Washington State Passes First EVER Income Tax

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Not sure if you've heard the news,

but the state of Washington just rolled out their first income tax.

What is it? What is coming next?

Well, it was rolled out as a get the wealthy.

The current tax is rolled out at what is it?

9.9% for any family, any household,

making more than $1 million.

However, I have two questions.

1. How soon will the state of Washington

lower that threshold from 1 million to say 100 grand?

You and I both know this is coming.

The state of Washington has just signed their death warrant.

What is going to transpire?

Well, that is step number 2.

How many millionaires are now going to leave the state?

As we have seen repeatedly, the wealthy are mobile.

Just as soon as this was announced,

you have your first rich person say,

peace, I'm out, and that is Howard Schwolz,

the founder of Starbucks, who started in Seattle.

Now he is gone.

He is leaving the state of Washington for the great state

of Florida.

This will happen more and more and more.

Folks, at the end of the day, capital goes where it is treated best.

And again, what is happening in the state of Washington?

Folks, the middle class is F'd.

It just is.

Look at the 5% wealth tax in California.

Just the threat of that caused a trillion dollars to flee.

Now, in Washington, you are going to see hundreds of millions of dollars disappear.

This is going to cause the politicians to go, oops, I'm sorry.

I know I said it was going to be a million dollars,

but you know what, we got to lower it to 500,000.

And then we're going to lower it to 250.

And then we're going to lower it to 100 grand.

And yes, this is coming.

The only thing you can argue is when, how fast my guess is a decade.

My guess is in 10 years, the state of Washington will be

have forced to lower this threshold from 1 million to 100 grand.

And yes, the middle class, not mobile, stuck in the rat race,

you signed your death warrant.

It is not going to be pretty.

Not to be outdone.

The federal government.

I can't believe this stuff.

The federal government looks set to pass the road to housing act.

What is inside this act that has bipartisan?

Yes, Democrat and Republicans are all for this bill.

What is it going to do?

Folks, it's going to cause inflation.

It's going to cause rents to go up.

And it has the potential to raise home prices.

Which is exactly the opposite of the problem they are trying to fix.

What does the bill say?

It basically says build to rent is not a model we want to see.

Which is frankly very unfortunate.

Build to rent is a very good model.

These were not mom and dads homes being taken off the market.

These were purpose built.

Think of them as horizontal apartments.

Well, now you're not going to be able to build those.

Which removes supply.

When supply goes down, prices go up.

This is such a stupid idea.

It is hard to fathom why anybody thinks this is a good idea.

And once again, I'm reminded of Ronald Reagan.

I believe Ronald Reagan uttered these words or words very similar to this.

Hello, I am from the government and I am here to help.

Reagan said that is the most dangerous sentence ever.

Once again, politicians are proving with this state income tax

in Washington and the road to housing act that they frankly don't get it.

They are going to hurt the people they are trying to help.

Looks like we have a lot of activity in and around the coast of Iran.

Yesterday, it appeared that Iran was basically mining the straight of her moves.

The US came out and sank, I don't know, 10, 15, 20 ships.

Then we get news this morning.

This news is more important, more meaningful, I believe.

There were three cargo ships attacked.

One, apparently, is abandoned ship and maybe sinking.

This is a problem.

This is going to cause more and more disruption.

This disruption is so big that the IEA just this morning is announcing the largest release

of oil reserves, 400 million barrels, 400 million barrels coming out of the reserve

from the IEA, so again, doesn't seem like this thing is getting any better.

Unfortunately, it feels like it's going to get worse before it gets better,

which I said for a week now, we don't want to see.

We did get a CPI reading today, but as expected, it's a nothing burger.

Frankly, this CPI print means absolutely nothing.

But we'll go over the numbers just because it happened.

CPI headline and core came in as expected, 2.4 and 2.5, respectively.

As always, folks, I go deeper in the numbers and I try to back out the mistake, the error,

the disaster that is shelter.

Shelter inflation this month was reported at 2.96%.

Let's just call it 3%, so the math is easier.

Let's just be clear, rent or shelter is not going up.

Shelter is actually negative when you look at the country.

It's close to negative 1%.

So if we just say it's 0, and shelter is roughly 1.3 of CPI,

the correct reading and the only correct reading for CPI is 1.5%.

