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Author Topic:   Tax Talk
dwise1
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Posts: 3405
Joined: 05-02-2006
Member Rating: 8.6


Message 1 of 13 (850575)
04-10-2019 3:33 PM


Let's compare our experiences with taxes under the new tax laws. Or is it still too soon?

First, we need to think about the metrics that we use. We've been hearing a lot of complaining about smaller or negative refunds (ie, they end up having to pay more than was withheld). Most of that is because of what I call "Bush 41 'Tax Cut' Effect". Remember when G.H.W. Bush gave us a "tax cut" which did not actually cut our taxes, but rather artificially reduced the amount of withholding from our paycheck? While that gave us a little more cash each pay period, in the end we still owed the same amount in taxes and ended up with either lower refunds or not having had enough withheld and having to pay out-of-pocket. IOW, the exact same thing we're seeing people hit with now and for the same reason. Many people plan for that refund and have even already spent it, so having it reduced or eliminated is hitting them hard.

That means that changes in your refund is not the right metric to use.

Instead, the real metric should be whether the actual tax amount has changed and in which direction. Not only would that entail comparisons of actual tax rates, but also the effects of changes in deductions.

From the IRS website you can download a PDF with the tax tables (plus all forms and instructions). If you are a wonk, you can compare the tax tables from 2017 and 2018 and work out all the changes in tax brackets, tax rates, etc. Or you could simply compare both years' taxes if your financial situation was mostly the same. My financial situation changed drastically from 2017 to 2018 because I retired, which makes that comparison more difficult for me. Instead, I took my 2017 taxable income and tax owed and looked it up in the 2018 tax table:


2017 Taxable Income 88685
2017 Tax 17683
2017 Effective Rate 19.937%
2018 Equivalent Tax 15572
2018 Effective Rate 17.557%
2017-2018 Tax Change 2111
2017-2018 Rate Decrease 2.38%

A 2.38% tax cut doesn't seem like much to crow about to me. Does it to you?

We have a new higher standard deduction, but is it truly higher? Last year, we had both a personal exemption and a standard deduction, but this year exemptions have been eliminated, it appears that the old personal exemption and standard deduction have been combined into the "new higher" standard deduction.

Let's look at the numbers so that we can do the math (my basic approach to several YEC claims):


Single
2017 2018
Exemption 4050 0
Std Deduction 6350 12000
Total 10400 12000
Increase (Total2018-Total2017) 1600

Married Joint Return
2017 2018
Exemption for 2 8100 0
Std Deduction 12700 24000
Total 20800 24000
Increase (Total2018-Total2017) 3200

So instead of nearly doubling your standard deduction (as I seem to recall they tried to sell it to the public), they simply rolled your personal exemption into it and give you a measly little increase.

Another consideration with the new standard deduction is how it compares with what you used to be able to deduct through Schedule A itemization. For example, this year my itemized deductions were greater than the new standard deduction, so I lost that $4050 personal exemption amount and I ended up paying more taxes on that amount -- sure, it was just $24 more this year in my new lower bracket, but it was more nonetheless. A tax cut is supposed to mean paying less in taxes, not more.

And what about the exemptions for dependents? That's also gone now and is covered instead by "Child tax credit/credit for other dependents" on line 12a. It is calculated on Form 2441, which is a standardly byzantine flow-charty tax form. It also employs a fraction multiplier which depends on your income (from .35 for the lowest income graduating up to .20 for $43000 and above). I'll have to leave it to how it worked out for someone with dependents, who will hopefully report whether they had gained or lost on that change.

While you're crunching your own numbers, keep in mind that for a meaningful comparison your finances had to have remained about the same. For example, if your income and deductions were close to the same between 2017 and 2018, then you can make a meaningful comparison. If not (like me by having retired), then you need to compensate.

What about the rest of you? Any unpleasant surprises? Any pleasant ones?


Replies to this message:
 Message 3 by Diomedes, posted 04-12-2019 9:54 AM dwise1 has responded

    
dwise1
Member
Posts: 3405
Joined: 05-02-2006
Member Rating: 8.6


Message 2 of 13 (850578)
04-10-2019 4:01 PM


New W-4 Form in the Works
In the OP, I mentioned what I call the "Bush 41 'Tax Cut' Effect" in which they claim to have given you a "tax cut" when in reality all they did was to reduce your federal tax withholding, giving you a little bit more take-home pay every pay period, while keeping your actual taxes the same, giving you a very nasty surprise come tax time. Which is what many people are experiencing and complaining about now.

