Capitalist Investor

Is Kamala Harris Getting Good Financial Advice? Ep. 272

• Strategic Wealth Partners

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In this episode of Capitalist Investor, hosts Tony Tiger and Cool Hand Luke dive into a range of engaging and at times provocative topics affecting today’s financial landscape. Here are the five hot topics they discussed:

1. Government Officials and Tax Inefficiency
Tony and Luke explore the apparent disconnect between government officials' personal tax strategies and the tax policies they advocate. They highlight a detailed investigation into Vice President Kamala Harris’s tax returns, revealing an approach that’s surprisingly conservative and, perhaps, inefficient. They contrast this with the far more aggressive financial tactics of other politicians, like Nancy Pelosi, raising questions about who genuinely understands and practices effective tax planning among public officials.

2. Insight into Kamala Harris’s Financial Strategies
The hosts unveil the financial strategies, or lack thereof, employed by Vice President Kamala Harris. Despite her high income and notable book sales, her tax returns suggest she's very conservative with her money, keeping large sums in low-interest bank accounts. Tony and Luke question her lack of engagement in more tax-efficient strategies such as retirement accounts and tax-deferred investment vehicles, sparking a broader debate on whether this conservative approach is a lack of financial savvy.

3. The Role and Impact of IRS Agents
Luke and Tony ponder the efficiency and necessity of the recent hiring spree at the Internal Revenue Service (IRS). They argue about the return on investment for employing large numbers of IRS agents dedicated to hunting down tax evasion. Their dialogue raises issues such as the overall effectiveness of this approach and whether it justifies the significant governmental expenditure.

4. The Philosophy of Minimal Government Oversight
A significant portion of the episode is dedicated to discussing the ideal size and role of government. Luke articulates a classic liberal viewpoint, advocating for more power to the states and smaller federal government. He criticizes the federal government's pervasive influence on individuals' financial lives, arguing that a more localized form of government could lead to more efficient and effective governance.

5. Strategic Financial Planning for the Future
Finally, Luke and Tony discuss the importance of strategic financial planning, especially in the context of increasing government control and changing tax policies. They emphasize the necessity of thinking long term rather than just seeking immediate tax savings. Various strategies are mentioned, including Roth conversions and the potential impact of reverting to older tax regulations, underlining the hosts' belief in the importance of proactive, informed financial decision-making.
In summary, this episode underscores Tony and Luke's perspective on the intersection of government policy and personal finance, highlighting how political actions and decisions could affect individual financial strategies. They encourage listeners to be their own ‘Chief Executive Officer’ of their finances, to think critically about who they seek financial advice from, and to remain vigilant about future changes in the financial landscape.
Stay tuned for more episodes of Capitalist Investor for insightful discussions on how to navigate the complexities of today's economic world.

