What Will the Tax Bill Do to the Housing Market?

The enormity of this change has not been fully appreciated just yet.
The tax bill now becoming law will impact the housing market in a big way via four mechanisms that gut the government’s subsidies of homeownership:
Nearly doubling the standard deduction (but wait…) Lowering the cap on the mortgage interest deduction for new purchase mortgages Capping the deduction for state and local taxes at $10,000 Eliminating the deduction for interest on home-equity debt, such as HELOCs. The Big Equalizer: The New Standard Deduction
Nearly doubling the standard deduction – from $6,350 for individuals and $12,700 for married couples filing jointly in 2017 to $12,000 and $24,000 respectively in 2018 – would be a simple way of giving many Americans an instant, massive, no-hassles tax cut.
But wait: The law also eliminates the personal exemption of $4,050 allowed for each family member. A married couple will see an increase in the standard deduction of $11,300 (compared to 2017). But it will lose $8,100 in personal exemptions. This whittles down the net increase in deductions to $3,200. For couples with kids, it gets more complicated.

This post was published at Wolf Street on Dec 20, 2017.

How That $1.4 Trillion In Repatriated Cash Might Result In U.S. Job Losses, Not Gains

Moody’s estimates that there is roughly $1.4 trillion dollars belonging to U. S. corporations that has been building up in foreign bank accounts for years now to avoid the 35% corporate tax that would be levied on them if they were brought back to the U. S. Of course, getting that $1.4 trillion back to the U. S. has been a critical component of the Trump administration’s tax reform bill as Gary Cohn and Steve Mnuchin have repeatedly argued that the money would be put to good use building factories and creating jobs for American workers.
That said, if history, math and logic are any guide, then the overwhelming majority of that money would be promptly returned to shareholders via stock buybacks and dividends immediately upon hitting U. S. shores. In fact, as University of Chicago law professor Dhammika Dharmapala told the Wall Street Journal, when a similar tax holiday was enacted in 2004 roughly $0.94 of every $1.00 was spent on buyback and dividends…something Gary Cohn apparently found out for the first time via a recent impromptu survey that yielded some ‘surprising’ results, if only to him…

This post was published at Zero Hedge on Dec 19, 2017.

The Full List Of Every GOP Senator Who Stands To Be Personally Enriched By The Tax Bill

Submitted by David Sirota of International Business Times
When the U. S. Senate takes up the final tax bill this week, more than a quarter of all GOP senators will be voting on a bill that includes a special provision that could give them a new tax cut through their real estate shell companies, according to federal records reviewed by International Business Times.
The provision was not in the original bill passed by the Senate on Dec. 1. It was embedded in the final bill by Sen. Orrin Hatch of Utah, who is among the lawmakers that stand to personally benefit from the provision.
In response to Democratic lawmakers who have slammed the provision as a lobbyist-sculpted giveaway to the rich, Republican Majority Whip John Cornyn promoted on Twitter a column by Ryan Ellis, a registered bank lobbyist who has been working to influence the tax legislation and who has defended the provision.
In all, 14 Republican senators (see list below) hold financial interests in 26 income-generating real-estate partnerships – worth as much as $105 million in total. Those holdings together produced between $2.4 million and $14.1 million in rent and interest income in 2016, according to federal records.
IBT first reported on the tax carve-out, which allows investors in ‘pass-through’ entities, including real-estate partnerships such as LLCs and LPs, with few employees to deduct part of their income that passes through those partnerships. In response to IBT’s reporting, Republican Sen. Bob Corker, who owns up to $35 million in ‘pass-through’ real-estate interests, claimed he did not know of the carve-out when he announced his support for the legislation on Friday, after previously casting the only Republican vote against the bill in the Senate, which did not then include the provision.

This post was published at Zero Hedge on Dec 19, 2017.

Freedom of Religion under Attack?

