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7.8T reasons dividend tax increases won’t crush stocks: That's the estimated value of all...

7.8T reasons dividend tax increases won’t crush stocks: That's the estimated value of all equity assets held by retirement investors that are not tax sensitive. Though it seems counterintuitive, Lucas Kawa thinks an increase on dividend tax rates might actually benefit the millions who hold high-yield dividend stocks in their IRAs and are able to buy into a potential sell without being impacted by the rising tax rate.
Comments (53)
  • Ready to back up that truck....
    24 Nov 2012, 10:40 AM Reply Like
  • So I won't be hurt because I can now buy div stocks cheaper for my IRA? So what if I am fully invested? If not do I take a 20 to 30% or more hit on my portfolio and then I can buy cheaper? Whoo hoo!

     

    This professional analysis, if you can call it that, is to just make dumb money sit tight, likely in their funds, so they can collect their quarterly/annual management fee while smart money moves out or takes offsetting short positions and then smart money comes back and buys at lower prices.

     

    This same view could also hold for Treasury Securities. If rates double you will now be able to buy the same securities cheaper. Duh! Thanks for nothing.

     

    Investors who have sat tight for the last decade have gotten killed.
    24 Nov 2012, 10:42 AM Reply Like
  • TVP:

     

    A couple rejoinders:

     

    1) For all those supposed "smart" folks, making market-timing short plays and making a bundle, there are legions of amateurs attempting the same, who lose their gluteus maximus trying.

     

    2) No, folks who held tight to well-yielding portfolios during the last decade have not been "killed," or even close. But, more than likely, those who did not "sit tight," but panicked out at various bottoms, have gotten murdered.
    24 Nov 2012, 11:49 AM Reply Like
  • I think it depends what you sat tight in. Unfortunately things I held the entire decade 2000-2010 (individual stocks) universally did terribly. But that was due more to terrible management than anything else.

     

    But fortunately, I also invested in my businesses and those did reasonably well.

     

    My concern about the dividend tax increase is that it will give "professional" management another excuse to not return cash to shareholders..... which means they will just give themeselves higher bonusses, more options, more equity.... all for mediocre performance. And when the time comes to sell their options they'll use the cash to buy back shares to boost the share price.

     

    After we drastically reform the tax code, and fix the entitlements, corporate governance should be next.
    24 Nov 2012, 12:26 PM Reply Like
  • david:

     

    1) If management buys back shares and thereby raises the share price, doesn't this make investors happy? You make it sound like it's entirely a self-serving scheme that comes at the expense of shareholders.

     

    2) It's up to each and every shareholder to make the decision whether to invest in a company or not, and each investor is free to vote with his/her feet and invest elsewhere. That's the beauty of the system; we're all free to decide to play, not play or where to play.

     

    It's OUR responsibility to make those judgments. I always get worried when disgruntled investors, who made their own bad decisions, want to abdicate this responsibility and transfer authority to the Government, as if that's somehow going to make things better or safer, when the opposite is the case.
    24 Nov 2012, 12:33 PM Reply Like
  • I'm not advocating transferring anything to the government. Corporate governance in our country is broken.

     

    I'd prefer that 1. Labor has one seat on the board - union or non union. 2. Nominees to the board that receive less than 50% yes votes or more than 50% no votes not be allowed to serve - even if there is no other nominee. 3. Shareholders be allowed to vote all their shares and all their votes against a single nominee - so if you own 10,000 shares and there are 4 open seats you can vote 40,000 votes against a single person. This allows shareholders to begin to demand independent nominees. 4. Binding voting on management pay and bonusses each and every year.

     

    I'd also like to see stronger rules about spinoffs having independent boards to prevent some of the nonsense that goes on in smaller companies that end up with 4 and 5 companies all with the same board members and all with the same management teams - except they've added their sons, daughters, wives, etc.

     

    I firmly reject the notion that I as an owner should sell because professional management finds ways to use corporate governance to steal from me.

     

    Give the cash to shareholders. If management is doing great things shareholders will buy shares. Far too often, share buybacks are done to boost the shareprice so management can sell, and to allow them to give themselves even more shares in the form of bonuses.

