In this episode, I chat with Army Robinson about the intricate role that government policies and tax regulations play in shaping financial planning and investments.
We explore how policies, like the upcoming Social Security adjustments and potential tax increases, impact the middle class and investors. Our conversation dives into the complexities of government involvement in financial services, from tax reform to estate planning, including the potential for more regulations on qualified plans and possible limitations on estate exemptions.
Army shares insights into the day-to-day challenges of educating policymakers who often lack financial backgrounds. They highlight the constant need to advocate for balanced policies, the risks of overregulation, and how financial legislation could impact future wealth-building strategies.
Tune in to hear more about the ongoing battles in Washington and how they might affect your financial future.
TRANSCRIPTS
Speaker 1 (00:00):
Are you worried whether your retirement plans are under fire? You would know if the government’s actually got you back or not? That’s exactly what I’m going to talk about when I show it today with Army Robinson. Stay tuned. Hello, my Phil Ripers. This is Chris Miles is your cashflow expert and anti Financianal advisor, welder Schultz for you, those that works. So sticking hard for your money, you’re now ready for your money store. He art for you right now. You want that money to work for you today where you become work optional. You work because you want to, not because you have to do it, because you want to be able to have that life that you love with those you love. And most importantly guys, it’s not just about getting you rich, it’s about living a rich life because as you are blessed and prosper financially, you now are greater capacity to bless the lives of those around you by creating that ripple effect through their lives as well.
(00:58)
Thank you for tuning in today, guys. Appreciate you guys been binging on these episodes sharing, but the top 1% of podcasts in the world. That is all because of you. Thank you for doing so. If you haven’t done this already, be sure to subscribe to our channels. We got the Money Ripples channel and the Money Ripples podcast channel. Be sure to be subscribed to both on YouTube right now. I got especially guest here today with us Armie Robinson. Now Armie, by the way, is not someone in the army, right? Armstrong is his full name. He’s with sca. He’s actually the chief advocacy officer with sca. Now, you may not have heard of sca, but I know that your everyday life is affected by the very work that they do on Capitol Hill. So excited have them talk to us today because what really happens behind the scenes, what are politicians really talking about are some of the things that you’re doing with your money actually under fire right now. That’s exactly what I’m talking to Army about today. So Army on our show.
Speaker 2 (01:51):
Thanks for having me, Chris. It’s a great pleasure to be
Speaker 1 (01:53):
Here. Yeah, man. So give us a little bit of your background. I know you kind of were in the legal realm for a bit. Tell us more about what inspired you to take this path with Ieca.
Speaker 2 (02:04):
So I spent a little over 10 years working on Capitol Hill for a variety of different members of Congress. Did a lot of work in tax and financial services. And so in 2017 when this predecessor version of this job was advertised, it was an opportunity to combine two of migrate loves and learn more about the holistic financial plan, which creates the kind of freedom and opportunity that you talked about in your lead. When people have, we know from your work and the independent research from Ernst and Young, when people have the holistic financial plan that includes investments and retirement, life insurance and annuities, they get better outcomes and that’s because the insurance products mitigate smooth, the risk and the investments generate the returns. It’s been a great journey. I love the work I do. I’m incredibly passionate about the people I represent such as yourself. FCA is inspired by this of delivering financial security to more people. So just like the ripple effect is let’s empower more people, stronger communities, more freedom, all driven through their financial security.
Speaker 1 (03:11):
Well, and the question is who do you really work for? Are you work for some big lobbyists? Are you work for the institutions or you work for the client? I mean, I’m sure that’s a question you probably get asked a lot of times.
Speaker 2 (03:21):
So my salary, I’m a W2 employee of a trade association that represents the profession. So Chris, you’re a member of Finca. We have just almost 10,000 members today. But our goal, you may not have heard of us yet, but our goal is to be the American Medical Association, the American Bar Association of your profession. So check us out in second.org. Our dues are very reasonable and I aim to deliver more value to you than you ever pay into the system. That’s why I get out of bed every day and we need everybody to join with us so that we are doing more to promote your financial security and forcing the government to do likewise rather than threaten.
