2025 Investment Impacts from Policy Change

[Bassin08]

POTUS has mentioned more than a few time that he’d like to abolish income taxes in favor of either Flat Tax, or Fair Tax. He even mentioned renaming the IRS the External Revenue Service. I’m for anything that eliminates the thousands of pages of tax code in favor of a 1 rate fits all.
That would be an economic boom. Imagine a system where the government only gets what it needs, and we the people getting to keep more of our own money.
At the very least, eliminate SS taxes. I get hit harder than I like on SS benefits that I paid into for over 40 years. The fact the government taxes me for the privilege of taking my own SS benefits is bullshit.

We are in agreement on this, as I stated in my post. Also our employers matched our payments.

[davidsa]

POTUS has mentioned more than a few time that he’d like to abolish income taxes in favor of either Flat Tax, or Fair Tax. He even mentioned renaming the IRS the External Revenue Service. I’m for anything that eliminates the thousands of pages of tax code in favor of a 1 rate fits all.
That would be an economic boom. Imagine a system where the government only gets what it needs, and we the people getting to keep more of our own money.
At the very least, eliminate SS taxes. I get hit harder than I like on SS benefits that I paid into for over 40 years. The fact the government taxes me for the privilege of taking my own SS benefits is bullshit.

in my home state, we are almost a flat tax and I like it.

Now on that Social Security, our perceptions of what it is/was/could be are all different. Having studied it in recent months, I conclude it is a Social Program. Unlike my 401k or IRA which was a result of input plus growth and has no social aspect. I think the perception problem is bringing 401k kind of thinking to a Social Program. Social security is a TAX where any future benefit is not guaranteed. That it is roughly 12.5% between employer and employee just demonstrates that our Govt. is incapable of managing anything. Put 12% aside for 40 years in an IRA in index funds and see what you get.

BUT, we have 30% incompetent or stupid people in this country that won't save anything so the govt has too force a social retirement plan.

[NitroZ7]

in my home state, we are almost a flat tax and I like it.

Now on that Social Security, our perceptions of what it is/was/could be are all different. Having studied it in recent months, I conclude it is a Social Program. Unlike my 401k or IRA which was a result of input plus growth and has no social aspect. I think the perception problem is bringing 401k kind of thinking to a Social Program. Social security is a TAX where any future benefit is not guaranteed. That it is roughly 12.5% between employer and employee just demonstrates that our Govt. is incapable of managing anything. Put 12% aside for 40 years in an IRA in index funds and see what you get.

BUT, we have 30% incompetent or stupid people in this country that won't save anything so the govt has too force a social retirement plan.

And these same 30% that don't put anything away can affect employer matches for highly compensated employees. To me that is like punishing a person that saves.

[davidsa]

Little more info on Social Security taxes

CBS reported that the Reconciliation Process that the dominant party seeks to use to pass and FastTrack the tax legislation prohibits certain types of changes. Changes to Social Security would not be allowed with this method. So Congress has the option of fast-tracking change with less votes required or expanding breadth of bill scope but requires more votes and potentially to be blocked. Not all Republican's are fully supporting this bill and we know the Dem's don't agree on tax cuts for AGI above ~400k.

[davidsa]

Entire tax bill stalled today, several hardliners rejected it in a vote in the House citing it increased the deficit. Better grab our

[davidsa]

I almost posted this in the pizza thread. Maybe us fat American's not spending $50 on junk for our bodies have a bigger problem. People want to be paid for loaning money to our country. Bills by conservatives that don't holistically demonstrate conservative values, may not be an easy sell on WallStreet not matter the vote in DC

[sdbrison]

Entire tax bill stalled today, several hardliners rejected it in a vote in the House citing it increased the deficit. Better grab our

Everything I have read on both sides says it does increase the deficit. Hard to claim you are saving money when you're just spending it somewhere else or lowering income. Doesn't change what is the biggest elephant no one wants to deal with.

