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Chiefshrink
06-10-2010, 03:14 PM
A good read and many will start moving out of their regular IRAs and 401Ks and take their tax hits now and move their $$ to the ROTH IRA because of what is coming.

Tax Hikes and the 2011 Economic Collapse
Today's corporate profits reflect an income shift into 2010. These profits will tumble next year, preceded most likely by the stock market.

By ARTHUR LAFFER

People can change the volume, the location and the composition of their income, and they can do so in response to changes in government policies.

It shouldn't surprise anyone that the nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates. People and businesses change the location of income based on incentives.

.Likewise, who is gobsmacked when they are told that the two wealthiest Americans—Bill Gates and Warren Buffett—hold the bulk of their wealth in the nontaxed form of unrealized capital gains? The composition of wealth also responds to incentives. And it's also simple enough for most people to understand that if the government taxes people who work and pays people not to work, fewer people will work. Incentives matter.

.People can also change the timing of when they earn and receive their income in response to government policies. According to a 2004 U.S. Treasury report, "high income taxpayers accelerated the receipt of wages and year-end bonuses from 1993 to 1992—over $15 billion—in order to avoid the effects of the anticipated increase in the top rate from 31% to 39.6%. At the end of 1993, taxpayers shifted wages and bonuses yet again to avoid the increase in Medicare taxes that went into effect beginning 1994."

Just remember what happened to auto sales when the cash for clunkers program ended. Or how about new housing sales when the $8,000 tax credit ended? It isn't rocket surgery, as the Ivy League professor said.

On or about Jan. 1, 2011, federal, state and local tax rates are scheduled to rise quite sharply. President George W. Bush's tax cuts expire on that date, meaning that the highest federal personal income tax rate will go 39.6% from 35%, the highest federal dividend tax rate pops up to 39.6% from 15%, the capital gains tax rate to 20% from 15%, and the estate tax rate to 55% from zero. Lots and lots of other changes will also occur as a result of the sunset provision in the Bush tax cuts.

Tax rates have been and will be raised on income earned from off-shore investments. Payroll taxes are already scheduled to rise in 2013 and the Alternative Minimum Tax (AMT) will be digging deeper and deeper into middle-income taxpayers. And there's always the celebrated tax increase on Cadillac health care plans. State and local tax rates are also going up in 2011 as they did in 2010. Tax rate increases next year are everywhere.

.Now, if people know tax rates will be higher next year than they are this year, what will those people do this year? They will shift production and income out of next year into this year to the extent possible. As a result, income this year has already been inflated above where it otherwise should be and next year, 2011, income will be lower than it otherwise should be.

Also, the prospect of rising prices, higher interest rates and more regulations next year will further entice demand and supply to be shifted from 2011 into 2010. In my view, this shift of income and demand is a major reason that the economy in 2010 has appeared as strong as it has. When we pass the tax boundary of Jan. 1, 2011, my best guess is that the train goes off the tracks and we get our worst nightmare of a severe "double dip" recession.

In 1981, Ronald Reagan—with bipartisan support—began the first phase in a series of tax cuts passed under the Economic Recovery Tax Act (ERTA), whereby the bulk of the tax cuts didn't take effect until Jan. 1, 1983. Reagan's delayed tax cuts were the mirror image of President Barack Obama's delayed tax rate increases. For 1981 and 1982 people deferred so much economic activity that real GDP was basically flat (i.e., no growth), and the unemployment rate rose to well over 10%.

But at the tax boundary of Jan. 1, 1983 the economy took off like a rocket, with average real growth reaching 7.5% in 1983 and 5.5% in 1984. It has always amazed me how tax cuts don't work until they take effect. Mr. Obama's experience with deferred tax rate increases will be the reverse. The economy will collapse in 2011.

Consider corporate profits as a share of GDP. Today, corporate profits as a share of GDP are way too high given the state of the U.S. economy. These high profits reflect the shift in income into 2010 from 2011. These profits will tumble in 2011, preceded most likely by the stock market.

.In 2010, without any prepayment penalties, people can cash in their Individual Retirement Accounts (IRAs), Keough deferred income accounts and 401(k) deferred income accounts. After paying their taxes, these deferred income accounts can be rolled into Roth IRAs that provide after-tax income to their owners into the future. Given what's going to happen to tax rates, this conversion seems like a no-brainer.

