• Tag Archives Tax
  • Goldman Showers Execs With $100 Million In Early Bonuses To Avoid Trump Tax Hit

    Goldman Sachs has accelerated nearly $100 million in stock awards to top executives before the end of the year in order to avoid unfavorable changes in the new tax code, according to public filings posted Friday.
    The most sweeping overhaul of U. S. tax code in 30 years includes a provision which caps a corporate deduction for executive pay; under current law, corporations can deduct up to $1 million per executive’s base salary, however there’s no cap on deductions for performance-based pay, such as bonuses.
    Under the new provisions, both base salary and performance bonuses count towards to $1 million cap – which is why Goldman accelerated $94.8 million in bonuses originally scheduled for January, 2018. By paying the bonuses early, the bank will save money on its own tax bill.

    This post was published at Zero Hedge on Sat, 12/30/2017 –.


  • California Supreme Court Set For Ruling That Could Cut Pensions For Public Workers

    For decades now public pensions have been guided by one universal rule which stipulates that current public employees can not be ‘financially injured’ by having their future benefits reduced. On the other hand, that ‘universal rule’ also necessarily stipulates that taxpayers can be absolutely steamrolled by whatever tax hikes are necessary to fulfill the bloated pension benefits that unions promise themselves. Alas, that one ‘universal rule’ may finally be at risk as the California Supreme Court is currently considering a case which could determine whether taxpayers have an unlimited obligation to simply fork over whatever pension benefits are demanded of them or whether there is some “reasonableness” test that must be applied. Here’s more from VC Star:

    This post was published at Zero Hedge on Fri, 12/29/2017 –.


  • China Eliminates Taxation For Foreign Companies Investing in China

    China has responded to global competition that is exploding in the wake of the Trump Tax Reform. While domestic news in the USA continues to bash the tax reform on class warfare, the rest of the world is trying to come to terms with what Trump has set in motion. China’s response is to allow foreign companies complete tax-free business on any profits they reinvest in China upping the stakes. Their position was stated by the Ministry of Finance and it is designed to ‘foster the growth of foreign investment, improve the quality of foreign investment, and encourage foreign investors to continuously expand their investment in China.’ The tax exemption applies retroactively from January 1st, 2017 beating Trump at his own game once more. Foreign companies who have paid taxes in China for 2017 will be refunded.

    This post was published at Armstrong Economics on Dec 30, 2017.


  • The Hidden-in-Plain-Sight Mechanism of the Super-Wealthy: Money-Laundering 2.0

    Financial and political power are two sides of one coin.
    We all know the rich are getting richer, and the super-rich are getting super-richer. This reality is illustrated in the chart of income gains, the vast majority of which have flowed to the top .01%–not the top 1%, or the top .1% — to the very tippy top of the wealth-power pyramid:
    Though all sorts of reasons have been offered to explain this trend–I’ve described the mechanisms of financialization here for years–two that don’t attract much mainstream media attention are money laundering and control fraud, i.e. changing the rules of what’s legal so what was illegal yesterday is legal today–presto-magico, illegally skimmed wealth is now “legal.”
    Correspondent JD recently submitted an excellent summary of the progression from Money Laundering 1.0 to Money Laundering 2.0:
    Money laundering 1.0 is making dirty money legal, control fraud is manipulating the ‘legal’ options, and money laundering 2.0 is making sure that ‘legal’ fortunes are not taxed and cannot be clawed back.”
    Conventional money laundering works by shifting ill-gotten gains into legitimate banks and/or assets. Ill-gotten gains can be laundered quite easily by buying homes or businesses (in the U. S., Europe, etc.) with cash. The home or enterprises can then be sold and the net is now legit.

    This post was published at Charles Hugh Smith on DECEMBER 29, 2017.