     

    Government's role is to provide regulations that ensure a level playing field. Government screwed up when they demanded extra taxes on salaries over $1 million dollars - that led to the issuing of options - which lead to equity grants. So fix the regulations and lets make boards more independent and give the owners of the business more ability to enact changes to the boards that supposedly exist to oversee management.

     

    And finally, I take full responsibility for my poor investment decisions when I make them. But I also recognize that I've made investment decisions that are good, only the gains are being stolen by management using the very corporate governance structure that is supposed to exist to ensure the owners are properly represented.
    24 Nov 2012, 12:46 PM Reply Like
  • And to specifically address the first point.

     

    No, it doesn't make investors happy. Management buys back shares, the share price rises. Management then cashes out their option.... share price declines. Management now has even more treasury shares to issue themselves in the form of bonuses. So what happens? This becomes a cyclical event - happening over and over - and all this cash used to buy back shares that end up in the hands of management should instead go to the owners of the business. Since Management is constantly selling the very shares they are buying the share price doesn't change - what has changed is who ends up with the wealth generated from the business - the owners suffer - management steals the wealth.

     

    Management should be paid cash, same as the employees. And if we'd fix corporate governance - management could earn a lot of cash for doing great jobs - and management could earn decent cash for doing a decent job - and management could earn a bounce out the door for doing terrible jobs.
    24 Nov 2012, 12:53 PM Reply Like
  • Tack

     

    Risk and return need to be weighed. Increasing dividend taxes increases the after tax return RISK of dividend stocks. Prices must come down. Combine that with rates at historical lows and artificially driven there by the FR it is irresponsible to suggest that there is some great advantage to sitting tight in anything that is interest rate sensitive. If your portfolio yield is 5% and you experience a 20% drop in the value of your portfolio it will take you 4 years to recover that loss. And when rates normalize the losses will be TREMENDOUS!!!!

     

    It will be the new bubble that people will look back and talk about as the successor to the dot com and housing bubble.

     

    This is not normal. You cannot think about these things with the old standard analytic points of view. I would not be relaxed right now at all and if possible try to insulate yourself with short positions at least to get through the next 2 to 6 months..

     

    I am also the same guy that called Apple lower, JPM higher after the $6 Billion hysteria and RIMM as a good spec stock. I could be wrong here but I don't think I am.
    24 Nov 2012, 04:48 PM Reply Like
  • TVP:

     

    Who said to blindly hold "interest-rate sensitive" issues?

     

    If rates rise, all those folks huddled in "safe" Treasuries are going to get clobbered, as will those in many over-par investment grade corporate bonds.

     

    That said, I'd expect all of the following yield-related issues to perform well in a rising-rate expanding economy:

     

    -- real estate issues & ETF's
    -- natural-resource issues & ETF's
    -- energy issues & ETF's
    -- convertible-debt issues & ETF's
    -- floating-rate issues & ETF's
    -- banks
    -- insurance companies
    -- some BDC's (those with significant warrants and options)
    -- some commercial REITs (equity & non-agency debt)
    24 Nov 2012, 05:00 PM Reply Like
  • Tack

     

    I just reread your first comment and that is how I read it. See below:

     

    "those who did not "sit tight," but panicked out at various bottoms, have gotten murdered."

     

    I think REITS will perform by the way.
    24 Nov 2012, 05:03 PM Reply Like
  • TACK

     

    If interest rates rise do you feel the metals will rise as well?
    25 Nov 2012, 10:40 PM Reply Like
  • "Lucas Kawa thinks an increase on dividend tax rates might actually benefit the millions who hold high-yield dividend stocks in their IRAs and are able to buy into a potential sell without being impacted by the rising tax rate."

     

    If I believe this guy, whoever he is, then isn't he saying now is a good time to SELL so I can buy the same stocks back later at a lower price?
    24 Nov 2012, 11:00 AM Reply Like
  • I would just expect that higher tax rates wouldn't hurt because you have to pay the tax man period end of story.

     

    If you own growth stocks you pay capital gains. If you own bonds you pay a tax on the coupon (except for munis and that could go away). If you own DG stocks you pay tax on the capital gains and dividend.

