. We were looking for $2 million. That didn't work. So one of the guys in the office said, well, this isn't working.

Let's go talk to some rich people. I said, well, that's good, but I don't know any rich people. And he said, well, I know two. So we talked. Emphasis on the part where he borrowed money from his dad right do you want to play the other one what was the other one there's two borrowed from my dad quotes

those two rich guys they wouldn't invest anymore I'd burn through at this point my savings and my profit sharing plan from Bain I'd burn through the the lines of credit my savings and my profit sharing plan from Bain. I'd burned through the, the, um, uh,

lines of credit, uh, and credit card. I'd kind of burned through all that, uh, borrowed from my dad. Uh, and it looked like that was all going to go down.

Computer enhance the part where he says borrowed from my dad. But yes, he did the whole rundown there didn't he yeah i don't know it's like how do billionaires get their money yeah borrowed from my dad sharecropping but so what he's talking about there and again the book goes through this is essentially uh his job is to sell it and then tom prulix is supposed to write this program 1984 he does write the first version um of what's called quicken i think they called it quick check originally but then they changed the name to quicken and this is like a personal finance

software that's supposed to be very intuitive easy to use apparently it would allow customers to write checks like put a blank check on their printer and then print onto the check, maintain a check register, add up income and expenses. And the idea is if you have regular bills, you can actually use this software to just kind of print your checks every month and save yourself some time.

So it is pretty cool and innovative in the sense that it's not like a complicated accounting thing. There's just like a check on the screen and you like fill it you know so uh tom prulik spends about a year like working his ass off building this thing and then in 1984 they launched the um the dos version for ibm pcs i believe apple 2 version comes out 85 but importantly what he's talking about there is they have a version and they have like these stopwatch trials where they like get random people to use other accounting software versus their own and show how much faster. And they approach more than 20 different venture capitalists in Silicon Valley and all of them turn them down. Oh, really?

Yeah. So it was like and then he mentions there one of their early employees has like a rich father-in-law and a rich former CEO at his old company. So they borrow $151K from those two. But they don't actually get VC money for the longest time. So essentially their early history is they have a fine product, but they don't have any VC money. And they're just kind of burning capital capital uh you know like hoping and waiting for their product to catch on yeah they're rich kids they got a whole bunch of good ideas but no real execution at this point because they don't have enough money to get the product out to people

but like the way he talks about it so defeated like in all of the borrowed money from my dad quotes he's just sighing so heavily just like, I borrowed money from my dad, and then these other people didn't give us any money, and now I'm a billionaire. He had to do some things he wasn't proud of. He's sad like the guy that had his sucked dick for the fire festival. He just has a grimace on his face the whole time. No, my life is not like that movie Midnight Cowboy.

I borrowed money from my dad i didn't borrow money i earned it but yeah so it's like essentially they have from 1984 to 1985 is their rough period like in 1985 there's and this is their you know founder mythology or whatever 1985 they have seven employees and then in 85 they hit a six-month period where they have to stop paying salaries. Oh, wow. So three of the employees quit because, of course, there's no salary. So 1985, there's six months where they're not paying salaries. But essentially what happens is they managed to get some banks, including Wells Fargo,

where he was consulting for Bain. They managed to get some banks to buy the product and the banks give them some money for their little personal finance software because that way the banks don't have to develop their own and then like wells fargo gets exclusive license to sell it in california you know the banks are kind of doing a shitty job selling it but that gives them some capital and then with that capital they spend like 125k on a direct mail campaign where they put like in um you know pc magazine and some other uh magazines of the day they put these like ads with you know testimonials and like a 1-800 number and coupon codes and this actually finally

gets them the word of mouth after like after you're done reading the article about tie fighter in pc magazine pc gamer like it'll be some like oh yeah and also there's this new tax filing software what what year is he doing the mail-in um shit uh 1986 okay they do the campaign just in time for the holiday season. The ad has special text that you can only see if you have taken the recommended dosage of fluoride. It was all part of my plan. And a free packet of fluoride. You get toothpaste with it.

It's the only part of it that's actually free but so essentially what happens by the 1986 holiday season they're like you know selling this thing hand over fist it's primarily spreading from word of mouth because it is better than competing products at this time uh but so an important thing happens like 1987 they have 13 employees 1988 30 employees 1989 100 100 employees um and just something that happens here that that we go through with like a lot of these silicon valley garage startups is essentially you have you know people like scott cook is the capital and then you have the programmers and the programmers are working 70 or 80 hour weeks actually developing this thing right and then a lot of times they get fucked out of money uh like i said in this inside intuit book very

vague on how equity actually worked here but i did just want to like do one other thing one other story from this is like they build a desk mate version of turbo tax in 1988 which if you hadn't heard of desk mate i hadn't either but, but it was like some other competing operating system that was obviously thrown by the wayside, but apparently it was like extremely hard to, yeah, it was an old OS that has since been discontinued, extremely hard to program for,

but I think DeskMate offered them like a million dollars guaranteed to build a DeskMate version, you know? Oh, really? But so, of of course it's like tom prulix and i think one or two other engineers have to like program for deskmate and so they have like you know tons of sleepless nights to the point where uh tom prulix ends up in the hospital with a blood ulcer because he's just been working non-stop you know uh and then

some other engineer from the time is quoted in the book as saying quote sometimes at night i sit at my computer and cry i am so tired but i just have to keep working oh man he told his mother that at the time and how did they get record of it the mother snitched i i guess so do you have any information on your son? Well, I do have this one story. That's so sad, though. Yeah, very incredibly sad. Apparently the engineers nicknamed Deskmate, they nicknamed it Deathmate.

