The Prof G Pod with Scott Galloway - The Economy Is Rigged for Billionaires — ft. Gary Stevenson

Episode Date: May 7, 2026

Gary Stevenson, former trader turned economist and inequality activist, joins Scott to discuss why wealth inequality is accelerating across the West. They unpack the rise of the billionaire class, why the middle class is shrinking, and whether wealth taxes, estate taxes, and stricter tax enforcement could reverse the trend. Gary argues that modern economies increasingly reward ownership over work — and warns that younger generations are on track to become poorer than their parents. Also, friendly reminder that we're live on Substack. Subscribe at profgmedia.com to get ad-free versions of all our podcasts, the full archive of Scott’s newsletters, and exclusive content including deep dives, livestream conversations, and subscriber Q&As. Learn more about your ad choices. Visit podcastchoices.com/adchoices

This episode is brought to you by FedEx. These days, the Power Move isn't having a big metallic credit card to drop on the check at a corporate lunch. The real Power Move is leveling up your business with FedEx intelligence, and accessing one of the biggest data networks powered by one of the biggest delivery networks. Level up your business with FedEx, the new Power Move. In communities across Canada, hourly Amazon employees can grow their skills and their paycheck by enrolling in free skills training programs for in-demand fields. Learn more at aboutamazon.ca. Risa knows a thing or two about great combinations.

Chocolate and peanut butter, obviously, but there's more than one way to Reese's. From indulgent Reese's big cups with caramel to crunchy Reese's pieces and Reese's miniatures, there's a delicious Reese's for Every mood. It's the same combo you love, just with more ways to enjoy it. So, whether you're snacking, sharing, or just treating yourself, nothing else is Reese's. Episode 395. 395 is the area code belonging to Halisco, Mexico. In 1995, the PlayStation launched globally. I had a Mexican girlfriend, and I should have known she had a drinking problem. And I asked her what her favorite book was, she said, Tequila Mocking Bird. Probably a hate crime.

Welcome to the 395th episode of the ProvGPod. What's happening? In today's episode, we speak with Gary Stevenson, a former trader turned economist and activist behind Gary's economics. I genuinely believe the biggest problem facing America in the West right now is income inequality. And that is, if you look at the genie coefficient, which is essentially a measure of variance or inequality.

I think it's an Italian mathematician named Jeannie. Anyways, zero is everyone has exactly the same, you know, communism. One is one person has everything. You know, Musk is getting close. Anyways, where we are now is the U.S. is at 0.85. When France was at 0.83, they started separating people from their heads. And so income inequality, the resentment, I think, is tearing us apart. It results in class warfare. It results in an inability to invest in the middle class. Essentially, the cycle is over and over again, and that is a small group of very talented, hardworking, and lucky people. Weaponized government can come up with incremental reasons why they should have subsidies, better tax loopholes, and they essentially run away with it. And we have a society that collapsed. This is essentially the story. of Central America and more broadly history throughout time.

And I think it's happening in America and the West. Anyways, I found Gary because he talks a lot about income inequality. He speaks to it very eloquently and very forcefully. And I'm a big fan of his work, and I think he'll enjoy the episode. So with that, we hope you enjoy our conversation with Gary Stevenson. Gary, where does this podcast find you? I'm in my flat in London, East London, close to Canary Wharf. Let's bust right into it. You were on property markets about a year ago, and at that time, the wealth tax conversation has picked up significantly in the U.S. The top 1% of households now hold a staggering 32% of all wealth. The greatest share since the Fed began tracking in 89, roughly equal to the combined wealth of the bottom 90%. I should also have the top 10% on 90% of the stocks. And at the same time, the portion of GDP going to workers just hit its lowest level in 75 years.

So this is given rise to a bunch of different proposals. One of which has gotten the most attention is in California. They're actively debating a one-time 5% tax on residents, essentially a wealth tax, with a net worth exceeding $1 billion. Let's start more broadly, and then we'll talk about the wealth tax. Do you feel like we're in an inflection point around a serious conversation, around inequality when I say serious that will actually lead to different tax policies? I think there's obviously been an increase in the salience of discussions around,

in particular taxation of the rich. If I'm totally honest, I think still when these conversations take place, as much as obviously from my perspective, it's great that they're taking place more often. I think they are still often a little bit facile in the sense that they, and I think that is because, especially in the US context, They're happening in this context of this incredibly factional political debate where it's very much my side, your side. And it's very frustrating for me because my background, as you know, is I'm an economist, I'm a trader. And what I see is rapidly growing inequality of wealth, which I think is increasingly obviously pretty directly causing rapidly increasing poverty, rapidly falling living standards.

And what I would like there to be is like a grown up sensible conversation where we say, okay, how do we stop this? But in reality, that's not really what is happening. What tends to happen is people like, well, to be honest, it's often not people like me. It's to sort of become two sides. It's like, tax the rich. And no, don't tax the rich because it's impossible.

And the conversation has become factional in this way, that it has not really created the space, which I would say really allows anybody, even me, to have a really sensible conversation about how can we actually. do this in a way that actually works. And I think that's true on both sides, really. I don't think anybody, and, you know, I work quite hard out here to try to find the people who are really doing the work on how can we do this sensibly. And I'll be totally honest, those people are not getting

funded, really. The people who are actually working on how do we really design this are not really getting funded. And it feels a little bit like it's being sucked into the sort of whirlpool that is politics. But if I'm totally honest, that is a significant improvement on where we were one year ago, two years ago, because at that point in time, really, nobody was really talking seriously about reducing inequality at all. So have we moved into a better place? Yes. Are we on the verge of fixing this problem? I don't think we're quite there yet. What is your view on wealth taxes? And this is a question that is loaded with a comment. Most of the research I've done on well taxes, shows that, to be blunt, they don't work, that 16 or 13 of the 16 countries that have tried

to impose them. I get them theoretically and that makes sense to me. But I think governments, especially I would argue the UK government, struggles with the difference between being right and being effective, and that wealth taxes are potentially right, but that R&O just picks up and moves to Brussels, that the wealthiest among us are the most mobile and can avoid wealth taxes. And I think there's also a decent argument that once someone has cleared the initial hurdles of taxation, it is private property. So I would argue they're not effective. I'm curious to hear your viewpoint on wealth taxes. If they are designed well, then they are effective. If they are designed badly, then they are ineffective. I don't think it's really any more complicated than that.