  • Stock Markets Hyper-Risky 2

    The US stock markets enjoyed an extraordinary surge in 2017, shattering all kinds of records. This was fueled by hopes for big tax cuts soon since Republicans regained control of the US government. But such relentless rallying has catapulted complacency, euphoria, and valuations to dangerous bull-slaying extremes. This has left today’s beloved and lofty stock markets hyper-risky, with serious selloffs looming large.
    History proves that stock markets are forever cyclical, no trend lasts forever. Great bulls and bears alike eventually run their courses and give up their ghosts. Sooner or later every secular trend yields to extreme sentiment peaking, then the markets inevitably reverse. Popular greed late in bulls, and fear late in bears, ultimately hits unsustainable climaxes. All near-term buyers or sellers are sucked in, killing the trend.
    This mighty stock bull born way back in March 2009 has proven exceptional in countless ways. As of mid-December, the flagship S&P 500 broad-market stock index (SPX) has powered 297.6% higher over 8.8 years! Investors take this for granted, but it’s far from normal. That makes this bull the third-largest and second-longest in US stock-market history. And the superior bull specimens vividly highlight market cyclicality.
    The SPX’s biggest and longest bull on record soared 417% higher between October 1990 and March 2000. After it peaked in epic bubble-grade euphoria, the SPX soon yielded to a brutal 49% bear market over the next 2.6 years. The SPX wouldn’t decisively power above those bull-topping levels until 12.9 years later in early 2013, thanks to the Fed’s unprecedented QE3 campaign! The greatest bull ended in tears.

    This post was published at ZEAL LLC on December 29, 2017.


  • As The Yield Curve Crashes To 10 Year Lows, Trader Shows “How To Put On A Steepener”

    Yesterday saw the US Treasury yield curve collapse to a fresh cycle low – the flattest curve since Oct 2007 – erasing the hoped-for trend change shift from last week…
    And this is occurring as net positioning in the long-end has never been more bullish.
    Between that and the effect of Trump’s tax reform plan, The Macro Tourist’s Kevin Muir lays out his thesis for getting long a steepening trade into the new year and details how to do it…
    Over the Christmas break, there has been a lot of chatter about this great chart from 13d Research that has been labeled, ‘the most important chart in the world.’

    This post was published at Zero Hedge on Thu, 12/28/2017 –.


  • NY Gov Rips Trump Tax Bill: “Let’s Pillage The Blue To Give To The Red”

    It seems that Trump’s tax plan has officially turned New York Governor Andrew Cuomo into a “trickle down” economics guy.
    Apparently unhappy that the new tax legislation will result in higher taxes for the “millionaire, billionaire, private jet owners” of his state who have mortgages over $750,000 and annual property taxes of over $10,000, Cuomo said that the White House’s efforts to “spread the wealth around” are nothing more than an effort to “pillage the blue to give to the red.”
    “Look, there’s always politics in crafting of legislation. But, this was an egregious, obnoxious…what the Senate was saying is because we have no Senators from the ‘Blue States’ we don’t care. So let’s pillage the blue to give to the red.”
    “That’s never been done in this nation before. That’s partisan politicking over any semblance of good government.”

    This post was published at Zero Hedge on Thu, 12/28/2017 –.


  • Trump Tax Cuts – The Spark That Burns Down The EU

    Authored by Tom Luongo,
    For most of this year I’ve been wondering what would the spark that would set off a banking panic in the European Union.
    I know, but what do I do for fun, right?
    I’ve chronicled the political breakdown of the EU, from Brexit to Catalonia to Germany’s bitch-slapping Angela Merkel at the ballot box. All of these things have been open rebukes of EU leadership and it’s insane neoliberal push towards the destruction of national sovereignty and identity.
    And what has propped up this slow train-wreck to this point has been the world’s financial markets inherent need to believe in the relative infallibility of its central bankers.
    Because without competent people operating the levers of monetary policy, this whole thing loses confidence faster than you can say, ‘Bank run.’
    The confluence of these things with the big changes happening politically here at home with President Trump are creating the environment for big trend changes to begin unfolding.
    And, as always, you have to look to the sovereign bond and credit markets to see what’s coming.