This morning my phone's news feed presented a USA Today article, Another tax headache ahead: IRS is changing paycheck withholdings and it'll be a doozy, which reports that there's a new W-4 form being rolled out to correct Trump's version of the "Bush 41 'Tax Cut' Effect". The article describes how filling out the new W-4 is like filling out your 1040, plus it raises privacy concerns as it ends up containing a lot of personal info that your employer will have to keep on file and hopefully protect as per HR PII (personally identifying information) requirements. Since exemptions no longer exist (see the OP, Message 1), you have to enter all your other taxable income (eg, from your second and third jobs), including from your spouse's job(s), and all your deductions, etc. Every employer will need to provide non-trivial training for all their employees to be able figure out how to fill out the new form.

The result of all that pain is supposed to be a much more accurate withholding rate which will result in withholding that just barely covers your taxes, such that it will pay for your taxes with near-zero refund. While that is the ideal level of withholding, most people have gotten used to using withholding as a kind of "Christmas Club" savings account and depend on that sudden "bonus" in their budget planning.

Except for all the pain, the new form will address a long-standing problem with the old (current) W-4 form based solely on exemptions (now no longer in existence) and which underestimated withholding for two-paycheck families, such as what mine was.

For example, I have been estimating my next year's taxes for a couple decades because the old W-4 was woefully inadequate. We were a two-income family with my then-wife ending up making slightly more than I did. One year we owed a lot because too little was withheld. If that were to happen again, then the IRS would fine me for under-withholding, so to prevent that I estimated the next year's taxes, estimated the withholding shortfall, and had that much extra withheld from my pay -- that is how I spotted the "Bush 41 'Tax Cut' Effect". And I have continued that practice with an Excel spreadsheet that I wrote for that purpose.


    
Diomedes
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Posts: 835
From: Central Florida, USA
Joined: 09-13-2013
Member Rating: 3.9


(1)
Message 3 of 13 (850682)
04-12-2019 9:54 AM
Reply to: Message 1 by dwise1
04-10-2019 3:33 PM


My effective tax rate dropped from 22.03% in 2017 to 19.94% in 2018. So a drop of 2.09%. Not huge from a percentage standpoint, but a decent amount considering my income which usually hovers around $200,000. Mind you I am already in a pretty low cost area, living in Central Florida.

Personally, having come from Canada, I think the taxes in the USA are outrageously low. My brother, who is a medical doctor, gets taxed around 50% on Ontario. His income is much higher than mine, probably in the $500,000 range. However, if I was living in Canada with my current income, my tax rate would likely be similar to his. Potentially higher since he has dependents and I don't. And if he was living in my area of the USA, my guess is his effective tax rate would be in the mid to high 20s.

It is somewhat sad that any talk of raising taxes in the USA is considered sacrilege at this point. We could do so much with what is tantamount to a little extra money such as improving schools, providing more comprehensive health care and having a more solvent social security and medicare system. I don't know why it is so hard for the Democrats to simply posit the notion of more tax brackets for higher income earners. You could technically leave the majority of the tax brackets the same and just add new ones. Our current tax brackets stop at $500,000 for singles or $600,000 if filing jointly. With a Federal rate at that point of 37%. Would it be that difficult to create some additional ones? Something like:

$500,000 - $1 million : 39%
$1 million - $2 million: 41%
$2 million - $4 million: 43%
$4 million+ : 45%

This could be tweaked, but is this really that hard a sell? It won't change the tax rates of the vast majority of people. And this tired old canard of Republicans saying it would hurt small business owners. I call BS. Virtually all businesses are LLCs of some sort. They are taxed differently. This only affects a person's individual income.


This message is a reply to:
 Message 1 by dwise1, posted 04-10-2019 3:33 PM dwise1 has responded

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dwise1
Member
Posts: 3405
Joined: 05-02-2006
Member Rating: 8.6


Message 4 of 13 (850700)
04-12-2019 2:52 PM
Reply to: Message 3 by Diomedes
04-12-2019 9:54 AM


Our current tax brackets stop at $500,000 for singles or $600,000 if filing jointly. With a Federal rate at that point of 37%. Would it be that difficult to create some additional ones? Something like:

$500,000 - $1 million : 39%
$1 million - $2 million: 41%
$2 million - $4 million: 43%
$4 million+ : 45%

This could be tweaked, but is this really that hard a sell? It won't change the tax rates of the vast majority of people.