The attack upon religion in Australia is not what one would call a direct assault. It is also not unique to just Australia. This is simply the way prosecutors expand the envelope of power. They look at a single issue and seek to address that issue alone. They rarely look at the implications beyond their immediate objective.
Take FACTA in the USA. The objective is to catch people avoiding taxes by putting their profits offshore. They begin with that assumption and ignore the fact that NOT everyone doing business offshore is to hide taxes. They then obstruct businesses from expanding globally. In my own case, despite the fact that we do business around the globe, because I am an American, I cannot open an account anywhere outside the USA because nobody wants to deal with the FACTA reporting back to the USA. My only solution is to go public since an American citizen can no longer own and operate a multinational business privately. Here we have a law designed to get tax evaders, but it blocks the legitimate business from operating. The only exception is the multinational corporation.

This post was published at Armstrong Economics on Dec 19, 2017.

The Darkest Hours

This is a syndicated repost courtesy of Kunstler. To view original, click here. Reposted with permission.
The Tax ‘Reform’ bill working its way painfully out the digestive system of congress like a sigmoid fistula, ought be re-named the US Asset-stripping Assistance Act of 2017, because that’s what is about to splatter the faces of the waiting public, most of whom won’t have a personal lobbyist / tax lawyer by their sides holding a protective tarpulin during the climactic colonic burst of legislation.
Sssshhhh…. The media has not groked this, but the economy is actually collapsing, and the nova-like expansion of the stock markets is exactly the sort of action you might expect in a system getting ready to blow. Meanwhile, the more visible rise of the laughable scam known as crypto-currency, is like the plume of smoke coming out of Vesuvius around 79 AD – an amusing curiosity to the citizens of Pompeii below, going about their normal activities, eating pizza, buying slaves, making love – before hellfire rained down on them.
Whatever the corporate tax rate might be, it won’t be enough to rescue the Ponzi scheme that governing has become, with its implacable costs of empire. So the real aim here is to keep up appearances at all costs just a little while longer while the table scraps of a four-hundred-year-long New World banquet get tossed to the hogs of Wall Street and their accomplices. The catch is that even hogs busy fattening up don’t have a clue about their imminent slaughter.

This post was published at Wall Street Examiner by James Howard Kunstler ‘ December 18, 2017.

The Rug Yank Phase of Fed Policy

Bogus Jobs Pay Big Bucks
The political differences of today’s two leading parties are not over ultimate questions of principle. Rather, they are over opposing answers to the question of how a goal can be achieved with the least sacrifice. For lawmakers, the goal is to promise the populace something for nothing, while pretending to make good on it.
Take the latest tax bill, for instance. The GOP wants to tax less and spend more. The Democrat party wants to tax more and spend even more. We don’t recall seeing any proposals to tax less, spend less, and shrink the size of the state. And why would we?
Today’s central planners and social engineers are enlightened and progressive. They know much more about anything and everything than the rest of us. In particular, they share a general sense that they know how to spend your money better than you.

This post was published at Acting-Man on December 15, 2017.

Market Talk- December 15, 2017

Asia drifted with prices for core all closing around -0.5% lower for the day. Volumes were light but the lack of conviction as well as year end book-squaring were the key discussion topics. The Dollars decline did not help Exporters within the Nikkei, but that has been an issue for a few days this week. However, late in the US trading day, we have seen a reversal of these declines with the DXY clawing back some earlier losses and is happy playing high 112’s against the Yen. Stocks had opened weak and did well to recover into positive territory at one stage probably the result of a good Tankan print. However, that was lost again at the cash close. Late in US trading we see futures back up but lets see how cash opens again on Monday. The Hang Seng suffered most with a little over 1% decline. This was due mainly to property and financials trading heavy.

This post was published at Armstrong Economics on Dec 15, 2017.

“Suspense Mounts” – Timing Of Tax-Reform Votes In Limbo As More Senators Get Cold Feet

With Bloomberg writing this morning that “Mystery, Suspense Mount” two days after President Donald Trump told the American public that Congress was ‘just days away’ on tax reform, two more senators – including one-time Trump rival – Marco Rubio appear to be getting cold feet – much to the market’s chagrin. Yesterday afternoon, stocks dropped and the VIX jumped above 10 as Rubio and Utah’s Mike Lee said they had reservations about the draft bill being put together by the conference committee.
Worries about the bill’s impact on the deficit have persisted, and if anything, they only intensified after the Treasury Department released a laughable one-page report about the tax plan’s impact on GDP and revenue that was widely ridiculed.
As the fast-moving Republican tax package has evolved, it has tilted increasingly toward benefiting businesses and wealthy taxpayers, a trend that aides were saying privately is a growing concern for some lawmakers. Provisions for offsetting the revenue costs of last-minute changes also were becoming worrisomely unclear, they said.

