Keith Hanson 0:07
Welcome back to The Keith Hanson Show Episode Number 713. On the program on this Friday the 15th day of May 2020. Alright, so I am pre recording the show. It's as of right now. It's about two o'clock in the afternoon, eastern time on Friday, and we are waiting for the US House of Representatives, the Nancy Pelosi controlled Congress to vote on this $3 trillion tax package. We've been talking about that quite a bit this past week. $3 trillion, is what they want to add on to the federal debt. Not a big deal when you're a Democrat. And certainly, I think to a lot of Republicans not a big deal as well, too. Because I mean, what's the reality that we're actually gonna have to pay back 25 trillion or as the democrats would have at 28 trillion. And as we spent a lot of time talking this past week, I think there's a bigger issue here and that is the point at which international economists have pegged the collapse of our economy really clouded and pivot and made manifest. This is scary. So I don't think there's any question at this point that the democrat controlled Congress will pass this bloated $3 trillion spending package. I don't think anybody really questions that. Is it likely to gain any sort of traction in the republican controlled senate? No, probably not. Would President Trump sign that into law? No, probably not. I think there's a lot of people out there that would agree that the plan is misguided. President Trump at this point has the right outlook for what the country needs. I think many of you listening would agree with that. We may not necessarily agree on the tactics and the strategies that he uses. But we have to agree that things that he has done up until the onset of this Coronavirus issue have been very, very good for the country. And one tax expert definitely agrees with me and I want to welcome to the program, Julio Gonzalez. He's the founder of the Gonzalez Family Office and the Chief Executive Officer and founder of Engineered Tax Services. It's the country's largest specialty tax engineering firm that specializes in the preservation of wealth and United States job creation, through IRS engineering based services that include research and developing manufacturing tax credits, Grant studies, energy tax incentive studies, cost segregation, depreciation studies for buildings, so on and so forth. This is a guy who knows about taxes. So much so as a matter of fact, that he was actually an advisor to President Trump helping advise on the 2017 Tax Cuts and Job Act, working very, very closely with the administration, Congress and Senate on tax reform, Julio Gonzalez, great to have you on the program. My friend, welcome.
Julio Gonzalez 2:44
Glad to be on. appreciate you having me.
Keith Hanson 2:46
Well, I you know, you know, I wanted to bring you on because I want your perspective specifically on what it is that the democrats say they're trying to achieve through this $3 trillion spending package and what actually needs to be done. done here, because my assertion and correct me if I'm wrong, but I've said this many times over the past week, is that similar to our healthcare industry, we don't attack the problem, we go after disease management, we seek to remedy the symptoms of the underlying problem. And that's what the Democrats want to do. Let's let's take away Cloward and Piven just for a moment. The Democrats want to throw billions and billions of dollars at additional unemployment insurance benefits, which simply addresses the symptom of the problem. The problem is the 36.4 million newly unemployed people over the past eight weeks that find themselves without a job because their respective state governments had said you can't go to work. So what we need to do is get these people back to work. We need to get the engine of this country revving up once again. And of course with that engine revving so to come in the tax dollars. Am I wrong?
Julio Gonzalez 4:00
You're exactly right. This hero act is really the stay at home act and basically, you know, dead on arrival with the senate because their plan for stimulus bill five would be to get people incentivized to get back to work and help the employers do that.
Keith Hanson 4:18
So, when you look at this, I mean, if this is truly a ripple effect, what's happening in our economy right now, there is a massive ripple effect right now people aren't working. So the states are spending money to cover in the federal government is spending money to provide unemployment insurance benefits, basically welfare to these people. But then you've got the other things as well. You've got small businesses that are most likely many small businesses are not going to be able to weather the storm. They're going to shutter they're going to close. If you have small businesses that will fail. You have individuals that are not spending money, they're not spending money in those small businesses, they're not going on vacation, they're not going on road trips, they're not going out to entertainment venues, they're not going out to restaurants, it seems to me that rather than throwing money at the after effect, reopen the economy and allow people to travel, allow people to spend money, allow people to go to restaurants, that's going to be a far more impactful stimulus. If I can put that in air fingers quotes than anything that Democrats or Republicans or both could ever throw at the alleged problem.
Julio Gonzalez 5:23
You know, 100% I mean, yeah, the President's been talking about the payroll tax holiday would obviously give a big boost to the employers to bring people back and, you know, retain jobs and that's a big part of it, and basically getting things back in open again, and that's what we want to do. We want to get back we want to get open again, we want to bring our people back, but the you know, it's really the details of these bills, right? So when a bill comes to the house or it comes to Senate, every lobbyists in the world is going up there, you know, asking for their industry, their way of bringing back their you know, respective have, you know, businesses, right? So but you know, the President is tuned in on, let's give the incentives to, you know, deduct again meals and entertainment and get back to the restaurants get back to the hotels get back to traveling, and give incentives that make sense to get people back to work not to stay at home. And that's the big difference between the House and Senate right now.
