CLAY: Right now, Buck, we have the Democrats… Joe Biden put in place this idea that he wanted a budgetary framework in place before he left the country for six days and Senator Bernie Sanders has said that he doesn’t see that pathway happening soon. He said, “I don’t think so” about whether they were going to be able to announce a framework today.

“I’m not quite clear in terms of the revenue package every sensible income option seems to be destroyed.” Now, Joe Biden is scheduled to leave for Europe for six days tomorrow morning. And again, that was the deadline he put in place that he wanted to have worked out. And what seems to have happened was initially there was this idea, “Hey, we’re gonna tax the billionaires,” right, this tiny sliver of the super wealthy, Buck.

“We’re gonna bring them in and we’re gonna have an unrealized capital gains tax.” But now a lot of people are asking two questions. One, how in the world does this work in practice, and, two, is it constitutional? And I want to just ask a basic question. I want you to think about this for a minute. For people out there who don’t spend a lot of time on capital gains, a capital gain is basically a paper profit.

An unrealized capital gain is that paper profit that has not been sold. In other words, you buy a stock for $10. It goes to $20. The profit from that 10 to 20 is an unrealized capital gain. So what we’re talking about here, Buck, is how in the world do you pay this for the billionaires? Elon Musk, for instance, has made $100 billion or more, but until he sells that stock, there is no real dollars for him to be taxed on. So this is suddenly becoming a massive issue ’cause a lot of people are saying, “Wait a minute. Can we even do this?”

BUCK: So, Clay, I just got back. I was in Vegas, not just to shoot big guns with my friends at The Range 702 in Vegas, but I was there for a financial conference. Friends of mine, Stansberry Research, do this annual Vegas conference, Stansberry Vegas, and they bring in all their top experts, people from all over.

I’ve been in the past. Rand Paul was there this. Nouriel Roubini has been there in the past. Think of a famous finance guy, and he’s probably been at this conference at some point. So it wasn’t a political conference I’m there to do a little bit of political analysis and do some meet-and-greet panel stuff and all the experts I talked to, first of all — and this is including some who are left of center.

There’s no commies there. It’s a finance conference, right. That would be a little weird. But a lot left-of-center people, they’re all saying the Biden administration is just finding new and clever ways to mess things up. They’re like, “Wow, it’s really…”

They’re making all kinds of poor decisions here but on the wealth tax specifically. First of all, everybody should know the history of this goes back to Congress passing the income tax. Some will point to the Civil War, attacks during the Civil War. But really the income tax as we know it goes back to 1909. So over a hundred years, and it was just gonna be on the super rich.

CLAY: Oh, yeah, of course.

BUCK: People forget, this country ran on excise taxes and duties and customs fees largely or entirely until this came about. Selling bonds. And here’s what what they were all of your saying. Amazon a perfect example. If you’re gonna tax the billionaires, right? Amazon had, I think they said, six different times had a 20% or more correction from 2000 to 2010 or 2015, I forget. But in your office where Amazon dropped in value dramatically. At one point Amazon dropped all the way down to six or seven dollars. Had this huge correction.

CLAY: It looked like it was gonna go bankrupt.

BUCK: That’s right. So, how the heck are you going to have a situation where you are taxing unrealized gains? Meaning the money is in your bank account; they’re taking a piece of it that’s how it currently works. The money’s in the stock, they’re gonna force you to pay based on the gain, but then stocks are volatile. Stocks go up and down. So think about the…

They basically said to me, “This is unworkable,” and the fact that Democrats are even bringing it up — and these are finance gurus. They’re like, “This is idiotic.” However, all they really wanted to do, first of all, there’s the political class warfare angle right, Clay. We’re actually going after billions. But beyond that, what they really want to do is create the ability to tax assets that are not liquid.

This is the real Holy Grail for the authoritarian money grab that they would like to do, the socialist money grab they’d like to do. They can get into your 401(k). Why do you get to have all these untaxed gains over the course of your 401(k) contribution? You look at how much money is in 401(k)s in this country? It’d ay for a lot of Bernie Sanders stuff.

CLAY: And, again, the workable aspect of this, you raised a good point. What happens if the stock market values go down, do you get a refund of $20 billion? For instance, Tesla stock has skyrocketed lately. Elon Musk, I believe, is the richest human in the world. But let’s pretend that Tesla hits some sort of financial difficulties that the market is not going as well for it and the stock price comes back 50%.

Well, wait a minute. Does Elon Musk get a $100 billion refund from the United States government for the lost value that he’s already paid stock in? Again, this is getting into the nitty-gritty here, but where does the money to pay the tax come from when it is an unrealized capital gains? Are you going to force the stockholder to sell stock in order to pay taxes?

If so, that could drive down the value of the stock even more. This is madness. Now, part of me thinks the Democrats are aware of this and they’re aware that it will be struck down by the courts. And they will understand that they’re going to have trillions of dollars in additional government spending with no additional revenue. But they just want to get these programs underway, and they don’t care about deficits. It’s madness.

BUCK: The other place — and this was brought up, because just the concept of taxing unrealized gains, which is fascinating. They’re going after… Oh, yeah, it’s just the billionaires, sure.

