New York and California Now Have A Wealth Tax

Thanks for joining us, everybody. This is Richmond's morning news on News Radio, WRVA, wake up with us or spend the rest of the day trying to figure out what's going on. All right. Today's tax day. I just talked about, you know what, do they really respect my harder at work when they seize my property? I know I need to because there's things the government does that I need. I need... sewer. I need water. I need roads. I need to be protected by an army. There's things that we need from the federal government. Do they treat our money? Do they respect it? Do they understand that it's my hard-earned tax dollars that pay for all of these things? So other people have some different ideas. One of the ideas that we see thrown out and actually put into place now is in New York and in California and other such places where they say, you know what? Let's just tax the rich even more. Let's tax the billionaires and let them pay for everything. Would that work? Let's find out. We go out to the news radio, WRVA, newsmaker hotline. My mentor, someone I respect more than anybody else in the world, professor of economics, classical economist, Dr. Richard Bylus joining us here on News Radio WRVA. Good morning, Dr. Bylus. Good morning, Rich. How are you today? I am doing well. I am doing well. So I called you today, said, Dr. Bailas, I need your help. Zohran Mamdani's got his billionaire's tax. Gavin Newsom's got the threat of a billionaire's tax. What would happen? if we were to follow their idea of the Democratic Socialist, aka Communist, and just taxed the rich and used all their money to pay for everything. And we'll start to see this now with a billionaire's tax that's actually taking a foothold in this country. Well, to begin with, the rich pay most of the taxes already. And it's always bothered me. And this is a question that I think people ought to ask. Why is it that we want to tax success? When people are successful, they make more money in one form of success, and we have to go ahead and tax them more. Why? Why do we do that? I don't understand, okay? But that's a question that I think we ought to look at. Secondly, if you look at the preamble to the U.S. Constitution, one of the comments is, promote the general welfare. And the word promote has now been changed in the minds of many politicians to provide. And so they want to provide things in the process of getting votes. And it's always comfortable to say, let's tax the rich because they can afford to do this. The problem is when you do that in a city like New York, where the taxes are already high, you're going to be losing the rich people to go someplace else. They're already moving out, and they'll continue to move out. They want to preserve their wealth. That's natural behavior. If I did just tax them at a higher rate, and we've seen this throughout history, we've seen this when we had such a regressive tax rate that it didn't make any sense to try to become more successful. In fact,

I think that it actually made people less successful because who wants to work your tail off and give 60, 70, 80, 90% of your income to the federal government. There's negative that comes along with that. Let me ask this question. If the tax rate, the income tax rate were 100%, how much tax revenue would there be? Zero. Zero. So the fact of the matter is that when you lower the tax rate, tax revenue go up until some point when you lower the tax rate, tax revenues will go down. But the question is, what is the optimal set of tax rates? And I've argued for a long time, a flat tax is probably the best thing. But we don't want to go in that direction. We want to continue to tax the wealthy, tax the rich. They're the ones that can afford it. And this is what New York City is doing. This is what California is doing. This is what a lot of states are doing. And I think we're going to see failure. We have seen it in the past, and we'll see it in the future. Why do you predict that failure? He just, Zohran Mamdani just said, listen, I'm opening up my first public grocery store, and we will have prices cheaper than everybody else, and it's going to be great for everybody. That's a fallacy he's sending. He also told everybody, then he also sold everybody on, hey, we're going to have free buses. That's not going to happen. Why is it that these pipe dreams never come true? I know nothing about the grocery business other than I understand that the cushion that they have, I don't know what word it is, is very low. All right. They don't really make a lot of money. The margins. They make money in volume, not in individual purchases. That's right. And one of the things you have to think about when you're opening up a grocery store is rent for the building, price of electricity, price of natural gas, price of water, price of getting the items that you want to put on the shelves. When you put all these things together, the return is pretty darn low. I don't know what's going to happen in New York City, other than where the experiments have been done in the past, they failed. And my guess is they'll fail in New York City. I don't know where they're going to cover the costs other than tax the wealthy. subsidies, subsidies, they'll call it subsidies, to make them stand up right. And by the way, he says, I think he said that they're not going to have the store open for three years. So I don't know a business that could withstand three years of building out before they go into business to see the first dollar come in. But here's... We're just going to have to wait and see. This stuff is right out of the communist handbook. And I wish, I just wish that sometimes... People would say what they are, but they don't. But there is a point I'd like to make, Richard, and people are sheep. They follow a shepherd, okay? And the question is whether the shepherd is good or bad, but people follow. And what happened in New York City with the election is they follow Zohran Mamdani. And we're going to see whether this is a good shepherd or a bad shepherd.