All right, and welcome to this episode of the capital's Fester. You got myself, Tony Tiger, and I got my, one of my colleagues here, cool hand Luke and young Padawan. And then we got. And we got Derek's on assignment, so we miss him already. I'm getting hungry. My belly's rumbling. I know, man. I know. It's almost lunchtime. It is. It is, man. What are you eating for lunch today? I don't know yet. I don't know. It's kind of. We had power issues in the office. I mean, the office. So I'm probably just gonna go. Probably go grab lunch on the way home, if that's okay with you, so. Yeah, you do. Anyway, I. I'm definitely gonna grab a nice, juicy, I think, sub sandwich somewhere. That's what I'm feeling. Maybe a Reuben, actually. Okay. Anyway, hey, at least you have a game plan. What do you got today? Alright, so today, I don't know what the word I want to really use, but. But you know how the proof. Not proof. It could be proof, but scenarios of how the government officials are tax efficient or tax inefficient, I should say. They mess up there. They mess up their own taxes or tax strategies, yet they're going to come out and tell you how to, you know, do your taxes, what strategies you can implement and what you can't, and provide all the rules when at the very top, they're messing it up. And we're. And what I found is an article where Kamala Harris's tax return has been under scrutiny. It's been, you know, rolled out and for. For the public to see since she's now a, you know, candidate for the presidency. So we get to see behind the curtains a little bit. And they released her tax return and it's under scrutiny because she, if, you know, to kind of get to the high level answers, like, she was trying to keep it, quote unquote simple. She didn't. She's not doing anything. There's no tax efficiency. There's nothing. She's actually very, very, very conservative with her money and her tax strategies. Quite opposite of some, somebody like maybe a Nancy Pelosi where, like, they have calls, like, like, extravagant in the money, broadcom calls. And like, I mean, it is. What they're doing is like, highly sophisticated kind of CFA work. Like, I don't know. So. But anyway, going down this thing. So the over the overview is that she kept her tax return simple. And mind you, she's been making a government salary of like 250 grand. And I believe her, her husband, the first gentleman, I think they call him, or something like that. Gentlemen. That's what you want to call whatever, man. I don't know much about him, but all I know is I guess he quit work so that, you know, she can be there to help her do her quote unquote job, whatever she's doing. But who knows? She missed several tax strategies. So one tax strategy that she did is that she, she released probably like a biography book or something in 2021. And she had like $450,000 in book sales. That's going to politics, right? And. Well, I'll get to that. Hang on, I'll get to that. She had a deductions of like 66 grand that year. This year, the book sales or 2023, book sales kind of obviously declined to only$7,000 is not, you know, not quite the line to buy the book. And then she had like $1,200 in deductions. And if you look at like, I guess like the percentage of how the deductions work, the one CPA is like, you know, I wouldn't, you know, I probably would have found more essentially what he said. The other thing is that she had about $50,000 in bank interest. That means she's got money. She got money. She got money, but she's just got it in the bank. So if, if she is getting 5%, which is probably the highest you can essentially find, she's got a million dollars chilling in cash. Yeah, she's. Or she's so representative of the black minority community, isn't she? Yeah, never mind. That's different. Moving on. Or if she's earning 3%, she's got about $1.7 million hanging out in the bank. Now, I said, okay, that's a lot of money, but I. Alright, but if you, if you were worth a hundred million dollars, is that a lot of money? No, if you were worth $10 million, that sounds like ten to 15% is in cash. That could be. So I went and did a little, you know, check and found out that her net worth is like $8 million. So representative. So, so, but hang on. So then I started thinking, I'm like, well, they're using net worth, so, like, I'm sure she's got some houses. Well, I looked those up. Those are, she's got two houses in California and one in DC. Those are some expensive houses in both areas. Right. And they gave the estimate of those houses to be around seven or $8 million. So that whatever is hanging out in the bank might be all of her money. Yeah, like, she's just being extremely conservative. She's not even involved. Yeah. Again, unlike Nancy Pelosi. I mean, that's probably why she's only got $8 million in net worth and. Being spending $150,000 in property tax every year. Well, whatever, man. But the hus, her husband stopped working. So you could make an argument that, you know, this million dollars is in their quote, unquote, emergency fund. Right. But I'm trying to connect dots and things like this. But, like, she's as conservative as it comes. She is not. I don't think she's a lick involved in the market. So I guess there's two ways as a politician to make your money. Either you go in and make a name for yourself and you sell books like Kamala Harris did, or you go in there and do what Nancy Pelosi does and use your. Go into a meeting and listen to. What you hypothetically front run what you think may happen based on conversations you heard in the hallway. Not saying it's happening, but I'm just saying, like, that's, you know, conspiracy theories. You know, you never know what you're on Twitter, and you never know what. You hear down the hallway. That's right. Anyway, I don't know why, from a tax standpoint, we even have to file our taxes at this point. Like, they know. Why do they have 50,000 new IR's agents or whatever? Like, what do they do all day? Like, they know how much we already have. They basically get most jordy of income, like, for the most part, 90, 90% legwork for taxes. Like, they already get reported what they need to have to file your taxes. So why do we even have to file anymore? Well, so, all right, so because you don't file, right. They know what you owe. Well, they. They hired all these tax, you know, ir's agents to go and find money that people have, quote, unquote, gotten away with. Okay, how much are you gonna find? Because that's my question. Because how much does it cost to employ 50 to 80,000 new IR's agents? Roi costs exactly. Like, are you break even? Like, do they, do they have to be, you know, hawks out there to just break even? So what are we. What are we doing? What are we doing? What are we doing? Making the government bigger for no reason at all, like we always do. So from a planning standpoint, though, like you said, the government's very inefficient at what they do. Like, even the people at the top don't plan. Let me get one more. Let me get one more thing that I got out of this article, and then we can talk about, like, the, you know, our thoughts and stuff. So. But the other thing is, it's very unclear whether she's maxing out her retirement plans. Right? So she should have access to a thrift. But it appears. And the way they were talking