Charlie Kirk 0:00
Hey everybody, welcome to this episode of the Charlie Kirk Show. I'm honored to be joined with a friend of mine, a dear friend of mine, someone who's been very supportive of turning point USA and the efforts we have here on the Charlie Kirk show. Julio Gonzalez who is the CEO of engineered Tax Services. There's so much complexity when it comes to the US tax code. We have so many younger listeners that sometimes don't understand the significance of federal tax law and how it impacts them. Julio, welcome to the program. First, introduce yourself a little bit to our audience, about what you do, how you do it, and the significance of the work that you do in the tax and public policy space.
Julio Gonzalez 0:40
Yeah, well, thanks for letting me be here. I'm so proud of what you guys are accomplishing and, you know, Job well done there. You know, we are the largest specially tax firm in the country. We do tax credits, they help keep people employed, bring jobs back to America, and we're really proud of that we probably generate about 2 billion a month in tax credits associated with being employed in the US with us labor. And so and beyond that I'm always working up in DC, with Congress, in the house, in the senate with the administration on different tax policy issues, making sure that our tax policy stays great, and that it continues to help our economy.
Charlie Kirk 1:19
So, Julio, you were very involved in the Trump tax cut the biggest middle class tax cut in American history back in the 2017 2008 2018, I should say 2017 2018. But budget reconciliation fight around the tax cuts. Can you talk about how involved you were, what you were fighting for, and the significance of that federal tax reform was for our country?
Julio Gonzalez 1:42
Well, really was fighting for lower income tax rates, you know, right before that, we didn't get the health care bill done. Right. So that was kind of a strike one, and we needed to get something done and it was going to be a close call on tax reform to where are we going to get that done? Where are we going to have someone that voted no at the last second, and You know, be over two. So it was critical that we got tax reform done. So basically, really, you were up there negotiating, you know, with the house, with the senate with everyone in there on Ways and Means and Senate Finance to come up with a bill that ultimately could get passed. And really that was the key is, you know, getting something done, we wanted to basically lower the income tax rates. But as you know, when tax reform is getting done, people are up there lobbying for their interest in for other, you know, industries. And so, you know, basically it was doing the math coming up with a way that the partnership between businesses, individuals, and this government was much improved as it was not over those past decade and making that better so that everyone could grow in this economy.
Charlie Kirk 2:46
That's well stated. People have to realize that when we have tax cuts, it's so much more efficient in a variety of ways, then forcibly taxing the money and then redistributing it a tax cut the smart money's already there in the market. So in your favor. To lower taxes, you are able to spur economic growth and economic productivity. Right now we're going through unprecedented economic uncertainty. We had the greatest economy in American history. The President did a phenomenal job of Building America to greatness. And now we have a little we had a little bit of a hiccup and I think we're in this transition back to greatness. I want to talk to you about something Julio that struck my eye. The New York Times reported the following yesterday, Larry Kudlow discussed extending the immediate deduction provision, known as full expensing it to structures, allowing anyone who buys a building to write off its cost right away the tax foundation in Washington, which analyzes the tax proposals and tends to find high economic effects from tax cuts, estimates that such an expansion would reduce federal revenues by $1.6 trillion dollars over a decade according for additional growth. Can you explain what this is Julio and are you opposed to this? Are you in support of this,
Julio Gonzalez 4:01
Well Listen, I'm sure that it's well intended. But I am definitely against it. And I'll tell you why. Because I don't think it's a good message, Charlie to, you know, tell everyone out there that we're going to give 2 million, we're going to take that away from Treasury that could go anywhere else could go to small businesses, it could go to payroll tax holiday, it could go to employment tax credits, and we're going to give this right off to billionaire real estate people that won't bring jobs back. And although again, maybe well intended, I don't think it's going to serve the purpose. And I think it's ultimately not going to be a good message for the party. And I think we're coming into elections. And I think that telling people that the billionaires are getting a tax write off, they'll never pay taxes again, because they immediately get to buy a property for 10 million, but you know, most of that's debt, right and then write it off. We did this, Charlie, let me say this. We did this in the 80s. We tried this. We went to meeting expensing of real estate in the 80s. And what happened Everyone out, leverage the buildings had a big write off, it became a huge tax loophole, the industry crashed, the banks crashed and every time the bank has to reserve $1 for bad real estate loan, they have to take out $40 of the system, which could go to small business administrate to any small business. So it's a, I think, a terrible plan that didn't work before it wouldn't work again. And I don't think it's good message for the party.