Keith Hanson 6:21
Well, and I would certainly say the Wall Street Journal article that we've talked about on a number of occasions here came out. Was it going back? May 15? Actually, one was, I'm sorry, no, today's may 15. May 8, was when the article came out headline Wall Street Journal businesses struggled to lower workers away from unemployment. Some workers are making far more from unemployment than at their old jobs, which is complicating reopening. Now. You know, I've said as as a compassionate constitutional Christian conservative, I have absolutely no problem with safety nets existing in our society. But just as we talked about yesterday, if anyone ever saw the movie fight club where Brad Pitt's character is on an airplane, he's thumbing through the emergency card in the back of the seat pocket. And he says, Ah, you know, escape door procedures at 30,000 feet, the illusion of safety. Well, you know, these welfare benefits they create, it's supposed to be a safety net. But what it does is it creates and maintains the illusion of safety. But the reality of a hammock, it's not a safety net, it's a hammock, you get into a safety net, you want to get out of it quickly, a hammock, incentivizes you and encourages you to just lounge there and do nothing. And that's exactly what's happening, that people are becoming complacent with their government checks. And this this, this is the fulfillment of cloud and pivot and I could just picture Bernie Sanders sitting there reading his dirty little fingers in Glee, that what he would really like to see come to fruition is actually coming to fruition.
Julio Gonzalez 7:48
Yeah, I mean, that safety net was created to basically for people that paid into the system, to the extent that they had some type of travesty that they would have a safety net, but not to you know, inspire them to stay home and have that hammock, right that you say, which is a great term. And and that's what we have to and, you know, Steve mourn and art up there. And Larry Kudlow. I mean, they when they doing these economy numbers they say and model that this won't work. We got to suspend that we got to get gone. We got to incentivize people to get back to work. not sad, huh.
Keith Hanson 8:23
Let's talk about the state's the individual states for a second here a couple of weeks ago, Mitch McConnell came out and said, Well, you know, listen, if the states are having issues economically, then let them declare bankruptcy. And again, I don't know if that was something that he meant literally at face value. Or if this was something that he said tongue in cheek, but I gotta be honest with you, I love the idea of the federal government should not be bailing these states out, let the states work this out themselves. And if they can't, for whatever reason, again, they're dealing with their own financial mismanagement. They put themselves there primarily Democrat controlled state legislators, they're democrat governors put themselves in these positions, let them build themselves out. And if they can't do it themselves, declare bankruptcy.
Julio Gonzalez 9:06
Declare bankruptcy because you're exactly right these, this virus is basically showing what was the inevitable, right mismanagement poor government ship. And now we have these states that are on the verge of bankruptcy and let them go bankrupt. Why bailed them out for bad mismanagement? No, there's no one bailing us out as a business owner for bad mismanagement. We file bankruptcy as well. And we as taxpaying Americans shouldn't have to bail out bad state behavior.
Keith Hanson 9:33
But we do it all the time, because the American people are looked at as nothing more than a very convenient ATM machine that will whenever you need to finance a reckless spending, or reckless financial planning or pork barrel projects, well, you simply go and milk the American taxpayer because, after all, isn't that what they're there for? I mean, this is this is what we've come to know in love with our elected officials. This is what we've come to expect. We're there to bail them out of their messes. Just like parents have been come to the rescue of irresponsible children. What mess? Can I clean up next for you?
Julio Gonzalez 10:05
Yeah. And now you see that this is exactly what's been happening the last year people are moving away from the States, the taxpayers that actually pay taxes in those states are choosing the move. They have options, right? And so to the businesses as well, they're saying, We're not staying in New York, we're not staying in Illinois, we're not staying in California. So what happens that deficit gets bigger and bigger, and then you get hit with a virus now, what are you going to do? Now? They're talking about raising payroll taxes, and getting these bailout programs and doing all the things that you know, force them to drive away all the businesses and all the companies and all the individuals and that's why they're at the state they are now.
Keith Hanson 10:43
You know, you look at and I was just looking at some numbers comparing, you know, a number of states here and their their COVID-19 responses and their their finances as well, most assuredly. And correct me if I'm wrong, that New York would definitely be one of the states that will be looking to the federal government to bail it out because of its unfunded slash underfunded retirement and pension liabilities and its massively bloated welfare state. Is that a fair assessment? Judging New York like that?
Julio Gonzalez 11:10
Yeah, fair assessment right there, just like Illinois, New Jersey, California. I mean, they're all in the same boat.
Keith Hanson 11:15
So you know, here's the interesting thing about the state of New York, they've got roughly 20 million people in the state of New York. Let's take Florida that has actually a larger population than the state of New York Florida's got about a 22 million person population. I you know, I'm a Florida resident. I live in Florida or that's my declared residency. We have zero income tax. I have a home in New Hampshire, we have zero state income tax in New Hampshire, we have zero state income tax in the state of Florida. New York has an 8% tax rate. It's funny that Florida with zero state income tax can balance its budget, but yet New York with an 8% tax revenue on income is still in debt and demanding that the rest the country bailed them out because of people like Cuomo who continuously and consistently mismanaged the funds of that state.