There's a movie called The American President. Annette Benny and Douglas was in it. And there's a line in there with Michael J. Foxes. In the absence of leadership, people will crawl across the desert to a mirage when they're looking and searching for a leader. And that always spoke to me that a lot of times we look so hard and we're so desperate for a leader. You'll latch on to the first person that shows you any kind of leadership. It tells you what you want to hear. And I think that's what's going on in New York. Well, I don't want to get religious, but I would recommend that people, if they're religious people or not, they get a hold of the Bible and they read John Chapter 10, because it talks about a good shepherd and then someone else that sneaks in and becomes a shepherd. And you never know what we have, but people are sheep. They follow the shepherd. And that's what happened in New York. That's what's happening in California. And quite frankly, Richard, that's what's happening in this country. We have to be very careful. Let me go back to tax policy for a minute. And I do, and I appreciate that because I think that's important for people to understand when you're talking about the good shepherds and such. I never understand this. We get so caught up in tax rates. The rich should pay their fair share. Should I care about the percentage of tax you pay? Because it almost seems like I want to punish the successful in a Robin Hood way that I'm going to take from Elon Musk to give to everyone else because he's so successful. We must punish him almost like we treated his success like he did something wrong. Did he break the law? Did he steal something, no? But we still want to punish him. I get so much, so many people worked up over tax rates. I'd rather worry about tax revenue. I don't care how much you pay percentage. I just want to make sure you have enough revenue to cover everything we have. It seems like we get lost with wanting to raise the taxes on everybody instead of worrying about, well, at what tax rate will we have the most revenue where our government can run efficiently? Well, I think it's a little broader than that. The question is, is government doing more than perhaps it ought to be doing, trying to buy votes? Because that's what politicians do, whether we like it or not, they buy votes by making commitments to people who elect them. And so the question is, is government expansion good or bad? And one of the things that we've seen recently, and we've known this for a while, but it's come to the light, and that is a lot of fraud in government. The bigger government is, the more fraud is likely to be because it's easier to conceal things. In small government, it's not easy to conceal things. And so we have to be very careful, and we're not. And that's what angers me because you'll hear politicians in D.C. talk about, well, the waste, fraud, and abuse, how dare you have any waste, fraud, and abuse? It would almost, Dr. Biles, is this logical? If I had waste, fraud, and abuse, it's no different than if I've got a leak in my water pipes, I wouldn't allow just a little bit of leakage out of my water pipes. Why are they allowing a little bit of leakage out of my tax dollars with waste, fraud, and abuse, and they're not concerned?

You get your damn water pipe fixes what you do. 100%. Okay, last thing. Let's just say that they keep going and going and going. If we wanted to tax all these billionaires and take everything they have, how long is it before we don't have any billionaires and that stream of income would go away and we'd be right back to zero with less growth, less jobs, less businesses? Well, we're not going to... Number one, we're not going to... tax all billionaires out of their wealth. People, even politicians are smarter than that. So we're going to, the question is, when billionaires start moving. what then happens? And maybe people begin to wake up a little bit, the politicians begin to wake up a little bit, and listen to some of the people who have voted for them, say, look, we need these people because we need the tax revenue. Maybe we ought to be a little bit more conservative in what we do. Less spending and fewer government programs, maybe more private sector programs. could take their place. Maybe Kathy Hochul should have taken your classes because that's the exact same thing she's saying to all the wealthy people that fled New York, went down to Florida. She's now begging them to come back a while ago. I don't want these people here. You're not true New Yorkers. Now she's begging for them to come back because they've seen their tax revenues fall because of all the wealthy people. Come back, come back. Come back and pay higher taxes. I mean, one of the nice things about the state of Florida where I now live. is there's no state income tax. And they have plenty of New York and pay taxes. No, no, no, I don't think so. And they have plenty of money to take everything down in Florida, thanks to Ron DeSantis. Dr. Biles, thank you so much for joining me. I appreciate again. The bottom line is people will vote with their feet. If you tax people into oblivion, they will leave, and then you'll be left with nothing. Maybe you should just be better stewards of our money and not try to punish those that have been successful, and it might work out a little bit better. Thank you, Dr. Bailas. I'll catch up with you. My pleasure. Take care. Bye-bye. Thank you so much. Dr. Richard Bylus joins us here. My mentor again.

He's one of the brightest men, smartest men I've ever met in my entire life. He was my professor in college, and we've kept in contact all these years later. So I get excited when I get a chance to get him to kind of explain economics to us. All right. Coming up on the program, we've got a lot of big stuff coming up on the show, including your chance to win $100,000 as we celebrate our 100th birthday here on News Radio, WRVA, all brought to you by Roof Max. All right. So what does it mean to have confidence in your vehicle? It's pretty nice. You drive off the lot. You go, you know what? I'm confidence in this car. I got a warranty. What's it mean when that warranty starts to go away? Like, ah. See, if you bought your car from Pearson's signature dealerships, you don't have to go, ah, because they double the engine and transmission warranty on your new vehicle. You know what it's like when you know I've got 10 miles and that warranties over and like, oh, my gosh, I hope nothing happens. If you buy your vehicle from Pearson Signature Dealerships, you don't have to worry about that. Why? Because of that Pearson Promise. See, you're already ahead just by thinking about buying your car from a Pearson Signature dealership. Because no matter what, you don't have to ask for it, you don't have to negotiate for it. They give it to you. They offer it. It's right there on the wall. You walk in, you know you're going to get double your engine and transmission warranty. There's a difference. That's why people have come in for generations. So whether you're on the west end and you're stopping by the Chrysler Jeep Dodge, Pearson dealership, or Pearson Mazda on West Broad, Genesis of Richmond, or Pearson Hyundai on the Midlothian Turnpike, or Pearson Honda near Woodlake on Holstreet, they all offer that Pearson promise. Find out more by going to buypearson.com, buy Pearson.com.