So...how are you liking those tax cuts so far (lol)

Cardinal:

You do understand that the refund for the 2017 tax year (the one you are filing now) will be unaffected by the new law correct? I do like that my withholdings have gone down. Basically a small raise for free.

Did you not read the very first sentence of the post?

I haven't been a member here very long, but I question the integrity and quality of the members on this forum. The discussion regarding taxes and economic outlook is extremely subpar.

Not one person can properly address any argument before throwing monkey shits and random insults.

What a joke WSO. Talk about bottom of the barrel.

thebrofessor:

full disclosure: not a fan of Trump, I hate the lack of fiscal conservatism in washington today, so I would've structured every piece of legislation differently if I were in charge.

that being said, from the standpoint of an investor and not a taxpayer, I'm pretty optimistic.

the bad:

• this tax plan absolutely hits higher tax states harder, and I'm not a fan of the "fair share" argument
• the argument that other states shouldn't subsidize the cheap states is false, I remember reading somewhere that higher tax states often send more to washington than they take back in SALT deductions
• most of the cuts sunset, so I wouldn't call this earth shattering
• estate tax exclusion amount isn't for farmers, it's usually the ultra wealthy, so while it benefits many of my clients, it's pointless imo
• if you live in a blue state, you're likely grabbing your ankles, and that's not fair
• there's a small income range that actually sees an increase in marginal rate, that's a bad oversight

the good:

• I don't really care about the loss of SALT unlimited deductibility. life is about choices, make your bed and lie in it. you live in CA and have voted for tax increases? don't get pissed when you can no longer deduct them
• lower corporate tax rate attracts investment
• repatriation should at a minimum be good for stocks, TBD on the economy, but Barron's did a nice piece detailing that even though companies will most certainly raise dividends and buyback shares, they won't do that with all the money, so you could see M&A, capex, etc., all of which could be good for the economy (capex was down during obama administration and the tax cut plus deregulation could change that dynamic)
• animal spirits. as analytical as many of you are here, and as hard as this is to believe, not every business decision is a simple NPV calculation. leaders feel good about lower taxes and are more excited about making investments and deploying capital (see Davos)
• this is coming at a time when there's global economic growth, and since the US tends to lead the rest of the world, that bodes very well for globally focused investors

the ugly:

• this tax cut will not outlaw the business cycle, so the fact that this passed doesn't mean we're immune from a recession. while I don't see one soon (6-12mos), that can change quickly and no business owner wants to deploy capital in a recession
• inflation. while the optics of $1,000 raises for a worker making $10/hour at wal mart is good, what it really means is wage inflation, and while low inflation is good and it's better than deflation, a Fed without Bernanke may not have the intense focus on this as they should
• while this should boost stock prices, valuations are still stretched, which holds down forward returns, so investors just now joining the party may be disappointed
• this tax reform, while good, does nothing to address the long term fiscal situation of the US. yes, they had to give the Dems some pork in order to get this passed, but this is absolutely going to explode our debt especially if it gets passed again when the cuts sunset (as I believe it will). I'm very happy for my clients and my portfolio and my career, but I worry that our country's lackadaisical attitude towards debt could prove disastrous (see Japan for the past 30 years, the nikkei and debt/gdp)

Expect a hike in state and local taxes.

While we might receive an ever so slightly cut in federal taxes, in order to fund infrastructure projects and other federal spending cuts, the funding will be shifted from a federal to the state and local level.

Just watch and keep an eye on those property tax bills guys...many might think they are catching a break and getting more money in their pocket...that can't be further from the truth.

As a rough example...if gas prices alone go up by $0.50 per gallon. This will cost an average commuter what...an extra $20 per month (being conservative) which adds up to an extra $240 per year...that's JUST in regards to gas.

State taxes will go UP Local taxes will go UP Property tax UP Utility bills UP Gas/Fuel UP Rent UP Groceries UP Cable UP Subscription/Membership Fees UP Entertainment UP Dining out UP

Whoa, people aren't getting $1,000 raises. Some companies gave out one time $1,000 bonuses to employees. Others followed companies like Starbucks that decided to implement a plan towards a $15 minimum wage a few years ago. All in all, low wage workers are getting maybe $20MM of the hundreds of billions being saved from this tax cut. Just pointing that out.

What that means is, inflation pressures are there, but that's mostly from the expectation that wages will start to rise as the expansion continues, capex increases, and thus, wages increase. Inflationary pressures are here, but, it's mostly driven by energy prices. And energy prices are very politically driven.

BBDreamin:

I don’t mind my extra $2k a year post tax (lol)

Your "extra $2,000" is just an illusion. It will be going right back to corporate profits and investment in the form of artificially inflated prices. Sorry, but in reality you won't be any richer than compared to previous year so don't plan on spending or going on any extra vacations. Your best bet would be to save.

dm100:

BB,

Don't confuse facts with fallacies that the left-wing lunatics want you to espouse. You don't realize by now that the $2k you are getting in extra money every year is nothing more than "crumbs"? Me thinkst the OP must have been a Pelosi/schumer mole. Who else could have come up with such tripe!

And for the OP, would love to engage you on your "1000 points of light" that should be shining so brightly today! Please, allow me the opportunity! I relish the chance

You've really gone off the deep end, haven't you? What is it exactly you'd like to discuss?

How about the fact that if corporate tax rates are going to be cut, we should see that benefit trickle down to the prices of goods right? Less tax expense should mean cheaper raw material and cheaper price of products correct?

LOL do me a favor and let me know when that happens because what we are going to see over the course of this year and the years to come are artificially inflated prices across the board.

There is no more "only time will tell" when it comes to Trump. We are already seeing the results and it will only get worse.

Haha right! If $2k is crumbs then I fucking love me some crumbs. Looks like I have $2k more in crumbs to put to work in the market!!! Let them evil corporations make that bread!!!

dm100:

Out of curiosity, how old are your neutrino? oh, excuse me, _CFO?

Sounds like you have decades of experience with these matters. Perfect forum for you, it would seem.

Eleventy three.

Lol

joey joe joe shabadoo:

I feel dumber for having read this post.

That's likely because you require data and statistics as "proof" in order for something to be true or make sense to you. But what you don't realize is how easily data and statistics can be manipulated. That's why I don't use it much when sharing perspectives.

Any low level monkey can look at data and interpret/analyze it. But if you are unable to see past the data then you won't be able to see the big picture.

That's why large organizations not only have C-suite and management, but board of directors and higher level oversight as well.

I missed this thread when it came out. @Neutrino_CFO", your first mistake was bringing economics to a finance forum. Most of the people here couldn't figure out a simple linear regression in college, and much less can they do any kind of critical thinking on the economy. To most people here, economics is like a financial model wherein you pull a couple of levers and some expected reaction occurs. Stochastic-anything isn't part of the common vernacular here. As a matter of fact, someone reading this post was probably thinking to reply with "what does that have to do with it" until they read this line.

Given that we do live in a stochastic world, let what will happen, happen. If people here try to explain it away (as those sufferers of Dunning Kruger are wont to do), let them. If you truly have an opinion that is more correct than that of most, put it to the best use you can. That's how I learned to cope with the current cycle of politically-induced mass stupidity: watch people walk into their mistakes, take advantage of it, and just ride the wave. You earned it.