Julio Gonzalez 12:10
It's just you know, an unbelievable I mean, the mismanagement the driving away big corporations the abuse in terms of tax New York created what 212 additional taxes in the last year carbon dining tax golf tax for you know, property taxes raising the mansion tax and, and that's where you see everyone that pays taxes lives.
Keith Hanson 12:36
So all right, let me ask you this, because a lot of people listen to talk radio and I know you've you've done the talk radio and talk television circuits. I mean, you're you're on Fox and Friends quite a bit. Let me ask you this. The average person when they're having a conversation with somebody, a co worker, a friend, a family member, or spouse, and they're talking about taxes, what is the easiest way to demonstrate it illustrate that the lower the tax rate, the more revenue is actually generated because I know in the twisted logic of a progressive democrat, that the only way to generate money is to go out and increase taxes. But yet instance after instance, after instance, and municipality after municipality after state after state, the states that actually have the lower tax rates, both the individual tax rates, the sales tax rates, and the corporate tax rates actually do much better in terms of revenue generation, and actually are closer to having balanced budgets than those that do not intend to tax everything heavily.
Julio Gonzalez 13:37
Well, you saw on the tax reform act when 2016 2017 What did we do we lowered income tax rates for individuals and for corporations from 35% to 21%. And we became much more competitive globally and we are in competition with all the other countries in terms of business in the states are in competition with each other as well for all the individuals and all the corporations and that's what happened. We leveled the playing field we brought the corporation's back we started hiring when you're in business, the government's your partner and when that partnerships a bad one and it's an equitable, you can't grow your business, and you don't want to stay here. And when it's a partnership, that's good and it's fair you can grow and what happened after that tax change, more money went to the IRS more money went to the Treasury, because although we had a lower tax rate, we had corporations moving in, we had more people employed, right we had the lowest unemployment before this virus that we've had in a century and so you have more people collectively paying in your mind goes up a treasure and that's how it works.
Keith Hanson 14:42
So I'm tuning in here to my trusty us debt clock. I love this website, USdebtclock.org and it'll tell you exactly where we stand. There's actually a number of metrics that are measured on this site, but as of an I did mention, we're pre recording the segment as of 2:25pm on Friday the 15th day of May 2020, our national debt stands at 25 trillion to 123,540,000,000. And at that point, I can't even keep track of it. Because the the numbers in the hundreds of thousands just keep going faster than I could actually quote it. $25,223,000,000,000 is our current debt. How do we even begin to think about paying that number down?
Julio Gonzalez 15:26
Well, I think you're right about good tax policy. I think that gets people you know, we weren't expecting a virus. We were on the right track paying down our debt and investing in this country. And we got to get back to the infrastructure and things like this the economy, but ultimately, we pay it back with a strong economy and people contributing into the system versus a handout right, where we're going the other way and building up the debt. So and poor state management and all these other bailout programs.
Keith Hanson 15:54
What is it about a fair tax or a flat tax system that you think has it has elected officials running for the hills. You know, when you talk about a fair tax or a flat tax system, you're looking at a system where it's a consumption based tax, there is no way to work around it. And I guess before I have you answer that I this is an example that I use all the time. But I want to bounce this off of you. If you have 100 people each earning $1 million a year, is it fair to say that out of all of those 100 people, it would be pretty unlikely that you would see even a group of two or three paying the exact same amount in taxes because of how that money is earned? Whether it's whether it's earned through through gains on an investment portfolio, whether it's an investment in real estate, whether it's actual salary that's generated, whether it's a combination of those stock and bond incentives plus salary, maybe it's an inheritance. Do you think that's an accurate statement that if you have 100 people, each earning exactly $1 million a year that it's unlikely that any of them are going to be paying the same exact amount in taxes?
Julio Gonzalez 16:56
You're right, it's gonna be snowflakes, right? No one's gonna be it identical when it comes to that.
Keith Hanson 17:01
Okay, so if you have a consumption based tax where if I go out and I buy a brand new car, I pay a 7% tax, I'm not paying any any income tax period, I may I may pay capital gains tax, I may pay dividends tax, something like that, but I'm not paying a tax on my income. So if I want to go out and buy a cart full of groceries, then I'm going to pay tax on that if I go buy a new car, I'm going to pay a tax on that. The beautiful thing about that is that Garner's taxes on money that is illegally gained, if I go out and and I'm let's say I'm a drug dealer, and I have $10 million in in money that I'm certainly I'm not going to report that on taxes unless I'm trying to launder that and make it appear legitimate. But if I have $10 million in ill gotten income, but I spend that $10 million on lavish vacations and jewelry and boats and luxury cars and watches and things like that, the federal government is going to get their fair share. If there is a flat tax or a fair tax that's imposed if there's a consumption base tax, it makes sense. So why are we so far away from actually looking and examining the topic of a fairer flat tax?
