Tax cut extensions

[MichaelB]

A nice summary here of the tax extension approved today Tax Cut Extension Enacted

Details for the financial nerds among us here Provisions in the Senate

 

[mickeyd]

Have the "Bush Tax Cuts" now become the "Obama Tax Cuts?"

 

[chinaco]

It will be spun in ways that provide a sound bite for the parties mouth pieces (often talk radio) to the parties zombies that suck it up and believe whatever they spin!

 

[travelover]

Those that voted against it were heartless monsters that wanted to deny unemployment benefits to those in desperate need, as well as being on the side of increased taxes for all hardworking Americans.

Those that voted for it were irresponsible fools that increased an already dangerously high deficit to even new, scarier levels which will be ruin of our children and grandchildren.

 

[NW-Bound]

I have seen several articles saying that the extended tax cut is a "stealth" stimulus. As such, it is not necessarily bad. I just hope that when the economy recovers, the gummint will know to cut back the spending to allow for the next bust cycle. I am of course too optimistic here.

 

[travelover]

.......... I just hope that when the economy recovers, the gummint will know to cut back the spending to allow for the next bust cycle.................

Right....and I'm gonna set out buckets in case it rains silver dollars tonight.

 

[NW-Bound]

Well, here's another silver lining for you.

Inflation in a way is a hidden tax that arguably hits well-to-do people more than the poor. Worse than income tax, it's a "wealth tax" that may hit FIRE'd people even harder.

So, just wait until gummint deficit spending causes the inflation that we have been expecting for a while. That's the tax in lieu of the higher income tax that many of us said we needed.

I am taking cover from the flame now

 

[Westernskies]

I am taking cover from the flame now

You can try to hide under a chair, but when the flames are coming from the bottom up...

 

[youbet]

So, just wait until gummint deficit spending causes the inflation that we have been expecting for a while. That's the tax in lieu of the higher income tax that many of us said we needed.

There's really not much to argue with there. Yep, people who postponed spending in order to accumulate wealth for later consumption will pay the price to whatever extent their holdings do not increase in value along with inflation.

Folks that think moderate (4% - 5%) inflation is not possible because of the available surplus labor and manufacturing capacity are fooling themselves. Little of those surpluses is readily available to increase supplies of food and commodities where inflation will hit first. After that, China and other Asian manufacturers will note that our demand for their output is relatively inelastic and will increase prices to offset the shrinking value of their vast holdings of US Treasuries.

It won't happen quickly, but over a decade many forms of investments commonly found in FIRE portfolios will take a serious haircut in purchasing power.

I say PARTY NOW!

 

[NW-Bound]

I say PARTY NOW!

People here know that I am a cognac drinker. However, being of a frugal nature, I only drank the XO grade when my wife got it for me from duty-free shops. But these bottles are only in the low $100.

Should I splurge now and get myself a bottle of Remy Martin Louis XIII? Is it really worth it? Can my palate even tell?

And no, I am not talking about the supreme "Louis XIII Black Pearl". One may need to take out a mortgage for that.

Oh well, it's probably all hype anyhoo. I will just stay with the pedestrian grade. In 10 years, when I cannot afford even that, will have to make my own moonshine.

 

[DeborahB]

Well - I was glad to finally know that the tax brackets remained the same for the next 2 years. I've been planning based on that assumption - now it's a reality. Whew.

 

[youbet]

will have to make my own moonshine.

In a decade the price of corn, in US dollars, will be up signifiantly. Make the moonshine now and store it.

Moonshine has served as a storage medium for corn in our country historically due to the poor longevity and difficulty of transporting corn itself.