Capitalist Investor

IRS Tax App, Pentagon Audit Failure, S&P 500 Hits 6500 by 2024, Ep. 300

• Strategic Wealth Partners

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In the latest episode of the "Capitalist Investor," hosts Diamond Hands D and Tony, along with guest Dave Abate, dive into several trending subjects in the world of finance, technology, and government policy. From IRS tax apps to Pentagon budget audits, here are the five hot topics covered in this week's lively discussion.

1. IRS Tax App Revival

Elon Musk and Vivek Ramaswamy are making waves with their attempt to reintroduce and modernize an IRS tax app designed to simplify tax filings. The idea is to create a pre-populated, mobile-friendly platform that would potentially render services like TurboTax and H&R Block less necessary. The hosts debate the feasibility and efficiency of government-run software while acknowledging that the IRS currently allows free filing, albeit without the seamless, automated features envisioned for the revamped app.

2. Pentagon's Budget Audit Failure

The Pentagon has failed its seventh consecutive budget audit, revealing significant financial management issues in a department with an $824 billion budget. The cost of conducting the audit was nearly $200 million. The hosts explore the complexities of auditing a department that deals in highly classified black ops projects and the potential for significant wastage and inefficiency within its vast budget.

3. Government Spending and Fiscal Responsibility

Vivek Ramaswamy highlighted the fiscal irresponsibility of various government departments in a recent tweet. The Department of Education, USDA, and AmeriCorp all failed to receive clean audits on their multimillion-dollar budgets. The hosts discuss the challenges of supporting tax increases when substantial inefficiencies and wastages persist in current spending.

4. Goldman Sachs' Market Prediction

Goldman Sachs has boldly predicted that the S&P 500 could reach 6,500 by the end of the year. The hosts provide their takes on this optimistic forecast, with some skepticism about the market's ability to sustain its current trajectory. While the market's rapid rise has been notable, the hosts caution against the reliance on such forecasts given the unpredictable nature of economic factors and market sentiment.

5. The Resurgence of Bitcoin

Bitcoin's soaring value continues to captivate the financial community, with discussions about its potential to hit $100,000 per coin. The hosts examine the factors driving this surge, including speculation about government involvement in cryptocurrency investments. They also talk about the psychological barriers investors might face as Bitcoin reaches new milestones, emphasizing the potential for continued upward momentum given the current market dynamics.

Conclusion

This episode of the "Capitalist Investor" provides a comprehensive overview of some of the most compelling topics in finance and tech today. From tax apps to market predictions and the future of cryptocurrency, the hosts offer insightful analysis and spirited debate, making it a must-listen for anyone interested in staying ahead in the ever-evolving world of investing.