I think inheritance tax is a form of a wealth tax. I think it worked relatively effectively to stop very high-level wealth accumulation in the US, in the UK, in at least the sort of 30, 40 years immediately following World War II, once you see these inheritance tax effectively removed, inheritance tax is already effectively removed, especially for the very rich in the US and the UK. That's when you start to see this wealth transfer start. So, you know, we had a form of a wealth tax,

and that limited inequality, and we removed that wealth tax, and inequality started to increase. if you want to find examples of well taxis designed and implemented badly you will find them and if you want to find examples of planes that were designed and implemented badly you will find them and if you want to find examples of spaceships that were designed and implemented badly you will find them the result of designing a plane badly the correct response to that is not to stop trying to design a good plane it is to design a good plane it's as simple as that about it but listen because exactly as I've just said the debate is in a

facile place. And the debate should take place on, okay, we have an urgent crisis of growing inequality, badly designed wealth taxes are not going to work. Let's really get some sensible and smart people together and design a world tax. And listen, I've been lobbying the government out here, as you probably aware, the Labor government and before that the conservative government for a long time. And what I say to them is put a little bit of money into a team of good economists and let me have access to them, let me speak to them, it's not going to take much because I cannot describe to you how horrendously underfunded this area is. Really, if the UK government or even the US government was to fund six good economists and good practical economists and say make the US,

the world leader on wealth taxation that is unavoidable to the super rich, then the US would become the world leader in that because it's so underfunded. So really, like, But of course you're going to get badly designed wealth tax. I'll tell you exactly why, because we urgently need a wealth tax. And people like me are massively ringing the bell on that, but we do not have the funding to design the wealth tax. So what you will get is, to be honest, quite childish political parties, saying we're going to give you a wealth tax without giving us the funding we need to design the wealth tax.

And then what they're going to do at the same time is they're going to try to keep their funders happy and they're going to try to keep their donors happy, which means they're going to put loophole in the wealth tax. And that's what's going to happen. But the response to that is not to give up fixing the problem. The response to that is to fund a good team to design the tax well. And I wish, you know, I guess we're having it now, I wish there was space in the media to have this conversation of,

look, these taxes are hard to design, but they're important. So let's do the work and design them well. But it's become this stupid debate of, oh, this essential thing, which if we don't do, society's going to collapse, is quite difficult and has been done badly. Let's give up. And I think that is an absurd stance to take, if I'm honest. I think people do distinguish an estate tax from a wealth tax.

And I want to acknowledge, and I've been talking about this for a long time, the idea of dynastic wealth is not healthy for anybody, I don't think. I think it's actually one of the really wonderful attributes of America versus Europe is we typically did not believe in dynastic wealth. And the difference in happiness, what do we want? We want taxes that are the least taxing. And if the basis errors inherit 100 billion versus 160 billion, no one's happiness is affected, but that $60 billion as inefficient as you might argue government is can create a lot of incremental

happiness in terms of child care or better funding the NHS, you know, pick your social program. I don't think of that as a wealth tax, but I get your argument that it kind of is a wealth tax. So it sounds like there's common ground around, I think the easiest means of increasing revenues would be, there's going to be, I think, $75 trillion in wealth passed on to the next generation over the next just 20 years to lower the exemption from $30 million to $1 million, because it doesn't hurt anybody as far as I can see in terms of happiness and would actually create a great deal of tax revenue. I'm pretty sure you agree with that.

The notion, though, that they're talking about in California, an actual wealth tax, where they attempt to value your asset base and then tax a certain amount of it. Do you think that is, do you think that can, if designed correctly, could actually be an effective tax or do you believe that wealth taxes, as I've described them, are not effective? I think if designed correctly, it can work. I think you obviously, obviously if you're talking about annual taxation on wealth, if you start that at a low threshold, there is an administrative burden. So I would probably say your ideal solution is a combination of, as you say, estate taxes on high amounts and wealth taxes. But if you're going to talk about wealth taxes, you probably do want to

start at a relatively high threshold because of the administrative burden. But also, let's be realistic, the income tax system has an incredibly high administrative burden. I think if we're in a situation now where we didn't have an income tax, I mean, to have that conversation now about income taxes, it would be widely claimed by the press that income taxes are impossible because of the administrative burden. You know, so this is possible, you know, of course it is possible. But I think, unfortunately, this thing kind of happens where I think there is a lot of bad faith argument from rich people who do not want to pay more taxes, that what they want to do is split hairs on the exact design of the taxation to try to avoid being taxed at all. The reality of the

situation is we live in a country, the UK, you know, the Americans who will be listing also live in a country where very rich people, once you're talking about people who have wealth of above 10, 20, 30, 40, 50 million pounds or dollars, pay significantly, significantly lower rates of tax on overall lifetime income than poorer people. And they are rapidly accumulating wealth at an enormous rate, far faster than the rates of growth of economies, at the same time as other groups of society, most obviously governments, but also including the working class and the middle class are rapidly losing their wealth share. So something needs to be done. I think world taxes could work if they were designed correctly. I think capital flight is a legitimate risk. I think it can be

managed and minimised if the tax is designed correctly. I think inheritance tax on large estates should obviously be part of the game here, but they've been massively demonised by the press. I understand why they've been demonised? Because what you've created now is an economy. We live in economies now where if you are not giving a significant adherence to your kids, am I allowed to swear? I don't know what the situation is swearing on this is. 100% we encourage it. The economies that we live in, the UK and the US, if you are not giving a significant inheritance to your kids,

if your kids aren't getting realistically something close to a million dollars, your kids are in trouble. And if your kids are getting close to nothing, they are basically fucked. That is the economy that we've created. So what we have created, to be honest, is an inheritocracy. It is not capitalism in any way. outcomes for individuals, especially for younger generations, are incredibly related to the amount of inheritance they get from their parents.

So we've created, and that is because, that is entirely because we tax work income and we do not tax hoarding wealth, right? But then obviously people have become very defensive because they're like, don't touch my inheritance, don't touch my inheritance. But the truth is, if you do not touch the hoarder wealth of the very rich, then everybody else is going to get squeezed out. But the very rich do this very, very clever thing where when I say tax them, They do this bait and switch, which is, what Gary really wants, is to tax you.