It would be a hard sell for the rich who crave ever more money and they are the ones who own the Republicans.

Speaking of MAGA {grin}, the mythical time in the past when America was great appears to have been the 1950's when we were building our infrastructure and our industry led the world. What enabled that was:

  • Not only had our industrial capacity increased during the war, but we were also one of the few industrial nations whose factories had not been destroyed by war. This is something that would be very difficult to recreate.
  • Large tax revenues (top bracket of 91%) giving the government the resources needed to build up our infrastructure (eg, interstate highway system and associated bridges and tunnels) which in turn enabled the economy to grow. We could do this and it is sorely needed; Obama tried to get infrastructure legislation, but the Republicans were sworn to keep that from happening and so far Trump couldn't care less.
  • Strong unions creating a large and prosperous middle class able to buy their homes, educate their children, and feed a strong economy. Unions also provide the training of the new workers, which would help alleviate our current problem of too few skilled workers. We could do this; a smaller and poorer middle class only weakens the economy, as does an increasingly rich upper class.
So the MAGA advocates (borrowed from Reagan, BTW) actually work against making American great again and work for dragging us down even further.

Here is a chart of the top income tax rates over time:

And this tired old canard of Republicans saying it would hurt small business owners. I call BS. Virtually all businesses are LLCs of some sort. They are taxed differently. This only affects a person's individual income.

Yes, BS for the reason that you give. But small businesses are still being hurt by the tax system while large businesses thrive.

Elizabeth Warren presented a flat corporate tax, 7% on all corporate profits over $100 million (eg, Elizabeth Warren’s new plan to make sure Amazon (and other big companies) pays corporate tax, explained: No more claiming big profits to investors while paying nothing to the IRS). Large corporations end up with huge profits and pay no taxes (or even get large refunds) because they can afford armies of lobbyists and armies of tax lawyers, whereas small business who cannot afford those armies are left to bear the brunt of business taxes. This weakens the economy even more, because small businesses are the primary job creators. We saw that in the 2008 crash when small businesses were forced out of business by banks refusing to give them standard short-term loans which caused unemployment to soar.


This message is a reply to:
 Message 3 by Diomedes, posted 04-12-2019 9:54 AM Diomedes has not yet responded

    
dwise1
Member
Posts: 3405
Joined: 05-02-2006
Member Rating: 8.6


Message 5 of 13 (850702)
04-12-2019 3:36 PM
Reply to: Message 3 by Diomedes
04-12-2019 9:54 AM


My effective tax rate dropped from 22.03% in 2017 to 19.94% in 2018. So a drop of 2.09%. Not huge from a percentage standpoint, but a decent amount considering my income which usually hovers around $200,000. Mind you I am already in a pretty low cost area, living in Central Florida.

One thing I'm curious about is deductions. I assume that your itemized deductions are greater than the new "and improved" standard deduction of $12,000 (you said you have no dependents, which I assume also means that you file as single). That would mean that, like me, you completely lost out on that $4050 deduction we used to have as a personal exemption but has been rolled into the new standard deduction (IOW, they really gave us hardly anything with the tax scam law). How did that impact you?

I'm retired now with these sources of income:

  • Social Security, which just barely pays for all my expenses. I buffer extra expenses with two healthy savings accounts.
  • Military pension from 6 years active duty and 29 years reserve duty. My ex-wife gets about 40% of that, so effectively I get 21%. That goes into one of the savings accounts to cover the year's "balloon payments"; eg, property tax, insurance premiums (eg, car, homeowner's, long-term care). My medical expenses are covered by my retirement benefits (I'm on Medicare with my military benefit covering supplemental insurance and pharmaceuticals).
  • Capital gains from a small investment account. Because interest rates are so low, interest income from my savings accounts is minimal.
  • In the future, I will also have required disbursements from my IRA accounts; I've already rolled my 401(k) over into an IRA.

Federal income tax views Social Security benefits as non-taxable, but only up to a point which I go past. In addition, any other form of income makes even more of your Social Security income taxable, so about $4000 of my Social Security ends up being taxable -- this year that figure was $9000 because I retired in mid-January so I received pre-retirement income for the first two weeks of the year. I did get a refund. Estimating for next year, withholding from my military pension will very nearly match my federal tax, so I should get a refund of about $11.