     

    The tax increase should be meaningless because it is applied to nearly every asset class. The only bullish thing is buying the current market overreaction, but the trouble is DG stocks became a crowded trade, which is why they are taking a hit.
    24 Nov 2012, 11:05 AM Reply Like
  • Brendan,

     

    "I would just expect that higher tax rates wouldn't hurt because you have to pay the tax man period end of story."

     

    Higher taxes lower after tax returns for everyone so I don't understand what you are trying to say here with this comment. After tax returns are what matter which means you will be poorer after a tax increase than you were before it. The proposed upcoming taxes on dividends would particularly hammer after tax dividend yields so this is no small issue since there is still a lot of money sitting in taxable accounts (including my own).

     

    Part of discounting the future returns from stocks takes into account the tax rates applied to those income streams and since taxes reduce income streams this implies that valuations will go down. That's the simple analysis.

     

    The unknown factor is whether investors will be willing to pay more for the same income stream which would be a form of multiple expansion. I don't know the answer to that question but I suspect we will find out in the near future.

     

    Selling for tax reasons alone is never a wise strategy so anyone doing it to avoid short-term taxes should think hard and fast about paying taxes now to avoid higher taxes later. The loss of compounding on the untaxed portion could be significantly better than the tax savings now.
    24 Nov 2012, 12:06 PM Reply Like
  • Kinda have heard similar comments, in terms of over taxation and doom and gloom due to debt, for the last 4 years. I have done very well during that period by ignoring the pessimists and following Graham's model of value investing.

     

    I believe the next 3-5 years are going to be as good as the last period and could in fact be sustained much longer as we add an enormous amount of capacity, employment and therfore swell the size of the middle class which will benefit all classes. Better get ready or get left out.
    24 Nov 2012, 11:15 AM Reply Like
  • There's always a clever sounding reason to not oppose more taxes or more govt. control. Bottom line... less private money operating in the economy. Decades of this "thinking" has destroyed the free America we once knew.
    24 Nov 2012, 11:26 AM Reply Like
  • More money as more people have it rather than less. Capitalism is at its best when ALL have money and spend it. What is so bad lifting all boats and ensuring we are fair in whatever the issues are, taxes, debts, opportunity, individualism, etc. Times are a changing, all can benefit.
    24 Nov 2012, 11:46 AM Reply Like
  • bgold1955: Because what you are implying as "fair" sounds like the endless redistributionism policy the left favors that makes things worse for everyone -- especially the people it is SUPPOSEDLY trying to help.

     

    History has shown that infantilizing people doesn't help them. However, buying their votes with promises of "more free money" certainly seems to help certain politicians win elections, as we saw a few weeks ago.

     

    1). 50ish years of the so called "war on poverty" has used such policies at its core. With more poverty now than ever, how is that working out for you redistributionists?

     

    2). Don't worry. ALL poor people who I have met (and many I have tried to help) spend ALL their money, and often as much as they can manage to borrow at usurious interest rates (and fees). THIS is the primary reason they ARE poor. (You CANNOT get them to save, regardless of any windfall they may get. This is apparently a cultural thing).

     

    3). Due to number 2, redistributing MORE money doesn't actually help. (Working out a way for everyone to be able to get decent health care might "help the poor"-- but remember, you cannot get something for nothing, so that creates a drag and disincentive on the productive part of the economy).

     

    4). Who are you or anyone else to tell someone else who has HONESTLY EARNED their money how it should be forcefully redistributed?

     

    ...

     

    So no, ALL do not benefit, that is a liberal red herring. Once inflation is factored in, the vast majority are hurt, in the long term.

     

    Disclosure:I am a libertarian. I contribute more money to worthy local charities (which I know are run well) than I spend on myself. I can afford it, so I don't mind doing it.