This post was published at Zero Hedge on Dec 15, 2017.

AlphaZero for President

From KurzweilAI:
Demis Hassabis, the founder and CEO of DeepMind, announced at the Neural Information Processing Systems conference (NIPS 2017) last week that DeepMind’s new AlphaZero program achieved a superhuman level of play in chess within 24 hours.
The program started from random play, given no domain knowledge except the game rules, according to an arXiv paper by DeepMind researchers published Dec. 5.
‘It doesn’t play like a human, and it doesn’t play like a program,’ said Hassabis, an expert chess player himself. ‘It plays in a third, almost alien, way. It’s like chess from another dimension.’
I started programming IBM machines in the late 60s, and at the time there was talk about the possibility of a computer someday beating a competent human at chess. Though the first programs stumbled along like children learning to walk, slowly, over the years, they improved, thanks in part to Moore’s Law and the genius of certain computer scientists. In February 1977 Chess 4.6, the only computer entry, won the 84th Minnesota Open against competitors just under Master level; it later defeated the US chess champion. [source] In 1988, Deep Thought became the first computer to defeat a grandmaster in a tournament. IBM bought Deep Thought, pumped it up and renamed it Deep Blue, and beat World Chess Champion Garry Kasparov in 1997.

This post was published at GoldSeek on Friday, 15 December 2017.

Mark Yusko Hits a Four-Bagger

My friend Mark Yusko, founder and chief investment officer of Morgan Creek Capital Management, is a phenomenon; and when you read his third-quarter letter, excerpted in today’s Outside the Box, you’ll see what I mean. His missive (a 72-pager!), has two main parts: a ‘Letter to Fellow Investors’ and Morgan Creek’s ‘Third Quarter Market Review and Outlook.’
Now, I could subject you to the latter, but the former is a heck of a lot more fun. It’s an amazing disquisition that takes us deep into the weeds on the subjects of Isaac Newton, Yogi Berra, and Willy Wonka. As you savor Mark’s encyclopedic knowledge and obvious love of baseball (and just about everything else), you may begin to understand why he’s such an effective hedge fund manager. Energy like this is hard to top!
And of course, Mark isn’t just spouting off; he’s calling on the aforenamed greats (among others) to help us ‘solve the puzzle’ of today’s increasingly screwball market. As he says,
As we stand here today in November examining the data, Darkness did not Fall and Gravity did not Rule on the equity markets, so what do we make of these results? Has the Universal Law of Gravity (valuation) been repealed? Have the global Central Banks finally discovered Babson’s anti-gravity machine, or is QE the symbol for the new element Upsidasium?
Let’s look back over the past year and see if we can call on a few heavyweights to help us with these questions and then we’ll introduce a couple of new characters to our serial to help us solve the puzzle.

This post was published at Mauldin Economics on DECEMBER 13, 2017.

The best tax incentive in the world

In a move almost destined to prove that laws and policies have absolutely zero meaning, the European Union released a list of ‘tax havens’ last week… with a massive, giant, highly conspicuous omission.
The blacklist contains the names of the usual suspects – Panama, United Arab Emirates, etc., along with a few additions like Mongolia and Marshall Islands.
But, again, conspicuously missing from this list is far and away the biggest tax haven in the world – none other than the United States of America.
It’s hard for US taxpayers to imagine the Land of the Free being a tax haven.
Americans are taxed heavily on ALL of their income, no matter where in the world they live.
Americans are taxed when they earn, when they save, when they spend and when they die.

This post was published at Sovereign Man on December 13, 2017.