Julio Gonzalez 18:09
So yeah, why is the tax code? What 720,000 pages? And why is it so complicated? Because, you know, big lobbyists, big corporations, the people that, you know, would pay into the system, you know, create complicated tax codes to preserve wealth and preserve cash and, you know, and lobby to do so. And so that's why we have a very complicated tax code is because everyone up there is fighting for their industry, fighting to put something into the tax code system to benefit, you know, their stakeholders, and that's never gonna, you know, stop if they have the influence and the capital and the money influence to help these people get elected.
Keith Hanson 18:55
How long do you see the states that have shut down the in essence, the grinding to the halt of the American economy right now under this this commie cold situation, how long do you I hope you don't mind me calling it the commie cold because that's exactly what it is. And I gotta be honest with you, it pokes the progressives with a stick. So I don't really think I'm going to abandon that term anytime soon. But I, you know, this this, this, for all intents and purposes, grinding the American economy to a halt as a result of this commie cold? How long do you think it's going to be before we actually get back to where we were in, say, December or January, from an economic standpoint and a job standpoint?
Julio Gonzalez 19:35
Yeah, I mean, how long do we wait till that they have that a cure? Right. I mean, basically, when, you know, I talk to people across the country business owners, you know, their employees are split 5050 on coming back to work, staying home and being safe and, you know, getting the safety funds from the government. So, I think people need to feel safe. I think people need to get back to traveling and I think, you know, we have risk takers, we're, you know, for the most part good US citizens that, you know, take chances and take risks. But ultimately, how do we get back? I think, you know, they're talking about now having that cure come December of this year. And I think that ultimately will help us regain. But ultimately, how do we get back in? When do we get back? I would think it would shoot back pretty quickly. Steve Moore says, if we don't have growth in GDP by September, we'll be in a deep recession, and a great depression for a very long time, so the clock's ticking. I think if we can get this turned around over the summer, September have some growth in the GDP and get on track. I think we'll come back pretty quickly.
Keith Hanson 20:39
Yeah. And and you just brought up a really good point, which is something that I think a lot of people haven't been paying attention to, or I think it's probably slipped their, their attention. We started talking about flattening the curve, the entire conversation, the shutdown of this economy, was in an attempt to flatten the curve. Now the conversation isn't about flattening the curve. It's about finding a cure. And it seems that the narrative has become, well, we're not going to reopen the economy. Once we understand that the curve has been flattened. Now the conversation has transitioned to Well, we'll be comfortable reopening the economy, once we have a vaccine, or we have a cure, we have some way of preventing it for treating it people who already have it, and preventing it and people who are at risk or who are just going about their daily lives. When did this occur? Because I gotta be honest with you. I didn't get the memo on that.
Julio Gonzalez 21:33
Yeah, I think that, you know, again, I'm just thinking about our employees, our companies that we work with and their employees and when that paradigm shift happened, and I think people got a little comfortable being at home, getting support from the government and feeling that you know, that there's the safety net for all of us, and I think there's less incentive to get back and I think now it's kind of shift to set the mindset that we can allow that right we got to get back to work. And we've got to create the stimulus programs to do that and not have the stimulus programs to stay at home.
Keith Hanson 22:09
Well, just the other day I political we talked about this on the show a headline from Politico dated the eighth of may a week ago, Democrat senators proposing $2,000 monthly payments to most Americans, no surprise that it's coming from Kamala Harris, Bernie Sanders and Massachusetts Democrat Ed Markey, but they want to send a $2,000 check to people who make less than $120,000 a year, it would expand that out to $4,000, a married couple who filed taxes jointly and provide an extra two grand a month for each child up to three. I mean, you talk about again, I don't want to go back to cloud and pivot lest I be accused of being a conspiracy theorist here. But you know how many people are actually gonna want to get off those welfare rolls, if they're getting $2,000 a month to sit on their ass and do absolutely nothing and to make it worse, if you've got kids. Let's see. You've got three or four kids because you're already on welfare. Well, it's fantastic. Now, I mean, I could potentially make 2000 if I'm living with my, you know, my baby daddy, if I'm, if I'm an unwed mother who's living with her baby daddy, she gets two grand, he gets two grand plus i got four kids. That's, you know, that's 8000 10,000 $12,000 a month to sit on my ass and do nothing. Oh, and by the way, I'm most likely going to wind up voting for Democrats, because they're the ones that gave me this windfall. They gave me all of this free stuff. So I'm certainly not going to vote for those evil Republicans who want to take away what I'm entitled to. This is Cloward and Piven, correct me if I'm wrong, but this is Cloward and Piven.
Julio Gonzalez 23:39
It certainly is. Thank goodness there's a different mindset over in the Senate, right, that can hopefully block this. We certainly have a different mindset in the administration. And ultimately, I'm, you know, we're fortunate that we're going to prevail here through this fifth bill, and maybe it's expel getting us through the summer. I definitely think that we're very fortunate in that regard.
Keith Hanson 24:01
Julio Gonzalez joins me on the Keith Hanson show on this Friday the 15th day of May 2020. Julio is the chief executive officer of engineered tech services and worked closely with the Trump administration advising on the 2017 tax cuts and JOBS Act, working very closely not only with the Trump administration but also with Congress and Senate on issues surrounding tax reform. We are gonna take a quick break when we come back much more with Julio Gonzalez on the Friday edition of the Keith Hanson show Don't go away.