Hello, and welcome to this week's episode of the Capitalist Investor. As always, you have me, Diamond Hands D. And we got Tony the Tiger, as always. And back by popular demand, Dave Abate. How's it going, man? Great to be back, boys. Yeah, yeah. Still. Do you have a nickname? I don't think so. I don't think so. No. What do you have your friends call it? Have a nickname for you? Yeah, I want one. I don't want it. You got any childhood nicknames? Sorry. I bet you, you do. I'll ask, I'll ask. I'll ask Tina, your wife, I'll find. Your son has one for you. I'll have to ask him. Oh. Not safe for work. I like it. All right, today we are going to talk about. Pretty interesting. The Doge with the Elon, Musk and Vivek. They're very active right now. They have. They're trying to resurface a IRS tax app so that we can file our taxes a lot easier with the government. Yep. The Pentagon has failed their seventh budget audit, and the Doge wants to roll up their sleeves and get involved with that, too. Man, these guys are going to be busy. Like, really busy. There's a lot. There's a lot of holes in that sev dude. I don't know how Elon gets anything done. He. He tweets so many times. Every single day, he's tweeting, he's launching rockets. He. He's been. He's been side by side with Trump for, like, two straight weeks. Oh, yeah. I don't even know if they've separated. So. Bromance. The bromance is real. He's not cloned at this point, I assume. I don't know. How do you do all this? Maybe it's like. Maybe he has his own Terminator. Like, you know, like a skeleton robot, you know, with flesh around the skeleton, metal robot. See? Several places at once. I don't know much. Too much going on for one capacity. Right? You would think. You would think. And then Goldman Sachs came out and said that we could hit the S P500, could hit 6500 by the end of the year. So we'll have some hot takes on that. All right. The IRS app. So the Doge came out and said the IRS had an old app that, you know, was going to be something where people could file their taxes and immediately. Turbo Tax, you know, Intuit, QuickBooks, that tanks, you know, tanked, like, 10% yesterday. And so did H and R Block, because they're, you know, Took our jobs from the old south park episode. But like, what's going to happen to TurboTax and what's going to happen to filing your taxes with HR block? Like you can do it for free through the government. My hot take on that is like, what government program specifically some type of software, some type of website has worked like really efficient. So they already offer this you can do, you can file for free through the irs. They're in a program, they're just making it mobile now. So I don't know if that's really going to change the game. Yeah. That much. Well, for what I've heard is that it's going to be like pre populated. So you log on and they know. Who you are already. Well, I think you have to log in first, but yeah. So you know all your pay history. Right. Everything that's been reported is already in there, is already calculated for you. You don't have to do any calculations. It just says here's how much you owe or here's how much you're getting back to me. That makes perfect sense. I don't know why we haven't done this for the history of tax reporting. Like it, it befuddles me. When you file your taxes and you have to input all the information. Right. And then they come back and they'll say, wait a minute, like you got that number wrong. Let's just like cut to the chase and you populate it with all the information you already know with W2s and 1099s. Why are we playing this game? Good question. Yep. So and it's actually more simple now. Like the standard deduction is been increased where most people can't itemize anymore. What? The salt tax has been eliminated for years and years and years now ever since the trump. I mean the complexity of taxes has gone down quite a bit. And you know, you think you still have elan. You say, man, it's still complex. Yep. Which it can be. Yes, yes. And then my second gripe has always been like, you know, we're in complain mode. Right. So second gripe is I like this. When you know, you file your return, you, you owe the government money, the treasury money. Right. You write in your check, then they're, they're applying the interest to the amount that you owe them. Right. Mm. What happens when you get a refund? Oh, they don't give you the interest on the money that you gave them. No, that's interest free loan. That doesn't seem like a uneven shake. I'll tell you the all right, so like that's, that's one thing. You know, I always feel like I try and overpay slightly to the government because I don't want to feel the wrath of, you know, penalties and interest. Right. But the thing that if you live in Northeast Ohio, like specifically Cuyahoga county, like Rita, man, she's a b. Holy cow, man, you, I mean, the pinch. Interest in penalties might be more than what you owe. Sometimes, like I try and overpay them too. I don't get the check back very quickly. But man, like, you do not want to mess with underpaying them redid us mess around this. Right? Oh my God, it's not good. But anyway, anything for you, Derek. No, you know, the only other thing I've heard on this irs, as well as potentially voting using the blockchain technology to implement some of this, which would be really cool. And an actual use for the blockchain, you know, that we talked about a long time ago, actually. Yeah. So, yeah, you know, that technology I think has gotten to a point where, look, you know, I don't want, you know, 2/3 of the, you know, tax preparing community to lose their jobs, but at the same point in time, the inefficiency and the waste and just everything that goes into preparing a tax return, I don't think it needs to be that way anymore. So this would be really exciting. Okay. All right. Pentagon failed their seventh budget audit. Right. So their budget is the fourth largest expense by the U.S. government. Social Security, health insurance and interest payments are the top three defenses. Number four, they come in at a cool $824 billion. Can't even fathom how big that number really is. But I thought it was pretty interesting that it cost taxpayers almost $200 million of outside tax auditors to audit them. And it's still in shambles. They're like, hey, we don't have enough info. We couldn't extract enough information to come up with a proper audit. So there's holes everywhere. And it was so funny. I, I was, I was literally talking to a client