I would love for you to kind of walk us through non-DOM. And the impression of, I think, people in the press, in Americans, myself included, is that, again, this is another example of being right but effective. And you may disagree. I would love for you to explain what the non-DOM taxation change in policy was in the last year. The general impression I have, and I'm open to feedback or correction here, is that, while theoretically it made sense, the number of wealthy people who have actually left London in order to avoid this tax is actually going to reduce receipts to the Treasury. This is a perfect example of something that was populist red meat, but actually isn't achieving the objective of raising revenues. So, one, can you describe, tell us actually what non-dom policies were and what happened?

Yeah, you know what? This is actually a really good story for describing how to do this badly, right? So the non-dome principle is like a really old principle of British taxation that dates back to like colonial times, which was basically you've got all these like foreign colonial Brits that are making tons of money overseas and they're not paying their tax in the UK because they live overseas. And basically, the UK says, well, you guys can come back and you know, you can live in London, presumably, wherever you want to live, and we're not going to tax you on your overseas income, all of your overseas earnings.

And this is to basically encourage, historically, you know, these foreign, very obviously Britain was this massive colonial empire, these foreign Brits to come back and spend time in the UK and spend their money in the UK. And it's been unpopular, obviously, because, well, obviously, that's historically. Nowadays, it's not used by colonial Brits, obviously. The empire's long gone. Now this is used by, you know, stereotypically Russian billionaires, but, you know, a variety of foreign billionaires. It allowed them to live in London and enjoy the benefits of living in London and have these enormous incomes and basically pay very little British tax because that is

on overseas income, billionaires, assets that they own overseas. And this is a good example of exactly the wrong kind of people you should go after from a practical perspective, because these are people who have very weak ties to the UK and can leave, right? Because when we talk about billionaires, right, there's British billionaires that own British assets, there's British billionaires that own foreign assets, there's foreign billionaires that own British assets, and there's foreign billionaires that own foreign assets, right? And you can obviously take that to the US. And the group of billionaires that you have the weakest power to tax is pretty, pretty obviously foreign billionaires who own foreign assets, right? These people, just to be clear,

you're not totally powerless on taxing these people. The best example, especially for a country like the US, is tariffs. You know, the tariffs is to some degree an attempt by the US government to tax foreign billionaires with foreign assets because you're taxing them on their things that they sold to the US. But especially as a small country like the UK, this is a group of people who you are relatively weak to tax and they can leave. What you should be, be trying to tax, in my opinion, is people who own your domestic assets. Because then they can leave. And if they're owning assets in your country, they're still generating income from your country and you still have power to tax it. So I think, but this is, it's a good example of what I'm

saying, where the media salience has come through on, okay, inequality is a problem, you know, and I would like to claim, you know, partial credit for that. But we haven't really clear that, because it has become so factional and the whole thing has become, you know, is Gary an idiot or is Zach Polanski an idiot or is Zohan Mamdani an idiot. We haven't really created a space where both sides acknowledge the truth, which is basically the left acknowledges, taxing the rich is hard and work needs to be done on designing these taxes correctly. And the right acknowledges, if we don't do anything on it, then living standards will continue to fall and poverty will continue to grow. And we build some sort of cross, left or right consensus on doing this.

And the conversation is not really happening. So what you end up and what you will continue to end up with, in my opinion, is badly designed populist policies. But that's not what it should be. What you should really have is a group of, you know, experts who come from a starting point of something has to be done in inequality. But at the moment, unfortunately, you know, we don't have that. But I'm hoping the end result is what it ends up with is people like me, unfunded running a YouTube channel, trying to build like a global tax think tank.

And it's absurd. It shouldn't be done by me. But what are the Democrats doing on this? The fact that Labor have not done anything is just a comedy, to be honest. It is really absurd. So my understanding is the non-DOM was all of a sudden people who had come from abroad could maintain their tax status in London and avoid what they see as a pretty onerous estate tax or wealth tax. And as a result, I don't know if it was a thousand or 10,000 millionaires.

left. I know a couple of people have moved to Milan or Dubai. Well, there's a lot of questions about the exact numbers here, and there's a lot of speculation that perhaps some people and some groups have tried to be misleading or inaccurate numbers. But, you know, I'm sure some people will have left. We probably don't know the exact numbers on it. But explain the effect of it. If I live in the UK and I'm worth $100 million and make $5 million a year, what does a new taxation policy mean for them and why have reportedly so many people decided it's too onerous and they've left? Well, these people were basically allowed to not pay effectively aid taxes at all, at least foreign billion. That's what the nom-d-on situation was there for. To be honest,

you know, different people differ in opinions on how this affects the UK these people leaving because these people were not paying tax in the UK anyway and they would definitely have been driving up rents and house prices in London. But some people would say they would be bringing economic benefits to London. I think it's, listen, you can have a question about whether you want to allow foreign billionaires to live tax-free in your country. That is essentially, this is what the non-dom rule is about. It is a question of, do you want to allow foreign billionaires to live tax-free in your country? It's probably, you know, from a sort of moral ethical stance, I think it's questionable how good a choice this is. But some would argue it has economic

benefits. The big question is, do you want your domestic assets, the assets of your country, to be owned by foreign billionaires? And I think it's important to recognize that these are two separate questions. And to be honest, I don't have any particularly strong opinion on whether the UK or the US should allow foreign billionaires to live tax-free in their countries. Because to be honest, that's not what I'm concerned about. What I am concerned about is the loss of wealth holding or British and American families and the British and American governments. That is, and if these foreign billionaires don't own British and American assets, then they are not the people who are squeezing out the British and American public. So in a sense,

it's not really connected to my campaign in any way. What I'm talking about is taxing the people who own your country, who own your wealth, because that is the wealth ownership which you can affect and which you can influence with your taxation policy. We'll be right back after a quick break. Support for the show comes from LinkedIn. It's a shame when the best B2B marketing gets wasted on the wrong audience. Like, imagine running an ad for cataract surgery on Saturday morning cartoons or running a promo for this show on a video about Roblox or something.

No offense to our Gen Alpha listeners, but that would be a waste of anyone's ad budget. So, when you want to reach the right professionals, you can use LinkedIn ads. LinkedIn has grown to a network of over one billion professionals and 130 million decision makers according to their data. That's where it stands apart from other ad buys. You can target buyers by job title, industry, company role seniority skills, company revenue, all suit can stop wasting budget on the wrong audience. That's why LinkedIn ads busts one of the highest B2B return on ad spend of all online ad networks. Seriously, all of them.

