In a nut shell Tax cut/Job act passed

[pb4uski]

M&A is horribly inefficient for that purpose.... very few deals are beneficial in retrospect and many are downright disasterous.... having worked in M&A for the last 10 years of my career I saw many instances where buyers made very poor purchase decisions because the CEO or another high level decisionmaker was in love with the deal... resulting in high goodwill which eventually became impaired and was written off.

 

[AllDone]

I think this was already baked in. Who's to say which is right?

Keeping this on the economics side of things, I believe the AT&T and W-F announcements were a marketing/publicity stunt. They've got cash sitting around anyway and I believe they figured it was worth the commitment of cash to employees now to make the new corporate rate look good, thereby improving the public perception and perhaps defending the lower rate in the future. The future of this lower corporate rate is by no means assured for the long-term (or perhaps even a few years).

For the businesses of this country to be able to keep this windfall, the tax-paying individuals have to believe it really is good for them.

Wells Fargo announced the pay increase last September, they just re-announced it today. Currying favor.

 

[Katsmeow]

The problem with figuring out if this is good or bad is that you can't really look at the bill in isolation. Also, you have to look at the fact that the individual tax changes will expire. And, yes, maybe a future Congress will change that. But, then you have to figure out what you do about the foregone revenue if that occurs. I don't want to get into politics at all. So, I will simply say that this law may have consequences (some good, some bad) that complicate the picture of determining if this is good or bad.

In the short term, we will pay less in taxes next year. We had gotten to the point where we were going to not itemize this year and would bunch property taxes to itemize in 2018. Instead, with the reduction on the threshold for medical expense deductions (from 10% to 7.5%) for this year and next we will be able to itemize this year if we pay property taxes this year (although honestly the difference isn't much). After this year, we won't itemize. So the reduction in rates and change in brackets will benefit us.

I am a little leery of the fact that the inflation adjust measure for the future will be different and not to our benefit.

 

[Senator]

Wells Fargo announced the pay increase last September, they just re-announced it today. Currying favor.

I am not sure about any favors, but here is an article that says the wage increases were a direct result of the tax cuts.

Wells Fargo & Co.’s move to raise its minimum pay to $15 an hour was part of a long-term plan and not related to the passage of the tax overhaul as the company implied, said a bank spokesman, who later backtracked and stated the hikes were in fact a result of the bill’s approval.

...

Asked directly to confirm that the pay raises were not a result of the tax bill, Gilchrist said, “That is correct.”

On Thursday, Gilchrist backtracked.

“We believe tax reform is good for our U.S. economy and are pleased to raise our minimum hourly pay to $15 as a result,” he said after The Times article appeared online.

Wells Fargo says raises were not linked to tax bill passage — then backtracks - LA Times

 

[meierlde]

Yeah, about that - what happened to a 'simpler tax code' and 'you'll be able to file on a postcard'? All we did here is shuffle the deck chairs around IMO, while simultaneously jacking up the deficit.

As investors we're all going to benefit from increased corp profits, but let's see if that translates into real growth and better-paying jobs.

Given how ubiquitious tax software is, either on the web or on the desktop, I don't see the complexity issue for individuals, in the simple case you just follow the interview method and the software takes care of the details. (Now if your running a small business it gets more complex but with w-2 and 1099s it is not so complex). I doubt many folks do their taxes by hand anymore.

 

[RE2Boys]

Well, finally sat down to estimate my generic 2018 tax return with and without the new tax law. For my family situation, get about a $1500 federal tax savings. ($1K due to having two college kids).
For 2017, established a DAF so I'll itemize for the first time in 20 years, and probably the last time ever.

 

[audreyh1]

My crystal ball says to bank some of those stock market profits now. Greed is overcoming fear. Maybe a 1962 type decline? Just theorizing here.

That’s was a dramatic sell off that even had a flash crash, and disenchanted retail investors for years to come!

(I had to go read about it)

 

[bobandsherry]

So no more property tax or local income tax deductions, that's not good news for tax payers in states like CA.

Honestly, property/income taxes have never been good news for CA, and some other states with high local taxes. It's good news for the other states which will no longer have to endure subsidizing the spending in those states.

 

[RobLJ]

Well, that certainly clarifies everything. Or maybe nothing. Or. . .

I am not sure about any favors, but here is an article that says the wage increases were a direct result of the tax cuts.
Asked directly to confirm that the pay raises were not a result of the tax bill, Gilchrist said, “That is correct.”

On Thursday, Gilchrist backtracked.

“We believe tax reform is good for our U.S. economy and are pleased to raise our minimum hourly pay to $15 as a result,” he said after The Times article appeared online.

Wells Fargo says raises were not linked to tax bill passage — then backtracks - LA Times

 

[audreyh1]

M&A is horribly inefficient for that purpose.... very few deals are beneficial in retrospect and many are downright disasterous.... having worked in M&A for the last 10 years of my career I saw many instances where buyers made very poor purchase decisions because the CEO or another high level decisionmaker was in love with the deal... resulting in high goodwill which eventually became impaired and was written off.

Many M&A transactions seem to make more real money go poof faster than those horrible share buy backs at peak company share prices!

 

[audreyh1]

Wells Fargo announced the pay increase last September, they just re-announced it today. Currying favor.

Thanks for pointing that out. It all just sounded a little too convenient.

 

[Senator]

Many M&A transactions seem to make more real money go poof faster than those horrible share buy backs at peak company share prices!

How do you know when the peak prices occur?

Actually, buying stocks at new highs is a good thing. If a stock is going to continue to raise, you will likely always be buying at what is then a peak.

Thanks for pointing that out. It all just sounded a little too convenient.

Wells Fargo was just one of many (Fifth Third, Boeing, ATT, Comcast, etc.) that announced wages being increased and more investment. It makes sense. Paying wages is an above the line expense and means less tax. Dividends are below the line. Tax savings means more profits.

I know tax savings for me means I can spend more. It is not any different for a company, they are just exponentially larger. I am going to save ~$3K+ a year due to these tax cuts.

Who knows why the real reasons for any extra spending is, but it should be good for the economy, the stock market and creating additional jobs.

 

[scrabbler1]

Honestly, property/income taxes have never been good news for CA, and some other states with high local taxes. It's good news for the other states which will no longer have to endure subsidizing the spending in those states.

It's the other way around. High-tax, "Blue" states such as CA, NY, and NJ subsidize the low-tax "Red" states.

AP FACT CHECK: Blue high-tax states fund red low-tax states - ABC News

 

[USGrant1962]

It's the other way around. High-tax, "Blue" states such as CA, NY, and NJ subsidize the low-tax "Red" states.

AP FACT CHECK: Blue high-tax states fund red low-tax states - ABC News

States don't pay taxes, taxpayers do.

 

[pb4uski]

What scrabbler1 is referring to is ratio of federal income taxes paid out to federal spending in that state.... most high-tax state taxpayers pay out more than they receive and most low-tax state taxpayers receive more than they pay out.... so in effect taxpayers in high-tax states subsidize taxpayers in low-tax states.

 

[W2R]