yesterday, and he worked for a CPA firm, one of the big four retired. But he goes, man, we were working with, you know, the Pentagon was one of our clients, so probably one of these auditors. And he goes, one their, their main boss at the time for the Pentagon. And like the whole finance department was a, like a five star general or four star general. So he's like, he goes, in my client show, he's like, man, he kept that. He poked the bear A little bit. He's like, you weren't even in a war. How did you get four or five? How did you get all these stars? You didn't do anything. Well, digress on that one. But he goes, this dude was in charge. And you know, he'd always bust his chops and say, man, you know, how many $600 hammers did you buy this week? Or something? You know, he had to go through these audits. But the Doge is sitting there looking, licking their chops to get into this one. My thing, my conspiracy theories, like, what about the black ops projects, like building invisible planes and you know, to radar. Right. And building, you know, cyber super hypersonic missiles. Like, can you really put that out there and say, hey everybody, we're doing this, like, you know, and like that's, that opens everything up for like espionage and stealing the secret sauce of some of this stuff. Like, I don't, I mean, how far do they think they're really gonna get into seek the secret, secret stuff of the United States? I'm with you. I mean, how much of this is like national security? Like, correct. Do we need full transparency in all of this? I mean, maybe they, I mean, it'd be nice, like, hey, we have a hundred, A hundred, you know, if it's 825 billion, we have $100 billion secret budget, you'll never know what we spend it on, but it's being spent. I don't, I don't know. I don't know how you get transparent with it or transparent enough to say like, hey, this is off the ledger. I don't know. But I mean, I'm sure there's holes, there's, you know, backdoor deals with contractors and things like that. But what about the, like I said, the black ops projects, I think the. Focus should be on the low hanging fruit. There's so much of it, like, let's just grab all those efficiencies and maybe let this one kind of sit on. The side for a little bit for the defense budget. Sure. You know, speaking of like, you know, government agencies, I was having the same conversation with the other that client. You know, we were talking about, you know, the red wave and, you know, how they're going to come in and clean all this stuff up. And you know, I kind of said, I'm like, I'm kind of interested to see how Trump is going to implement some of the tax breaks or the, or the tax situations for like not taxing tips. Right. And not taxing Social Security. And it kind of thought about it. You know, we spend like, there's like $1.5 trillion spent on Social Security. That's what the government pays out every year. And they only collect. And I looked this up. $50 billion in taxes from that money and Trump's going to wipe that away. So maybe it is plausible that he can. I know it's a little side note, but it'll be interesting what he. What, you know, what the, what he implements from what he said during his campaign trails and what he, what he does or what he doesn't or what he can't. So. Yep. So Vivek Ramaswamy, he tweeted yesterday, I happen to remember, so. The Pentagon failed its seventh consecutive audit. Their budget is 826 billion. Department of Education failed to receive a clean audit for the third time in a row. Their budget is 268 billion USD. USDA showed significant deficiencies across multiple divisions. Their budget is 203 billion. Auditors declined to give a clean opinion to AmeriCorp. Another billion dollar budget. Utterly unacceptable is what he said. So, yeah, no one knows where any of this money is going. So. So to get back to politics, obviously there's, you know, things that. Hot button topics, right, that, that everyone's always going to argue about. But how could you ever support a candidate that wants to increase your taxes with stuff like this going on? I don't know that that is what really blows my mind. Like the whole paying your fair share, like, you're clearly wasting a lot of this and no one thinks we should do anything about that. This is the first time it's come up. It's pretty crazy. It's like, hey, I gave you guys $50,000 in tax for my salary this year. Do what, do what you want with it, you know, Go do what you got to do. It's wild. People think that, like, if you increase taxes, like all of that money is going to go somewhere where it's supposed to. It just gets, it just gets eaten by the system. The system is, you know, the, I don't know, I don't want to go down too many rabbit holes. But like it's just the overpayment to contractors, you know, and some of these contractors could be large farm, you know, pharma companies, pharmaceutical companies, health care. Like, I don't know, man, there's pills out there that are supposed to help you. They cost fifteen hundred dollars a month. Like, that's crazy. And then I can get amoxicillin for a dollar. I'm going to Be optimistic. Oh, there we go. And look at it as this enormous opportunity for improvement. That is optimistic. So they got four years to figure it out. I think, actually, too. Because I think they gave themselves a deadline. Maybe I missed. I thought I saw a tweet somewhere that said this is going to be the birthday present to America and the 250th anniversary. Really? That's what I thought. I saw that somewhere where we're already, like, getting the wrapping paper ready. And so I know this is gonna work because we're already planning the gift. Wow. That they gave themselves a deadline, which is amazing because no one. No one in the government gives themselves a deadline. Exactly. I like that. I'm optimistic. Okay. All right. I like this. Listen. This is a good. This is a different tone, Derek. This is very uplifting episode. I'm over here smiling. I'm like, all right, let's go, Dave. All right. And then the last one, Goldman sees that the market hits 6,500 by the end of the year. Hot takes, guys. We're going to get there. I don't know. Is that chart about this topic. I'm really anxious. Dave rolls in with some charts and stuff. A little. Little numbers. Little, Little. Unlike Luke who just shows up. But this dude's coming prepared. Like me. Kind of chuckle with the. Whenever you see they forced to put these numbers out here. He's an engineer. That's why it's like, you gotta. I kind of know how the sausage is made. I do, too. I do, too. I love it. All right, what do you got for me? I'm sorry. Yeah. So what I'm looking at is, like, awesome. Cool number. Something to talk about. But let's. Let's just, like, go back in time in the time travel machine to January 1st of 2024 and see what the predictions were. Just to see, like, how accurate these things like to tend to be. And I'm just looking like, the range at the beginning of the year for this year. Right. Right now, the S P is like, just under 6,000, right? 