California state income tax does not tax Social Security benefits. It also still has personal exemptions. As a result, my state income tax was less than zero, so effectively zero and I got all my withholding back as a refund. The same will happen next year.

However, the year I turn 70½ I will need to start withdrawing about $18,000 each year from my IRAs. That will count as additional income and will make a bit more than $18,000 of my Social Security taxable -- in effect, my taxable income will increase by about twice my IRA disbursement. My estimated tax will increase from $700 to $3700. My state tax will be less than $100, but still no longer zero.


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 Message 3 by Diomedes, posted 04-12-2019 9:54 AM Diomedes has not yet responded

    
Percy
Member
Posts: 18374
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.9


Message 6 of 13 (850722)
04-13-2019 12:13 PM


I'll just add a few brief comments about our (me and my wife's) personal tax experience this year. Because of a stock sale our gross income increased by 40%, and there was no withholding on that additional amount. We expected to owe substantial federal tax, but it turned out to be a very small amount. If it hadn't been for the stock sale we would probably have had a substantial refund.

Also, the larger standard deduction made filing taxes much easier this year. I didn't have to go back through my 2018 financial records looking for property tax payments, auto registration costs, and charitable donations.

I like the improved simplicity. Doing the taxes used to be an all day affair, now it takes me only an hour or two. If the Trump tax cuts hadn't included huge breaks for the rich and for corporations that caused a huge increase in the deficit that Trump wants to pay for by cutting programs like Social Security then I would think it a big win.

I should add that another reason for our improved tax-filing simplicity is our decreased income. I retired a few years back, cutting our household income by 2/3. I don't collect Social Security yet, and we don't yet have to begin withdrawing from our 401k's or IRA's.

--Percy


Replies to this message:
 Message 7 by dwise1, posted 04-13-2019 2:02 PM Percy has responded

    
dwise1
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Posts: 3405
Joined: 05-02-2006
Member Rating: 8.6


(2)
Message 7 of 13 (850728)
04-13-2019 2:02 PM
Reply to: Message 6 by Percy
04-13-2019 12:13 PM


The Effect on the Deficit of Cutting Social Security and Medicare: Zero
My perspective is filing as Single, so your perspective of filing as Married Joint allows us to examine the effects on that. Modifying my table in the OP, Message 1, slightly:


Married Joint Return
2017 2018
Exemption for 2 8100 0
Std Deduction 12700 24000
Total 20800 24000
Effective 2018 Std Deduction 15900
(2018 Std Deduction - 2017 Exemptions for 2)
Increase 3200
(Effective 2018 Std Deduction - 2017 Std Deduction)

Assuming home ownership and hence property taxes, a household's itemized deductions should not be twice as much for Married Joint than it is for Single. That should make it more likely for a Single's itemized deductions to exceed the Standard Deduction than for Married Joint.

However, except for a measly extra $3200 more leeway this year, you should have been able to do better taking the standard deduction in past years and hence your past taxes should have been just as easy as you found them this year. Remember, a large part of that new standard deduction comes from you having lost the exemptions for you and your spouse. If you didn't use to have to itemize (taking that small $3200 increase into account), then you ended up losing the deduction game.
 
 
Now to use your remark as a springboard, I see your few brief comments and raise the issue you mention:

If the Trump tax cuts hadn't included huge breaks for the rich and for corporations that caused a huge increase in the deficit that Trump wants to pay for by cutting programs like Social Security then I would think it a big win.

Cutting Social Security benefits would have no effect on the deficit. Social Security benefits are funded entirely from a special trust fund that is separate from the part of the budget that creates the deficit and therefore is not connected to the deficit and has no effect on the deficit. That trust fund is funded by special payroll taxes listed on pay statements either as "Social Security" or "FICA" (Federal Insurance Contribution Act). No other tax revenue sources are used, which isolates it from what's really creating the deficit.

The issue of Social Security running out of money is because of changing age demographics. In the past there were more workers than beneficiaries so that trust fund grew and was invested wisely in gov't bonds. Now the baby-boomers are retiring and drawing benefits so we now are having more beneficiaries and fewer paying into the system. There are several possible solutions, one of which is to cut benefits, but note that such cuts would still have no effect on the deficit.