Speaker 1 (04:05):
I could imagine. I mean most people that are part of our show, they’re ripples and followers here. They probably have a little bit of distrust for government, especially if you’re a Gen X like we are, right? I mean naturally you kind of question by if anybody’s got your back, you just got to do it yourself. But I mean, how dangerous is it right now in the current landscape, right? I mean, are there constant talks about changing tax rules or even like 401k, like 59 and a half? Do they change that or are they going to change how they tax it or what’s happening right now that you’re seeing?
Speaker 2 (04:38):
Chris, I’m going to blow your mind. Are you aware that our federal government’s, there is no fiscal sanity at our federal government? Let’s say it that way. What are you aware of that
Speaker 1 (04:51):
Wait, wait. Are you telling me that they don’t understand money? Is that what you’re saying?
Speaker 2 (04:54):
No, they understand money just fine, but it’s the age old if we spent our budgets the way the federal government did out of business in a jail. Now it’s not really an apple to apples comparison in fairness, but the amount of debt and deficits our country faces is literally staggering. And that’s before people have talked for years throughout your lifetime. And mine about solvency of social security. Social security goes insolvent in 2033, less than 10 years from now, if Congress does nothing, current beneficiaries will face a 20% cut to benefits. So next year’s tax bill that they have to write with the expiration of the tax cuts and Jobs Act could run 4.6 to $7 trillion. Who’s going to pay for it? Where’s the money going to come from? And that’s before we ever get to fixing social security. So that’s where all this stuff matters a lot. And at Finca we aim to represent you and we aim to help you get engaged in the game so you can be your own best advocate.
Speaker 1 (06:05):
Yeah, but aren’t we safe? I mean, come on, Mala Harris is talking about how she’s going to protect the middle class worker and everything and it’s not going to be the rich people. I get screwed, right? I mean, is that really the case? I mean, is that just lift service or are they really trying to enact laws to do that?
Speaker 2 (06:21):
Oh, for sure. I mean, when the A MT, remember the alternative minimum tax, did you know how many taxpayers paid it the first year it was in law? 700. How many you have paid it? 28 17, like 6 million going back to 16th Amendment to the Constitution was passed that allowed constitutionally the income tax. You know how they sold it, Chris, don’t worry, pay it. Only James Pier Pop Morgan will pay it. Don’t worry. You’ll never pay the income tax. Did you pay the income tax last year? Last year I did,
Speaker 1 (06:56):
Yep.
Speaker 2 (06:57):
So it always starts by saying they’ll tax somebody else and we need, I mean, taxes aren’t bad. I don’t want to pay all the taxes I owe and not a penny more. I enjoy the services my government provides, but I don’t want to pay exceedingly and I don’t want to pay confiscatory taxes. I think you’ve heard me say this before, maybe why I’m on this podcast, but the American system of government is designed to elect a representative body not to elect the best amongst us, and it does what it’s designed to do pretty well. I spent lots of my days with members of Congress and I could tell you they come from all stripes and shades and there’s only five or six of the 535 members of Congress, whoever did what you do, who are financial advisors of any kind. But there are two former professional MMA fighters, one Republican, one Democrat, one man and one woman. So I guess that’s important too. We want diverse elected representatives, but they could be experts in Zika or healthcare or cybersecurity or the military. It’s a large and complex institution, a large and complex country, and there’s a lot of important issues facing it.
Speaker 1 (08:11):
Now, I know you were on both sides of the aisle, of course, and you’re not trying to delay favorites. I mean, is there a difference between ’em or at the heart of it? Are they all kind of wanting and doing the same things? Oh,
Speaker 2 (08:24):
From my perspective, there’s a major difference, but at FCA we have friends and allies and enemies in the Republican Party and in the Democratic Party. And so I get paid to win by you whether the voters choose Kamala Harris or Donald Trump.