    This post was published at Zero Hedge on Thu, 12/28/2017 –.


  • Tax Plan Jitters Cause Sudden Collapse In Manhattan Apartment Prices In 4Q

    Apparently the combination of a massive flood of excess supply in the form of new luxury developments and a Trump tax plan that penalizes people living in expensive cities by capping SALT, mortgage interest and property tax deductions was simply too much for the Manhattan real estate market to ignore in 4Q 2017. After reaching an all-time high of nearly $1.2 million in 2Q 2017 (chart per Douglas Elliman)…

    …the Wall Street Journal this morning notes that median Manhattan apartment prices have dropped to $1.08 million in 4Q 2017, down 9.8% compared to the peak set earlier this year.
    Not surprisingly, Pamela Liebman, the president of New York real estate broker The Corcoran Group, attributed the pause by Manhattan buyers to the tax bill and said that folks are increasingly convinced that prices peaked in 2017 and may continue to be under pressure.

    This post was published at Zero Hedge on Dec 27, 2017.


  • In An Unexpected Outcome, Trump Tax Reform Blew Up The Treasury Market

    Over the past week we have shown on several occasions that there once again appears to be a sharp, sudden dollar-funding liquidity strain in global markets, manifesting itself in a dramatic widening in FX basis swaps, which – in this particular case – has flowed through in the forward discount for USDJPY spiking from around 0.04 yen to around 0.23 yen overnight. As Bloomberg speculated, this discount for buying yen at future dates widened sharply as non-U. S. banks, which typically buy dollars now with sell-back contracts at a future date, scrambled to procure greenbacks for the year-end.
    However, as Deutsche Bank’s Masao Muraki explains, this particular dollar funding shortage is more than just the traditional year-end window dressing or some secret bank funding panic.
    Instead, the DB strategist observes that the USD funding costs for Japanese insurers and banks to invest in US Treasuries – which have surged reaching a post-financial-crisis high of 2.35% on 15 Dec – are determined by three things, namely (1) the difference in US and Japanese risk-free rates (OIS), (2) the difference in US and Japanese interbank risk premiums (Libor-OIS), and (3) basis swaps, which illustrate the imbalance in currency-hedged US and Japanese investments.

    This post was published at Zero Hedge on Dec 27, 2017.


  • The Treasury Yield Curve Is Crashing Most Since Brexit

    Remember the post-tax-reform, pre-Christmas spike in yields and the yield curve? Yeah, that’s all over now!!!!
    Treasury yields are down 4 days in a row with a major collapse occurring today as the long-end plunges over 8bps – the most in 3 months. The 2s30s yield curve is down over 8bps – the biggest-single-day flattening since Brexit (June 2016)…

    This post was published at Zero Hedge on Dec 27, 2017.


  • $1.5 Trillion GOP Tax Bill Signed By Trump – Housing Largely Uneffected Thanks To Lower Marginal Tax Rates (Ham and Mayonnaise!)

    This is a syndicated repost courtesy of Snake Hole Lounge. To view original, click here. Reposted with permission.
    President Trump on Friday signed the Republican $1.5 trillion tax overhaul that is expected to trigger tax cuts for most Americans next year. The GOP/Trump bill undoes some of the damage caused by the tax increases put in place on January 1, 2015 by the Obamacare legislation such as increasing the top bracket from 35% to 39.6%.
    Although this is not related to housing per se, the corporate tax rate has been cut to 21%, putting the US in the middle of the G-7 nations instead of being the most heavily tax major nation on earth.

    This post was published at Wall Street Examiner on December 26, 2017.