Spend $250 on your first campaign on LinkedIn ads and get a free $250 credit for the next one. Just go to LinkedIn.com slash Scott. That's LinkedIn.com slash Scott. Terms and conditions apply. Support for the show comes from an AWS. How much of your workday is actually work versus just hunting for information? The answer you need is buried in a Slack thread. The data is in Salesforce or in an email from two weeks ago.

By the time you pulled it all together, half your morning is gone. That's the problem Amazon Quick was built to solve. Quick is an intelligent workplace assistant that connects to all your systems, your documents, your dashboard, Salesforce, cheer of Slack email. and gives you complete answers in seconds. Not links to dig through, actual answers with full context. And here's where it gets interesting. Quick doesn't just find answers.

It turns them into action. Create a deck, update a ticket, send a message right there in the conversation without switching tools. It's AI that actually works the way you do. Learn more at AWS.com slash Quick. Support for the show comes from Quince. With the warmer season officially here, you need to have clothes that can help you stand out from the crowd and keep you cool. pieces that feel easy, comfortable, and put together, something like Quince. Quince's fabrics feel elevated, the fits are clean, and everything just works without needing to overthink.

Quince has all the wardrobe staples for spring. Think 100% linen shorts and shirts from $34, lightweight, breathable, and comfortable, but still look put together. And clean, 100% Pima Cotton T's with the softness that has to be felt. Our producer Claire Miller has tried Quince, and she's a fan. Claire, your thoughts. Yeah, you know I love Quince. And we're heading out on tour soon. I need a new wardrobe for all those stops through the country. So I'll be putting in a big order at Quince. Love all their stuff.

It's high quality. Feels super comfortable. Fits well. Can't get enough of it. There you go. Go to quince.com slash Prop G for free shipping and 365-day returns. That's a full year to build your wardrobe and love it. And you will.

Now available in Canada, too. Don't keep settling for clothes that don't last. Go to Q-U-I-N-C-E.com slash Propji. for free shipping and 365-day returns. Quince.com slash prof-G. You brought up Miram Dami, and he's proposing a piettaire tax where essentially if you're on a second home

worth over $5 million, you start to pay an annual tax. And I think if you own a $10 million condominium in Manhattan, and I'm asking for a friend here, it taxes you about $100,000 a year. And my sense is, look, no one likes taxes. I especially don't like taxes that are going to impact me.

But as far as a taxation goes, taxing very wealthy people who have a second home somewhere, it effectively is almost like a wealth tax, right? Because it just reduces the value of their second home. They transfer a certain amount of the value of their second home to the government. This to me, and I haven't seen, I'm sure this cost that can be cut in New York, but I find this a fairly, I don't know, the idea of decent tax policy, targeting the very wealthy. If you own a second home worth $10 million in New York, you'd probably make them pretty good money. And that this is not an easy tax to avoid.

If they decide to sell their house, someone will pick it up. It's basically a transfer of wealth of the value of second homes to the government. And this to me strikes me as a decent tax. Apologies to the word salad. Your thoughts. It's clever because, you know, if we compare it to what we just discussed, right? which is the non-dom tax. The non-don tax, you're trying to raise tax

on foreign billionaires who own foreign assets. This is a group of people over which you, the British government, the American government, has a pretty weak hold, right? Because they're not citizens of your country and they own enormous amounts of wealth, not in your country. These are the people who most easily can leave. And what I said to you was,

you want to tax people who own the assets in your country because these people cannot escape the tax. And I think what Zora Madani has done there, I'll be honest, I was quite impressed because you probably picked up from our conversation so far. I am worried about bad implementations coming into place. And what I saw when he did that was pretty much exactly as you say. This is canny in the fact that it's targeted. It will effectively hit, I would imagine, pretty much exclusively very wealthy people and very wealthy people who cannot avoid the tax. And that is smart.

I want to be clear, in theory, in principle, it is a lot less fair than a wealth tax or an estate tax, right? Because this is taxing a specific subset of wealthy people, people who own very expensive second homes. It's a pretty good proxy because a lot of wealthy people will own second homes. But, you know, how much is it going to hit the real problem, which is like Jeff Bezos, Elon Musk. In reality, it's not. So I think it's a cleverly designed tax. It's well targeted. It reassures me that there are some people.

people working on the design here who are cany and practical and are cognizant of the risks of flight. But the real big problem, especially in a country like America, is the real big dogs, right? It's the musks. It's the bezos. It's the billionaires. And this tax is not going to hit them. So clever tax, well designed, not the complete solution. But of course, Zora Madani, he's not the president, right? He's the mayor of New York. So I think he's designing a good, he's working. He's He's designed well with tax in the context of the powers that he has, but I think we could do more to fix the real problem if we start talking about what national governments can do, which is obviously more. I'm fascinated with tax policy. I was excited about this conversation. So I'm a fan of the idea of, if you think about it, basically, assets grow tax deferred, income as tax hit every year. I think that at a very simple level, that is, one of the major drivers of wealth inequality. And because earners are taxed every year,

it's hard for them to ever become owners. The people are fortunate to become owners, become superowners, because their assets increase in value tax deferred, whereas your asset, your sweat gets clipped 30, 40 percent every year. So I like the idea of going after assets in the sense that if you borrow against the common strategy, the wealthy, you buy stock, You never sell, you borrow against them to fund your lifestyle, you die, step up and basis. They're never taxed. What about the idea of taxing? It triggers a capital gain event in your tax when you borrow against your assets.