(08:42)
And I’ve been here since 2017. So in 2017, the tax Cuts and Jobs Act included major threats to the profession and the work we do do, the original draft of that bill would’ve ended all deferred comp in America. The people who wrote it didn’t intend that outcome, but what they wrote would’ve had that effect. And then in 2021 with all Democrats, we had threats and opportunities. So I don’t know exactly what’s going to win the election this year, but I know whether it’s all Republican, all Democrat or divided, we got work to do and we have to explain the value of the work we do in order to protect the policy that enables it.
Speaker 1 (09:22):
That was kind of my next question for you is what things that you have to teach them, what do you have to explain to them? I mean even just are there certain things that you’re always having to reexplained? You’re always having to try to stand up for the profession or stand up for what’s going on in the industry, but what are the kind of things that you’re seeing right now or have seen?
Speaker 2 (09:44):
Well, I mean, so that work is constant because the turnover is constant. We tend to focus any other profession. Congress is defined by the worst amongst them, not the best. Same with our profession. It’s the who’s under scandal who ripped somebody off. Bob has cash in his freezer with the gold bars and whatever. You don’t know or hear about this sort of no name member of Congress who’s just out there, Republican or Democrat trying to solve problems. I mean, look at the fiduciary rule that President Biden rolled out last
Speaker 1 (10:22):
Halloween.
Speaker 2 (10:24):
If you went to the Council of Economic Advisors a explanation in justification for that rule, they fundamentally misunderstand the role of investments and insurance. His whole thing was junk fees. And part of the way they said an annuity involved the junk fee is that because there was a floor and a cap, because there was a risk hedge, just the definition of an insurance product that’s a risk hedge. You didn’t get the same returns and the annuity that you would’ve if you bought the s and PD.
(11:00)
Well, that’s a fundamental misunderstanding and an opportunity for education. If you want the returns by the s and p, if you want to mitigate your risk by the insurance product, but they’re not designed to do the same thing and it turns out they don’t. So we have to do a ton of education. There are people up there who can’t distinguish life from health from PNC that you talked about some of the complexities in your show around 4 0 1 Ks versus Roths versus back doors versus all these different planning techniques that are breathing to you is like ancient Greek to some of these staffers and members. And it’s not bad people. And it’s not because dumb and it’s not because evil, it’s because you only be an expert in so many things. And so that’s why people are justifiably skeptical of their government. But a lot of the advocacy work I do is education. All I ask when you go up to Capitol Hill is be passionate about what you do and teach ’em. And when that light goes on and they’re like, oh, wait, I can do, how do I protect my kid? How do I save for college? How do I do this? It’s like, oh, now it’s all clicking into place.
Speaker 1 (12:14):
Well, it brings a question to mind that I didn’t think of asking you, but do you really think that maybe the government’s just overstepping too much, they have to become an expert in almost everything it seems like, right? It could be medical community, like you said, the A type of stuff. You’re making decisions on medical things, you’re making decisions on education, you’re making decisions on welfare, and now you’re supposed to somehow have information and know about the financial services world. I mean, other than someone blatantly breaking the law, which obviously they should be punished. That’s what the government should be there for. I mean, are they overstepping beyond just the punishment of somebody doing something illegal? Are they doing too much right now?
Speaker 2 (12:52):
Well, not taking off my a hat and just put it on the me piece. I think so. No. Right. I don’t think it’s possible to write a perfect rule set. I don’t think it’s possible to protect everybody from every conceivable heart. That’s just my view. So you need a principles based system that, as you say, should throw the book heavy and hard at people who commit fraud or steal. If you steal from clients, then I think you should pay a penalty, a very steep one. But other than that, if you’re trying to do the right thing, and we should try to keep the rule sets simpler rather than more complex, that’s definitely not the ethos of our government. It has grown a ton and it controls more and more things. So that’s just part of the reality.