Charlie Kirk 5:24
So you, you're also looking out for the President's best interest. Basically, you're saying we must protect the president here to not fall into a trap where they can accuse him of just looking out for the interests of the wealthy, the few and the well connected. I know that you have discussed this issue with Steve Moore and other people. And I think there's a sense of urgency behind a new stimulus bill Julio. You understand the tax complexity and the tax code. There are people hurting listening to this podcast right now. We are getting flooded with emails Julio at our email Freedom@CharlieKirk.com with people that have lost their jobs, people that have had their businesses totally shattered. Julio, you're instrumental, you talk to the President, you talk to members of Congress, what are you pushing for in this new stimulus bill, from a tax code policy standpoint that our listeners can get behind?
Julio Gonzalez 6:16
Well, I think what we have to do is stop the payments going out the $600 every week to people to not work, right. I think we gotta take that away. I mean, obviously, Nancy wants that in the bill. She put that out. She wants to go bail out all the different states as well. So we can't let that happen. But what we do have to do is give employers an incentive to hire the unemployed, and we have to have the unemployed have an incentive to go back to work. And if we come up with that kind of tax, law and incentives, that's the plan we need to do because Charlie, we're running out of time, we got to get the GDP turned around, right? We got to get out of the recession. We got to grow in August, September. So that kind of elections we have a whole different third quarter and fourth quarter this year.
Charlie Kirk 7:01
Yeah, I completely agree. And the only way we're going to get this economy, the way we need it to go is not more infrastructure deficit spending. And I do support some form of infrastructure bill. However, I'm a little hesitant to get behind that, Julio, because of the waste and the fraud and the abuse that would be behind it. If if the democrats really had their way. I think a much better way of addressing this would be a pro growth tax cut bill that would empower workers and empower employers. And so you are one that really understands how that all works. Can we just take a step back? Can you talk about the economic significance of tax cuts for students listen to this podcast that might be taught by their teachers, and taught by their professors that tax cuts don't work? They only go to the rich and that we need more government spending. Can you help respond to that?
Julio Gonzalez 7:55
Yeah, and I can tell you when we did tax reform, our goal was to learn The income tax rates when you're in business, you're a partner with the government, government. And that partnership needs to be a great one. Right? It has to be one that's mutually beneficial. It wasn't under Obama. Not at all. We couldn't even save any money because we had such high tax rates. We had so much regulation, that we couldn't grow our businesses, we didn't know how to grow. We just had no ability to do so. And then we had the constraint of healthcare on us. So President Trump comes in lowers the income tax rates for individuals, for companies. So now we can invest. He removes a lot of the regulation, he puts up these tariffs with China, right, who gave us the virus and helped us, you know, so that we could finally compete here in the United States. We could bring businesses back, we could bring jobs back because now we're competitive. We have a competitive income tax rate. You know, it's not only federal right, but state why why do some states like Illinois, right that you know, very well, New York, they can't compete, right because they have high income tax rates. They left Florida. They love Texas, right? Because we're more fiscally responsible.
Charlie Kirk 9:06
Yeah, I am from Illinois. And in a previous podcast, Julio, I, I put them on trial, I did a trial for the state of Illinois if I was the prosecution, to try to essentially put forth the verdict that they have abused and use the people of Illinois. I'm proud to be from Illinois. But I'm saddened by what's happened. It's all because of bad tax policy, corrupt politicians, extracting wealth from the people. Now I'm a resident of the state of Florida. So you and I are both Floridians and the coolest part of my annual income tax reconciliation, zero percent that I owe to Tallahassee, zero percent of my income every single year. Julio, you are in Florida. Can you talk a little bit about the competition between the states? Are you seeing a lot of people come to Florida? Are you seeing positive movement, obviously prior to the virus, and you know, we have to kind of preface it with that. But do you see a good amount of out of staters Now looking at Florida as a pro growth, low tax opportunity state.