Because it was just impossible to program for. And then they sold none of it, except for the million guaranteed they got. But, you know, it is just kind of like, it's an an interesting story where of course scott cook is the one worth four billion dollars and then one the closest thing the book comes to enlightening us on the equity thing is that uh there's a story of a dispute between tom prulix and scott cook and what basically happens is tom prulix uh believed that when he stayed on in 1985 with no salary, because like we said, they were not paying salaries,

so four of them stayed on with no salary. He believed that when he stayed on in 1985 with no salary, he and Cook had essentially restarted the company together with equal equity, except for a small amount set aside for Cook's initial capital investment. Cook believed that Tom had been compensated with a large but not equal equity grant in 1986. So they had to get an independent mediator, and then they gave Tom a couple hundred thousand shares.

Sure, sure. And that was good enough. But the point is, you know, today Scott Cook is $4 billion, and to the best of my knowledge, Tom Prulix is not at a billion. He's got several hundred million. I'm sure he's doing fine, but he's the one who actually did the 80 90 hour work weeks um you know programming the thing and put himself in the hospital with an ulcer busted his ass and he got one-fourth of the money that uh cook went away with at the end of the day and then one of

us learned deskmate it wasn't you and you know that's even like compared to the actual early hires like the other engineer who's like crying at his desk every night because, you know, like the engineers apparently requested like office furniture, just futons so they could sleep next to their computer. Yeah, it really puts the average employee of Intuit today's situation into perspective. Nearly no equity. Working 40 hours a week or more yeah but regardless uh what happens is uh they they launch this product and then from 87 onwards they're like tripling their revenue every year so it's very popular spreads by word of mouth and um they're they're only like real conflict during this time is Microsoft is busy squashing every other software like a bug in their fucking windshield.

Microsoft. What are you, a semi-truck on the freeway of life? But so Microsoft gives them some lowball acquisition number in 1991. They turn it down. And then Microsoft releases Microsoft Money in 1991 they turn it down and then microsoft releases microsoft money in 1991 and it was just kind of like from my reading of this had microsoft really put this on the front burner they probably could have just destroyed quickbooks or quicken whoa whoa whoa are you telling me microsoft didn't put in the extra mile and make something that they made good enough

quality to beat a competitor. All I'm saying is if they had moved Yogi's dad from Excel to MS Money, we wouldn't be doing this episode today. I was hoping that Microsoft Money was Microsoft actually printing currency and just goes back to company credit. It's like a company town for the Microsoft employees.

You just pay them in store credit. I think that's how it started. And they went, you know what? We could make some other money from this too. What if we didn't break the law? Microsoft money is a key plot element in Mad Max 3. The Redman faction. It's like money, but better.

But so regardless, Microsoft Money has released 91. Go M's. Yeah, and Quicken, they compete with it. They released their Windows version two months later, but they undercut Microsoft on price. They have these $15 mail-in rebates. They're focusing on this full-time, whereas Microsoft's got a whole bunch of things on their plate.

And they have this kind of loyal customer base. So they're actually able to secure, I think, like 70% of the market share. And then, you know, both Quicken and Microsoft move into preloading their software on PCs. And they get, I think, about 40% each of PCs come with either the Quicken or the Microsoft money. But regardless, Quicken IPos in 1993 morgan stanley takes care of that one and scott cook sells five million dollars worth of stock on ipo day but holds another 140 million at the time wow and uh so yeah he's uh extremely rich when they ipo and uh and then i guess the the only other story from this time before we kind of move on to the rest of the scandals is essentially Scott Cook was actually very hesitant to go into the tax business.

But Tom Prulix, the guy who really did most of the work here, insisted that they go into the tax business. He was trying to convince them in 89. Instead, they didn't go until 93. So they actually had to pay a much higher price but the point is you know we were mentioning today turbo tax is like 35 of their revenue so it's like this is their real growth industry is like keeping the tax code complicated but what essentially they do is they buy a company called chip soft which uh mike and evy chipman had uh made this turbo tax shop sorry chip Yeah, that was their actual name.

Their names were Chipman. Okay. It's another name. Yeah. So somebody is just great. Like there's some like obscure Silicon Valley thing where you get to brand people with new names. Purelex. Purelex, Chipman, Cook.

When Scott Cook bought the company, he branded them. Yeah, it was just like a craze. It lasted like a year or so. People were just like kind of companies. It's like sharecropping. It's like Prince and Carmen Electra. People don't like to talk about that period in Silicon Valley when they were optimizing the last names but regardless uh these guys uh mike and evie chipman they they build turbo tax they sell their

company for 25 million to an investment bank then the investment bank sells it to um into it for 232 million in september 1993 And since essentially ever since 1993, Intuit's main job has been keeping the tax code complicated. Yeah, that sounds about right. Yeah. This company that makes money from making tax software for the people benefits from complicating tax law to make it easier for the people, but somehow also make them more money. Seriously, a lot of the rhetoric about taxes

being complicated i think just comes from advertising yeah i think so from intuit and people you know his family's all marketing base but it makes sense that like i mean taxes certainly are complicated but it would behoove turbo tax to be like in every advertisement you know what's hard taxes yeah it's like you know what you hate doing right right our taxes right right like specifically yeah yeah it's in the real life and it like it's like, you know what you hate doing? Right, right. Our taxes. Right, right. Like, specifically into real life. And it feels like almost like an infomercial quality where it's like, you know the hardest thing about your day?