Welcome back to The Keith Hanson show on this Friday the 15th day of May 2020, Episode Number 714 of the program have a very, very good conversation, a great conversation I might say with Julio Gonzalez, the Chief Executive Officer of Engineered Tax Services. He's also an advisor to the Trump administration working closely with the administration, Congress and Senate on the 2017 tax cuts and jobs act reform that's the one that probably put a little bit more money if you remember seeing a little bit more money in your paycheck. Well, that's the that's the program. That's the policy that allowed that to take place. Julio, thank you so much, again for jumping on the program. I appreciate your time. Yeah, happy to do it. Alright, so I did pull up a copy of the What's it called? Now the Heroes Act? Is that with her some of the colon?
Julio Gonzalez 26:53
That's right, the Heroes Act
Keith Hanson 26:55
okay. Well, boy, I'm 1800 Hundred and 15 pages. I gotta ask you this Haha, Who the hell is working on this thing, this thing at 1815 pages, you wouldn't have enough time during the totality of the Coronavirus to really even read and absorb this. This seems like something that has already been boiler plated was ready to go as we just need the crisis to unveil this. Am I being a conspiracy theorist here who actually sits down and comes up with a 1815 page bill over the course of a weekend. How does this get done?
Julio Gonzalez 27:35
Yeah, well, you know, I think they have their templates ready to go. There's no doubt about it, that you're always looking for that time, right? You're always looking for that crack where something's going to happen then you have your chance to put in your language and basically, then those next few weeks the lobbyists go up to DC spend time with the lawmakers getting their issues added in to this bill and hoping that there's that opportunity that you know that language gets into the bill finally.
Keith Hanson 28:06
I'm looking at looking at some of these things here. Oh my god, this is this is insane health provisions, retirement provisions, relief for multi employer pension plans relief for single employer pension plans, other retirement related provisions, continued assistance to unemployed workers accountability and government operations. We've got the COVID-19 hero act itself which is under division k providing medical equipment for first responders and essential workers. Then we go on to amendments to emergency family and medical leave exemption act and emergency paid sick leave act. Then we get into consumer protections and telecommunications provisions. Like the COVID-19 compassion and Martha right prison phone justice program. God knows what that is. I mean, pork, pork, pork, pork, pork and some more pork. Oh, and by the way, there's also a carve out for money for a national mail in ballot program, which is just I mean, congratulations, we gotta pass the bill so we can find out what's in it. You know, the famous words from Nancy Pelosi, you know, what am I missing here? What what else is buried in this thing? And and really what is the bill, the 1815 page bill that's being touted as the quote heroes act? What does this really seeking to do? What are the democrats want to walk away from with this?
Julio Gonzalez 29:28
Well, I really think they want to, you know, get their states back to the pre 2017 tax reform. So like in this bill, they're trying to repeal the state and local tax program that's currently effective in our federal government and our federal law. So basically, you know, when tax law passed New York and all the other blue states got really upset because now the limitation was $10,000 to their taxpayers for what they could deduct the federal level in terms of state tax. So the salt program, they want to get that out, right? Because when we did the federal tax changes, we said, we shouldn't be supporting the states in their poor tax planning by allowing them to deduct, you know, the taxes that they're paying in New York or wherever, and then get to deduct them federally. And so we try to eliminate it. You know, Kevin Brady and McCarney, were there and we're basically saying we got to get rid of all these. But then we kind of came to the $10,000 limit. And that's what became federal law. Now they want to repeal that take their chance of, you know, giving, you know, maybe Senate a few things so we can repeal the state and local tax program so that they can continue in those states that all the taxes they pay against federal income and the federal government saying, we don't want to, you know, bail you out. We don't want to be responsible for you guys taking tax deductions just because you're charging people somebody taxes and that they could take 50% off at the federal level. So that's a big one, right? That's a non starter. I'm I believe in the Senate. Right? I don't think anyone there is even going to let that you know, get started. Not Mitch certainly. And so you know, that's in there. Right. And and that's a big one that's that's for them going to be a big one that they would love to go to their, you know, states and say, Look, we got it, we got salt repealed. But the other one a repeal also we just put in the cares act that you can go back and take losses and go back and amend previous tax returns for taxes that you paid in previous periods and get those refunded based on the losses that you have now, they already want to repeal that which we just passed in the Care Act Three weeks ago.