The result will be a crash in tax receipts once the surge is past. If you thought deficits and unemployment have been bad lately, you ain't seen nothing yet.

Mr. Laffer is the chairman of Laffer Associates and co-author of "Return to Prosperity: How America Can Regain Its Economic Superpower Status" (Threshold, 2010).

Rain Man
06-10-2010, 03:29 PM
How will converting IRAs to Roths cause a crash in tax receipts? It would produce more tax revenue now, and the losses would be spread out over the next 20 years as people retire.

His main point seems reasonable, but I don't think IRA conversions would crash tax receipts in 2011. Am I missing something?

Hydrae
06-10-2010, 03:30 PM
I am far from an expert when it comes to the economy as I am still educating myself but I had a similar thought just this afternoon. I can just feel it in my bones that we are not done with this "crisis." For me personally I base this on all the fire sales I see all around me. Sales in general are up but from what I have seen the retailers out there are offering tremendous deals to get people to still spend money. One example would be Honda who was not hit the way the US car manufacturers were and were not going through the recall issues Toyota was facing. So why, for the first time in their history, were they offering 0% financing? Desperation to keep sales up perhaps?

I honestly don't have any more than that. I know, pure anecdotal, etc but I will be very surprised if I am not right in the long run.

HonestChieffan
06-10-2010, 03:41 PM
Cabelas had a great sale today on 9mm ammo. Added to the stash

orange
06-10-2010, 04:44 PM
The BRILLIANCE of Arthur Laffer

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orange
06-10-2010, 04:52 PM
"Missing Elements" of Mr. Laffer's Incomplete Story
June 7, 2010
by Asha Bangalore


Mr. Laffer illustrates his arguments about tax cuts and the positive impact on economic growth with the Reagan tax cut experience (see chart 1, replication of chart in Mr. Laffer's article) in today's Wall Street Journal (Arthur Laffer: Tax Hikes and the 2011 Economic Collapse - WSJ.com) and he predicts a dire economic situation if the Bush tax cuts are allowed to expire at the close of 2010.
http://www-ac.northerntrust.com/content/media/attachment/data/pasted_image/1006/document/bkh1_07160630_11582442.jpg
Stepping forward from Laffer's utopic economic era, why did the economy post noticeable growth after tax increases were implemented in 1993? The recession ended in March 1991 and the banking system was beset with issues, which delayed the robust recovery until later. A revival of bank lending led to the self-sustained growth witnessed despite the tax increases instituted in 1993 by the Clinton administration. If Laffer's thesis about tax cuts is valid, why did the U.S. economy record the weakest period of economic expansion following the Bush tax cuts of 2001 and 2003? The evidence from tax cuts is essentially not as strong as Mr. Laffer's leads the reader to believe.

The best method to compare the performance of the economy across these three business cycles is by using an index chart. The index chart (see chart 2) sets the level of real GDP in each trough at 100 and plots the corresponding growth of the economy. An index reading of 108 in this chart stands for 8% increase in real GDP growth from the trough. Real GDP's outstanding performance in the 1982-1990 expansion exceeds the imprints of the next two business expansions without doubt. As shown in the chart, real GDP of the U.S. economy had risen 25% by the end of the expansion which stretched from March 1991 to March 2001, while the U.S. economy recorded a growth of 18% between the trough and peak of the expansion during November 2001 and December 2007. In other words, economic growth registered during the Bush-II period is roughly 72% of the GDP gain recorded after the Clinton tax increases.

http://www-ac.northerntrust.com/content/media/attachment/data/pasted_image/1006/document/bkh1_07160541_11582442.jpg

An important aspect to note is that the federal budget deficit has recorded a surplus only during 1998-2001 (see chart 3) when considering the different tax regimes since the early 1980s. The budget deficits after the Bush tax cuts were exacerbated by war-related expenditures and support programs to stabilize economic conditions after the financial crisis unfolded in August 2007.

http://www-ac.northerntrust.com/content/media/attachment/data/pasted_image/1006/document/bkh1_07160311_11582442.jpg


It is not clear yet if the Bush tax cuts will expire in 2010. Given the fragile state of the economy, it is entirely possible that the tax cuts will be extended into 2011. Assuming the tax cuts are allowed to expire, the forces that may prevent strong economic growth in 2011 are entirely different from tax increases. The headwinds from the financial sector, by way of a severe credit crunch, lackluster job growth, and housing market challenges are factors that will influence the near term path of the economy. The evidence presented here suggests that Mr. Laffer's story is selective and incomplete. Many factors will play a role in how the U.S. economy performs in the next few years in addition to taxes.