The hardest thing about your year? Taxes. I wonder if there's just some sort of turbo that could fix all your problems. TurboTax. I think, like, so what we were playing is Scott Cook gives various talks to i think stanford university and and one other uh talk there but yeah so like he addresses that like

at one point he says you know like taxes are so complicated or something and it's like dude you know why that is yeah it's a lot it's like a lot of a lot of like sort of silicon valley platform origin stories are like, I or my spouse was just really struggling with this thing. I was like, there's got to be a better way. So there's a new software platform that continues to make it complicated. But it's our complication. I'm just imagining the Tinder origin story.

My wife kept catching me cheating on her. And I was like, there's got to be a better way to meet anonymous strangers. There is a Russian app that's for threesomes, I think. And the guy that created it was because his significant other was embarrassed to want to try a threesome. He's like, you shouldn't be embarrassed. That's a natural thing. So he created the app to help people that want to be in threesomes get together and i mean like it makes sense most good ideas come from you know seeing a problem and fixing it but uh they're like that really a lot of these stories are just like so based around like a

narrow legal definition of what's possible in some industry they just ruthlessly exploit yeah that's like the like the uber ceo who i hope we do one day on this show um i remember a talk where he was describing the origin of uber and he's like one time i was late for a meeting waiting on a taxi and i was like there's gotta be a better way so i decided to destroy all labor if this one thing's easier for me the world can get as complicated as it needs to like i So I decided to destroy all labor law. If this one thing's easier for me, the world can get as complicated as it needs to. I had a tough time once. I didn't know how to do something, so workers shouldn't have rights.

But that's like one step away from supervillain status. That's all that is, right? At one point, I got pricked in the finger by a little thorn, and from then on, I decided to cut all of the trees in the area like that's like i was afraid of needles yeah so i had to design this like impossible machine that gets all this information for a prick of blood i was waiting for a taxi and i thought what if instead of paying this guy money i paid some other company money and he just uh breaks even after maintenance and expenses if that even yeah but i do like the idea of a russian building a three-way app like that's the kind of app you think of when your gdp falls 50 percent in 10 years just kind of like the world's gonna end

so let's make a three-way app late capitalism apps what's free but also not free but yeah so to talk about like what scott cook has kind of said on the topic of you know the government doing taxes and everything here he does give this kind of interesting talk to stanford students and one of them asks them like first how do you ethically do political lobbying and his answer is like such bullshit where he's like well you know our job is like congress people where he's like, well, you know, our job is like Congress people, they deal with such complicated stuff all the time and we have to explain things to them, you know, like they need the truth to understand these topics. They don't always know all these complicated things. So we have to like explain the truth to them.

And that's why we hire lobbyists, which, you know, not true, but yes, one on the right. How do you approach political lobbying from both a business and ethical perspective? Yeah. How do we approach political lobbying, from both a business and ethical perspective? Yeah, how do we approach political lobbying from a business and ethical perspective? Yeah, we do. We do. I'd say we don't do much, but we do. There's one issue where there's a lot of confusion,

so we try hard to help the legislative staffs of the legislatures hear the other side of the story. And because they hear, well, when you go to a congressional hearing, and I've attended a few. You hear the other side of the story, a briefcase full of money. I've never testified in front of Congress, but I've attended a few hearings.

It is amazing how hard it is for a legislator to do their jobs. So it could be a committee hearing on banking regulation having to do with options. So it could be a committee hearing on banking regulation having to do with options trading or something. And you've got these legislators up there who are lawyers. They have no clue.

They're being passed sheets of questions to ask by their staff. And then you see the people who testify literally lying through their teeth. Okay. They do a little bit. They did like 11 million, wasn't it? In lobbying.

Yes. On lobbying of Congress in 2018, I think. It is amazing how hard it is for a legislator to do their job when they are not currently sitting in a steakhouse with us. Ordering off anything they want at Peter Luger's. It is amazing how much they fuck up their jobs when that is not taking place. But yeah, I mean,

that's just a completely disingenuous answer. And then there's the other drop where he talks about the government doing your taxes. People who want the government to do taxes to basically do what we do. And 36 other countries do. The government would collect all this data that they don't actually have,

but in theory they could somehow collect data on your income, your deductions, whether you paid somebody for child care. They'd have to collect data on your student tuition. And then they would do your taxes for you and just send you a bill saying here's how much you owe, send it in. So that sounds really attractive on the surface, and that's basically what we were trying to build, is to collect all that data so when you arrive

we can just tell you what your refund's going to be. That's good for us to do, because we're not the enforcers. The laws are enforced by the federal government. And so our system works where people report all their income, and out of the fear that if they don't report it, they will have a jail term. So what happens when somebody knows that the government can't find the income you got, that the government doesn't know about?