[davidsa]

Everything I have read on both sides says it does increase the deficit. Hard to claim you are saving money when you're just spending it somewhere else or lowering income. Doesn't change what is the biggest elephant no one wants to deal with.

agreed

Bill passed the house last night. one reasonable person from OH and KY in the Rep Party voted against it. If I was in the house, I would have said NO even if it cost me my job. Like everyone, I love lower taxes. But that means our spending needs to be lower as well and I can't tell that spending has come down any in spite of DOGE

[NitroZ7]

agreed

Bill passed the house last night. one reasonable person from OH and KY in the Rep Party voted against it. If I was in the house, I would have said NO even if it cost me my job. Like everyone, I love lower taxes. But that means our spending needs to be lower as well and I can't tell that spending has come down any in spite of DOGE

I agree. We see what long term yields are doing now and it is a warning shot across the bow for deficits. Unless they can reduce spending to a degree to offset the tax cuts then it is not a good idea. I would not favor tax cuts over potentially having to make reductions in social security or medicaid. Hopefully it results in enough growth to increase tax revenue but I am not really convinced that it will.

[boneil]

I happened to catch the "taco trade" question. I would bet money, the question was a plant, and he took it personally. He's gonna have a much tougher stance on trade.

[TownesZ21]

When can we make intelligent economic decisions.... not let temper tantrums because people correctly call you out affect the world economy?

[NitroZ7]

I just want to know if we are imposing tariffs on all that smoke coming from the Canadian side of the border

[TownesZ21]

I just want to know if we are imposing tariffs on all that smoke coming from the Canadian side of the border

That depends on what kind of smokes..... or smoke

[caddyjoe77]

what do you all think of the bond market? what do you think will happen? Do interest rates drop?

yes i know -- complex answers to all.

[davidsa]

what do you all think of the bond market? what do you think will happen? Do interest rates drop?

yes i know -- complex answers to all.

I don't like treasury based bond funds. US Treasuries have become very fickle and or political. While a short term bond fund should deliver the avg yield of the bonds it holds, it seems every day the bond market is a roller coaster. If I want a roller coaster I will put my money in equities with much higher growth rates. Just seems to me the risk and admin costs of bond funds are not worth the squeeze. This is observed bond behavior over last 10 years that has made me aware.

For fixed income products as a retiree, I want to get the low rate of return I signed up for. In my portfolio that means annuity products that work almost exactly like a CD, CD's, and MMA. The annuities I hold pay higher rates historically then treasuries.

Yesterday I scanned an article about Warren B. saying he would not touch mid to long term bonds. I think what he is getting at is that with our growing national debt, holding such notes is too risky. I'm sure Buffett would buy the bond not a bond fund but looks like his is in short term bonds only.

[Bassin08]

I have a 30 year bond that is maturing this month. It was at 7.5%, so I did well on that, but those were different times. I am thinking about rolling our ROTHS into some form of fixed income now. At our age now(82) I think it is is time? Right now they are 100% equities.

I do have four preferred stocks that are down 25+30%, but paying a decent return, but not enough to get back to par. Not sure how to handle that. They are in a IRA, so I can’t use the loss on taxes. I was thinking of selling them and using the proceeds for my RMD?

[davidsa]

I have a 30 year bond that is maturing this month. It was at 7.5%, so I did well on that, but those were different times.

Wow! Just want to pause and say job well done. The rate you did not control. That you knew that was historically great and you went all in for 30 years is just WOW!!!!!

[davidsa]

I have a 30 year bond that is maturing this month. It was at 7.5%, so I did well on that, but those were different times. I am thinking about rolling our ROTHS into some form of fixed income now. At our age now(82) I think it is is time? Right now they are 100% equities.

I do have four preferred stocks that are down 25+30%, but paying a decent return, but not enough to get back to par. Not sure how to handle that. They are in a IRA, so I can’t use the loss on taxes. I was thinking of selling them and using the proceeds for my RMD?

with a 7.5% bond for 30 years, I likely should get my advice from you But I will make this comment. I want my most growth full / risky assets in my ROTH. The ROTH is going to my heirs. The IRA I want the fixed income and dividend equity funds. Said another way, if I look at my portfolio analysis on Fidelity, I am balanced. If I look at the IRA, I'm very conservative. The Roth I'm very aggressive. This is the way it should be in my view. The roth is the last thing most of us will get a distribution from.

I shared with my dearest friend an old statement this week- Penny wise and pound foolish. Sometimes we let the here and now influence much larger strategic decisions. That might not be wise.

[Bassin08]

I have it the way you say now.

[davidsa]

I have it the way you say now.

I think any financial planner would say you have it right and that is where I got this advice.