about inside of this article is that she's not doing that. And here's where the mess up is. Like, if you have a large sum of cash. I've been having these conversations with people lately. If you have a bunch of money in non qualified accounts, that is an inefficient place to have your money. Cause it doesn't grow tax deferred. So immediately just going up the tax efficiency ladder, we go into traditional iras, and then the top of the ladder is roths. If she were just to take, saying, like, hey, make my paycheck smaller, let me get the deductions, let me get my money in a tax deferred account, and I will use some of my cash to fulfill my cash flow needs. You know, and this article kept on saying, well, she doesn't really need to do this because she's gonna be fine for the rest of her life because of government pensions. And, you know, she'll never. Like, that's not the point, man. Like, you're gonna. Somebody who is going to be in power, who is going to be dictating how I spend, how I save, and how I spend my tax money, isn't implementing the same strategies that I. That make sense to me, and I can prove them that they make sense. Yeah. Now I'm. Now I'm just pissed off like that. That's what kind of irritated me. It's not the government's job to do almost any of that, but I have. Somebody at the top that's so inefficient. Right. Telling me what to do. Right. I'm just saying that no one should tell anyone what to do. Like, I'm just saying I am a classic liberal. Like, I believe in what our founding fathers of America believed in. I believe in free markets. I believe in power to the people. I believe in a limited government, more power to the states. I think states are, the smaller you get from a government standpoint, the more efficient you get. So I'd rather have states more powerful than a big federal government. So the problem is, federal government is too big, and they're giving out too much juice, and they are deciding what we do, what we can't do. They are dictating tax policy to the point where it is impacting all of our individual lives. So the most inefficient, biggest entity in the world is now in our lives? Every single day, every morning we wake up. That's not how the system was supposed to be designed. So that's what's the most annoying thing for me. I won't tell you what to do, how efficient or inefficient you do. Maybe you'll give me advice. Maybe I'll give you advice. You know, client standpoint, we always say, you're the CEO of your situation. We're the CFO, right? I'm not going to tell you what to do. I'll show you the pros and cons. Yeah. I mean, I'll never be the person that goes in the room and say, I'm the smartest person in the room. I am always the dumbest. I always want to be. I just feel like, hey, I'm smarter than most, but I don't know anyone in this room, so I can't say I'm the smartest. I just have the Socrates. When you have somebody that's running for president, you know that their personality is like, I'm smarter than everyone in this room. Ego, narcissistic, whatever that might look like. Right? Is what I would assume. And, you know, and then you get, like, people like Trump who are overly efficient. You don't pay your taxes because. Yeah, because I stole the strategies from you guys. Like, you broke the strategies. I just figured them out. Or hired ten other people to figure it. Well, right, but. But he's got. He's that savvy. Yeah. Like, now I have. Now it just tells me, like, man, we're about to. You know, there's a possibility that Kamala Harris, an unsavvy financial person's, about to run the country. But this is why, from a planning standpoint, you don't go to h and R block. You don't go to. I'm not. I don't want to use them as an example, but, like, I'm not saying to pick them out as an example, but you don't want to go to just a random person, think that you're getting the best advice. You also don't want to go to rely on one person for everything. C. No, CPA is running. There's two versions, right? There's the mic, there's the micro view and the macro view. The micro view is like, how much can I save you right now? Today, this year? Let's. I need to squeeze every bit of juice out of this, out of this fruit. Right? Or you have the macro view. It's like, hey, we can make all of these moves. And today's moves might not put the most money in your pocket today, but if we look over the next 510, 20 years, you're going to have more money and it's going to be in a better, tax efficient place. And then also looking at what's happening around the world. Like, I was alluding to government getting bigger taxes, going up, like all that kind of thing, factoring that into and actually having a conversation with your CPA to get their ideas about the future. So you can plan around the future as well, because it's important to think about what's coming, not just saying, oh, if things stay normally how they are now 20 years in the future, this is what you should do. There's another part of the equation. It's like every model is wrong. It's like every quantitative model in the markets, whatever it be, is wrong because it's always using current data to try and suggest the future. You have to kind of throw in another data point of where is things actually heading, what could happen, and how do you plan around that? Well, I mean, it's like doing a Roth conversion. You have to pay tax, but that's the micro is like, don't do that. The micro view is like, don't do that. You don't. You want to pay more taxes this year? That's stupid. But if we do it now and taxes go up in the future, because if we were just to easily revert back to the Obama tax, you know, tax laws, taxes would go up 15% to 20% overnight. So pick your poison. You got you. As long as you can understand that you have to pay taxes at some point in your life on these investments that you have in tax deferred accounts, you know, as you come to terms. With stop paying taxes, what would they do? I don't know. Good luck with that charge. So. All right, well, there, there, we got it. We got, you know, we had a. Revolutionary war over a 1% tea tax, right? Well, we talked about this a couple, couple episodes ago. They tax everything. They tax it before you, before it lands in your paycheck. And then what lands in your paycheck also gets taxed through state tax, real estate, everything else gets, everything's taxed. Just saying. Thousands and thousands of people died over 1% tax. Sad day in american history. Maybe it's a good revolutionary. Actually was a good. Revolutionary day. That's why we're here. That. That's why we're here. Luke, you're paying 50 60% in taxes to the government now every year. Better find somebody to say thank you to. It's great. All right. All right. Well, that's today's. That's today's episode. If you have any questions or ideas, comments on the show, things you'd like to hear, you can always reach out to us at info connect.com and we will catch you next episode. See you next time. The opinions expressed in the podcast are for general informational purposes only and are not intended to provide specific advice or recommendations for any investment, legal, financial, or tax strategy. It is only intended to provide education about the financial industry. Please consult a qualified professional about your individual needs.