It feels to me a little bit technically messy. I think it would be, I mean, I'm not necessarily against it. I think the most, the more obvious and graceful solution is to just stop, step up at death, which seems I don't see, for those who don't. know, the idea is, you know, you pay your capital gains tax when you sell and rich people can solve that by never selling. And every time they die and give their assets to their kids, the purchase price gets re-updated to the price when they inherited it, which basically means capital gains tax never gets paid by the rich. The reason, again, this doesn't actually

solve your Bezos-Musk problem. And I think, you know, I know Bezos are only two people, But what they stand for is the billionaire class, which these are the guys who are really going to eat everything, you know, the rate at which these guys are going to go. It doesn't solve that because people like Bezos and Musk, they use, as you say, this borrowing solution. So the reason they borrow is because it means they never have to claim any income, right? And they're using the borrowing to cover their day-to-day spending. And of course, the day-to-day spending of somebody like Bezos is obviously massive, you know, famously he rented out of the whole of Venice for his wedding or whatever from the person. perspective of an ordinary person, his day-day spending is enormous, Bezos's lifetime spending is nothing. It is a drop in the ocean compared to Bezzi's lifetime income. So if you try and fix

this problem of he's borrowing against, this thing that gets made a lot of in the, you know, on social media and the press, which is these guys don't pay tax because they borrow against it. To be honest, that is actually, that is not really the problem. Because that is to cover their spending. And their spending is like less than like 0.1% of their lifetime income. The problem is quite simply that they pay an incredibly low percentage of tax as a percentage of their lifetime income. But to be honest, it's not even that. It's not even that. The problem is quite simply, if you do not tax very rich people like Bezos and Musk at really very high rates, the problem is quite simply compound interest. It's as simple as that. Even if you were to successfully

tax Bezos and Musk at 40% of lifetime income, excluding inheritance, once you start including inheritance than you can actually stop aggressive wealth growth. But if you were to tax them even at 40%, which is, you know, a million miles from where you tax them now, their wealth would still grow much faster than the economy. The question here is really, it's quite a simple mathematical question, right? Do you want everything to be owned by the tiny elite or not? If you do not want everything to be owned by a tiny elite, you have to aggressively tax extremely high levels of wealth. Because otherwise, if you're Jeff Bezos, what's he worth, $300 million? $300 billion, right?

Even if he makes 5% a year, right? Which he's going to make way more than that. Even if he makes 5% a year, he's making $15 billion a year, right? And it's just going to grow, right? It's going to grow unbelievably quickly. Right? So really, to be honest, I think the borrowing thing is it's a bit of a myth because the amount that these guys borrow is immaterial

relative to how much they earn. So I think that's a little bit of a red herring. It strikes me that the most effective and simplest way to get at this problem would just be an AMT. Corporations in the US, I don't know how it is here in the UK, paying their lowest taxes since I think 1929.

You talked about, mentioned what's happening in the UK in terms of the wealthy not paying or the super wealthy not paying their fair share, absolutely the same thing. And this occurs because of loopholes that are inserted into the tax code. It's actually, I find that the argument, and you made this point, is a false argument in that is we argue about tax rates when we should be arguing about tax code. There are five Fortune 100 companies that don't pay any taxes.

I took advantage as an ink called 12 of 2 with the first 10 million in proceeds when I sold my last business was tax free, which quite frankly just makes no fucking sense. I don't understand why entrepreneurs don't pay taxes on a gain. But anyways, wouldn't the simplest, most effective means of maintaining a progressive tax structure, raising revenues, and addressing these problems without going after individual loopholes just be an alternative minimum tax? Yeah, so the big proponent of this minimum tax is Gabriel Zuckman. Have you spoken to him? Have you had him on? Right.

So for the... I haven't. Well, you should. I mean, if you're interested in this, like he is the guy on tax code, you know, much more than me. That this is, anyone who doesn't know, Gabriel Zuckman is a French economist working out of Paris who is trying to base. bring in a minimum tax, pay on exactly as you say, on billionaires. And it's basically saying everybody should be paying at least 40%, you know, including billionaires. First thing to say, I'm 100% supportive of a minimum tax rate. And at the moment, ordinary people in America and the UK

are paying their 30, 40% and billionaires are paying effectively nothing. It would be an improvement. But even if you were to tax billionaires 40% like an ordinary person, it would not be enough. Unless you have a rapidly growing economy, which we don't, it would not be enough to stop their wealth growing. And if their wealth is growing quickly in economies that are not growing, that wealth is going to be coming from somewhere. And I think that the big part of the story that we've had in the last 20 years, but especially the last five, six years since COVID, we've had this context of simultaneously rapidly growing wealth at the top end, in particularly billionaires, and this collapsing government wealth and significant falls in middle class and working class wealth

and what constantly amazes me is how few people seem to recognise that these two things are the same thing. Our economies have not grown. billionaire world has exploded and government wealth has collapsed and middle class working class world has collapsed. That is the same thing.

That is wealth transfer. That is two sides of the same coin and that is quite simply what happens if you allow a billionaire class to go untaxed, But the truth is, if you were to raise billionaire income tax effectively up to 40%, which it should be because that's what ordinary working people pay, but you kept billionaire inheritance tax and wealth tax at zero, you would not stop wealth transfer from continuing.

You would only slow it down. That's the truth. And I think if you look historically, the reason we had these like 50 years, well, what you want to call it, 30, 40, 50 years, the golden age of capitalism after World War II, we kind of lucked into that by accident, right? because we had these very high rates of income tax, and we had these very high rates of inheritance tax. And for people who don't know,

both in the UK and the US, we're topping these out at sort of 90%ish back in these 30, 40 years after World War II. Even though, I don't think that was a perfect tax system, but because it targeted a lot, it didn't hit the very wealthy more than it hit your high-earning workers, like famously, The Beatles, paid 95%,

you know, this kind of thing. And, you know, much richer people were not paying more. what it did was it stopped there from being a class of incredibly rich people who are rapidly growing their wealth share. That's what it did. And as soon as you cut those taxes down, which we obviously did in the 80s in the UK and the US and eventually all over the world, suddenly you open the box and you let out, you allow there to start to be a class of people who aggressively increased wealth share. And that comes from everybody else's wealth share. And this was such an unbelievably naive thing to do. do. And I think this could only have happened, in my opinion, because of those 30, 40 years where we thought, you know, everything could just be perfect for everyone. And we forgot that the last 2,000 years of human history is everybody being unbelievably fucking poor,

while 10 people own fucking everything. You know, that is the history of Europe, right? And we managed to stop that for a period of time. You know, if you look at the sort of the founding fathers and the start, the founding of the US, they have all of these ideas about we have to stop aggressive concentration and accumulation of power. We have to prevent them. We have to have division of power. We cannot allow the America to reproduce the mistakes that have destroyed Europe and created a year of disgusting inequality in poverty. And then we created finally, you know, in this 34 years after World War II, we had this situation where ordinary working men and women could go out, get a regular job, buy a house, have a family, get a retirement, get a

pension, have holidays, have a good life. And we did not have essentially rapacious super wealthy class, owning everything. And then in the 80s, we were like, you know what, let's just give it back to them. Let's just give it fucking back to them. And you have a choice. You have a choice, right? Either, it's just purely because of compound interest. If you allow the people with all the wealth and the power to use that wealth and power to take the rest of the wealth and the power from the less powerful, they will do it. All of history tells us that is true. It's as simple as that. All of history tells us that is true. You have a choice either very high rates of tax on the very rich or extreme inequality and poverty.