The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

http://www.northerntrust.com/pws/jsp/display2.jsp?XML=pages/nt/0601/1138283678319_6.xml&TYPE=interior&er=dgcDetail&c=primary/resource/1006/1275944180574_442.xml

petegz28
06-10-2010, 05:05 PM
Schiff made him look like a fool. A FOOL!!! Anyone with an 8th grade education could see that we were heading for trouble. And Schiff was spot on, all we were left with was the debt. We were once a manufacturing based economy. We moved to a services\consumption based economy. In the mid-2000's a lot of the services jobs were starting tog et off-shored while, as Schiff points out, people continued to extend their debt beyond belief.

The fact of the matter is we are a non-job producing society. And the jobs we do create anymore are being straddled with more and more taxes and higher long term costs. The Fed Gov continues to run up debt as if they literally have a money tree. It's borderline insane. And Schiff will continue to be correct until the Fed Gov makes meaningful changes to our tax and labor laws. We cannot continue to run up debt while jobs continue to be sent out of this country. We cannot continue to burden companies with additional costs and taxes or more will continue to leave this country.

While it is politically suicidal, and many on the Left "feel" it is a bad move, we need to eliminate the corporate tax for companies who employ Americans. We need to quit spending on every "feel good" social program that provides nothing but more debt to the tax payer. And we to quit borrowing from China.

Obama has proven tax cuts and tax incentives work. Look at the home buyer's credit. Real Estate sales jumped and now are going to fall like a rock since the program ended. Cash for Clunkers was similar. Basically the Fed Gov needs to reduce the cost of living. And that starts with making it cheaper to do business in this country. Businesses create jobs, contrary to the streak of Federal hiring we are seeing under Dear Leader. If taxes on companies are cheaper, their product costs less to make, which in turn leads to higher sales which in turn leads to more jobs. And if a company chooses to off-shore their jobs they need to have it stuck to them.

Wake the fuck up, America! China is kicking our ass all over the globe. They own us. They own our debt. They own our jobs.

Foreclosures are at their highest levels in history.
Jobless numbers are proportionally similar.

We can't keep extending unemployment. We have to provide incentives for companies to business in this country and to hire Americans to fill the jobs.

orange
06-10-2010, 05:13 PM
petegz28,

I take exception to one thing:

While it is politically suicidal, and many on the Left "feel" it is a bad move, we need to eliminate the corporate tax for companies who employ Americans.

I don't think there would be the SLIGHTEST resistance from the Left to "eliminating the corporate tax for companies who employ Americans" - on the portion that they ACTUALLY SPEND on employing Americans.

"Free Marketers" will argue against that, though, because it's "Industrial Policy" - hence "big government" - hence evil.

FD
06-10-2010, 05:15 PM
It seems like the amount of income that can be shifted is likely a small proportion of total income. In an event, this would only show up in tax receipts, the timing of income doesn't change its composition or amount, which are what matter for the real economy. If anything, companies shifting production forward in response to tax laws is exactly what we need right now to bolster the nascent recovery.

FD
06-10-2010, 05:16 PM
petegz28,

I take exception to one thing:



I don't think there would be the SLIGHTEST resistance from the Left to "eliminating the corporate tax for companies who employ Americans" - on the portion that they ACTUALLY SPEND on employing Americans.

"Free Marketers" will argue against that, though, because it's "Industrial Policy" - hence "big government" - hence evil.

Its also completely impractical. They need to just eliminate the tax across the board.

orange
06-10-2010, 05:18 PM
Its also completely impractical. They need to just eliminate the tax across the board.