Julio Gonzalez 10:04
You know, I can tell you that all my clients are looking at Florida, whether they're coming from Illinois, New York, New Jersey, Pennsylvania, California, it's something that you have to look at even Tesla wants to get out of California, right? Even they want to move out because it's too hard to pay the taxes and look, everyone's moving out. So the deficits in those states get bigger. So what do they do raise taxes again, but all they do Charlie is drive out the people that can't pay taxes, and that's why the deficit gets bigger. That's why you see these, you know, New York now they have the carbon dining tax, they have the golf playing tax, they have every tax you can imagine. They created 112 new taxes. Chicago, Illinois created 140 new taxes over the last 12 months, because they have this huge deficit. And ultimately, you know, so they keep taxing and keep taxing people keep leaving.
Charlie Kirk 10:56
Even Alexandria ocasio Cortez, his mother left New York for Florida because of taxes. So it goes to show that, you know, tax policy can be a huge indicator on human movement and individual freedom. I want to talk about a piece Julio, that you wrote in Forbes. And we mentioned this before, but you said Why 100%? immediate expensing would do more harm than good. I want to talk about this more broadly, Julio, which is, a lot of times we get accused, as being just defenders of the wealthy and the few and the well connected. Are there specific policies that you support specific types of tax policy that you believe will really help a middle class revolution? And are there types of taxes that quite honestly, tax proposal that you say, you know, I don't think I'm totally in support of that because it would be too beneficial to the, you know, the rich and the few in the well connected disproportionately?
Julio Gonzalez 11:51
Yeah, no question. I think that, you know, when we have immediate expensing of equipment and things that small businesses can invest in to make money Certainly I agree with that because these assets they wear and tear, they have depreciation and basically are used up. But when you have immediate expensing for real estate, which earns income has appreciation, and then you get to expense it all up front, which is heavily leveraged. I think that's not good policy now, you know, the president saying, let's have the payroll tax holiday for individuals and for businesses, and certainly, that would help boost economy and help people hire people. He also talked about specific industries, right. We used to have what was called meals and entertainment expensing right through our taxes, which was taken away but now he's saying bring that back so that we can go out and support the hotels, we can go back to the restaurants, we can dine, we can do those and have certain expenses that obviously would incentivize us to get back to that get back to traveling, which we have to do we have to get back to work. We have to get back to traveling. We have to bring this back to get to the economy going again.
Charlie Kirk 12:53
So you um, you've seen the firsthand damage that the lockdowns have done and we on the Charlie Current show we've been focusing on the difference between saying that the virus has shut down our country. No, it was the lockdown that shut down our country. It was a reaction to the virus. The state of Florida has done amazingly well. Governor Ron De Santis has led brilliantly more of a population in the state of New York. Amazingly, despite having more people, far less deaths, actually a fraction of the deaths of New York, New York State, respecting civil liberties opening before New York, it's been incredible. A lot of the proposals right now on Capitol Hill, are being floated around payroll taxes, would you think it's better to eliminate the payroll tax or to give a holiday on it? Or do you think that it's not a good approach to try to get rid of payroll taxes?
Julio Gonzalez 13:48
Well, you know, it's the worst of the two evils. Right. I mean, if you take away that money from Treasury, obviously we put social security at risk, but do you take it away hoping that that money comes back? You know, Charlie, what We saw with tax reform was that we lowered the income tax rate. So everyone said that there was going to be less money going into the Treasury less money going into the IRS. But what happened? It went up. Why? Because people were working. People were paying more taxes into the system. And every month since tax reform happened, more money went into the system, not less, like every liberal said would happen, right? Because why people are paying less taxes, but everyone was working, right. More people, less unemployment. And that's the math right. And that's the simple math. And I think that's right.