  • BRICS the Rise & Fall

    The first thing to go when a country is moving into economic crisis is the arts. This is intermixed with various social programs. As the economic crisis broadens, demand for taxing the rich rise. However, all this accomplishes is to cause capital to hide and hoard even more refusing to invest or spend and this then adds to the economic decline.
    The BRICS were touted as the new rage in the world economy. The BRICS were even holding their own summits and they were supposed to surpass the G7, were all the forecasts. Brazil, Russia, India, China and South Africa became known as the ‘BRIC’ nations back in 2001 which was a term coined by of course Goldman Sachs.

    This post was published at Armstrong Economics on Dec 27, 2017.


  • How To Prevent A Tax Levy

    Far too many people underestimate the IRS for its ability to follow through and get that last dime from them. The ‘IRS’ might as well stand for ‘is really serious,’ so the way you handle your taxes should be serious, too.
    They won’t pull the rug out from underneath you, though. You will get a notice and demand for payment, a notice of intent to levy, and a notice of a right to a Collection Due Process hearing. These will come in the form of five letters that is often referred to as the ‘notice stream’. If you don’t pay the balance or arrange to pay the balance by the time you get the last notice, the levy could be issued. The IRS will garnish your wages. Remember that ‘really serious’ part? The IRS issued 3 million in levies in 2012 alone.
    What can you do? There are steps you can take to have the levy lifted but we recommend doing one better – don’t get the levy in the first place. Ahhh, the power of prevention. Even if you are in dire straits, there are things you can do to keep this from happening. Read on for more about how to prevent a tax levy.
    Get Confirmation; Then Negotiate The first thing you need to do is make sure the IRS didn’t make a mistake. Hey, it’s rare but it does happen. If you’ve been able to verify your balance, it’s time to negotiate. It is possible to contact the IRS and come up with a payment arrangement. Figure out what you can pay and go from there, securing the help of a tax professional if you need to. Monthly payment installations can be arranged. As long as you make the monthly payments, the levy will be deferred and likely canceled altogether.

    This post was published at Deviant Investor on December 26, 2017.


  • The Endlessness Of A Temporary Tax

    Governments regularly claim that they favour tax reform. When this claim has been repeated so many times that virtually no one believes them anymore, they announce a tax reform, to show that they really mean it. They then reshuffle the existing taxes to give the appearance that taxation will actually be lowered.
    When it becomes apparent that the reform is a sham, they often pull a rabbit out of a hat in the form of a ‘temporary’ tax, that’s pre-legislated to end sometime in the future.
    Sounds promising.
    So, let’s have a look at one such temporary tax and see how things worked out.
    The US government introduced the War Revenue Act of 1898 – a tax on telephone use – under the claim that it was necessary to pay for the Spanish American War.
    In what way does telephone use pertain to a government invading another country? Well, actually, one has nothing to do with the other. But, let’s leave that discussion for another day and see how this temporary tax played out.

    This post was published at Zero Hedge on Dec 26, 2017.


  • A Natural Experiment For Philadelphia’s Soda Tax

    The city of Philadelphia’s controversial soda tax is providing a lot of material for serious scientists to evaluate the effects of arbitrarily imposing a tax on the distribution of a range of naturally and artificially-sweetened beverages. Since we’re near the end of the tax’s first year of being in effect, we thought we’d focus upon one of the more interesting findings to date.
    Consumers are primarily the ones paying the tax
    Thanks to the quirks of geography and development, some parts of the terminals at Philadephia’s international airport fall within Philadelphia’s city limits while other parts do not, which means that Philadelphia’s Beverage Tax is imposed in some parts of the airport while not in others. Cornell University’s John Cawley recognized that situation would make for a natural experiment for assessing some of the impact of the tax, where they collected data for soda sales at the airport in the period of December 2016 through February 2017, which provides a window into how both prices and sales changed as the tax went into effect on 1 Janaury 2017. Here’s a summary of the research’s findings:
    The research, co-written with Barton Willage, a doctoral candidate in economics, and David Frisvold of the University of Iowa, appeared Oct. 25 in JAMA: The Journal of the American Medical Association.
    Philadelphia’s tax of 1.5 cents per ounce on sugar-sweetened beverages is one of several passed by cities throughout the United States. The goal is to increase prices and dissuade people from drinking soda to benefit their health. These taxes have been controversial; Cook County, Illinois, recently repealed its tax, which had only been in place a few months.