So think waiters and tips. What percentage of tip income gets reported? And he says, like, tip income zero gets reported. And the idea is essentially if the government sends you a bill, if they underestimate, then you're not going to tell them right okay so you know we've said a couple times there are 36 countries that do what he's describing yeah and many of them are like large advanced countries they're comparable levels of corruption to us right right but they can still do it well he literally says hey what we're doing is something the

government could do but can't because they're not us. Yeah he's just being like inconsistent in like answering that question. For some reason 95% of Intuit's revenue comes from the United States of America. Yeah I'm not shocked about that. Yeah. Oh what was it? Something like

42% of their revenue comes from their consumer line which includes Turboax, QuickBooks and that stuff. So, yeah, I mean, they tend to lose a ton from the IRS using information it already has to estimate and then report what you owe and then just do your return for you, basically. And if you get a refund or you owe more and they decide that. Right. For free. Who's the ultimate middleman it's like everything you hear about like when bernie sanders says like every other advanced country does single-payer health care this is a thousand times easier than that right right this would be single payer for your tax refund basically so yeah of course we can do that. Right. Outside of Cook getting screwed over, would it save the people money as well in the long run? Of course. Hours.

And it would save them hours of their lives, too. Yes, your time. It empowers you in a lot of ways, I think. Right. To just have, like, oh, okay, this is why. All right, fine. I think it would prove to people how easy most people's taxes really are to do. If you just have one or two W-2s and that's all your income,

I mean, it's really easy. It's just intuitive. But, Stephen, what about the gig economy? And we could finally end that TurboTax program where Scott Cook makes you change your last name after you do your taxes. Well, especially after, like, in starting next year when the Trump tax law comes into effect.

There's a lot of bad things you can say about that one thing that it does is uh simplifies the tax code to where you basically have no reason not to use the standard deduction so all the people that were itemizing like probably about 80 or 90 percent of them won't it'll just be pointless because they'll just take the standard deduction right so for all of those like 1099 filers and like gig economy people they even even they will just be like all right this is just really simple now yeah and that's interesting though because it does show like if you're listening to this you might have seen the pro publica story just this last week about how the house just passed a bill that would make it

illegal for the irs to offer this free e-filing. So, and, you know, TurboTax and I believe H&R Block had spent like $11 million in the last two years lobbying on this. And so, clearly they have a sense of urgency because like Steve said, the standard deduction is going to go up. A lot of people are not going to need these softwares as much. So, of course, it's like right away we have to make it illegal for the IRS to offer this thing so that people still have to use our software yeah i think that just raised the stakes yeah making it so that irs couldn't do this

is like you know it's become even more apparent that taxes are actually pretty simple to do for most people yeah if you're a rich person with a really complicated set of llcs or something like grub stakers oh yeah you'll still. You'll still need to get your accountant or get H&R Block involved. But for the average US household, it should take under an hour. Or the IRS could just do it for you. I mean, either one sounds

better than paying fucking Scott Cook to have children that ride horses professionally. So the main benefit is just knowing that Scott and his family are okay. I mean, that's really all that I'm getting from this. Yeah, that's all I'm getting out of it. I want them to keep riding. I mean,

I want them to keep going down that old town road. That's why I follow with TurboTax. Oh, that's good to know. Yeah. You want to make sure those horses are enslaved. I'm an equestrian, you know, aficionado. I do like how Turbo turbo tax has that part where you can uh write off the medical bills for the ulcer you get programming turbo tax uh but so essentially like and we'll we'll get back to the the the tax story that that

just recently happened we'll close out with that but just to finish the biography here uh scott cook actually stepped we mentioned the ipo in 93 scott cook steps down as ceo in 1994 he gets a guy bill campbell to be the new ceo scott cook since that time has kind of been a board member a significant player but he's not doing the day-to-day operation he's just sitting on his pile of money sure you know um scrooge mcduck over there yeah and so microsoft uh offers money pit deduction um and i had to widen it this year so maintaining your money pit that's like it's it's a deduction you wouldn't know that if you didn't use turbo tax yeah um but so in 1994 microsoft tries again to buy Intuit, and they make a serious offer. They offer like $1.5 billion.

TurboTax, or sorry, Intuit is all in. But then the Department of Justice under Bill Clinton, they actually block it, and Bill Gates decides, I'm not going to fight. So he walks away from the deal. And it is kind of important to know, and we'll get to this when we do our microsoft episode but the department of justice uh in either 94 or 93 bill gates made a quote about how bankers are like dinosaurs so a lot of financial people were very nervous about microsoft moving into banking and electronic money ordering and all that stuff so they put a lot of pressure on the department of justice to

make the monopoly antitrust case against microsoft so it is just kind of like it's it's a story of how antitrust enforcement actually works which is that major players in an industry will put pressure on doj when their position is threatened yeah that makes sense yeah are you trying to say that scott cook is involved in politics, Sean? No, but he denied that. Did we play that? You get involved in politics. I'm sorry? Why have you decided to get involved in politics?

I'm not. That's easy. The question was why did I decide to get involved in politics, and I'm not, at least unless it's something I didn't know about. Yeah. I like how he didn't read that The Nation article

about how he gave Max personal donation to both Mitt Romney and Harry Reid in 2012. Couple of winners. Yeah. No, and again, we'll go through this, but on the tax side into its entire business model is lobbying yeah it's like yeah there's a reason the students were laughing when you said that i just love the end

of that he's like unless there's something i don't know about like just what a perfect weaseling out of the reality that is you know you're involved in politics his quicken software was auto printing those checks that he set to mitt romney and harry reid yeah he did his own taxes and include those deductions but so you know again just to kind of bring you up to the present uh quicken kind of moves through the 90s they take a big hit on the dot-com burst interestingly enough they were like they had their hands in um quicken mortgage we'll get into are now called quicken Loans. They bought the company called Rock Financial, and then they turned it into Quicken Loans. And then after the dot-com bust, they like, we have to get out of

mortgages. They were in the insurance market for a bit as well. We have to get out of all these things. So they sold Quicken Loans back to the management team, and now it's an independent company. But essentially, they were in mortgages and insurance for a quick minute and uh they got out in time but i did just want to mention um in 1999 quicken is sued for the first time for fraudulently collecting and selling online user data because like by 1998 they launched quicken.com and then they become you know very heavily involved in the internet space. And since that time, there have just been semi-annual consumer lawsuits about what exactly they're doing with your data. And it's especially concerning when it comes to taxes, because that's your most personal information.