Charlie Kirk 14:32
So as I was mentioning, you know, the the difference between Florida and New York we have some numbers here just to just to kind of complete the point. Florida's population is 22 million New York's population is 19.5 million Florida has a zero percent income tax in New York has an 8% income tax. governor of Florida, of course, is a republican governor of New York is Andrew Cuomo, the Democrat. Florida had 50,000 virus cases. New York had 366 Thousand that we know of Florida had about 2200 deaths. New York had 29,000 deaths. I mean, look at the difference between the leadership of the state of Florida and the state of New York. It's so significant, and it is so distinct. And so I do want to also ask you about this Julio, which is, can you debunk the idea that tax reform the 2017 2018, Trump tax cut was only a big tax break for the wealthy. our listeners, email us about this all the time. You helped push for this. You helped. I don't want to say lobby, but you helped really put energy behind it. Can you help debunk the idea that that tax cut was only for the wealthy?
Julio Gonzalez 15:42
Yeah, I mean, certainly, I mean, we were able to lower the income tax rates for the individuals as well as the small businesses. And obviously, when we did that, not only were people paying less taxes, about 2000 per household, but they were also able to get better pay from the companies that were able to To conserve because they have less taxes, and ultimately we removed the regulations. And that helped as well. So ultimately, you know, people were making more spending more on the economy. And that was really one of the tensions. But I will say this, Charlie, President, what didn't want to stop with the Tax Reform Act, right. He felt like tax reform should be something we do all the time. You know, we make changes, and then we see how it happens. You see, tax reform happens every 30 years. So it's difficult to always change taxes, right, because it's tough to get everything through the house and through Senate. But, you know, President want tax reform 2.0 right, to start focusing in on the individuals and start bringing those tax rates down as well. So for him, it never ends. It's like always constantly making things better, always improving things. And that's really what he was behind. And so he hadn't stopped. I mean, tax reform. 1.0 was just the start of it for him.
Charlie Kirk 16:56
I think that's a that's a great point. And so so Julio You think as you start to project and see things moving forward, do you think that we are on this transition back to greatness? How do you see things progressing? And you think heading into the election, we are on a good trajectory to get us back to an economic, economic Renaissance and an economic recovery for the future.
Julio Gonzalez 17:19
Fortunately, I think the future looks bright. I think, fortunately, we had a great economy coming into this the best, you know, ever, and we were able to get through it. I think the President did a great job with the cares act and some of the things that we did there to accomplish helping keep small business open and Florida's back and open. And if we're the recipe for getting this country going again, I mean, listen, Charlie, I mean, I think people are keeping their social distancing. I think they're being careful. I think they're practicing good health. But ultimately, it's like, normal business down here in West Palm Beach. And, you know, I think people feel great about it here. I think we're saying the stock market reflect that this morning. Right? That People are feeling really good about us coming back. And we're seeing that there's gonna be some curiouser pretty shortly, I think.
Charlie Kirk 18:06
Totally. So I think that, you know, as we hone in on the path forward, I think it's so important that people understand the significance of how taxes play a role into it, and Congress is so into the weeds on this, and a change in just a couple tax percentages or tax points can make a massive difference. But why is it that the democrats and the people on the left are refusing to make tax cuts permanent for middle class and individuals? I mean, have you seen this play an impact on middle class workers and business individuals? And what kind of explanation is there? Because Julio, I see this really contributing to us getting back to greatness in our country.
Julio Gonzalez 18:48
But you're certainly right Charlie, when you don't have anything permanent, and you're constantly unsure as an individual or as a business that makes it very difficult, especially business when you don't know what to spend. Because you have tax extenders and things that aren't permanent, same as the individual side. So I think getting taxes to be a permanent thing with permanent rates so that we know what we're doing know how we're able to take our deductions and know how much ultimately, we can put into the GDP. I think it's really important.
Charlie Kirk 19:16
Yeah, no doubt, totally. So, you know, all that we're putting, you know, just we're pushing for the tax reduction and a restoration of economic growth and economic productivity. And we talked about a lot here that free enterprise capitalism is the most moral proven and most moral, proven and effective economic system ever discovered. And so you start to see that capital flows can really start to be disrupted when the socialists and the leftist start to get involved. Are you worried? Are you worried, Julio that some of the pushes in DC and some of the pushes by the radical democrats right now are trying to get in the way of that and trying to see that the tax rates that might be put, you know, to raise taxes to actually comment Escape some of the hard earned income of individuals all across the country. What what are your clients saying to you, Julio, what are the small businesses owner owners telling you that they're most worried about heading into this year?
