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December 11, 2012 at 3:10 PM in reply to: Bond holders vs. Calpers – who gets priority when CA cities go BK #756116
SK in CV
Participant[quote=UCGal]
Lots of costco employees at my local costco have been there since it was Price Club (started in the 80’s)[/quote]
It’s been there even longer than you think. I got my first card in August of ’76. I don’t think it was open for more than month. Just ran out of the 12,000 paper plates I bought on that first trip.
December 11, 2012 at 1:57 PM in reply to: Taxing the rich more? How about making companies bring money back…… #756100Participant[quote=UCGal]I have a question.
I heard during the election and during the early fiscal cliff discussions a proposal to “limit deductions”…Isn’t that AMT on steroids? The GOP claims to hate the AMT…
What is the difference?[/quote]
The “limit deductions” scheme, particularly during the campaign, was to protect what the GOP considers the “job creators”. Those with very high income. Romney’s plan was to be revenue neutral, so eliminate deductions and at the same time decrease top rates. The current scheme is to increase revenue. Both end up with the largest benefits going to those with the highest income, who currently benefit very little from deductions. (If income is $2M or more annually, the maximum home mortgage deduction, for instance, will only save under current law and interest rates, about $17K. A savings of less than 1% of income. But for someone earning $300K, it would be more than 5%.)
Note that not a single politician involved in these negotiations on either side of the aisle has ever identified a particular deduction they’re ready to eliminate. They’re afraid to face the special interests that want to protect each and every deduction that has become essential to their particular piece of the economy. What will the NAR have to say when they seriously begin talks of eliminating the mortgage deduction?
December 11, 2012 at 12:13 PM in reply to: Taxing the rich more? How about making companies bring money back…… #756089Participant[quote=flu]
What would be a more accurate one? Seriously, do you have one…Because I am curious[/quote]
I don’t remember the exact numbers, but Obama’s proposal is roughly $1.6 billion in tax increases and $400 billion in cost cutting from current.
The republican proposal is roughly $800 billion in tax increases (Primarily on YOUR back, and not so much on the back of the really rich. Eliminating deductions hurts you a lot more than it hurts those with > $1 million of income), and i think $1.4 in spending cuts, primarily on the back of the elderly and poor. That’s also from current levels. From fiscal cliff levels, it’s also a spending increase.
December 11, 2012 at 11:59 AM in reply to: Taxing the rich more? How about making companies bring money back…… #756085Participant[quote=meadandale][quote=flu]I’m not really sure taxing people (any people more is really gonna solve any budget issues)…
Spending problem, no?[/quote]
That might be the most awesome disingenuous misrepresentation I have ever seen.
It uses one baseline for spending (which is NOT the current baseline), and two different baselines for changes in revenue and counts the increase but doesn’t count the decrease. It is entirely divorced from reality.
December 11, 2012 at 8:35 AM in reply to: Taxing the rich more? How about making companies bring money back…… #756075Participant[quote=meadandale][quote=SK in CV][quote=meadandale][quote=CA renter]
How about leveling the playing field and taxing ALL income at the same rates instead of just “punishing” workers (especially W-2 slaves)?Thoughts?[/quote]
Well, I’d argue that taxes on wages are too high, not that taxes on investment income is too low.
If unlike the majority of the wage slaves, I’ve been smart enough to set aside some money and invest it rather than spend myself into debt, why should I have to pay the government half of any return I make risking MY OWN MONEY?[/quote]
Kind of a straw man argument. No one has suggested half.[/quote]
Dividend taxes are going to be 43%. That’s pretty close to half.
Capital gains rates are going to be almost 25% (20% plus the 3.8% ObamaCare bonus).[/quote]
For the vast majority of people, the taxes on dividends and capital gains won’t be anywhere near those levels. For 98% of couples with income under $300K, it will be much less.
December 11, 2012 at 8:17 AM in reply to: Taxing the rich more? How about making companies bring money back…… #756071Participant[quote=meadandale][quote=CA renter]
How about leveling the playing field and taxing ALL income at the same rates instead of just “punishing” workers (especially W-2 slaves)?Thoughts?[/quote]
Well, I’d argue that taxes on wages are too high, not that taxes on investment income is too low.
If unlike the majority of the wage slaves, I’ve been smart enough to set aside some money and invest it rather than spend myself into debt, why should I have to pay the government half of any return I make risking MY OWN MONEY?[/quote]
Kind of a straw man argument. No one has suggested half.
December 11, 2012 at 7:51 AM in reply to: Taxing the rich more? How about making companies bring money back…… #756067Participant[quote=ocrenter]The bottom line here remains: the W2 professionals are the easy prey. With no ability to stash their cash outside of the country, yet considered “rich” by the huge and growing underclass, this group is the perfect low hanging fruit for the government seeking funds.[/quote]
huh? Only a miniscule % of w-2 professionals would be hit by a tax hike. The logic in this comment is divorced from reality.
December 10, 2012 at 10:17 PM in reply to: Will Fiscal Cliff cause tax increase for existing 2012 year? #756059ParticipantAll discussions are related to changes to 2013 rates.
Participant[quote=EconProf]Historically, rapid increases in the money supply and generally liberal fiscal policy combined with stimulative monetary policy has resulted in inflation. This inflation prompts higher interest rates, which causes the market prices of existing bonds (with their fixed interest rates) to fall.