So the Corporations can outsource more and pay nothing! Of course. Why didn't I see that?


hmm,

No, after thinking about it for a few minutes, I can't see how that would help after all. I also don't quite understand - maybe you can clear it up for me - why incentivizing capital investment in the U.S. - by essentially paying companies to create jobs here - is impractical.

FD
06-10-2010, 05:20 PM
So the Corporations can outsource more and pay nothing! Of course. Why didn't I see that?

Companies that outsource portions of their business don't pay US corporate taxes on that income already. I didn't think we were talking about outsourcing here.

petegz28
06-10-2010, 05:20 PM
petegz28,

I take exception to one thing:



I don't think there would be the SLIGHTEST resistance from the Left to "eliminating the corporate tax for companies who employ Americans" - on the portion that they ACTUALLY SPEND on employing Americans.

"Free Marketers" will argue against that, though, because it's "Industrial Policy" - hence "big government" - hence evil.

I have to disagree, Orange. The Left loves the phrases "raise taxes on corporations"..."make them pay their fair share". Every Democrat in office I would lay money has uttered those phrases at one point or another.

And yes, you are correct, Free Marketers would argue it. They would call it isolationist even. And they are phoocked in the noggen. One one hand, Free Makerters want the ability to exploit cheap, foreign labor. On the other hand they bitch that the Fed Gov does nothing to incentivise the hiring of Americans.

My solution is a happy medium. You are free to seek foreign labor, you will just be taxed out the ass for doing so.

And I have to add that the Labor Unions have to take a back seat. They are the reason our auto industry is in shambles. Unions are great in theory but they have run amuck and are costing the tax payer in real $'s. They are the reason GM has to look to Mexico while Hyundai does just fine without them in Alabama or Georgia or wherever they are.

petegz28
06-10-2010, 05:24 PM
Its also completely impractical. They need to just eliminate the tax across the board.

Nope, there has to be some ties to eliminating the tax.

orange
06-10-2010, 05:27 PM
My solution is a happy medium. You are free to seek foreign labor, you will just be taxed out the ass for doing so.

Let us bask in this moment of pure agreement.

http://farm4.static.flickr.com/3094/3138845619_22775abaa8.jpg

KC native
06-10-2010, 06:19 PM
hehe, not surprising someone posted this shit. Barry takes Laffer to task too.
http://www.ritholtz.com/blog/2010/06/art-laffer-make-up-your-own-facts-here/

To a man whose only tool is a hammer, pretty soon everything begins to look like a nail.

I couldn’t help but be reminded of that aphorism as I read the most popular article on WSJ.com yesterday — Tax Hikes and the 2011 Economic Collapse — a screed on the Laffer curve and Supply Side Economics by none then than Art Laffer.

If either the WSJ OpEd page or Mr. Laffer had foreseen the most recent economic collapse we just lived through, or the credit crisis, or the housing collapse, or the derivatives problem, or any of the other economic disasters that befell the country I might give their warnings some credence. (I give credit to Laffer for discussing the possibility of a recession in Feb 2008 — way ahead of most right wing economists) But considering all this occurred with their man in the White House for 8 years, and they somehow missed it, leads me to one of two conclusions: Either they are extremely bad economists, or they are extremely partisan observers.

Given that so many of the dismal set missed all of the above, we should give them the benefit of the doubt. Let’s not simply assume they are bad economists — instead, this looks like just another money-losing partisan screed.

In his OpEd, Mr. Laffer confuses causation with correlation, ignores market history, makes spurious argument, and simply make up crap as he goes along.

It is, to any thinking person, an embarrassment. Consider:

• “The nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates.”

This is mostly true, but misleading.

First, 7 states have no income tax; the other two tax — New Hampshire and Tennessee — only tax dividends and interest income.

Many of the states without income taxes — think Texas, and Alaska — are blessed with natural resources. (Nevada’s blessing is Innumeracy). They don’t have income taxes because the lease licenses to the mining and oil industry throw off so much revenue, that these taxes are not needed. Confusing correlation for causation is a Freshman college error, and we should expect better from Laffer.

Note: 5 of the 9 have a corporate business tax: Alaska has a state corporate income tax, Florida has a corporate income tax (5%); New Hampshire has a Business Profits Tax (8.5%); South Dakota has a financial institutions income tax; Washington has a Business and Occupation Tax. Since these are the fastest growing states according to Laffer, is the lesson to other states to add a corporate tax?