If you want to do identity theft, you get somebody's tax information. They also own the company Mint. mint yeah they buy that in 2009 also sells aggregated user data that they promise and have released some ports saying like no it's anonymized it won't be able to be tracked to any specific user but you have to wonder since i mean these are all just these are like very specific facts about consumer spending it also has like regional data and you know and like household size and everything like that's quite a breach yeah extremely personal information that i don't want into it making money off of right like there's something like uh turbo tax the program it stores all your passwords for financial institutions.

Like when you like link your bank account to it. Yeah. It like stores your passwords for financial institutions, your bank account, all that stuff. And there's actually no way to use the software without it doing that. Oh, really? So, you know, there's like all this kind of disturbing stuff. And but what I wanted to talk about next was essentially there are two whistleblowers from TurboTax who talked about how TurboTax has been dealing with stolen identity refund fraud. And this is a particular thing where people quite literally steal your identity and then they file for a refund for your refund with the IRS. And then if, you know, the IRS doesn't check, they send you they send them a check for X thousand dollars and then they run away.

And they'll make hundreds of these fake applications with just whatever social security numbers or other identifying details they have for various filers. And so this is from a blog called Krebs on Security. Broke this story in 2015. Robert Lee, no relation to the Confederate general. Can you confirm that? You looked at the 23andMe? Robert Lee, who famously lost Intuit a ton of money at Gettysburg. So he was a security business partner.

This is from Krebs on Security blog. A security business partner at Intuit's consumer tax group. He left in 2014. He says his team at Intuit developed sophisticated fraud models to help Intuit quickly identify and close accounts that were being used by crooks to commit massive amounts of stolen identity refund fraud. And so basically he says that he developed this software for them, but they refused to implement it. And the reason was they found that when they implemented software or that when they reported stolen identity refund fraud to the IRS promptly, the people who were doing stolen identity refund fraud would just move to into its competitors. So essentially, the idea is like, if you fill out this return, and you check the box on TurboTax that says, hey, pay the fee as a percentage of the return, then if the IRS approves, you know, say a $2,000 return, then 50 of that goes to TurboTax. So they can actually make money on stolen identity refund fraud. And Robert Lee kind of goes through this a bit. He says,

if I sign up for an account and file tax refund requests on 100 people who are not me, it's obviously fraud. We found literally millions of accounts that were 100% used only for fraud. But management explicitly forbade us from either flagging the accounts as fraudulent or turning off those accounts. And he says, you know, they were sending data to the IRS about this. But then what would happen is once they noticed that their revenue stream was going down during peak time, he said there was a time period where we didn't deliver that information at all. And then at one point there was a two week delay from getting the information and delivering it to the IRS. Really?

There was no technical reason for that delay, but I can only speculate what the real justification for that was and then like one other thing that these two whistleblowers said is that they had essentially set up a turbo tax honeypot where you know if you're using like clearly if you're using multiple social security numbers or um or if you're using an existing social security number on a different account you know know, then clearly that's probably fraud, you know, and all these other tells of fraud. But so essentially what they did was a honeypot program for TurboTax, where if they suspect fraud, they can put you in a window where it looks the exact same and you're filling out all the data, but it doesn't actually submit it to the IRS. So you can waste the fraudsters time and try to figure out what they're doing and, you know, isolate all these suspected fraud cases and review them by hand.

So they build this whole honeypot program and TurboTax or sorry, Intuit explicitly forbids them to implement it for TurboTax because, again, they are making money from stolen identity fraud. Right. And here's another quote from Robert Lee. In this enlightened age, there are few I believe, but what we'll acknowledge, that slavery as an institution is a moral and political evil in any country. It is useless to expatiate on its disadvantages. So it's just Robert Lee, ladies and gentlemen, from the horse's mouth.

Yeah, you know, I liked when he whistle-blew on Intuit, but I didn't like when he defended the white supremacist confederacy. Wait, read that back? He was anti-slavery. It's actually a pretty profound quote, yeah. Well, it was an anti-slavery quote, but he still, like, what was it?

He was Virginia, so he wanted to defend Virginia. In this enlightened age, there are few I believe, but what will acknowledge that slavery as an institution is a moral and political evil in any country. It is useless to expatiate on its disadvantages. So Intuit, you're saying, is anti-slavery. That's interesting. Apparently.

I wouldn't have guessed. The internet tells you. This is what Robert Lee said. He wanted to defend Virginia by getting 30,000 people needlessly killed at Gettysburg. He also said, we should live, act, and say nothing to the injury of anyone. It is not only best as a matter of principle, but it is the path to peace and honor. I mean, like, I looked up Robert Lee quotes, and then looked up robert e lee quotes and then we looked up robert lee racist quotes and i just went with the quotes guys but yeah okay so essentially and

that's your story about you know they're not taking action on stolen identity refund fraud and it's just kind of funny where it's like intuit makes all these different cases against the government you know doing this auto refund or auto free file and one of the cases that they make is that quote taxpayers could face new privacy and security risks unquote and it's like the government already has this information if you file a w-2 and clearly intuit is a major privacy and security risk because they don't give a shit about stolen identity refund fraud and they will sell your information to whoever you know and they make money off stolen identity refund fraud but so one other thing i wanted to go through is this um a tax professor uh writes in the Hill. He writes an opinion piece that says essentially Intuit is violating the free file agreement.