The Fed has done their job, the Fed has beat inflation.

I do not understand why we are continually talking about a CPI reading that is

clearly wrong, but it is what it is.

The reason I say this CPI reading is unimportant is you look inside the number,

it actually says gasoline is down 5.6%.

Have you seen what's happened to gas in the last 10 days?

It won't be negative 5% next month.

Next month, here's my fear, I'll say it right now.

I'm afraid that CPI headline next month is 2.9.

2.9, it was just reported at 2.4.

Why is that?

Well folks, you have to remember what we talk about the base effect.

What number rolls off?

We are going to roll off a very small number, I believe it is 0.

And I believe we are going to have a month on month print of 0.5.

CPI next month could be 2.9 and it could be 3.

That's going to be a problem.

That's going to be a problem.

Talking about shelter, apartment rent concessions, these are country numbers,

this is for the country, apartment rent concessions are the highest since 2010.

That is 5.6 weeks.

You are getting more than a month of free rent.

So don't tell me that shelter is up 3%.

You're wrong, you're idiot, you don't know basic math, Mr. Fed.

So yes, shelter is negative.

If you're giving away more than a month of free rent,

that's not up, that is down.

Kevin Warsh, coming in as the Fed president,

assuming he can get through Congress,

is facing a perfect storm for the U.S. economy.

He's going to be having to fight inflation and likely a weakening labor market.

And frankly, as I said, I think it was earlier this week,

stagflation is starting to feel like the base case, meaning the most likely outcome.

That is the worst case scenario for the Fed,

and they are very quickly going to have to pick which target they want to go after.

What else do we want to talk about?

Oh, let's talk about school.

Remember folks, we have activities going inside school every day of the week.

Today is no different.

Inside school, in about 20 minutes,

you will have the ladies of ORAT accountability group.

If you are a lady or a female,

and you are a real estate investor,

and you are looking for your tribe,

we've got an amazing woman's accountability call at 8 to 9 a.m. Pacific,

called the ladies of ORAT.

And then from 6 to 7, 30 this evening,

there is a weekly accountability call.

So again, figure out what works best for your agenda or your schedule or your topic.

We have got you covered in the group.

There's 10 or 11 accountability calls.

So again, check it out.

Ladies of ORAT at 8 and weekly accountability at 6 p.m.

All of these times are Pacific.

Let's thank Andrew and Casey.

Both joined school yesterday.

Yes, Casey from brick by brick wealth is now a part of school.

If you want to send her a message,

she is in there.

She joined yesterday.

Shout out, Andrew.

Make sure you introduce yourself and get a part of the community.

Oracle released earnings yesterday and beat top line bottom line and raised guidance.

Again, kind of putting a dent in the story of debt and things of that nature.

US is building the first oil refinery in 50 years.

I had no idea it's been 50 years since the last one was built.

We just keep shutting them down in California.

I think two more are shutting down.

Shout out Gavin Newsom.

He's winning.

This refinery we built in Brownsville, Texas.

Talking about oil, we've got Saudi Arabia now reducing production because they have no place

to store it.

This is going to become a big problem because as you shut down these refineries or these

productions, it takes time to bring them back online.

This is not good.

And we have weekly mortgage demand.

Weekly to mortgage demand was up 3.2 percent in total.

Purchase apps up nearly 8 percent.

Yes, folks, lower rates matter.

Up 7.8 percent week on week 11 percent year on year.

And refines.

Bud didn't really budge up half a percent week on week.

But up 81 percent year on year.

Most importantly, FHA loans.

FHA loans up 11 percent.

I think that is important because often FHA buyers are first time home buyers.

And I want to see those folks get up off the mat and participate in the housing market.

All right, folks, don't forget if you want to get around other people building wealth,

I'm giving you the best platform out there called school slash orat or one rental at a time.

Again, nearly 700 people go in the same direction asking questions, networking,

accountability, free education, all the good stuff that is in there.

Again, I hope to see you there.

And of course, if you're a landlord, never forget, give steadily a chance.

They saved Olivia and I over 20 grand in 2025, which I am grateful for.

All right, folks, take care yourself.

Have a wonderful day.

We'll be back tomorrow 7.30.

Well, no, tomorrow is at 7.

Tomorrow is Thursday 7 a.m. tomorrow.

Thanks.