     

    My issue is the forceful redistribution (which is NEVER deemed enough by the left) in the name of "goodness".
    25 Nov 2012, 12:05 PM Reply Like
  • Outcast..... Full disclosure - I am a Moderate that has swung from both sides. You spent a bunch of time writing what you wanted to hear and wrongly making assumptions, my point is, in my opinion, we are entering a very favorable business cycle regardless of taxes. Either benefit from or keep on whining and lose out. I've greatly benefitted in the last 4 years and it's unfortunate that a bunch whiners have not. Preach to someone else as I completely stand by my comments on a strong middle class. If you disagree, you sure are not going to convince my otherwise.
    25 Nov 2012, 05:12 PM Reply Like
  • I think you should probably audit a couple history courses at your local community college.

     

    These last decades have seen the tax rates "trickle down" to one of their lowest points since the guilded age.

     

    The free America you fawn over a la the 1950s? Tax rates where nearly double where they reside now.

     

    Taxes are not going to ruin the economy. As a matter of fact they have been a boon for growth historically.
    25 Nov 2012, 05:47 PM Reply Like
  • ms

     

    So "taxes are a boon for growth." By all means raise them to 100% so we can all enjoy the growth. Drawing false relationships to try and achieve an objective is not helpful.

     

    And if you want the middle and lower class paying the rates they paid in the 1950's? Feel free to tell them. That is the majority of voters. I am sure they will take it well.
    25 Nov 2012, 08:38 PM Reply Like
  • @mscott, I'm much less concerned about tax rates than regulation. The regulatory and legal burden in this society is _staggering_.

     

    I don't consider money flowing around at the direction of govt. rules to be private money. Hence my previous comment.
    25 Nov 2012, 09:10 PM Reply Like
  • As a retiree living on his dividend income, the possibility of higher taxes would not induce me to sell any of my dividend paying shares. If anything, I'd have to buy more so as to have the same income, after tax, if rates rise. And if I did sell, there is no way to replace the income.
    I suspect this whole brou ha ha over the vulnerability of dividend paying shares to higher tax rates will be just as much of a non-event as "Y2K" was.
    24 Nov 2012, 12:17 PM Reply Like
  • Uncle,
    Welcome comment from a "voice of reason" !
    25 Nov 2012, 11:56 AM Reply Like
  • "When my taxes go up, I'll just invest more to make up for the loss."

     

    Do you see the logical fallacy in your argument? And further, why not operate an entire economy in this manner?
    25 Nov 2012, 09:13 PM Reply Like
  • If the spending continues, soon your IRA, 401k, and any other asset you may have will be confiscated by the government. All in the name of goodness, fairness, security, etc, etc.

     

    In regards to the idea that higher taxes on dividends is somehow good for investors...... thats garbage. It will just further enable professional management at firms to NOT return cash to shareholders.... and basically return it to themselves through options and equity grants.

     

    Here's whats going to happen. There will be some type of short term compromise where tax rates on upper income earners go up to 39%. Other deductions will be reduced and 50 Billion in spending cuts will be promised in the future (which will never happen). Once Obama has that, then he will demand Trillions more revenue next year as part of the grand bargain - The only spending that will actually be cut is defense - all social spending will again be promised in out years and never happen. No entitlement reform will be included.

     

    Then entitlement reform will take place late 2013 or early 2014.... and it will be basically more taxes.

     

    The tax sunami is coming and it isn't going to matter what type of assets you have or where they are. Those in power in DC believe its their money to be used as they see fit.
    24 Nov 2012, 12:18 PM Reply Like
  • The discussion here to date has focused mostly upon the short term effects to be expected upon dividend tax rates increases taking effect. In particular, the focus has been upon differing effects for those who have cash to invest and those who are fully invested in stocks at the transition point. Arguably an even more interesting discussion would focus upon the longer term effect of such increases.

     

    I would argue that modest increases (say on the order of 5 %) would have a surprisingly small effect positive or negative (in other words, after the initial gnashing of teeth the value of the equities in question would tend to revert to their respective norm values adjusted for changes to other extraneous factors that simultaneously occur). The key would be that the increases not be too large or be implemented over too protracted a period such that markets for the equities in question break decisively to the downside and the prospect of recovery in value is obscured for an indefinite period.