59. Yeah. Literally today. Yep. The range heading into this year was a low of 4200. And up to 5400 was the range. So we're already. 5400 was the top range. Top, top, top, top bull case. I mean, I heard in July. I was listening to Talking Heads in July. They were like, we're going to hit 6,6000 in the S and P by, like, next year. They're talking by the end of this year. That's another I mean, 500 on top of 6,000 is what, about 7, 8% on top of what? We're all, we're looking at a 30% gain this year if that, if this happens. So the big takeaway is I don't put much stock in these kind of. They're so hard, so many moving parts. Right. But they're, again, these firms are forced to put a number out there. So you kind of take it with a grain of salt is what it is. But I think the more reliable thing is like, they're not going to be anywhere close to that number. So are we going to get there or not? I think so. All right, Derek, what do you got? Yeah, you know, it, it just seems to have, have bubbled up so quickly here. And that's after you got a little run by the non mag 7 stocks. And then the last couple days, you've seen another run in the mag seven stocks. So I do find it hard to believe that we have that much Runway left, especially with the valuations where they're at right now. I think we're in the top getting blown off stage right now, and I expected to kind of move sideways here from where we're at to the end of the year. Okay, so we got us, we got, we're going to stay at 6000 there, which is ridiculous. And Dave's saying 65. That's his bullseye. He's on board. More room to run. I do, too. All right, so my thing is, first of all, with Trump winning the tax clarity is a huge momentum. The next four years, if not longer, if he puts, if he puts his tax law into permanent law like that, that's going to be a big change, because the next time it can get changed is either when there's probably either a completely blue government or red government. Right. So clarity on the taxes is so big because people can plan for the next four years, businesses can plan all of that stuff. Trump's going to come in and deregulate, you know, a lot of the things that are regulated specifically through the banks. So that means money will become a lot more, you know, available for, for M and A. They're talking M and A is going to really step up again that, you know, we have, you know, the historic Santa Claus rally that we can still look forward to. And there's a lot of momentum and there's a lot of money being dumped into risk assets right now. Specifically bitcoin. Bitcoin is really taking off, like ever since the, our last episode, it's up probably another 5 or 6%. And, you know, and then there's. Then you got like, you know, rumors that Trump media, that doesn't really do anything, is gonna buy a crypto company, a crypto bank, like a, Like a, Like a coinbase, type of, you know, custodian, I guess. So we'll see if that plays out. But, you know, they're really hitching their wagon. You know, at least the crypto people are hitching their wagon that, you know, Trump is gonna buy bitcoin. He's going to buy the bitcoin for the US Government, things like that. So the only thing that I can see taking us off track is no one's really talking about this war in Ukraine, in Russia. You know, it's like, if you kind of read the media like, this is Biden setting us up for World War Three by letting Ukraine use specific missiles against Russia. And Russia's like, don't do that or I'm going to bomb you back to next Tuesday. Maybe there's more clarity on tariffs, like, what that's really going to look like, and companies, you know, a lot of, A lot of businesses can start planning around that. So those are kind of my pros and cons to it, but I think we get there. Unless, again, unless some kind of, you know, the war, a war pops off in Europe. I think that's our biggest blacks, you know, black swan. How about crypto? Just absolutely crushing. You think we'll have the $100,000 Bitcoin party before the end of the year? We might have it by the next episode. Yeah. Next week. So, yeah, if I'm mysteriously absent, that's because my dogecoin investment has finally paid off. Okay. If it hasn't paid off yet, it's. Not going, oh, it's paid off. No, I think that's, like I said, though, like the last episode, like, 100. A hundred, hundred thousand dollars per coin. That's like the, the psychological, you know, number. I, I, that's what I feel. I don't, I didn't. Again, I even, you know, I bet you if I looked at the technicals, it would say it's way overbought. But the psychological saying, like, hey, that's my, that's my number to sell some shares or, you know, like, oh, my God, I don't want to buy it above 100 because it seems expensive now. Like, I don't. I think there's going to be a lot of more mental behavioral finance roadblocks. I think the part that, the psychological part that plays into it is when you. When it starts getting all these grabbing these headlines again and it's getting more and more. It's almost like it gets on people's radar more with the fomo, and it's kind of like, hey, man, I need to still get on this train while I can before it completely leaves the station. So I feel like it's still got a lot of, like, a lot of room for momentum because there's so many people on the sidelines still a lot. Of people on the sidelines. And what if the government comes in and buys, though? What if they become. I don't know who the biggest holders of bitcoin are, but what if they become the big. I mean, that's a lot. That's. That. That's gonna suck up a lot of supply and create a lot of demand, which should drive up the price further. Question mark? I mean, I would assume I'm the wrong guy to ask, so. We'll see. I mean, you know, we're obviously everyone. Bitcoin's on everyone's radar right now, so. All right, D. All right, well, thanks. For listening this week. If you have any questions, comments, show ideas, hit us up@infowp connect.com and we'll talk to you next week.