Tell me one point in history that this proves that. I think the only exception of the rule is occasionally a nation is blessed with some sort of natural resource that gives them abnormal, errant wealth. And they can have both low taxes and support the middle class because they're making billions in oil revenue or something else. If you look at the early US, the early US has effectively infinite land to grow into, right? And then what you can have a rapacious billionaire class that wants to rapidly expand without eating its own because it has infinite resources to eat into. But once those hit the boundaries of the infinite limited resource, if you allow them to keep growing their wealth,

when the economic opportunities rapid growth have stopped, then, you know, I mean, this is why obviously you see, this is why colonialism happens, right? Because you have this rapid growth, you have the creation of a being their class in Europe, and then they rapidly run out and eat the entire world. And what happens when they eat the entire world?

World War I. You know, this is what happens. You simply cannot allow a tiny group of people to own everything. And if you don't tax them, you know, this is just the force of compound growth. You know, if you allow these guys to grow, then that means, you know,

the people listening to this now, how are their kids going to compete for ownership with Bezos and Musk's kids when they're growing their wealth at 10, 15% a year? And if you tax them at 40% and don't tax them on wealth, don't tax them on inheritance, then all that means is instead of going at 15% a year, they grow at 10% of year. And it's still too much. That's the truth. I see it as, and I think it's just different sides of the coin, that conservatives or the incumbents have managed to convince the general population that the middle class is a naturally occurring organism. And I don't think there's any evidence of that. I think it's actually an accident in history by a group of progressives who said, unless we redistribute income, the middle class dies. And it feels to me that the only way we make progress is for economists and historians to say, the middle class is an experiment and something that requires, and I'll use the R word, it requires redistribution, that the luckiest and the most talented among us who become very wealthy have to give a disproportionate share. of their wealth back to the middle class or the middle class dies.

And we're returning to your point to the way history has been 99% of history. From 45 to 2000, the equalization of equality was the anomaly. And it doesn't happen naturally, that if we don't interject and recalibrate the law of the jungle, it goes back to the jungle. Isn't it just we need to puncture this middle,

that the middle class is a naturally self-occurring healing organism? Once you allow there to exist this class of people that rapidly, rapidly, rapidly grows their wealth share, then what you will see is the weak holders of wealth will be picked off one by one. And I think the first weak holder of wealth, which, to be honest, we've already lost, was the Western port. So, you know, I talk about my dad quite a lot. My dad worked for Royal Mail, the post office here in the UK for 35. years earning 20,000 pounds a year, low earner. And he's born in 57, so he's working in 70s, 80s, 90s, and he's able to buy a house and get pension and get retirement. And what you see here

is this like freak occurrence, which is incredibly rare in history, of people in the bottom, 20, 30% of society being able to accumulate wealth. And that's gone. That's gone. This is the first group of people that lost out when we start when we start creating a super rich class. And the reason that they were able to be lost is because they thought we lived in a world where I don't need to give assets to my kids because work can accumulate assets. And as you say, that was only possible because they lived in this very unusual period of time where you did not have a tiny group of people eating everything. So they thought, I don't need to worry about like protecting my wealth, protecting my wealth,

because we live in a world where working gives you assets. And you see, it's really interesting. I grew up in a very, very immigrant area of East London. And you see this difference between like the English families and the immigrant families, which is the English family thought we don't need to give wealth to our kids because work gives wealth. But these Indian families have come from poverty, have come from very unequal society, and they recognise, no, working people don't get assets. We're going to work our tits off and we're going to make sure we get some assets.

You know what I mean? So I think I think people need to recognise, yeah, it was. It wasn't normal, but it can be normal again. You used the term accident of history. And I'm going to push back a little bit on that because it wasn't an accident of history, Scott. This is the result of generations and generations and generations of working men and women getting their heads down in abject poverty

and working and struggling together so that their kids and their grandkids will have a fair share. That's what it is, Scott. And to be honest, whether this country and whether the future of the UK and the US is the kind of poverty that my granddad lived in or the kind of relative security that my dad lived in is a simple question of whether the men and women today get their heads down and work together

to protect the position, the collective power position of their kids the way that our grandparents and great-grandparents and great-great-grandparents did. That's for me, to be honest, I don't like using this term, but it is class struggle. It is class struggle because that's what's happening. We'll be right back. I'm Midge First, two-time Indyrecile Champion, championship MVP, and forward for the U.S. Women's National Team. Before I went pro, I graduated from Harvard with a degree in psychology.

Which comes in handy more than you think. Any athlete pursuing greatness knows there's a certain mentality you have to have. What people don't know is what that costs. In my podcast, Confessions of an elite athlete, I sit down with the best athletes in the world and explore the psychology, mindset, and unseen battles on the past. to greatness. So take a seat and learn from the confessions of an elite athlete on YouTube or wherever you get your podcasts. This week on Net Worth and Chill, I'm joined by Tank Sinatra, the meme king, with over 15 million followers across Tank's good news, influencers in the wild, and his personal

account. Tank is breaking down what the meme economy really is, how much a single sponsored post pays, why major brands are throwing serious money at jokes, and how meme culture think Preparation H, starter packs, and a perfectly timed screenshot is actually reshaping how we think about money and value. Get ready for a conversation that'll change the way you scroll, make your rethink what going viral is really worth, and prove that sometimes the most serious money moves are wrapped in the silliest of jokes. Listen wherever you get your podcasts or watch on YouTube.com slash your rich BFF. We're back with more from Gary Stevenson. The next topic I'd love to get your insight on is I'm constantly,

asked, what is the difference between the U.K. and the U.S., and I struggle to explain why the U.K. has done so much less well than the U.S. because when I look at the underpinnings of the U.K. economy, I think the education system here is superior to the U.S. I've had my kids for extended periods of time in the U.S. education system and the European, in the British school system. And while, obviously, it's situational, I find on average the approach to education here is better. There's tremendous IP. There's a decent argument

that AI was actually invented in UK universities. Great culture, rule of law, a general kind of zeitgeist of fair play. People from all over the world want to live here. It just feels like all the under,

a strong immigrant popular. It feels as if all the underpinnings are here. And yet if you take out London, the household income of the UK is lower than the portion. states in the U.S. And it feels as if there's no growth here. I'm curious to get your, if you were to summarize, and also, growth solves a lot of

problems, right? The way I think the U.S., if they ever address its deficit, will not only be fiscal responsibility, but the fact that we're growing, that just kind of helps everything, whereas the U.K. doesn't appear to be growing. I'm curious, I at your metal level here, what do you think the big difference is between the U.S. and the U.K., both in terms of culture and economic policy, that was resulted in One, 1995, same GDP per person in Europe as the US. Now I think we're 30 or 40% more.