Keith Hanson 31:41
Yeah, I'm just I'm going through this as you're as you're talking here, the state and local law enforcement activities Office on Violence Against Women $30 million to grant a grant to combat violence against women $15 million for transitional housing assistance for victims of domestic violence. I would say you know, again. I mean, it's I hate to make a joke out of this but reopen society get people out of the house because, you know, I can't imagine how many how many instances of child abuse and domestic abuse are really going to come to light after families are being locked up for a month and a half, two months three months pay the liquor stores are still open so people can get bombed out of their gourds You know, when the beat their wife and kids and you know, I mean, where else you're gonna take out your frustrations can't go to the gym, you know, you can't go You can't even go running outside, you know, because all you can't be outside without a mask on. You know, this is this is insanity. Julio, this is Justin. And and I guess it would be a lot easier to to comprehend, or I guess it would be a lot easier to stomach. If we weren't so close to that $30 trillion marker that these international economists have said, this is the point at which this can no longer sustain, you know, 118% of our of our debt to GDP ratio. That's that's where we're at right now. 118%. I remember several years ago when the warning call was going out, when the numbers were approaching 100% saying you know that that's non sustainable when you hit 100% debt to GDP ratio. Now we're at 118%. And we don't show any signs of stopping, let alone slowing down.
Julio Gonzalez 33:11
No, I exactly right. I mean, listen, when we did tax reform, you know, we added, you know, billion five and debt to basically buy down the tax rate and get that in place. But we knew when we scored it, that that was going to give back more money to the treasurer, we knew that would kick start the economy, which had been performing at, you know, all time lows. And as we saw that really work, the economy came back strong. We started paying that back to try to drain the IRS because more people were working, the economy was booming. So we had a plan and a plan to get people back to work, be more competitive, get companies to come here, get companies to reopen, you know, and also work with you know, certain regulations right and, and tariffs as well to make that all come together. But here, we're just saying hey, let's increase the debt, but not really as an investment in our country to get it back foreign investment and to bailout states to have people stay at home. And that's a disaster recipe.
Keith Hanson 34:10
You know, one of the things that I've heard floated out there as an idea is to give tax incentives to companies that are looking to expand and are looking first to to hire from that pool of as of right now, it's 30. Was it 36 point? I want to make sure I got my numbers correct. 36.4 million newly unemployed individuals within the past eight weeks. So you know, what about a tax incentive, giving tax incentives to companies that are hiring those people back? You know, maybe at a rate that would be maybe a little higher than what the normal average rate would be to try to offset that? Well, I'm really kind of comfortable sitting on my butt doing nothing collecting all this money that I'm getting on unemployment.
Julio Gonzalez 34:52
Yeah, I think really, I mean, that's why the President wants the payroll tax holiday not only for businesses, but for the individuals. They've talked about. You know, the r&d tax credit, which is really a credit or a refund against wages for people that work in innovative jobs, and, you know, currently you have to go back and get that after the year of payroll, but they've talked about advancing that so that you're paying, you're getting it as you go. Those would be great programs that would incentivize businesses, it's not going to cost the country any money. We're not going to be writing checks and creating the debt. We're going to be investing in our companies and getting that right back because then our people are paying taxes again, and I think that's where we want to go as an administration.
Keith Hanson 35:33
So once again, and as you had disclosed earlier, we're recording this. We're pre recording this to air this evening. It's it's going on right around three o'clock in the afternoon, Friday afternoon. We are waiting for this imminent vote that's going to take place in the house. It is expected to pass today. They have the it will probably pass later on this evening or tonight. It's gonna go on to the Senate. The Senate most likely is not going to get anywhere in the Senate. But what what couldn't we expect over the weekend to hear as the the preemptive strikes against Senate Republicans who are likely to block this and prevent this from going anywhere?
Julio Gonzalez 36:12
Well, you know, it's, you know, this is all about election suit, right? I mean, I don't know how your audience has felt about that, or how you felt about that. But this is really gearing them up the, you know, the House side to get ready for these elections and do anything possible to keep us down and keep us, you know, stand at home. I mean, how do you feel about that?
Keith Hanson 36:37
Well, I mean, first of all, I think that this entire Coronavirus situation and the way that it's been handled has been to put the blame squarely on Trump and his administration to derail all of the good work and the talking points that his administration would have going into the 2020 election. Look, we've got record confidence in the economy. We've got record low unemployment numbers in every single demographic in certainly in in whites and blacks and Hispanics, people are working people are spending money. People are traveling, the economy is booming. You've got more corporations that relocated outside of the United States coming back to the United States, not only bringing jobs back, but also bringing money that was stashed offshore back to this country. They're repatriating dollars. They're repatriating countries, they're repatriate or excuse me, companies. They're repatriating workers. I think that the vast majority of this is an attempt to gain ground that they did not gain when they failed to to remove the president via those those ridiculous impeachment hearings.
Julio Gonzalez 37:37
It's just been one obstacle they put in front of them after another and using this virus as an advantage to finally put the nail in the coffin. But, you know, what the President has showed us is that he can't be put down and certainly look at his response. I mean, the responses right on and the first three bills that he put out, I mean, getting the money to the corporations to get them keeping the doors open and giving them a chance to get through first cycle of this illness, this virus and giving us a chance and that that worked. I mean that work greatly. And it was just brilliant of him and then to go to the payroll tax holiday, that's not going to cost us the country, you know, cash today and ultimately allow us to pay that back by getting the jobs open. And, you know, look at the states that are opening. We're doing great job here in Florida. We're back to getting open and phase two now and everything's going well, Georgia is working well. No one's seeing the spike there either. So, you know, I think the practicality of it but what you said though, too, is you know, there's got to be both sides. People got to feel safe and not intended to stay at home.