Speaker 1 (13:45):
And you mentioned a lot of the tax things that are going on right now. Obviously they’re trying to figure out how to pay for social security. I mean even the national debt is the interest is even bigger than what they can pay on mean. So it’s getting pretty out of hand. I mean, is there top on the floor or any kind of bills that they’ve heard about where they’re maybe trying to tax qualified plans differently than what they’re doing today?
Speaker 2 (14:06):
Retirement policy has generally been kept separate from tax policy, which in your world probably seems artificial and arbitrary, but it is the way Congress has dealt with it over the last couple of years, which actually for our perspective is a good thing because we believe we need more tools to empower more people to craft their own financial security so that we can preserve the public sector safety net for those who really need it. And so the whole other tax fight is about how do we pay forward and extend this other piece. So it’s good that they sort of keep ’em separate, but even in the debate, I mean there’s a whole variety of ideas out there. If you look at the presidential debate of 20, the primaries there on the democratic side, even between then candidate Kamala Harris and then candidate Joe Biden, how they went through that just last year during the retirement bill hearings. Ron Wyden, who’s a senior senator from Oregon and chairs the Senate Finance Committee, you may remember the headlines. He was all upset about Peter Thiel’s Roth, right? There’s only one Peter Thiel in the world, right? That’s not a huge public policy problem of people who were putting their pre IPO stock into our Roth.
(15:27)
But what Senator Wyden argued was because of Peter Thiel, look at the sensationalist story of Peter Thiel. Maybe we should cap deferral at 5 million bucks. Once you’ve deferred $5 million, you should lose the benefits of deferral in your qualified plans. Now that policy didn’t become law, but those kinds of things are debated out there. Should they be cast their means tested, et cetera. So it’s definitely an area of concern as we move forward.
Speaker 1 (15:58):
Now, you may not know the answer to this. This is the first time I’ve ever asked you this question, but I would imagine that most lawmakers, they want to protect whatever they want protected whatever’s in their best self-interest too. Are there any specific kind of investments that maybe would say, you know what, we want these to be left alone because this is what we have onion. I know Nancy Pelosi has a lot of money in wineries. She’s obviously got her vineyard, she’s got her husband’s got his own financial profession and things like that, and it’s amazing how she’s all about taxing the rich, but she is rich. Technically. She’s in the a hundred plus million dollars range, but she still will attack her own self while not really trying to tax herself. Right. So do you see any kind of comments, right? I know you said they come from all walks of life, but is there something they say, this is something that we do as politicians, and this is why this is a no-touch kind of thing.
Speaker 2 (16:51):
If I could make every member of Congress a consumer of a holistic financial plan, my job, be a lot easier, they do protect what protects their family. I don’t think there’s necessarily targeting based on that. I think it’s more based on constituent interest, right? People from Kentucky, like horses in bourbon, people from California like wine, and that represents businesses and jobs and other things. So the Texas folks like oil and gas as to Louisianas, right? There’s a regional element to that. And in the representational nature of our government as opposed to a pure partisan one, but Alaska, San Francisco, Nashville, dc, these are all vastly different places with different concerns and issues. That’s part of the balancing act that Congress has to go through
Speaker 1 (17:45):
Right now. What about life insurance obviously mentioned, of course, that we know that life starts is tax free. We talked about on the show from time to time, I mean obviously there’s got to be people that say, Hey, why is this tax free, especially if people are growing money here tax free, just like they would was a Roth. Shouldn’t we have some limitations here too? I mean, do you kind see that debate happening ever?