What in your mind is the difference? I think just first, before I get into it, it's important to recognize that I think sometimes these narratives of US outperformance, do you sometimes gloss over the fact that a lot of the better big level macro numbers from the US are really not filtering down to a lot of the American public. So obviously, US has had higher GDP growth, and this is true. Average versus mean. Yeah, and I think it is important to recognise that living standards for a lot of Americans have really significantly fallen. Financial security for a lot of Americans have really significantly fallen and poverty has significantly fallen.

But that's not to say your point is untrue. I think like the UK, I think when the UK, the last 15, 16 years, the UK has been really the standout weak performer in the Western world in terms of economic growth. You know, some interesting things have been happening in Japan the last couple of years. but I think really the UK is, yeah, it's the big one. You know, I started working in 2008, and at that time, I think the UK was probably seen as one of the strongest, if not the strongest economy in the world, really, of big countries. And the collapse has been pretty catastrophic.

And you can trace that back to, you know, quite simply, a number of really catastrophically bad economic and political decisions, the first of which is austerity. So for Americans that don't know, you know, and this is very relevant for Americans given, you know, the Doge and the recent aggressive attention on government cost cutting. You know, we had our cost cutting experiment in the 2010s, right? So we had the David Cameron, the start of the Conservative government was in 2010, and their big economic plan was to aggressively cut back the state, right? It was austerity. And then what you have is this insane period of 10 years of zero interest.

rates, when the government could have been borrowing and investing essentially for free, when what they're actually doing is just basically dismantling the state and dismantling all of the protection systems for the poorest people in the country. And basically creating a permanent, unsupported underclass in the country. And other countries did this to various degrees. You know, you look at, for example, Greece, which is effectively forced into doing it. But, you know, with the benefit of hindsight now, with, you know, long-term interest rates in the UK 5%. The fact that we had 10%. years of zero interest rates and chose rather than to invest at that time when investment was

free. They could have literally just borrowed and bought the stock market and they would have been like incredibly rich. But instead, they basically did the exact opposite of that, anti-investment. It was a catastrophic economic error. And, you know, I think this is really relevant for anybody watching now in the US because, you know, the US is starting to look at this narrative as, you know, the way to solve economic problems is to dismantle the state. You know, did it work for the UK? You know, did it work? It was a catastrophe.

And then obviously, you know, after that, you don't need me to tell you. Obviously, Brexit, you know, I don't think you'll find many economists. You think that that was wise, or at least a wisely implemented economic policy. But, you know, what is happening now in the UK is happening all around the world. I did a video a couple of weeks ago, which looked at the share of like seats in politics. parliament going to the main two political parties. So you will be aware that, you know, across the world we have had for a long time essentially two party politics with a big centre left party and a big centre right party. And since 2008, the financial crisis, that has basically ended.

And you can look all across Europe and you see these parties used to take something like 80 or 90% of the seats, depending on what country you're looking. And now they're down to 30 or 40 or 50% of the seats. And in many cases, it's not even the same two parties because they've collapsed. And what that is, essentially, is the Western world, across the Western world, and it's definitely happening in the US, it's a Western world that has seen living standards consistently fall since 2008 and has not been given a solution by any major political party, which is turning in on itself and saying, well, what the fuck do we do? What the fuck do we do? And every country is trying to figure out how to stop living standards and falling. And the UK settled on Brexit, which was, to be quite honest, a shit answer. You know, the US is looking at Trump. That's not going to work either. You know, I'm out here making the pitch. I think unless you stop aggressive increase in inequality, you are going to see living standards collapse everywhere. And it's really important to recognise, as much as, you know, the UK has become the sick man of Europe and I don't deny that.

Living standards have collapsed everywhere, Scott, in France, in Italy, in Spain, in Japan, in Australia, in America, in every country, living standards are falling. So yeah, look, you know, I don't think the UK has done a great job of it in the last 15 years. And if you want me to put that down to two things, it's austerity and Brexit. But the truth is, this is happening everywhere. What, by the way, Gary, I always found when I talk to the time, literally the time space continuum goes on pause. I can't believe we've been talking for 56 minutes. So if you, if there was some sort of star chamber of fed chairs and heads of tax policy across the West, the G7, and you could implement one or two policies to effectively go after income inequality without

lurching too far to the left and stopping growth. There are some dangers. We have a tendency. The clock appears to never be at center. We have a tendency to swing back and forth. And I would argue that some of the taxation policies, progressive policies in the 70s and 80s may have actually, you know, done what the rich catastrophes about, and that has slowed growth. What are the one or two policies you would want to see implemented across the West?

to try and address income inequality effectively? So I push more on wealth inequality in particular because really, if you're working for your money, you've already lost, basically. It's about wealth inequality. I think the two, it needs to be taxes which aggressively go after the top 1%, not of earners, but of holders.

This is, this is really, because at the moment we have an unbalanced system, which does aggressively, in most case, tax high earners, but does not effectively at all tax, high holders, high owners, high hoarders. I think the two taxes which have the real power to get wealth back into the hands of ordinary families are wealth taxes and estate taxes. But I think when you bring them in, there's going to, there would be, the debate always tends to focus on rates, but really the question should be entirely about avoidance. How do we bring these taxes in in such a way that the

super rich cannot avoid them? And I think, to be honest, the real way that you do that, that is exit taxes and tax on foreign owners. Because if they leave and they're still being taxed on their holdings of American assets or British assets, then they can't avoid the tax without selling the assets. And then that means you can get your assets back. I think really, I think this is the key here. And look, China would not allow you or I to own $10 billion of Chinese assets.

And when they come to us at the end of the year and say, hey, can we get our tax on your Chinese assets? we say, hey, I live in Marilabone because it's good for my dogs. You know what I mean? They're not going to listen to that, you know. You know, and I think we're stupid. But we're not, the thing is, we're not stupid because the people who set the tax policy, it's fucking working for them.