We mentioned with the IRS in 2002, they've got this agreement that recently the House just passed a bill that would make it the law and permanent, where the IRS will not develop this free file e-return system in exchange. Intuit and H&R Block are supposed to offer 60% of taxpayers free file. But the thing is, they violate the conditions of this,

where essentially if you go, according to this op-ed from a tax professor in The Hill, federal tax law contains strict requirements pertaining to the disclosure or use of a taxpayer's return information. The law commands that tax return preps, including Intuit and H&R blocks, solicit and receive, quote, knowing and voluntary taxpayer consent before disclosing or using taxpayer's return information for any reason, including marketing paid services unrelated to the return. State laws contain similar requirements. And the point is, they may routinely be violating these requirements. Intuit's practices, if a free file user with TurboTax from the IRS homepage, goes from the IRS homepage to TurboTax free file version, they immediately have a, by clicking create

account button, you agree to TurboTax's terms of use. So even to get from the IRS to free file and TurboTax, you have to agree to their terms of use and have, and you click it and it acknowledges you've read their privacy statement. And then there are three documents, which essentially says that, um, and if you don't consent, they don't let you use it. Of course, Intuit's, uh, consent waiver violates the requirement uh that they made with the feds that says tax preparers are prohibited from conditioning receipt of federal tax services on a taxpayer providing consent to disclose and use of his or her tax returns so essentially this agreement that into it has where you have to click and agree right that's

explicitly forbidden from the 2002 agreement, but nobody gives a shit. So when you click the create account, basically you have to agree that Intuit has the right to do whatever they want with your data. And also they strip your right to trial by jury. So you have to go into arbitration if you have any problem with Intuit doing with with your data sort of what we did with andy good reads yeah but so it is just kind of interesting where like you know and it's it's kind of mentioned throughout here is that uh only three percent of taxpayers use this free file in in any given year and and from this hill op-ed of that three percent less than half use free fileile again the next year. Which, you know, I mean, as we mentioned, they're using FreeFile to upsell,

but it also, they make it confusing, hard to find, and not as convenient, obviously, as their paid versions. But, you know, it is just kind of disturbing where it's like they can enter this agreement with the IRS and then immediately violate it by forcing people into arbitration and saying, hey, we have the right to do whatever we want with your tax data. And they, of course, directly market to free file users where they'll email any free file user the next year and be like, hey, you want some more money this year? Try our paid version. And if you're just kind of going through your free file without paying close attention, you'll probably accidentally click on one of the upsells.

Yeah, I mean, the Internet has always been ripe with people falling for scams, but this certainly has been eye-opening when it comes to like, oh, hey, we're going to give it to you for free. Actually, it's not going to be free. This is like when you download when you download something you accidentally install the toolbar yeah I've had

McAfee downloaded 8 times a year because I fucking don't click the goddamn Adobe update or thing to say not to add fucking smart scan or whatever the fuck it is every time and I'm like when did I get McAfee on my goddamn computer and I'm just like god damn it I have to un fuck it is every time every time and i'm like when did i get mcafee on my goddamn computer and i was like god damn it i have to uninstall it every time yeah you can wind

up with three toolbars yeah and like a weekend mcafee's like hey you want to pay me and i'm like i didn't even want you here i hate when i install mcafee and then it makes me take bath salts in order to log into my computer makes me do a bunch of research chemicals and then say the N-word on the internet. That's the fluoride, Sean. But so, according to ProPublica, Intuit spent about $11.5 million on federal lobbying from 2008 to 2013.

As we mentioned, I believe they spent over $6 million just on the previous two years. There's a story, there's an npr planet money which talks about this tax professor in california named joseph bankman was a stanford law professor and he designed ready return for california in i believe 2005 and into it like spent over a million dollars lobbying against it and you know got all these um they would have intuit people follow him to his talks. Oh, really?

And spy on what he was doing and these sorts of things. And they essentially, Ready Return actually was passed and exists in California, but there was no marketing budget. So most people in California have no idea that they have the right to file their taxes for free. And less than 90,000 Californians used it last year, though they report 98% satisfaction rate, which is pretty crazy for anything. That's absurd. I know.

First tech software. I mean, it makes sense. It was free, right? Yeah, it's the best seasoning. And I guess essentially the story that we just heard was that what's called House house resolution 1957 just passed uh april 9th 2019 on a voice vote um and it's headed to the senate now we'll see if it passes the senate but as mentioned this will uh forbid by law the irs from offering this ready return free refund and interestingly enough uh civil rights hero john lewis is a sponsor

is the main sponsor along with republican mike kelly which is one of those depressing things you run into in american history sure you know a guy gets his head beaten on a bridge in salma for civil rights and then this is a new idea of good trouble? To pass a controversial bill. It makes you really think about why we need into it. It wasn't an omnibus spending bill, but it did include a lot of provisions, right? Well, it's called the Taxpayer First Act of 2019. So, I mean, there probably was a rationale, right?