    This post was published at Zero Hedge on Dec 26, 2017.


  • California renters will come out ahead with new tax plan while homeowners will see a higher tax bill under GOP plan.

    You constantly hear that owning a home is a no brainer in California because you will always get major tax benefits. Well the new GOP tax plan is actually going to benefit California renters while California homeowners in crap shacks will see higher tax bills. It is an interesting tax proposal because the typical US household owning a typical $200,000 home is going to come out ahead. This is your bread and butter ‘American’ family. However, Taco Tuesday Baby Boomers and Gen X’rs in California have been getting mega subsidies for buying hyper expensive crap shacks. Every tax bill that comes out seems to favor homeowners. In fact, I haven’t seen one that hasn’t favored homeownership. But the way the tax bill is setup, crap shack owners are going to actually have to pay more and renters are going to benefit nicely from the much larger standard deduction. We are now seeing some scenarios where this is playing out.
    Crap shacks getting more expensive
    The L. A. Times has a piece where they examine various households in regards to the proposed tax plan. In one example you have a professional couple that bought a crap shack in Redondo Beach (3 bedrooms and 2 bathrooms – your standard million-dollar SoCal home). They paid $915,000 for the place back in 2016. They are going to see an increase in their tax bill:

    This post was published at Doctor Housing Bubble on December 26, 2017.


  • Trump’s Tax Cuts: The Good, The Bad, and the Inflationary

    At last, tax reform is happening! Last week, President Donald Trump celebrated the passage of the most important legislation so far of his presidency.
    The final bill falls far short of the ‘file on a postcard’ promise of Trump’s campaign. It even falls short of the bill trotted out by Congressional Republicans just a few weeks ago. It is, nevertheless, the most significant tax overhaul in more than a decade.
    Corporations and most individual taxpayers will see lower overall rates. That’s the good news.
    Unfortunately, there is also some not so good news investors need to be aware of.
    Because no spending cuts will be attached to ‘pay’ for the tax rate reductions, the legislation will grow the budget deficit by an estimated $1 trillion to $1.5 trillion over the next decade. The actual number could end up being smaller…or bigger, depending on how the economy performs. But more red ink will spill.

    This post was published at GoldSeek on Tuesday, 26 December 2017.


  • Man Who Delivered Gift-Wrapped Horseshit To Steven Mnuchin Compares Himself to Jesus

    An LA County psychologist who thinks President Trump’s tax bill stinks to high heaven, compared himself to Jesus after admitting he delivered a gift-wrapped box of horseshit as a Christmas present to Treasury Secretary Steve Mnuchin. Robby Strong told AL.com he dropped off the box of horse manure at Mnuchin’s house as an ‘act of political theater’ to hammer home the point that ‘Republicans have done nothing for the American worker.’
    Boldly taking the Christ-analogy to a place it has never gone before, Strong told SoCal radio station 89.3 KPCC that “what I did, I would like to compare to what Jesus did when he went into the temple and overturned the tables of the money-changers, who were exploiting the people financially in the name of religion.”
    ‘In the long run, if we don’t do stuff like this, what are we going to have left?’ Robby told KPCC. ‘I feel like that’s what the GOP has done to the American people,’ added the man who, bizarrely, is a psychologist with the LA Department of Mental Health.
    Things start to make much more sense, however, once we learn that Strong claims he was an organizer for the Occupy LA movement; predictably he sides with critics of the $1.5 trillion tax overhaul who say it favors corporations and the wealthy, CBS Los Angeles reported.

    This post was published at Zero Hedge on Dec 25, 2017.