     

    No one personally likes to experience a tax increase but, arguably, like all life's other minor setbacks, we actually adjust to them rather faster and better than we expect (provided, of course, the setbacks are not crippling in nature).
    24 Nov 2012, 01:32 PM Reply Like
  • bob,

     

    According to research done by Christina Romer, President Obama's former Chair of Economic Policy, tax increases have a negative GDP multiplier of between 2 to 3 times:

     

    http://bit.ly/TVN7mJ
    "Tax Increases Reduce GDP
    "Tax changes have very large effects: an exogenous tax increase of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent."

     

    How do changes in the level of taxation affect the level of economic activity? The simple correlation between taxation and economic activity shows that, on average, when economic activity rises more rapidly, tax revenues also are rising more rapidly. But this correlation almost surely does not reflect a positive effect of tax increases on output. Rather, under our tax system, any positive shock to output raises tax revenues by increasing income."

     

    So if taxes go up by $100 billion, GDP is expected to go down by between $200-$300 billion as a result in that particular year. Given how low our current rate of growth is it is not clear whether we could withstand the hit to growth especially if we get all the proposed increases being discussed.
    24 Nov 2012, 01:45 PM Reply Like
  • Galt,

     

    We may be comparing the proverbial apples and oranges. I would not dispute Ms Romer's analysis concerning the probable effect of a general tax increase, particularly one that cannot be offset by fiscal stimulus or some other inducement for growth. My comment was addressing the likely effect of a modest increase of taxes on a particular class of income (i.e. dividends). I was postulating that this might only have a modest and short term effect on the general economy and, consequently, be followed by significant recovery in equity value even for those directly effected.
    24 Nov 2012, 02:26 PM Reply Like
  • Thomas:
    "Investors who have sat tight for the last decade have gotten killed. "

     

    Not sure what you have been "sitting in" that got you killed in ten years, but if you are talking about good quality, dividend stocks, you are dead wrong.

     

    Over the last ten years, boring old P&G has given investors an average total annual return of 8.4%.over the last ten years. CHD has delivered an average annual total return of 17.9% per year to its investors.

     

    If you look from 2000-2010, an investment made in MMM on December 31, 1999 had a return of 117.79% on October 8, 2010. The dividends were responsible of 30.21% of the total return for that period.
    24 Nov 2012, 01:50 PM Reply Like
  • Thomas,

     

    I agree with tikigod18. For example, over the last 10 years BTI has an average annual total return of 20.94%, RAI 19.68%, MCD 18.5%, GIS 7.98%, HRL 11.57%, O 12%. (M*)
    25 Nov 2012, 11:53 AM Reply Like
  • tiki and jdh

     

    As the Fed has driven down rates to abnormally low levels interest rate sensitive investments have done well of all kinds as well as commodities. So what are the chances that interest rates are cut in half or double from here? The probability on the latter keeps rising. If you keep betting on the former which was a good bet in the last decade you will meet your Waterloo. People who think "it is different now" and who are complacent come and go every boom and bust. Don't be one of them.

     

    I chose the S&P 500 as a "sit tight" measure of the market as that is a broad measure and if you are going to sit tight then that should be a reasonable place to sit. So statement is valid. You can pick out some investments and some sectors but overall the market is down significantly in real terms. Take Apple out and you get another hard check.
    25 Nov 2012, 03:16 PM Reply Like
  • TVP,

     

    I'll stick with dividend growers. If Mr Market marks them down, that does not affect their dividends, and in fact simply provides opportunities to buy at higher yields. I do not try to beat the market, and I do not care much what the market does. I do like to collect dividends, and the yield on the S&P 500 is pathetic, just not as pathetic as treasuries.

     

    Don't forget, in the short run the market is a voting machine, but in the long run it is a weighing machine. Dividend growers over the long term provide superior returns to all other equities in the S&P 500, so they are the 'sit tight' equities, not the entire S&P 500.
    25 Nov 2012, 03:29 PM Reply Like
  • jd

     

    How about a 30 to 50% loss of capital? Is that something that makes you take note?

     

    You have a double whammy of taxes going up and yields going up at some point.