That a couple more progressive Democrats signed on or said aye. Right. Well, so John Lewis took like Ocasio-Cortez and another Democrat aside and essentially convinced them at least to not publicly oppose it. Because there's like another part of this bill that makes it so that the IRS can't harass lower harass uh lower income taxpayers katie hill of california is another one he talked to it makes the irs that can't harass low-income taxpayers who owe money with private debt collect collectors and i guess there are some other good parts of it but it and so basically what they're they decided on was that oh we'll try to bring free file to the to the floor later i think is the idea but it it is just really suspicious where it all seems odd yeah but this is going to the

senate and uh we'll see but i just can't imagine them stripping this provision from the senate no way they should whatever bernie says once he gets soon bernie says look i agree with robert lee I wonder what Bernie says once he gets to him. Bernie says, look, I agree with Robert Lee. My favorite Virginian, Robert Lee, had it right in 1865. Straight Bernie Sanders turn. Bernie Sanders reaffirms anti-slavery position. And so I guess just one other thing I wanted to close out from these management talks that Scott

Cook gives. Well before we get there though, I want to talk about his shit ass kids. He's got three of them. Annie, David and Carl. I think Carl with a K. Carl with a K. And there's not much on Annie or David but Carl is the same age

as myself. He's 29 years old. And the reason he's being brought up in this moment is he's married to actress phenomenon, Kaley Cuoco. Yes, that's right. The Bazinga mistress to end all Bazinga mistresses. The real Big Bang and the Big Bang Theory. Interestingly enough about Kaley Cuoco is she married some random tennis player for three years

and then divorced him and then in May... He couldn't do his tax returns right. In May she divorced that person and started dating Carl at the end of that year which is no big deal but in her Wikipedia

it says that she played tennis when she was younger but then stopped at age 16. But then she also rides horses a whole bunch, and that's why she loves Carl Cook, because he's an equestrian. It's funny how I know that the word equestrian means horse rider and provider and shit.

It means person you don't want to be trapped in a conversation with. But when you see the word equestrian written down, it does seem something very official. It does seem like, oh, it's got an e and a q in it this guy seems important but then i've noticed you've insisted on not saying equestrian just saying horse person i like saying horse person it just seems nice but um i will say that all of my research about billionaires and their families and relationships come a hundred percent from like online celeb gossip rags like every time i've had to look this stuff up it's you know some sort of like entertainment guam.net that i find this

information on um carl cook when he was a teenager went into a professional equestrian slump and was quoted as saying it sounds silly but i didn't know how to do anything else. I really didn't want to go to school, so it was either that and be unhappy or really get good after writing. The kind of quotes you get to give after your father fucks the programmer out of 50% of the equity. So apparently this guy, Carl,

and his now wife, Kaylee, met at HITS Coachella, which is a horse festival in Indio, California. You want to make Coachella worse. Let's put horses in that show. Coachella on horseback. Exactly. And so they met there.

Beyonce has to perform on horseback. I mean, I would be a good show if you ask me. They have to cancel Coachella because Modest Mouse gets kicked in the head by a horse. I just love the notion that you think Modest Mouse is performing at Coachella. But they met at this HITS Coachella, which is a horse thing. And they were both focused. This is from Noel Floyd. Five things we learned from hanging out with Carl Cook and Kaley both focused. This is from Noel Floyd,

Five Things We Learned from Hanging Out with Carl Cook and Kaley Cuoco. I fucking hate all these articles, but apparently both were focused on the horse show and when a mutual friend introduced them,

they both shrugged it off and then my interpretation is Kaley figured out who this person was and then Carl had a pull to maybe give it another go and hopped on his mini bike to bring a glass of champagne to Kaylee in her barn aisle.

Unfortunately, she hates champagne, but needless to say, the rest is history. So, got a couple of horse kids, horse fucking all day and night. Well, when I heard that she was into tennis and then horses, I thought self-made woman. That's at least a seven on Forbes' scale. I think so.

7.9 if you ask me. But yeah, so that's his son has married Kelly Cuoco, the Big Bang. Kelly Cuoco. Kelly Cuoco. Oh, and the best thing about it is Cuoco in Italian means cook. So she's already got the family name. No need to rebrand. Cuoco in Italian means really complicated tax return. cook so she's already got the family name no need to rebrand yeah coco in italian means means

really complicated tax return scott was like i don't have to do anything with this no no we didn't check shit well one thing is fine funny is that uh this uh cheat sheet.com uh just drags kaylee cuoco because proof that kaylee cuoco is a bad actress who got lucky with the big bang theory just runs through her entire uh fucking filmography and says that she sucked josh les me april 14th 2019 of entertainment cheat sheet so listen my research isn't that valuable but let's be honest it's the dirt that people want to hear and uh kaylee cuoco went from fucking a tennis player that was rich to fucking this random dude uh who who random horse dude who uh seems to enjoy horses it's so funny like i didn't want

to go to school i wanted to focus on horses full time in like one of the articles the person describing uh carl cook is like you know he was talking to like the other horse trainers and it was like he doesn't even seem like a writer. He seems like one of the engineers here. And it's like, listen, far be it for me to discredit someone's effort, but if I had nothing to do but ride horses all fucking day, I'm not going to pretend like I'm going to show up

and go up and get out of there. It's all I do. I'm going to be an asshole all day. But everybody in the family rides horses, their mother, all their siblings. And, you know And his mom... They'll be ready to get away from the mobs. I mean, the thing that's kind of interesting is that if you look at some of the horse championships that Carl has won,

I don't know, apparently that's a thing, he's made like a couple hundred grand off just horse riding. All his competitors were stuck doing their tax returns i mean like it does feel kind of like i mean this person clearly doesn't need his money but then again i don't know anyone in the horse riding world that needs the championship money but maybe it's my own bias look at it um his uh mom there uh signios b she like started a couple of companies as well but they're very vague and there's not much information on them, like Software Production Corporation or something like that. And there's not really any other information about his siblings

on the internet. You say Signiosby, I just think of Shanji thinking, I mustn't be afraid. We're able to track down the Cook household in Woodside, California, one of the wealthier suburbs of Silicon Valley. Say the address, we'll beep it.