• “Bill Gates and Warren Buffett—hold the bulk of their wealth in the nontaxed form of unrealized capital gains?”

What unmitigated and embarrassing nonsense.

As everyone else in America is well, aware, both Gates and Buffett have committed their vast wealth to charitable foundations. Hence, the issue of “nontaxed unrealized capital gains” is simply irrelevant.

And of course, Laffer is aware of this — he is simply engaging in pedantic rhetoric when he makes this claim. (I believe the vernacular term for this form of argumentation is “full of shit.”)

It really throws a monkey wrench into the ideological dogma when the wealthiest Americans, those who have benefited the most from economic freedom and entrepreneurial opportunities recognize and criticize the growing wealth disparity in America as a very real problem.

• “At the tax boundary of Jan. 1, 1983 the economy took off like a rocket, with average real growth reaching 7.5% in 1983 and 5.5% in 1984.”

Again, factually accurate but totally misleading.

Reagan had the good fortune to take office at the tail end of a 16 year secular bear market, just as Paul Volcker fed the economy its distasteful medicine. Inflation was broken, and interest rates began their 25 year slide towards zero.

To ignore the reality of these factors, and credit tax cuts as the sole cause of the 1980s and 90s expansion is simply to discard reality because it does not fit your neat ideological universe. That is a surefire recipe for losing money as an investor . . .

• “Today, corporate profits as a share of GDP are way too high given the state of the U.S. economy”

After their many deductions, special legislative favors, un-repatrioted overseas profits, and too clever by half accounting, US corporations pay a very small percentage of their profits as taxes.

Decades of lobbying has created massive loopholes. Consider the total taxes paid to the US Treasury by any of the major banks and brokerages, the special tax treatment for hedge fund managers, the energy industry deductions, inadequate licensing revenue, etc.

This isn’t a question of MORE taxes — but basic Tax fairness. When American firms don’t pay their fair share of taxes, that means American citizens must make up the difference.

If you are against high taxes, you may want to consider what the total corporate tax base of America has looked like over the past 30 years — as profitability continues to go higher.

It is not just me who noticed the absurdity of the OpEd, Northern Trust’s Asha Banglore also calls out Mr. Laffer’s analysis as wanting:

“Assuming the tax cuts are allowed to expire, the forces that may prevent strong economic growth in 2011 are entirely different from tax increases. The headwinds from the financial sector, by way of a severe credit crunch, lackluster job growth, and housing market challenges are factors that will influence the near term path of the economy. The evidence presented here suggests that Mr. Laffer’s story is selective and incomplete…”

Basing your investments on “selective and incomplete” analyses is how you lose money in the captial markets.

Indeed, I have railed in these pages against the ideological, fact-free OpEd in the WSJ — not because of the politics, but because they have been such consistent money losers. That would not matter so much if it were the NYT or the Podunk Press, but this is the Journal, for crying out loud, It is supposed to be the paper of record for investors.

That the money losing OpEd page of the WSJ produces its most well read articles goes a long way in explaining one thing: Why 80% of money managers underperfom every year. Filling your head with Ideology, becoming a “magical thinker,” ignoring data, making up your own facts — these are a recipe for under-performing asset managers.

If I were to create a list of questions to ask potential managers of my money, one of them would be: “Do you read the WSJ OpEds?”

If the answer were yes, I would not walk but run in the opposite direction.

Ignore the prior bear market and Paul Volcker — nothing matters but Tax Cuts!

http://www.ritholtz.com/blog/wp-content/uploads/2010/06/20100606161254.gif

Chiefshrink
06-10-2010, 08:54 PM
Hmmmmmmmmmmmmmmmm..:hmmm:

All these Keynsian O-bot economists who never accomplised anything or ever proven anywhere in the world that a Govt controlled economy has been successful is "dissing" on a man (Laffer) who pretty much proved that supply side economics(trickle down) and tax cuts worked and continue to work.

Laffer is proven these other moron economic progressive marxists are just "posers" IMO.