Keith Hanson 38:45
You know, I'm not so much concerned truthfully about the the response that Trump will give or how his administration will handle this. I'm concerned about the propaganda initiatives from the from the left from the progressive democrat from the, you know, the the independence and the communists that are out there that that that those propaganda effects will will actually take some of those votes away from the president and and one of the things or and also just the wearing down of the American people people are tired, they are tired of this. They are frustrated with this. They are exhausted with this. And I don't know if you happen to catch the report that came out on Tuesday but Fauci there had said during an interview that a return to school in the fall would quote be a bit of a bridge too far. Which was kind of interesting when they were doing the senate committee hearing on on COVID Senator Lamar Alexander asked him he said Doc, a quote, Doctor, let's look down the road three months there will be about 5000 campuses across the country trying to welcome 20 million college students 100,000 public school students welcoming 50 million students, what would you say to the Chancellor of the University of Tennessee Knoxville or the principal of a public school about how to persuade parents and students to return to school in August. And his response was, I would tell her that in this case, the idea of having treatments available or a vaccine to reef is to facilitate the re entry of students in the fall term would be something that would be a bit of a bridge too far. So what that tells me is, again, just as we spoke earlier about this, this is not about or it is no longer about flattening the curve. It is now keeping the economy in a lockdown status until a vaccine is developed. If we're waiting that long, we're looking at you know, realistically, conservatively, 12 more months of this. Do you think that the American people are going to have the wherewithal to look at Trump and say, Yes, he is the best bet going into the election. If come September, October, November, we're still in the situation that we're in right now.
Julio Gonzalez 40:51
Well, yeah, no, it's not the perfect storm. I mean, Biden sets the bar pretty low. So we're, we got that.
Keith Hanson 40:58
Okay, so you got you met him.
Julio Gonzalez 40:59
Get it set the bar low, lower than him. But, you know, that being said, you know, you're right. I mean, they have these things going on this perfect storm of the virus that interrupted the best economy we've ever had the lowest unemployment we've ever had every, like you said Hispanic, black, and, you know, everyone else, you know, at work at the highest levels. And, you know, but keep the schools close, keep the work closed, and, you know, continue to go to that great depression and, you know, rely on the government and go back to that communist state that, you know, they're trying to set so that, you know, they can win the election. Yeah. I mean, certainly, that's on the table, but certainly, we have a Senate in administration that I don't think is going to allow that to happen, I think, you know, ultimately will prevail and getting the economy back open, because I think we're gonna fight hard for that. And, you know, certainly, there's a lot of people that do support the president over 50% that do want to get back to work and, you know, ultimately, we don't see, this is his fault, right? So, you know, fortunately, us as business owners, even though we have this issue, I mean, he wants us to get up and instead of waiting, we want to know, if we can get back to work safely. Schools can do the same.
Keith Hanson 42:15
You know, and it's interesting, good. So let's say that the President comes out and says that, you know, all of the states have to reopen. Well, of course, now you're going to have all of these democrat controlled states that are going to be claiming to now this is where they're going to become constitutionalists Tullio, now they're going to start invoking the 10th amendment. Now, we all know, we're going to assert our state sovereignty and we have the right to do what is best for our citizens and blah, blah, blah, and they're going to continue the lockdown. That's my concern. I see this thing going in I there was I want to say it was New York today that just announced that they were going to continue there. Maybe it wasn't but but somebody had mentioned to me in passing that one of the states and I believe it was New York announced that the majority of the steps were going to remain in place until now June 15th. You know, that my my gym the health club that I go to, you know, this guy right now is getting really, I mean, he's preparing to do battle with the State of New Hampshire right now. Because he, as of May 4 reopened his gym. Well, somebody somebody ratted them out, somebody dropped the dime on him. And so now the state's you know, all all. I mean, they're literally getting ready to go in there and raid this place and shut this place down. He's like, I can't survive. You told us this was going to be may 4. And so I did all of my financial forecasts until May 4, I have to reopen. And you could certainly say that the gym is an essential business because I can tell you, when I go to that gym, there are an awful lot of police officers awful lot of firefighters, awful lot of MS workers and critical workers. We've got Dartmouth hospital right there. A lot of doctors, a lot of nurses are in that gym. And they have to be in peak physical condition to do their jobs, firefighters, rescue personnel, emfs police officers, these people have to be in good physical condition to do their jobs, or at least they should be. And so that gym is essential to frontline workers. But yet, His Highness His Royal Highness governor chris Sununu is continuing to stray away from Republican constitutional conservative ideals and walk lockstep with the democrats in maintaining this ridiculous lockdown in the Granite State. And you see that across the country?