CLAY: Just the billionaires, yeah, of course.

BUCK: Clay, it feels like a backdoor way to also maybe get at the gains that people have in the housing market. And now we talking everyone listening who maybe you bought your house for 200K, and maybe your house now is worth, you know, 250 or 300, depending how long you had it, you’re gonna be paying annual gains, a tax on your annual gains?

Think about what that would actually mean. These are the kind of things. The government is rapacious in its desire for, quote, “revenue,” i.e., taking money from all the people listening to this. They get very creative. It’s like in New York City, Clay. The one thing this city does really well? Write parking tickets. They are super Ninjas at writing parking tickets ’cause it’s revenue; it’s taking money from people.

CLAY: Well, and I think your point on the IRS and the initial income tax is a good one. We know once they implement it, it’s only going to expand.

BREAK TRANSCRIPT

BUCK: What happened to the wealth tax, Clay? Looks like maybe something’s not happening.

CLAY: Yeah. So, we were just talking about how insanely dumb the idea of a billionaire-specific tax was and is. And in the last 15 minutes, news has broken that Senator Joe Manchin of West Virginia — who seems to be one of the few Democrats still possessing a functional brain — also said the billionaire tax doesn’t make sense and that means the billionaire tax is all but dead.

This is according to Jake Sherman who just put this out, and what does that mean in the big picture? It means that, given that Kyrsten Sinema has said she won’t support tax increases on the rates and given that now Joe Manchin is opposed to a billionaires tax, the odds of any sort of budget reconciliation agreement before Joe Biden leaves tomorrow morning for Europe — which is the deadline he put in place — seemed to be fairly low at this point in time.

And that means it could drag, which I think is gonna terrify Democrats into next week, which would mean that Tuesday election — if Glenn Youngkin were to beat Terry McAuliffe — everything may collapse. By the way, Manchin saying he can’t in good conscience agree to increase the deficit, which is already at $29 trillion. He seems to want this thing to drag on. Remember, he argued for a “strategic pause” in the Wall Street Journal. So that is the absolute latest on this massive tax-spend plan by Joe Biden.

BUCK: And I told you, Clay, when I was out in Vegas with my friends from Stansberry Research at their conference the number one issue of concern across the board was inflation, and just how destructive it is and what it does. Remember, inflation doesn’t necessarily hurt people with a lot of assets. The stock market super high right now. But looking at the actual economic impact on the American people and the long-term impact, inflation was their biggest concern that I was hearing across the board, ’cause Manchin says no billionaires tax. Earlier today he did say this in the morning.

MANCHIN: On the taxes, first of all, I said this. Everybody in this country that has been blessed and prospered should pay a patriotic tax. If you’re to the point to where you’re able to use all of the tax forms that you can to your advantage and you end up with a zero tax liability — or have had a very, very good life and had a lot of opportunities — there should be a 15% patriotic tax.

That’s me speaking. It’s not I’m not speaking for anybody else. People in the stratosphere, rather than trying to penalize them, we ought to be pleased this country was able to produce the wealth. But with that there’s a patriotic duty that you should be paying something to this great country to give you the protection and the support and the opportunities. That’s called a patriot.

BUCK: It’s never gonna happen, Clay. Had to say another thing that we’re gonna talk about. I would love for there to be a flat tax. I spoke to Ted Cruz when he was running for president some years ago. He was talking about abolishing the IRS and having a flat tax, right?

CLAY: Yes.

BUCK: That would make a lot of sense. Never gonna happen in the current political climate.

CLAY: Yeah, and look, I think what Manchin is going to end up doing there is, there is talk of an agreement of a 15% minimum tax rate on corporations that sometimes evade paying their full share of taxes. Now, all the accountants and all the tax experts can explain how that comes to pass because there are all different sorts of complications that are far new nuanced for most of us to even understand unless we have effectively a PhD in taxation.

But it is significant big picture. And I understand a lot of people out there say, “Hey, I don’t care on a day-to-day basis what’s going on in Washington, D.C.” What is significant here is the Biden budget — which is basically now the focal point of his entire presidency, and that he put a deadline of wanting resolved before he left for a six-day trip to Europe.

It seems, at least right now, highly unlikely as we sit here on Wednesday that this is going to be solved by tomorrow morning, which would mean it drags into the election days in New Jersey and in Virginia. And that Virginia in particular could strike a big blow against the Biden agenda. Because, Buck, if Glenn Youngkin wins, then there’s not gonna be more Democrats saying, “Hey, you know what we definitely need to do? Tax and spend even more.” They’re going to be of the belief that the Biden agenda is even more under assault so that significance of that Virginia race becomes even more paramount.

BUCK: The whole game the Democrats play is the pretense — again, Bastiat’s The Law, the belief that you can live at the expense of every other man, that this will always be paid for by someone else. That the Biden agenda will be free, that they are effectively the federal government equivalent of Santa Claus and the Republicans are the Grinch.

No, this only works until people start to feel why this doesn’t work, and that is what inflation is. That is what these intrusions into the markets and these monetary policies result in, and this is going to hurt. This is going to get worse. It’s gonna continue in to 2022. They know that.