2025 Investment Impacts from Policy Change

[davidsa]

not a political view or right or wrong; just discussing impacts of changes on investments and financial models as policies go into effect. I don't think any of us have any say in what happens in policy but the changes may provide opportunities and risks. I assumed wrongly that some of the changes would take time. Now I see a series of executive mandates will change things this week.

The change I perceive will have the most impact on my financial strategies is what happens with income tax rates 2026 and on. For my 2025 plans, I am executing in 1/12 chunks monthly so I can allow some of the new policies to be formed on tax. The elimination of tax on Social Security Benefit would be an interesting development as well.

[boneil]

I certainly think there will be opportunities and risks. I'm fortunate that I am young enough that the retirement accounts can weather any storm that may or may not happen over the next few years.

Is there some tax poilicy changes coming? other than crypto. I thought the only thing we were expecting was that current tax policy would be extended.

There's gonna be some big policy changes with crypto. The next few years are gonna be crazy in the crypto world. At the end of 4 years, we're gonna find out really if Bitcoin and other cryptos have intrisic value. Similar to when the internet started.

[wingrider1800]

You may have to contact Nancy to get that information.

[davidsa]

Is there some tax policy changes coming? other than crypto. I thought the only thing we were expecting was that current tax policy would be extended.

I would expect an extension but I also see great focus on balancing the budget. So I think it needs to play out. Let's assume the tax cuts are extended for 4 more years but the budget is not balanced and we have lots of unhappy people. That would make me think we have a massive flip flop coming in 2028. That might suggest a double down strategy on Roth IRA's and Roth 401k's because the blind assumption that tax rates in retirement are lower than when working. So none of this changes what is in the portfolio, but rather in what vehicles.

[tcesni]

I doubt any changes in tax policy would take effect prior to the next fiscal year beginning Oct. 1, 2015. It will be a dogfight to get changes to taxing SS benefits through Congress. I remain extremely dubious.

[davidsa]

I doubt any changes in tax policy would take effect prior to the next fiscal year beginning Oct. 1, 2015. It will be a dogfight to get changes to taxing SS benefits through Congress. I remain extremely dubious.

The only tax change in 2025 might be the elimination of tax on SS payments if it is possible to make that happen with a presidential order which I read is feasible. Just stating what I've read is coming this week. Everything else I see in 2026 but if the 2026 year looked better then 2025, I might delay a few actions I'm taking. Even with a united house, senate and president my thinking is everything will be a dog fight because no easy buttons exist.

Those of us who have worked in big corporate are familiar with the external agency that sells the Senior Exec on an easy button. Then after a large contract is awarded the agency starts to pivot when they see what was always visible; that easy buttons don't exist. To balance the budget, something needs to be cut.

[sdbrison]

Making the 2017 tax cuts permanent would be an investment boon I believe, not sure if they can get it done.

I'm surprised no one has mentioned the energy sector. I would think some executive orders there would spur some growth there.

[tcesni]

The only tax change in 2025 might be the elimination of tax on SS payments if it is possible to make that happen with a presidential order which I read is feasible. Just stating what I've read is coming this week. Everything else I see in 2026 but if the 2026 year looked better then 2025, I might delay a few actions I'm taking. Even with a united house, senate and president my thinking is everything will be a dog fight because no easy buttons exist.

Those of us who have worked in big corporate are familiar with the external agency that sells the Senior Exec on an easy button. Then after a large contract is awarded the agency starts to pivot when they see what was always visible; that easy buttons don't exist. To balance the budget, something needs to be cut.

I would be interested in a reference that indicates the President can alter tax policy of SS benefits by decry and bypassing Congress. The present policy is part of legislation passed during the Reagan administration in 1983. I wouldn’t be surprised to see it attempted though.

[boneil]

We won't have to guess for long, just a few more hours. I think theres about 100 plus EOs being signed today.

I'm thinking the tax policy extension is already priced in the markets. Maybe we get some changes to it that could affect us. Energy policy, I don't know. I definitely think any cuts to regulations to energy policy will help profits of companies but I don't think it will spur production increases above already planned increases. Tarriffs and immigration are the big ones. Immigration policy will take time to see the affects but tarriffs will be quick. I think the tarriff issue is why energy prices have been rising in recent weeks. And then we get to see if broad tariffs cause inflation or not.