     

    Generally agree with dividend stocks providing great returns over the loooong run. Although Freddie/Fannie and a number other bank stocks and mortgage issuers that were dividend players show you can lose your shirt.
    25 Nov 2012, 05:11 PM Reply Like
  • TVP,

     

    What loss of capital? Not for me.
    25 Nov 2012, 07:33 PM Reply Like
  • jdh

     

    Look boss the plane!
    25 Nov 2012, 08:39 PM Reply Like
  • TVP,

     

    I agree that yields will go up in the future, at least for bonds. Taxes will also go up, and my guess is that we will go over the fiscal cliff and everyone will pay more taxes. But that is not a reason for the doom and gloom that you are expressing, at least not for dividend investors. For bond investors rising rates will be a problem if they do not hold bonds to maturity. And rising taxes means that a larger portion of their interest income will be taxed away. These are all reasons to be invested in dividend growth stocks. There is no reason from historical experience to think that dividend payers will reduce payouts if dividend taxation goes up. The dividend champions have been paying rising dividends for many years in many different tax regimes. Yes, higher dividend taxes will affect dividend yields, but then dividend growth stocks have a habit if increasing dividends, which will help reduce or even eliminate after tax yields for dividend stocks.

     

    So I say again, let the markets mis-price quality dividend stocks. Those if us who own them have no reason to sell during market panics, and if you do not sell then you do not lose. Just ask any of the many dividend growth investors that write regularly on SA and that experienced the 2008-09 crash; they held on and kept collecting dividends with no loss of capital. Only those who panicked and sold made those 30-50% losses you refer to.
    25 Nov 2012, 09:19 PM Reply Like
  • Once the new rates are established they become the new normal. People will make investment decisions based off those new rates and stocks will rebound because the alternatives are still slim. I would much rather get 75 percent of Altria's dividend of 5.4 percent then many of the other options out there.
    24 Nov 2012, 03:08 PM Reply Like
  • Well said msumak.

     

    I was saying much the same thin in my earlier comments (but not nearly so well).
    24 Nov 2012, 05:37 PM Reply Like
  • omg, the cat is out of the bag!
    24 Nov 2012, 06:29 PM Reply Like
  • Surprise!

     

    Does anyone really think IRAs/ 401ks will continue to be "tax free" forever with the new and growing Obama re-distributionist (eg "give me more free stuff") majority dominating the game at the ballot box?

     

    If so, think again. The demographic and social die has been cast.
    25 Nov 2012, 08:22 AM Reply Like
  • Indeed strap. IRAs and 401s will lose their tax status for the "wealthy," much like Social Sec. benefits became taxed, and like the ATM came in, and like deductions are phased out for higher incs, etc.

     

    This is not America as it used to be. Invest accordingly.
    25 Nov 2012, 09:13 AM Reply Like
  • Just thank God that the democrats didn't regain the House.
    25 Nov 2012, 11:22 AM Reply Like
  • Good grief, the sky is not falling, the Bush tax cuts have been on the books for all of a decade, four of those years under Obama. Our nation did fine with the old level of taxation. While overdue, now is the time to repeal them, which is at most all the Democrats and Republicans will agree to. Bush gave a gift to the American people, a gift that significantly benefited the wealthy and has significantly impacted our deficit. I'm sure we will all get used to the new normal.
    25 Nov 2012, 08:16 PM Reply Like
  • Lets not forget the nearly 4 decades, from Vietnam to Iraq, of distant foreign war that got us where we are today. What is the return on that investment? How many successful Western Style Democracies have we set up in the last 4 decades? I hear a lot about cutting social programs from the right. Frankly, I find it hard to be a fiscal conservative and miss the dismal return on investment and huge cost of our near continuous war mongering. Obama, or whomever is in office, is going to have to pay for this or, take the politically more popular solution, just keep kicking the can down the road (until we eventually destroy ourselves from within). Lets not stop investing in ourselves: fixing pot holes, investing in education, healthcare, etc just so we can keep spending more than the next 17 countries combined on our military industrial complex. And yeah, the sky isn't falling. But if you really care about debt, look first toward the costs, in both lives and dollars, of our 4 decades of warmongering.
    25 Nov 2012, 08:51 PM Reply Like
  • @james / @ptn,

     

    In my view, yes, the sky is falling. Not because of specific tax plans or rates; that's too simplistic. More fundamentally, the basic relationship between govt. and citizen is on a permanent trajectory now. Govt. is a provider, a guarantor of sustenance. That reduces prosperity as people look to ride rather than pull, and produces less kind/generous fellow citizens, who decide personal generosity isn't needed with a govt. program there to help others.