Julio Gonzalez 20:13
Charlie, they can't compete with higher income tax rates. We just came out of that, through the Obama era where we couldn't compete. And we can't compete against international small business. It's too difficult when the income tax rates are that high when we have too much regulation. And to go back to that just would mean that we would go back to that really terrible economy where we're not hiring. We're not growing our companies. And that really is the bottom line. We saw how well work with tax reform we saw this economy gets hits all time greatest minorities at the highest employment rate ever. That's a big win. And to change that and go back to old school would just be just terrible.
Charlie Kirk 20:53
And so I think Julio that's such an important point because as we try to know the road ahead, we have to look backwards. See, in a lot of ways, not necessarily backwards, but look retrospectively and see the success that we've had previously and see that we were able to build the greatest economy in American history see that we were able to have the lowest ever black unemployment, lowest ever Hispanic unemployment, lowest ever Asian American unemployment, lowest ever black poverty rate. And so the economy is the engine that keeps the country going. It's the greatest poverty elimination program in the history of the country. It is the most successful program. It's the most it's the best way to essentially get individuals to flourish to their highest possible level. Joe Biden's presidency in my opinion would literally eliminate the potential return back to greatness. It was the Obama Biden economy that needed a turnaround from it. And we don't need a round two. Julio, can you tell us the difference between managing people's taxes and understanding the asset flows and the economy of the difference between the Obama Biden economy and the Trump economy.
Julio Gonzalez 22:03
I'll tell you that came back with Biden. I mean, it would be mass exodus. You know, again, Charlie, people and businesses have choices. And we saw under the Obama era, that when the income tax rates were high, the regulations were high. They went offshore, they went other places. And so did they individuals as well, you know, the tech companies, when we have bad tax policy, they take their employees and put them offshore, where there's higher r&d tax credits, where there's less taxes, and we lose those jobs. We lose those key core jobs that we finally just brought back. We're straining to bring back all this industry manufacturing, again, at its all time high, especially in the Midwest, we're network redoing, we're mining again, and we're doing all these different things and you know, to to change that and go back to the Obama days. I mean, would basically, I think would be mass exodus for all all business.
Charlie Kirk 22:56
Yeah, I completely agree. And Joe Biden was that An expert at exporting our jobs to china. He was phenomenal at being able to pander the Chinese Communist Party to focus on the deindustrialization on America, not in a positive way. But it seems that Joe Biden, despite representing himself as someone that is a voice of the middle class as a voice of the working class, as a voice of Scranton, Pennsylvania, was the exact opposite. So Julio, in the couple minutes we have remaining, what are the big takeaways you want our listeners to advocate for in the public policy? space, you are a well respected expert on tax policy, you're actually in the weeds around what you do at engineered tech services. What what are some things that you think our listeners should really take away when it comes to fighting for lower taxes, advocating for the president understanding the power of the free enterprise system?
Julio Gonzalez 23:54
Good point. I mean, listen, I think when President Trump got into office, I don't know that every thing, all these tax reform changes were, what he was focused on. He was his key thing was bring down the income tax rates, bring them down for the businesses, bring them down for the individuals, remove regulations, and let us be competitive globally. And that worked. And and so, you know, for everyone out there, I think we have to fight for that, because we saw the results of that we saw the low unemployment, we saw an economy at an all time high, we saw earning power at an all time high. And that's what was doing it. Well, that's, you know, it's it really comes down to the low income tax rates, you know, the less regulation, but a businessman that understands business more than anything, and runs the country like a business. I mean, you know, if we just look at it, I think every business owner at every individual runs their own business, which is themselves. You know, we understand what's good for ourselves and what's good for our business. And we understand what works and I think we were saying that with President Trump.
Charlie Kirk 24:57
I agree. Well, Julio, this has been a great discussion and you Your Tax Services. I encourage everyone to check it out. Thank you for joining the Charlie Kirk show today and thank you for advocating for free enterprise and lower taxes and prosperity for all.
Julio Gonzalez 25:10
I appreciate it. Thanks