KC native
06-10-2010, 08:59 PM
Hmmmmmmmmmmmmmmmm..:hmmm:

All these Keynsian O-bot economists who never accomplised anything or ever proven anywhere in the world that a Govt controlled economy has been successful is "dissing" on a man (Laffer) who pretty much proved that supply side economics(trickle down) and tax cuts worked and continue to work.

Laffer is proven these other moron economic progressive marxists are just "posers" IMO.


You are a fucking moron. Asha Bangalore works for Northern Trust who is a huge asset manager and Barry Ritholz is director of research at a firm he helped found and. Barry not only was out in front of the crisis but also bottom ticked the market. Art Laffer is a charlatan.

Chiefshrink
06-10-2010, 09:11 PM
You are a ****ing moron. Asha Bangalore works for Northern Trust who is a huge asset manager and Barry Ritholz is director of research at a firm he helped found and. Barry not only was out in front of the crisis but also bottom ticked the market. Art Laffer is a charlatan.

Annnnnnnnnnnnnnnnnnnd???? Sooooooooooooooooooooooooooo what!!!!!!!

Laffer is proven these "posers" just sit back and take shots at a guy who is the "real deal" IMO.

petegz28
06-10-2010, 09:18 PM
Laffer was about as wrong as you could be in 2006. I don't take the guy seriously at all. Schiff was spot on. The upcoming tax hikes aren't going to kill us. Granted, we don't need them at this point in time but they aren't going to be the end of the world.

KC native
06-10-2010, 09:27 PM
Annnnnnnnnnnnnnnnnnnd???? Sooooooooooooooooooooooooooo what!!!!!!!

Laffer is proven these "posers" just sit back and take shots at a guy who is the "real deal" IMO.

Laffer is far from proven. As Ritholz pointed out, Reagan started his presidency at the end of a 16 year secular bear market and Volcker had broken inflation. Throw in the huge demographic shift with the baby boomers and it shows that tax cuts are the least likely explanation for the bull market that started in the 80's. Oh, and both Asha and Ritholz are successful asset managers. Laffer can't say the same.

Chiefshrink
06-10-2010, 09:49 PM
Laffer is far from proven. As Ritholz pointed out, Reagan started his presidency at the end of a 16 year secular bear market and Volcker had broken inflation. Throw in the huge demographic shift with the baby boomers and it shows that tax cuts are the least likely explanation for the bull market that started in the 80's. Oh, and both Asha and Ritholz are successful asset managers. Laffer can't say the same.

Do your homework on Laffer and how he sold Reagan on supply side economics and then get back to me.

The Mad Crapper
06-11-2010, 06:35 AM
Guys, guys guys. Relax.

Obama can just print up some more money.

KC native
06-11-2010, 03:58 PM
Do your homework on Laffer and how he sold Reagan on supply side economics and then get back to me.

ROFL Do your homework on what was actually going on at the time and what happened afterwards and then try to discuss this like a big boy.

The Mad Crapper
06-11-2010, 04:02 PM
But at the tax boundary of Jan. 1, 1983 the economy took off like a rocket, with average real growth reaching 7.5% in 1983 and 5.5% in 1984. It has always amazed me how tax cuts don't work until they take effect. Mr. Obama's experience with deferred tax rate increases will be the reverse. The economy will collapse in 2011.

Hmmmmm...that can't be right.

Comrade Orange said so.

Dallas Chief
06-11-2010, 04:37 PM
Cabelas had a great sale today on 9mm ammo. Added to the stash

Did you buy some of that tasty Wolf ammo? If so, I hope you plan on cleaning your nine after every trip to the range...

orange
06-11-2010, 04:49 PM
http://clamsend.com/eBay/doodleblog/images/Doodle_58_Voodoo_Doll_number_5_Ronald_reagan.jpg

2bikemike
06-11-2010, 05:19 PM
While I'm no expert either I can't say what affects the ability to cash out IRA's without paying the penalty will bring. I would think short term the Govt. would see a rise in tax receipts. The long term affect is much harder to predict.

However if I had the means to convert our IRA's to a Roth I would do it in a heartbeat. The problem for me is the way I have my investments structured I would not have enough cash to pay the taxes owed. I have no doubt that tax bills are going to rise and I would much rather pay the taxes now than say 10 or 15 years from now.