     

    We used to honestly be a society where you had to provide for yourself or receive help voluntarily from others. That generates prosperity for all, and creates generous, giving people. De Tocqueville's famous observation that America was a nation of groups, organizations, and societies was on the mark, precisely because we had such limited govt. at one time.

     

    Ironically, limited govt. creates more social cohesion, more generosity, and a tighter feeling of community since we must rely on each other.
    25 Nov 2012, 09:18 PM Reply Like
  • How many democracies? Well I try to list them.

     

    Poland
    Latvia
    Lithuania
    Estonia
    Slovenia
    Slovakia
    Czech Republic
    Bulgaria
    Romania
    Ukraine (questionable but they are having elections)
    Georgia
    Thailand
    Vietnam (ironic from your comments)
    Argentina
    Brazil
    Peru
    Mongolia
    Armenia
    Croatia
    Macedonia
    Nepal
    Malayasia
    Indonesia
    Several Pacific Islands nations
    And I'm sure I've left out several

     

    Countries that have more freedom than 40 years ago:

     

    Russia
    Kazahkstan
    Kyrgyzstan
    Tajikistan
    China
    Azerbaijan

     

    And again I'm sure I've left out several.

     

    One country where we have less freedom than 40 years ago:

     

    USA
    25 Nov 2012, 09:44 PM Reply Like
  • James:

     

    RIGHT ON !!!

     

    ;
    25 Nov 2012, 11:31 PM Reply Like
  • My goodness- every SA article these days seems to get bogged down in political arguments. I think the gist of the article is that most retirement savers are locked in conventional IRA/401K plans where we are subject to regular income tax rates on all our holdings. So any changes in the dividend or capital gains tax rates doesn't matter to us. Thanks to G.W. , my retirement tax rate has been lower than the rate under which I deferred taxes.
    25 Nov 2012, 09:33 PM Reply Like
  • Agreed. You used to be able to hold good discussions down here but now everything is becoming politicized.
    26 Nov 2012, 05:26 AM Reply Like
  • Well, so far so good for me. Trading has done me well, still at a 10% annual gain trading.
    One note of caution, everyone thinks things will work out. I look at EW and i do not like what i see. Crashes surprise everyone. No one expected the 29 crash or the 87 crash, first one at 91% loss and 87 at 50% loss. True over the long run it all worked out but the 29 crash, the market did not reach that high again until 52, 30 years! It's foolish to expect always the best, that's when things turn sour. I said gold going to over 1500 back in 2009 and it did. I think next year we hit a wall. I am not a pssimist since i expect to put 90% of my cash in the market when gold hits 700. Best luck to all.
    25 Nov 2012, 09:41 PM Reply Like
  • No Tax is a good tax. Taxes are stealing period. Look at what these asshats have done. The Gov. Buys the Bonds and Treasuries are so cheap now Grandma and Grandpa have to come into the Wall Street Casino to make a buck. In the mean time the markets are being minipulated by Obummer and his pal Uncle Ben at a tune of 4.2 Billion Dollars a week blowing though Shovel Ready, QE 1,2 and now 3 Dollars some one will have to pay back. This is insanity. Grandma and Grandpal are going to get their asses handed to them as if deflating the value of our Dollar was no bad enough. I do not see how American will be able to Retire in America in ten years and may have took look else where to live with any quality of life. I do not even recognize the USA any more. This is more of a Banana Republic.
    26 Nov 2012, 01:54 AM Reply Like
  • heh

     

    And Mitt ran on completely eliminating both cap gains and dividend taxes and Ryan was going to cut govt. spending ... for real.

     

    I guess americans don't believe in prosperity anymore.

     

    We have officially become an idiocracy.
    26 Nov 2012, 02:48 AM Reply Like
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