Julio Gonzalez 44:12
Yeah, I mean, you know, we had several reports of CEOs being arrested this week in California for opening up their businesses. Certainly, Elon Musk said, I'm opening up and if you want to arrest me do so. And, you know, and I'll be in Texas in the next couple of months. So, you know, that's interesting as well. I mean, like, we ultimately have, you know, choices, whether it's good tax line estate or, you know, just overall good government management. And, you know, I think it's going to impact where you ultimately end up as a state and where you do as a business as well and we see those businesses moving already. And because, you know, the some states they just want to lock you down, but, you know, there's a lot of states that are you know, Texas is open, Georgia is open, we're open, and, and thank goodness, thank goodness. We don't have to hide behind. You know, the curtains and worry about someone you know, telling us.
Keith Hanson 45:04
Let's have some fun for a second here if you will. You don't you don't have a tinfoil helmet by chance do you?
Julio Gonzalez 45:09
No, not with me?
Keith Hanson 45:11
No. Okay, well, let's let's pretend that you have your tinfoil helmet. I'm gonna get mine and let's go into conspiracy theory land for just a second here. Okay, because we got a couple minutes left, you'd mentioned we got we got we got you know Joe Biden okay. But here's the thing. Joe Biden is not the nominee, not yet. And the DIA the Democrats, they pushed their their coronation ceremony from July until the end of August. I think they're still doing it in Milwaukee. But anyway, they've pushed that that convention off until the end of August. Let's say for a moment that Joe Biden continues with the gaffes and I don't think we've seen the end of the Tara Reid situation with him as well. But let's assume for a moment that Joe Biden is not the nominee, that we go through the DNC, and the DNC decides that they are going to do what they want to do when they want to do it, which is pretty much how the democrats play ball. And they appoint, let's say, Oh, I don't know, Hillary Clinton to be the nominee. Do you think that Hillary Clinton could actually beat Donald Trump? If the propaganda machine continues to spin the way that it does?
Julio Gonzalez 46:28
I mean, you know, anything is possible, right? No one thought President Trump was gonna win and that was a, you know, great day. And, but certainly, we were all prepared to move our businesses out of the country. And so could it could it happen I mean, you know, the environment, the virus, I mean, anything could happen, but you know, I just don't see that happening. I from from your mouth to God's ear, Julio. I hope that that never does. But again, as long as there are still Vegas, I said this many times before I have this sneaking suspicion that she is going to pop up, we have not seen the last of her and I cannot see the DNC putting all of its eggs in a Joe Biden basket. It seems like it would be the biggest for castable loss. For the Democrats. This is not this guy was supposed to disappear after the first or second after the first or second caucus and primary, but he didn't I mean, he he truly launched a come from behind victory here. And now all of a sudden, you know, well, he's he's the guy at least he is the he is the nominee to be the presumed nominee. I don't know something, something about it just tells me you know, don't don't get comfortable with the thought of it being a Trump Biden head to head match because I, they, I mean, think about how they do business. They pivot they obfuscate, they change the rules. They're they're like an eight year old who's losing a checkers, they change the rules as they're going along. And if they don't win, still, they throw a temper tantrum and flip the checkerboard over. That's I think what's gonna wind up happening at that convention in August it I, until that actually happens and until they appoint Joe Biden as the nominee, I keep thinking it's gonna be somebody else because they I can't see them putting all of their eggs in that Biden basket.
Well, there's clearly a reason she has the odds on favorite in Vegas, no doubt about it. I think they're factoring that into it as all the way are as well.
Keith Hanson 48:25
It's absolutely scary. All right, we are getting tight on time here. So we're gonna let you go. Julio Gonzalez, the Chief Executive Officer of Engineered Tax Services. He's also an individual who helped to advise President Trump as well as Congress in the Senate on the 2017 tax cuts and jobs act hooli. If people want to check out more on you, what's the best website for them to visit?
Julio Gonzalez 48:45
Yeah, thank you for that ad. EngineerdTaxServices.com. We, again, we're there especially tax firm that we work with CPAs nationally, helping them with tax credits to keep their clients you know, gaining on employment. Then continuing to higher and higher jobs in the USA.
Keith Hanson 49:03
All right, we'll put that up in the show notes too. If people want to check that out engineer tech services.com, look for that in the show notes. If you're heading over to Keith Hanson show calm or if you're grabbing an archived version of the program, you'll be able to catch that on the website. Julio, I'd love to get you back on here. As soon as this thing progresses. Again, I think it's going to pass the House, I don't think there's going to be enough democrats that are going to break ranks and vote with Republicans on this. Again, it's really unlikely that it would gain any traction at all in a Republican controlled Senate. And certainly it would never make it past President Trump's desk. But, you know, listen, if at first you don't succeed, try and try again, if they don't pass this $3 trillion package. I'm sure they've got another one waiting in the wings, just waiting to introduce it, you know, seven nine days down the road.
Julio Gonzalez 49:46
No question about that. But like you said, the media is difficult out there for President Trump. So keep doing what you're doing. I think you're doing a great job and I know the country appreciates what you're doing.
Keith Hanson 49:56
I genuinely appreciate that. Julio. Thank you so much. Have a great weekend, guys. God Bless and let's talk soon again. Okay. Okay, thanks. Thank you.