The Mad Crapper
06-11-2010, 08:09 PM
Please God, I pray the boy king chokes on a ham sandwich and drops dead before November.

KC native
06-11-2010, 08:30 PM
Please God, I pray the boy king chokes on a ham sandwich and drops dead before November.

ROFL banned again. Good work.

petegz28
06-11-2010, 08:44 PM
ROFL banned again. Good work.

Why would he banned for that?

KC native
06-11-2010, 08:49 PM
Why would he banned for that?

I think it was his excursion into the lounge that got him banned again.

bevischief
06-12-2010, 05:41 PM
December 2012 we are doomed... The Mayans say so...

dougiedav
06-12-2010, 09:53 PM
I found telonu.com recently and I really liked how they have reviews on companies, schools and people.
It's pretty informative and helpful.
In looking for a retail job like Dick's Sporting Goods, do you think the reviews on Telonu.com are significant??
thanks, all opinions appreciated.

cannon1988
06-12-2010, 11:21 PM
Economic collapse is not predictable.

Also, this isn't even an issue if we begin to recognized the ubiquity of our government and adopt its entire presence into our lives. Then we'd all say - "what collapse?"

patteeu
06-13-2010, 07:08 AM
A good read and many will start moving out of their regular IRAs and 401Ks and take their tax hits now and move their $$ to the ROTH IRA because of what is coming.

What's going to stop Congress from changing it's mind in the future about Roth IRAs and deciding to end the tax advantaged growth on those investments? At least with a traditional IRA, you get the tax advantage up front and you don't have to rely on Congress staying the course.

patteeu
06-13-2010, 07:17 AM
How will converting IRAs to Roths cause a crash in tax receipts? It would produce more tax revenue now, and the losses would be spread out over the next 20 years as people retire.

His main point seems reasonable, but I don't think IRA conversions would crash tax receipts in 2011. Am I missing something?

I think he's saying that the crash in tax receipts will come from the overall effect of people accelerating income into the current year to avoid taxes in 2011. I think the traditional-to-Roth conversion phenomenon is just a small part of that acceleration. :shrug:

patteeu
06-13-2010, 07:37 AM
Schiff made him look like a fool. A FOOL!!! Anyone with an 8th grade education could see that we were heading for trouble. And Schiff was spot on, all we were left with was the debt. We were once a manufacturing based economy. We moved to a services\consumption based economy. In the mid-2000's a lot of the services jobs were starting tog et off-shored while, as Schiff points out, people continued to extend their debt beyond belief.

The difference between manufacturing and service aren't nearly as important as the difference between production and consumption. You seem to be conflating these concepts.


Obama has proven tax cuts and tax incentives work. Look at the home buyer's credit. Real Estate sales jumped and now are going to fall like a rock since the program ended. Cash for Clunkers was similar. Basically the Fed Gov needs to reduce the cost of living. And that starts with making it cheaper to do business in this country. Businesses create jobs, contrary to the streak of Federal hiring we are seeing under Dear Leader. If taxes on companies are cheaper, their product costs less to make, which in turn leads to higher sales which in turn leads to more jobs. And if a company chooses to off-shore their jobs they need to have it stuck to them.

I'm not sure what you're saying he proved here. If you just mean he proved that tax policy can affect behavior, I agree. If you're endorsing these particular tax incentives, I'd point out that those were both intended to stimulate consumption, not production and as such they were exacerbating our problem of encouraging consumption over production.

Dave Lane
06-13-2010, 07:44 AM
I think I've heard this before...

Chiefshrink
06-13-2010, 09:10 AM
What's going to stop Congress from changing it's mind in the future about Roth IRAs and deciding to end the tax advantaged growth on those investments? At least with a traditional IRA, you get the tax advantage up front and you don't have to rely on Congress staying the course.

Fair point and 'it' could happen as our govt continues to look for any and all forms of revenue from the "couches and chairs" of "We the People" in the future with the Obama regime in control for the next 2 1/2 yrs.

Traditional IRA tax advantage up front is not advantageous 'when' these tax rates skyrocket!!! This is Laffer's whole point. Take your tax hit now while the rates are much lower.