Speaker 2 (18:07):
Well, so I would say life insurance is taxed appropriately, and the core of it is it is insurance. We don’t pay tax. It indemnifies a loss. That is the essence of the insurance. You get paid out from your health insurance. You don’t pay. That’s not income to you. You cash the car, you have a fire at the house, or God forbid you die. That’s an indemnified loss. We don’t tax that as income. And that’s been true since the founding of the income tax in America. And so I understand why you use the words you do, you’ll understand why I use the words I do. It’s taxed appropriately. And for sure. I mean, there was an article, a law journal article written by a Northwestern Law student or professor, I can’t remember which, that was just published in the last two weeks, that suggested curtailing the tax treatment of cash value permanent life insurance. So is it discussed? For sure. It’s discussed, but my issue with that is the size of a policy has to be financially underwritten. You can’t just buy any amount of life insurance you want. You have to prove the risk you’re insuring against, which might be the tax bill you’re going to pay when you die. It might be the money necessary to transfer your business or whatever the case may be. The amount is driven by risk. And if the amount is driven by risk, then the indemnity should not be kept at any level.
Speaker 1 (19:38):
I guess if you look from a lawmaker standpoint too, they’re thinking decision that they’re worried about the bills, that the government’s rocky up right now they’re thinking, well, if somebody actually protects themselves to where we don’t have to pay out so much more money to them, well, maybe this is a good thing. Maybe it’s just like why a retirement plan is good, because that’s less trying to suck off the government milk, so to speak, trying to suck off from the social security. Maybe we get them to take their own responsibility to do their own things, is that what their thinking is? Is, oh, this is something that actually helps us out, so we should probably protect it.
Speaker 2 (20:11):
Well, that’s what our thinking is, and that’s part of the message we try to sell. It’s received better in some corners than others. And there are Bernie Sanders, Senator Elizabeth Warren have a worldview in which they think that idea is nice, but they think the refrain is, Chris, you’re not paying your fair share. Corporations and wealthy are paying their fair share, taxing, unrealized gains, taxing capital gains of death. A bunch of these ideas, the build back better agenda that President Biden first introduced in his first six months at office would’ve led in some cases to tax policy at death. That could have led to 77% aggregate tax rates by any imagination. And I think people should pay their fair share, but I think it’s a trope that they don’t yet. If you’re a tax cheat, I think that we should throw the book at you. But if you’re living by the rules, then the rules should apply equally to everybody.
Speaker 1 (21:18):
So speaking of tax of the rich, right? I mean we already have this huge estate exemption right now. A couple could pass on roughly about 26 plus million dollars to their heirs tax without the death tax. It may not be tax-free, but at least no death tax. Well, I know that could get repealed at any time that’s been extended for so many years. But do you think that might be coming to an end? We’re all sudden who’s classifying as the enrich according to the government could change? It could actually lower or they might say, no, no, if you’re worth at least 5 million, you’re rich. Which now I’m seeing more and more middle class people being worth into the millions of dollars right now. A million dollar net worth doesn’t make you rich anymore. You’ll get Mr. Belvedere showing up at your doorstep or Tony Danza working as your house cleaner or you don’t get, I’ll really show at our age. Tony Danza, Mr. Belvedere. I love it, Chris. It’s true television. Well, it’s true. We always used to think if you’re a millionaire, that’s it. You’re set. And now you’re like, oh, I’m middle class if you’re even a net worth millionaire. So my point is, this might be outside of your realm of what you did with sca, but is there some kind of even talk and discussion about do we repeal that? Do we go back to the $1 million? Anything above that gets a death tax in addition to whatever other tax it might be hidden too?
Speaker 2 (22:36):
It’s a huge point of conversation, Chris. So the Tax Cuts and Jobs Act trump’s tax cuts of 17. Those pieces that were on the individual side of the code basically all expire at the end of next year. So that’s what’s going to drive Congress to write a tax bill. So that’s your marginal rates, your doubled standard exemption, your salt cap, your estate tax exemption, which was doubled, the 1 99 cap, a small business pass through deduction expires. So those all expire at the end of next year. That’s what, and full extension costs $4.6 trillion. So in this selection, you ask if there was a difference in what the parties propose. The outside newspapers will tell you between where Kamala Harris is and Donald Trump is, there’s like a $7 trillion tax window one way or the other
(23:30)
On the estate tax specifically. In 2017, they doubled it. So it was five and a half and 11 index for inflation from 13 on. And then in 2017 they doubled that number and that’s where you get to the sixth you just quoted. If nothing else changes, it reverts back. It basically gets cut in half at the end of 2025. The question on this will be depending on who the voters send to Washington for the next Congress, what does that Congress do with the estate tax exemption? They leave it at five and a half and 11 unified lifetime giving from the 2013 deal. They leave it at 11 and 22, which now index to 13 and 26. There are some who still favor repeal, even though the estate tax has been repealed seven times, its first enacted problem with that strategy is it always comes back. And so it’s not a real good strategy to plan around. Of course, they amend the constitution. If they amend the constitution to repeal the state tax, you can plan around it not being a thing.