It's gonna be exciting, just look at crypto the last 36 hours.

[davidsa]

We won't have to guess for long, just a few more hours. I think theres about 100 plus EOs being signed today.

I'm thinking the tax policy extension is already priced in the markets. Maybe we get some changes to it that could affect us. Energy policy, I don't know. I definitely think any cuts to regulations to energy policy will help profits of companies but I don't think it will spur production increases above already planned increases. Tarriffs and immigration are the big ones. Immigration policy will take time to see the affects but tarriffs will be quick. I think the tarriff issue is why energy prices have been rising in recent weeks. And then we get to see if broad tariffs cause inflation or not.

It's gonna be exciting, just look at crypto the last 36 hours.

Markets can thrive on uncertainty and dip when the reality is known. If will be interesting to see what is announced and the market reaction this week. I'm unable to find the exact link with reference to Social Security taxation and executive orders but as said, we won't have to wait long to see what gets signed today.

[milligjg]

You may have to contact Nancy to get that information.

I get it.

[mossie3]

Majority of people I know drawing SS pay little to no taxes on it now. It would only save me a few hundred, as very little of my SS falls into the taxable category. It helps the wealthy who may be drawing $4-5K SS a month who pay taxes on 85% of their SS earnings. They could save ~$16K per year.

I doubt any changes in tax policy would take effect prior to the next fiscal year beginning Oct. 1, 2015. It will be a dogfight to get changes to taxing SS benefits through Congress. I remain extremely dubious.

[tcesni]

Majority of people I know drawing SS pay little to no taxes on it now. It would only save me a few hundred, as very little of my SS falls into the taxable category. It helps the wealthy who may be drawing $4-5K SS a month who pay taxes on 85% of their SS earnings. They could save ~$16K per year.

That would be my wife and I when start drawing SS in 18 months. I don’t need the extra $ considering it will move up the date of when SS will have to make automatic cuts in payments to those who rely on it. I guess I could buy more Senkos or even a bigger screen FFS. I only have a 9” screen on the Canada boat.

[davidsa]

Majority of people I know drawing SS pay little to no taxes on it now. It would only save me a few hundred, as very little of my SS falls into the taxable category. It helps the wealthy who may be drawing $4-5K SS a month who pay taxes on 85% of their SS earnings. They could save ~$16K per year.

agree, those with income from 401k/IRA are the ones seeing most of the tax on SS. I guess the 401k is taxed so why not SS is the logic.

[davidsa]

I watched, scanned and googled for any exec orders related to tax and came up empty. One mention was made about eliminating the tax on tips.

Still, the market seems to be in celebration mode again today which always feels good. I'd imagine this continues until discussion of eating our veggie's comes up. Everyone in the US is thinking dessert only at this point in time.

[boneil]

I'm guessing we'll get executive orders over the next few days. No way we had 100 to 200 yesterday. The market is celebrating no new tariffs, they've been walked back.

[boneil]

I can't imagine that it happens, but if it does, abolishing the income tax is not priced into anything

[davidsa]

I can't imagine that it happens, but if it does, abolishing the income tax is not priced into anything

did you see something online? No income tax at all seems crazy. Just extending the existing tax policy until 2035 will cost something like 4 trillion in lost revenue. Offsetting this with growth and cuts seems hard to imagine.

[boneil]

did you see something online? No income tax at all seems crazy. Just extending the existing tax policy until 2035 will cost something like 4 trillion in lost revenue. Offsetting this with growth and cuts seems hard to imagine.

Fake news may have gotten me. Reports on X is saying New York Times is reporting that Trump is looking into getting rid of it. But it may have been fake.

[tcesni]

Fake news may have gotten me. Reports on X is saying New York Times is reporting that Trump is looking into getting rid of it. But it may have been fake.

Not fake but one of the ideas he has floated during a “weave” session when talking about the wonderful days of the McKinley administration when there was no income tax and government revenue came from tariffs and land sales. This is one idea I don’t see going anywhere but I wouldn’t bet on anything. With enough tariffs and a VAT maybe federal income taxes could be eliminated.