There's a website of a guy or a company that's their whole thing. They just figure out where celebrities and also billionaires live. Apparently, Izzy is worth about six million. Not yet.

But yeah. I think he has another house in San Francisco. So it's not his only house. The guy who does that website where you can find out where billionaires live is welcome to come on this podcast anytime. We would love to talk to him. He does a valuable public service that when there are mobs of people and you need an address to lead them to, we'll become very valuable. We'll put it on the Twitter.

Yeah. How about that? Yeah, we'll put it up on the Twitter. It seems like an interesting website. It was a good find, Steve. But so any,

anything else on Quoco? No, that's everything on Quoco. I just wanted to, one other thing Scott Cook did is besides, you know, keep our tax code complicated is he gives these talks about management strategies and he had

one little quote I found interesting about the Israeli Air Force. Oh. So I was just in Israel, took the family and went with another family and we spent time with a number of Air Force, Israeli Air Force, retired generals and some others

we just acquired a company that was rooted in Israel and the CEO is Axe Air Force. Retired generals and so on. We just delightfully acquired a company that was rooted in Israel, and the CEO is X Air Force. And the Israeli Air Force dominates the sky. There's not even a challenge anywhere in the region. They just have crushed every appliance. And you ask them why. And then a bunch of the Israeli Air Force people

have gone into business with us tactfully. You ask them why, and they'll say a couple of things. But one thing they say is we have this culture of self-critique. After every mission, we'll do a training mission a day. And after that training mission, we get in a circle. Everyone has to come up with the three things they could have done better in that mission. Everyone, including the general.

All come up with a list of three, and they tell their list of three things that I could have done better. And they also say, if your list is not the real list, we're Israeli, we're in your face, we'll tell you. No, I don't think you got it. So it's this culture of constant self-critique. If you build that into your regular rhythm, it's not surprising they became the best,

arguably in their kind of combat, air combat, the best in the world. I've got some familiar with Israelis that like to critique. One of them has a special place in my heart. Is he talking about Sheldon Adelson? I don't know. That host is a chode. But yes, if you are looking for business management techniques

to use against your competitor companies that you are also blockading from receiving medicine, might I recommend listening to the Israeli Air Force? But I mean, it's just like, it's such a bizarre quote, because it's like, first of all, you went to Israel with your family where your horses have more daily calories than the fucking Palestinians in Gaza. But second, it's like, what has the Israeli Air Force been doing since the 80s? It's just bombing, what, Lebanon, Gaza, you know, I mean, it's like, these are not... Not moving targets. Right, this is not, they're not going

to... Drinking each other off. They're like, we circle up, and everyone has to jerk off three people in the room. That's not the right list, it's six people. Including the general. We're all just equals. And then after somebody comes,

we have to talk about how we could have made them come faster. And you have to be honest. You have to dominate. They're Israelis. They'll get up in your face and take that load. And with that, this has been Grub Stakers. I'm Yogi Paiwong. Steve Jeffries.

I'm Sean McCarthy. this has been grub stakers uh i'm yogi boy wall steve jeffries i'm i'm sean mccarthy i do just want to say that culture of critique is the name of an anti-semitic book so i think we can close this episode by uh saying that steve cook is a virulent anti-semites all right good night we'll be back next week star of the television show the big Bang Theory went to Instagram apologizing for comments that she made to Redbook magazine about feminism. Kaley Cuoco said that she enjoys cooking for her husband and that she was, quote, never that feminist girl demanding equality, unquote. And she clarified what she meant to HLN's Mara Raphael. Why do you think there's, like, such a strong reaction to being a feminist or not a feminist anymore? I think there's just a strong reaction to Kaylee talking.

Kaylee needs to shut up once in a while. Kaylee needs to just close the mouth and stop talking. If you keep talking, you're going to say something wrong eventually, right? Always. And that's the thing. With that quote, whatever the hell I say, it would not... You never want to offend anybody. Everything I say in my life, now, from this point on, something's going to offend somebody and the other person's going to love it.

That was a three and a half hour conversation that you saw two sentences with a dot, dot, dot. What it meant was I felt privileged to be able to not only have a career and be as powerful as women are today and also be at home and feel like a homemaker and make my husband dinner and all those things and to be able to have those things and that's what I meant by that and if anyone really wants to be offended by that I can't believe anyone that knows me knows exactly where my heart is and that's that's what I have to live by cuz it's hard you can't say nice though now

you can like tweet a reaction or post yeah that is not it out there what you really think and you have a second chance that maybe you didn't used to. That is true. Social media is kind of great and bad like that. You're right. It takes your quote or Redbook hasn't even come out yet and they're already knowing all this, you know, it's like, oh my God, that cover hasn't even come out yet. But you are able to kind of, and things like this is nice where I can say, this is not what I meant to say.

This is not what I meant to say. This is not what I meant to say.