Speaker 1 (24:35):
Right. But that’s a big one. That’s hard to too, that’s not like San used to walk in and say, oh, we’re just going to change it now.
Speaker 2 (24:40):
Right. Exactly.
Speaker 1 (24:42):
Yeah. Gotcha. Is there anything else that people should be aware of that you’re fighting for right now that could be affecting potentially their daily lives?
Speaker 2 (24:52):
I think there’s a ton of tax policy, not just at the federal government, but also at the state. So Chris, I’d perhaps wrap where we started, which is check us out@fca.org. It’s F-I-N-S-E-C-S-E-C-A, financial security for all fca.org and give us a try. But we had an issue in Nebraska, I don’t even know if you’ve heard about this, but the governor called special session and he was worried about property taxes in Nebraska. So we wanted to lower the property tax rate. And his proposal to offset the revenue was to add a sales tax on services in the original draft of the bill. One of the 34 name services was investment at price, whatever that means. So we’re going to tax people’s financial security or what they choose to try to get to get more financial security. The advice that they seek, which all these people need.
(25:47)
And ultimately the bill they signed and got into law didn’t include that because of our great work in Nebraska, but it was similar to Kentucky did this two or three years ago. They were trying to lower their income tax and tax investment advice. You tax something, you get less of it and more financial advice for more people in this country. So there’s always issues popping. We talked a lot about tax today, but whether it’s long-term care or independent contractor, there’s all kinds of different things that affect the work you and your clients do. So we’re updating on it and we’re advocating for it all along. So come and join us.
Speaker 1 (26:23):
That’s awesome. Yeah, we should pleasure link in the show notes so people can be part of it. I know I’m a member. I definitely support your guys’ cause too and for anybody that feels called to, I definitely recommend it. And you’re right, even the capital gains, that’s the one thing I keep hearing over and over for the last week or so, people were like, oh no, we’re going to get tax capital gains on money wet made in the first place. And I’m like, okay, we’ll see. That’s a hard one to get past. But you never know.
Speaker 2 (26:51):
Well, I mean the idea is out there, right? They’re fully, and again, the allegation is look at Jeff Bezos, right? And he’s never paid tax on most of his accrued wealth because he created this amazing company. But that’s true for most of those middle class people. You were talking about Chris, right? We bought our stocks and then have to sell ’em before we make any money.
Speaker 1 (27:14):
That’s right. Exactly. Well, I really appreciate your time here today. This is very informative. Like I said before we went on the air, this is Christmas for me. Just be able to talk to you and ask you these questions. So I appreciate you at least be willing to entertain that with me.
Speaker 2 (27:29):
Absolutely. Pleasure to be here. Thanks Chris.
Speaker 1 (27:32):
You bet. Hey everybody, be sure to check out within second.org. We’ll put that in the show notes again, if you feel called to be able to become a member of that to support their cause. Again, we want financial security and independence for all. So be sure that if that’s something that calls to you, check that out. But guys, remember there’s people just like Army out there every day fighting for us pretty his own ripple effect. Doing the things that he knows can actually help bless not just his life, obviously, and not just financial advisors, but even the lives of everyday people just like you. So guys, be sure that when you’re thinking about what you’re doing in your life, what’s the ripple effect you want to create for others as well? What’s your legacy? Go and make it a wonderful process week. We’ll see you later.