We’ve now had many years of such monetary and fiscal stimulus and yet have low inflation and still-falling interest rates. Do the old rules no longer apply? Or do they just not apply yet, and will some day hit us with a vengence?
I’ve been wrong myself in predicting a return of inflation and rising interest rates, so am giving up on predictions.
The old rule about the time lag between a change in monetary policy and the resulting impact on the real economy–whether to tighter or looser–was about eighteen months. Well, that rule is certainly out the window.
It appears that other forces that affect inflation, interest rates, and expectations are overwhelming the stimulative effect of easy money: The deep recession, deleveraging, and especially the economic weakness of the rest of the world making the dollar look relatively safe.
For those of you who believe inflation will result eventually, shorting bonds is one way to put your money where your beliefs are.[/quote]We are kind of in uncharted waters. Predictions of high inflation are pretty consistent with most economics theories. I’m no particular fan of the federal reserve bank, but their actions over the last 30 years have been pretty masterful. We can pretty much forget what their stated mission is, they’ve had mixed results in doing what they’re theoretically supposed to do. But forget what they’re supposed to do. Their real mission is to protect their member banks. And the biggest threat to member banks is inflation.
Banks are debt holders. That’s what they do. They nickel and dime us for services but they make their money by the spread between what money costs them to rent and what they earn by lending it out. Banks bear the risk of inflation. It is their achilles heal. High inflation will kill them. So the fed will protect against it all costs. The byproduct of their unpredictable and resounding success is wage stagnation. I really have no idea if that was the plan. Maybe it was not just the byproduct. But it is the result.
The next step is problematic. If we do see wage inflation, the fed will jack up interest rates. If interest rates go up, the value of long term debt falls, and banks suffer. So the fed has to walk a tight-rope. Their actions will cause damage to their primary protectorate (the banks, not the conomoy as a whole), so as to prevent even greater damage that higher inflation will cause.
No predictions. I’m just convinced that the fed will do what it can to protect banks above all else. Which means they will do whatever they can to reduce the risk of bonds collapsing.
Participant[quote=joec]We may go off the fiscal cliff to make it easier to get a deal. It’s reported at many places where once we go off the cliff and taxes are going back to 39.6% federal for income and dividends, massive defense cuts, etc…
[/quote]
Let’s add some more accurate perspective to this. Tax rates would not go back to 39.6% for income, including dividends and capital gains. Very few people would be subject to these rates, only the top 2 or 3% of taxpayers. It would only apply for married couples with income in the $300K range and up, and single filers with income around $250K and up. Capital gains would still have preferential treatment. Instead of a max tax rate of 15%, the rate could be as high as 20%. Still better than ordinary income.
Similar changes like these have historically had lead to no significant changes in the economy. The more drastic changes, as far as the economy is concerned, are the higher taxes on lower income levels. These would be taxpayer’s whose marginal income losses (unlike those at higher income levesl) lead directly to reductions in consumer spending.
It isn’t a cliff because these changes wouldn’t happen overnight. But combined with the draconian cuts to federal spending, would cause the US to follow Eurupe into a similar austerity driven second recession. There is no good that can come of it. It is not short term pain in exchange for long term stability. There is no long term stability at the end of the rainbow. Just more short term pain, until the path is reversed.
ParticipantSadly, for those who watched closely as the health care law evolved, this isn’t the least bit surprising. Fowler was a central character during the development of the law. She has been hopping back and forth between working in private industry and government for more than a decade. She was blamed by many liberals for Senate Dems eliminating the public option from evolving health care law while working for Max Baucus. Though in fairness, there were a handful of Senate dems who would never vote for a bill that eliminated private insurance. (Off the top of my head, Lieberman, Landrieu, Nelson, Lincoln, I’m pretty sure there were more.) As a result, we got a bill that made some decent reforms, increased coverage and access, but the primary beneficiary are insurance companies and large care providers. This is, unfortunately, the way the legislation process works.
Participant[quote=flu][quote=SK in CV][quote=SD Realtor]What is the ideal economic situation do you make money on a buying bonds?
Conditions similar to 1980-1984.[/quote]
Yes. Buy at the end of 1980 and sell at the end of 2008. And short right before the fed realizes it can’t protect bond holders from inflation forever. I have no idea when that will be.[/quote]
You can short bonds? (Not saying I’m gonna do it. Just curious)[/quote]
Yeah, a few different ways. The simplest would be plays using ETFs. TLT is a straight bond fund that can be optioned. Or TBT is an ultra short (2x i think?) fund. Or you can even sell puts or buy calls on it. Be careful with that one. You’re trading a product that’s already a double inverse fund. So if you think the market is gonna tank, you want to go long on it. Don’t wanna get caught being right, but trading wrong.
Participant[quote=SD Realtor]What is the ideal economic situation do you make money on a buying bonds?
Conditions similar to 1980-1984.[/quote]
Yes. Buy at the end of 1980 and sell at the end of 2008. And short right before the fed realizes it can’t protect bond holders from inflation forever. I have no idea when that will be.
Participant[quote=no_such_reality]I vote to eliminate all credit card limits for everyone![/quote]
A better analogy would be the credit card company approves all your purchases, and then at the end of the month refuses to increase your limit.
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