Medicare Part A (Inpatient/hospitalization) is funded similarly with FICA payroll deductions going into a special Medicare trust fund, separate from the part of the budget that creates the deficit, which completely pays for Part A benefits. Medicare Part B (outpatient) is a straight-forward medical insurance program funded entirely by insurance premiums paid monthly by all beneficiaries -- it's not even part of the budget and so has no effect on the deficit. Medicare Part C (supplemental and advantage policies) and Part D (pharmaceuticals) are private medical insurance policies, which obviously have nothing whatsoever to do with what's really causing the deficit.

Social Security and Medicare have nothing to do with the deficit -- not so with Medicaid, but that program is very much smaller. Slashing Social Security or Medicare benefits would have absolutely no effect on the deficit. GOP plans to use such slashing to reduce the deficit that they have caused are nothing but BS lies!

Stepping down from my soapbox now.


This message is a reply to:
 Message 6 by Percy, posted 04-13-2019 12:13 PM Percy has responded

Replies to this message:
 Message 8 by Percy, posted 04-13-2019 5:24 PM dwise1 has responded

    
Percy
Member
Posts: 18374
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.9


Message 8 of 13 (850746)
04-13-2019 5:24 PM
Reply to: Message 7 by dwise1
04-13-2019 2:02 PM


Re: The Effect on the Deficit of Cutting Social Security and Medicare: Zero
dwise1 writes:

However, except for a measly extra $3200 more leeway this year, you should have been able to do better taking the standard deduction in past years and hence your past taxes should have been just as easy as you found them this year.

Property taxes in NH are high so in the past we did better itemizing. Before we paid off the mortgage we did even better itemizing.

About Social Security, Medicare and Medicaid, I won't guess at the details of how Trump and the Republicans plan to raid these programs to decrease the annual deficit, but my understanding is that that is what they want to do. For example see Senate Republicans Set Sights On Cutting Social Security and Top Republicans are already talking about cutting Medicare and Social Security next.

--Percy


This message is a reply to:
 Message 7 by dwise1, posted 04-13-2019 2:02 PM dwise1 has responded

Replies to this message:
 Message 9 by dwise1, posted 04-13-2019 7:04 PM Percy has responded

    
dwise1
Member
Posts: 3405
Joined: 05-02-2006
Member Rating: 8.6


Message 9 of 13 (850753)
04-13-2019 7:04 PM
Reply to: Message 8 by Percy
04-13-2019 5:24 PM


Re: The Effect on the Deficit of Cutting Social Security and Medicare: Zero
Property taxes in NH are high so in the past we did better itemizing. Before we paid off the mortgage we did even better itemizing.

Well, I'm Southern California, so I don't know how we compare in terms of property tax. Instead of us getting into compare sizes, let's just call it close enough to a draw. Glad to hear that you've paid off your mortgage. For many years it had been a goal to pay off my mortgage before retiring, so I'm glad I achieved that. I cannot imagine trying to retire with a mortgage payment or rent hanging over my head (in my neighborhood, the amounts of the two are not that much different).

bout Social Security, Medicare and Medicaid, I won't guess at the details of how Trump and the Republicans plan to raid these programs to decrease the annual deficit, but my understanding is that that is what they want to do. For example see Senate Republicans Set Sights On Cutting Social Security and Top Republicans are already talking about cutting Medicare and Social Security next.

I quickly read through both stories, but could not see any mention of how cutting Social Security or Medicare was supposed to have any effect on the deficit, only that the GOP (Greedy Old Pricks) wanted to slash those programs using the deficit as an excuse.

Is there anybody who can make an actual case of reducing the deficit by slashing Social Security or Medicare? Certainly Faith is their most vociferous shill here, but I cannot see how even she could be so willfully stupid to make such a case (though I do not doubt that I could be surprised).


This message is a reply to:
 Message 8 by Percy, posted 04-13-2019 5:24 PM Percy has responded

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 Message 10 by Percy, posted 04-14-2019 8:14 AM dwise1 has not yet responded

    
Percy
Member
Posts: 18374
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.9


Message 10 of 13 (850767)
04-14-2019 8:14 AM
Reply to: Message 9 by dwise1
04-13-2019 7:04 PM


Re: The Effect on the Deficit of Cutting Social Security and Medicare: Zero
dwise1 writes:

I quickly read through both stories, but could not see any mention of how cutting Social Security or Medicare was supposed to have any effect on the deficit, only that the GOP (Greedy Old Pricks) wanted to slash those programs using the deficit as an excuse.