All I was saying was as it is configured right now this is the best move for your $$$. Tax rates and interest rates are guaranteed to go up and not just a little bit in 2011. Luckily Bernanke said interest rates will remain low for the rest of year so in my mind 2010 is the yr to rearrange your financial house to combat this and the rest of the "free market" has recognized this as well.

What is not known is if "We the People" take back the House and Senate in
2010 can "We the People" significantly 'diminish' this coming financial collapse
by extending the Bush Tax Cuts and cutting taxes further and stop the irresponsible spending that the "Regime" is doing in order to collapse our dollar purposefully.

But to your point, if "We the People" cannot take back our Govt. then it probably doesn't matter how well you adjust your $$ because Uncle O "WILL STEAL" (redistribute in his Marxist mind:rolleyes:) at every turn:shake:

patteeu
06-13-2010, 11:17 AM
Traditional IRA tax advantage up front is not advantageous 'when' these tax rates skyrocket!!! This is Laffer's whole point. Take your tax hit now while the rates are much lower.

Shifting from Traditional to Roth is a reasonable thing to do, but it's not the "no-brainer" that Laffer describes it as because of the real risk that Congress will reneg at some point in the future. The same pressures that are likely to drive future tax rates up (at least as long as democrats remain in control) are the ones that could lead Congress to reneg on Roth.

The Traditional IRA does have a tax advantage up front, even in an environment of dramatically rising tax rates. The comparison is to normal savings where taxation occurs at BOTH the front end and on back end earnings. Both Traditional and Roth have a tax advantage compared to regular savings, it's just that the Traditional IRA represents the bird in the hand while the Roth is two birds in the bush as long as tax rates are rising (one or fewer birds in the bush if tax rates are holding steady or declining).

2bikemike
06-13-2010, 01:06 PM
Shifting from Traditional to Roth is a reasonable thing to do, but it's not the "no-brainer" that Laffer describes it as because of the real risk that Congress will reneg at some point in the future. The same pressures that are likely to drive future tax rates up (at least as long as democrats remain in control) are the ones that could lead Congress to reneg on Roth.

The Traditional IRA does have a tax advantage up front, even in an environment of dramatically rising tax rates. The comparison is to normal savings where taxation occurs at BOTH the front end and on back end earnings. Both Traditional and Roth have a tax advantage compared to regular savings, it's just that the Traditional IRA represents the bird in the hand while the Roth is two birds in the bush as long as tax rates are rising (one or fewer birds in the bush if tax rates are holding steady or declining).

If our short sighted Government were to attempt to renig on the Roth it would take time to get through the channels. I would think at that point you would be able to dump your Roth for cash prior to any Roth rule changes.

patteeu
06-13-2010, 01:40 PM
If our short sighted Government were to attempt to renig on the Roth it would take time to get through the channels. I would think at that point you would be able to dump your Roth for cash prior to any Roth rule changes.

I don't think there's anything to worry about in the near future, but Congress has changed tax laws effective in the current tax year on countless occasions so I don't think anyone would have time to avoid the impact unless it was the intention of Congress to give them that time.

KC native
06-13-2010, 07:19 PM
Fair point and 'it' could happen as our govt continues to look for any and all forms of revenue from the "couches and chairs" of "We the People" in the future with the Obama regime in control for the next 2 1/2 yrs.

Traditional IRA tax advantage up front is not advantageous 'when' these tax rates skyrocket!!! This is Laffer's whole point. Take your tax hit now while the rates are much lower.

All I was saying was as it is configured right now this is the best move for your $$$. Tax rates and interest rates are guaranteed to go up and not just a little bit in 2011. Luckily Bernanke said interest rates will remain low for the rest of year so in my mind 2010 is the yr to rearrange your financial house to combat this and the rest of the "free market" has recognized this as well.

What is not known is if "We the People" take back the House and Senate in
2010 can "We the People" significantly 'diminish' this coming financial collapse
by extending the Bush Tax Cuts and cutting taxes further and stop the irresponsible spending that the "Regime" is doing in order to collapse our dollar purposefully.

But to your point, if "We the People" cannot take back our Govt. then it probably doesn't matter how well you adjust your $$ because Uncle O "WILL STEAL" (redistribute in his Marxist mind:rolleyes:) at every turn:shake:

So, running away from Laffer being proven now? ROFL