It is fucking working for them. And that is why I don't talk really, well, I mean, I do increasingly more and more, but I don't talk primarily to politicians. I talk to the public because I honestly believe the politicians, especially the high-level ones, listen, David Cameron made 10 million pounds within a year of leaving office. Is he going to be the guy?

Rishi Sunak's father-in-law is one of the richest men in the world. Are these guys going to be the guys who change tax policy against the very rich? It's not going to happen. So really, my message is not so much to the politicians, it's to the British and American people. I guarantee you, unless this is pushed for aggressively by the public, it will not happen.

and ordinary people see their kids and their grandkids be significantly poor than they are. So to be honest, I don't want to talk to the politicians. I want to tell the public, because they are the guys who will fix this if it ever gets fixed. Well, you'd like to think we have a democracy, and if enough people buy into this philosophy, they'll elect people who will also, they can hold accountable. The notion of taxing wealth where it is, or I would argue it's been created, has trickles down to, I think, state taxation policy. So, for example, Jeff Bezos just announced he's moving to Florida to spend more time with his dad, which is adorable, but is a lie.

And that is he aggregated $120 billion in wealth using the great infrastructure, the great state of Washington, their schools, their hospitals, their technology. And then about the time he's going to register those blessings, he pieces out to Florida such that he doesn't have to pay back to Washington taxes. I mean, it seems to me that a very basic policy of paying taxes on where you have assets and where you aggregate wealth. kind of makes sense. And to your notion of the tax gap and tax enforcement, supposedly there's $750 billion a year in the U.S. of taxes that are owed to go uncollected. And I don't know if the same, and this is my final question, but in the U.S., the biggest tax cut that no one has ever seen, is that they basically neutered the IRS.

And if you're very wealthy, you're encouraged not to hide income, but to be as aggressive as possible because AI can audit your taxes. It can audit lower Minilcom households, but it takes an army of auditors to come in in audit the wealthy, such that, again, you neuter the IRS. That's the greatest tax cut in history. It's the same thing happened in the UK? I think they definitely should fund it more, and they would get more. But I think the reason that they've been able to sort of defund the tax collection agency is because nobody is protecting the brand of tax in the eyes of the public. I've been thinking about doing a series of videos called The Joy of Tax

because people hate tax. Obviously people hate tax. Nobody wants to pay tax. So it's like really put... This is why Margaret Thatcher and Ronald Reagan could do what they did and slash taxes and basically destroy the poor and have the poor actively cheer on their own destruction. Because people hate taxes. People need to understand what tax is.

Tax is your army that protects you from your domestic billionaires. If you do not have an army, then you can't stop Putin. And if you do not have an IRS, then you cannot stop Musk and Bezos. And both of those groups of people want the exact same thing. They want your mom's fucking house and they're going to get it. Unless this is it. Listen, if you do not fund your army, you will get invaded by a foreign army. And if you do not fund your IRS, then Elon Musk will have your mom's fucking house. This is your army to protect your assets from your domestic billionaires, your domestic, and they are the real threat to the American public's wealth.

Well, let me provide a suggestion. I think so much of this, because you have such a huge following, I think so much of this comes down to words, and I think we would be much more effective in restoring a progressive tax structure. Instead of calling it an estate tax, we called it, or a well tax, we called it a hoarder's tax. Because that's effectively what I see is going on, is our hoarding. And just as we felt, we built up resentment towards people hoarding, hand sanitizer or toilet paper during COVID, is it any less damaging to be hoarding wealth

well beyond what you and your kids will ever need? I mean, shouldn't it be a hoarding tax? Your thoughts? Yeah, you know, I've thought about using the term hoarding more. The inheritance tax the estate tax has been massively, massively, massively, massively demonized for a long time. And I understand why. I think the most obvious thing that you should do to change estate tax is change the timing. There is no reason why, there is absolutely no reason why that tax needs to be timed at the time your dad dies. There's no reason. You know, your dad dies when you're 30 and my dad dies when he's 17, we pay the tax at totally different times. Set it on your dad's 110th birthday and set it at an incredibly high rate on incredibly high amounts. Simple as that. And then it's,

then it's not, it's not a death tax anymore. It's a hoarding tax. But what you, what really needs to be done is people need to understand that if you allow the super rich to accumulate wealth very quickly, what that means in very literal terms is your family loses its wealth and your government loses its wealth. You know, that's people need to understand that we do not live in an infinite some world and you cannot have a group of people who own everything unless you and your group of people own nothing. I think if you if you generate that understanding to be on and that's the number one. What I want is to be in a very situation where if I walk out here and go on the show, street and pull some guy over and say, why do you think living standards are falling? Why do you think

your kids will be poorer than you? And I want 70% of people to turn around to me and say, because of growing inequality. Simple as that. And if I achieve that, then this problem will fix itself. Gary Stevenson is a former trader turned economist and activist behind Gary's economics. His work focuses on rising inequality, wealth concentration and economic policy. Gary, I always love listening to you. I think you're able to kind of distill fairly complicated concepts down to kind of basic human emotions and, I don't know, just rational and reason. I think you're doing great work. Very much appreciate your time, Gary.

This episode was produced by Jennifer Sanchez and Laura Janair. Cammy Rieke is our social producer. Bianca Rosario Ramirez is our video editor. And Drew Burroughs is our technical director. Thank you for listening to the Propgee Pod from Propgee Media. Support for the show comes from Square. The easy way for business owners to take payments, book appointments, manage staff, and keep everything running in one place.

Think of your favorite small business. I love this restaurant concept. I think they've got several locations called Dig In. And it's basically home-cooked food. And this place just makes it feel like home cooking. And they do a great job. I like Square. I think it's very elegant technology.

And if you run your own business, Square can work for one-location shops, pop-ups, mobile service businesses, and multi-location franchises. You can take payments at a kiosk counter website or with your phone, all synced in real-time. square has built in tools, including loyalty and marketing to help you connect with customers and reward them for showing up again. You can track sales, manage inventory, and access reports in real time, whether you're in the shop, on the go, or running things solo. With Square, you get all the tools to run your business with none of the contracts or complexity, and why wait? Right now, you can get up to $200 off square hardware at square.com slash go slash prop G.

That's S-Q-U-A-R-E.com slash go slash prop-G. Run your business smarter with Square. Get started today.