Right. Those articles make clear that Trump and the Republicans want to reduce the deficit on the backs of social programs, but they don't say how. I said I wouldn't venture a guess on how to do it, but I suppose a couple possibilities would be legislation taking some of the money, or Trump declaring a national emergency allowing him to rob those funds. Reagan signed a law that raised social security taxes that somehow transferred the increased income into the general fund (Ronald Reagan and The Great Social Security Heist). If it could be done once it could be done again.

--Percy


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 Message 9 by dwise1, posted 04-13-2019 7:04 PM dwise1 has not yet responded

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LamarkNewAge
Member
Posts: 1408
Joined: 12-22-2015
Member Rating: 1.7


Message 11 of 13 (850824)
04-15-2019 12:45 AM


Bush 41 was regarded as a tax cutter?
I remember he had $500 billion (over 5 years) deficit-reduction package which included (net) $160 billion in tax increases.

It was a plan supported by Democrats and opposed by most congressional Republicans.

It did have a tax cut for some groups.

Before the 1990 plan was passed, the wealthy only paid a 28% marginal tax rate while a lower-income bracket paid 33%. The 33% group got a 2% tax cut, so it was 31%. The most wealthy bracket got an increase of 3%, so 31% instead of 28%.

As of 1990, it meant those making over $49,000 (or $50,000) a year paid 31%.

3 brackets:

15%

28%

31%

(there were four brackets before the 1990 law)

(15%, 28%, 33%, then 28% for the most wealthy bracket)

But the never-ending story for both the 1990 and 1992 elections was BUSH THE TAX INCREASER BROKE HIS "READ MY LIPS" BOAST FROM THE 1988 ELECTION.

The fact that the deficit reduction did not materialize until Bush left office (due to a tanking economy) robbed Bush of any political benefit to go along with all the negativity and Republican division.


    
LamarkNewAge
Member
Posts: 1408
Joined: 12-22-2015
Member Rating: 1.7


Message 12 of 13 (850825)
04-15-2019 12:53 AM
Reply to: Message 10 by Percy
04-14-2019 8:14 AM


Re: The Effect on the Deficit of Cutting Social Security and Medicare: Zero
quote:

Reagan signed a law that raised social security taxes that somehow transferred the increased income into the general fund (Ronald Reagan and The Great Social Security Heist). If it could be done once it could be done again.

The money was used to purchase treasury bonds, which brought a return in the form of interest payments. Treasury Bonds were a good investment (since inflation was knocked out by the time of the 1983 law).

And treasury bonds were purchased, by Social Security, long before Reagan, and ever since.

(Do you prefer investing Social Security surplus funds in the Stock Market?)

(ironically, the stock market was helped by investing in federal treasury bonds, because the resulting reduction in interest rates, made the treasuries less attractive to investors, so they invested more $ in the stock market.)


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Diomedes
Member
Posts: 835
From: Central Florida, USA
Joined: 09-13-2013
Member Rating: 3.9


(2)
Message 13 of 13 (850894)
04-16-2019 2:45 PM
Reply to: Message 12 by LamarkNewAge
04-15-2019 12:53 AM


Re: The Effect on the Deficit of Cutting Social Security and Medicare: Zero
quote:
ironically, the stock market was helped by investing in federal treasury bonds, because the resulting reduction in interest rates, made the treasuries less attractive to investors, so they invested more $ in the stock market

The downsides however with the existing policy of the Fed and the government is that retirees now have to allocate more money into the stock market in retirement. Which is far more volatile. In the past, bonds yielded higher returns thereby allow for more stable investment income for people in their Golden Years.

The other downside is we have had several bubbles manifest in the stock market as a result of continued low interest rates. Dot Com, the Housing Bubble and other smaller ones that make the overall stock market far more tenuous and prone to large corrections. In fact, I am pretty certain we are in another bubble in technology stocks. Social media companies like Twitter and others have high valuations but generate very little revenue. Tesla is in a similar situation and the upcoming IPOs of things like Uber show exorbitantly high valuations that are in my opinion, completely unjustified relative to their current revenue levels and business models.


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