Toronto’s Housing Bubble Is Crushing The Strip Club Industry

Until now, Canada’s soaring housing prices were just another innocent asset bubble spawned by low interest rates and an endless supply of Chinese cash that needed to get laundered. That said, massive bubbles are almost always followed by severe unintended consequences that can have a crippling impact on society as a whole…and in Toronto those unintended consequences are now manifesting themselves in the form of a rapidly deteriorating supply of strip clubs.
As Bloomberg points out today, the soaring value of Toronto real estate has made it all but impossible for strip club owners to turn down multi-million offers from condo developers leaving only a dozen strip clubs in a city whose purple neon lights used to be easily visible from the distant fringes of our solar system.
Condos are killing the Toronto strip club. In a city that once had more than 60 bars with nude dancers, only a dozen remain, the rest replaced by condominiums, restaurants, and housewares stores. Demand for homes downtown and for the retailers that serve them is driving land prices to records, tempting owners of the clubs, most of which are family-run, to sell at a time when business is slowing.
‘Sometimes I feel like the last living dinosaur along Yonge Street,’ says Allen Cooper, the second-generation owner of the famous – or infamous – Zanzibar Tavern. The former divorce lawyer says he has been approached by at least 30 suitors for his property in the past few years but is holding out for a ‘blow my socks off’ offer. ‘I don’t know how many condos we’re going to get, but it seems like just a wall’ of them, Cooper says.

This post was published at Zero Hedge on Dec 12, 2017.

RAND PAUL: ‘I CANNOT VOTE TO ADD MORE TO THE ALREADY MASSIVE $20 TRILLION DEBT’

Senator Rand Paul said Tuesday that he cannot vote to add more to the national debt. The lawmaker wrote in a post on Twitter that ‘I promised Kentucky to vote against reckless, deficit spending and I will do just that.’
Rand Paul may be one of the few fiscally conservative Republicans in politics today. Paul’s tweet didn’t suggest he would oppose the GOP tax bill due to deficit concerns.
I cannot in good conscience vote to add more to the already massive $20 trillion debt. I promised Kentucky to vote against reckless, deficit spending and I will do just that. pic.twitter.com/BUYqm91mli
– Senator Rand Paul (@RandPaul) December 12, 2017
The lawmaker clarified in a follow-up tweet that tax cuts ‘are never the problem.’

This post was published at The Daily Sheeple on DECEMBER 12, 2017.

Senate Tax Debacle: Certain Pass-Through Entities Face Marginal Tax Rates Over 100% Under Current Bill

As the House and Senate continue to try to reconcile their two versions of a tax plan, the taxing structure for pass-through entities (s-corps, LLC’s, etc.) continues to be somewhat controversial, if not completely nonsensical. As we pointed out last week, the Senate bill somewhat randomly chose to exclude pass-through entities organized as family trusts from tax cuts which would ultimately leave them on the hook for much larger tax bills due to the elimination of other deductions. It’s unclear whether this bizarre exclusion was just an oversight or an intentional political hit on an easy target that no one in Washington DC would dare defend publicly: rich families organized as trusts.
Now, a new note from the Tax Policy Center lays out some scenarios whereby the marginal tax rate for high-income pass-through entities could soar to over 100%. Of course, while two rational people can debate the impact of a ~40% tax rate on a person’s desire to work, we’re almost certain that a taxing structure that takes more than 100% of your marginal income will be a slight disincentive. Here’s an example of how it works from the Wall Street Journal:
Consider, for example, a married, self-employed New Jersey lawyer with three children and earnings of about $615,000. Getting $100 more in business income would force the lawyer to pay $105.45 in federal and state taxes, according to calculations by the conservative-leaning Tax Foundation. That is more than double the marginal tax rate that household faces today.
If the New Jersey lawyer’s stay-at-home spouse wanted a job, the first $100 of the spouse’s wages would require $107.79 in taxes. And the tax rates for similarly situated residents of California and New York City would be even higher, the Tax Foundation found. Analyses by the Tax Policy Center, which is run by a former Obama administration official, find similar results, with federal marginal rates as high as 85%, and those don’t include items such as state taxes, self-employment taxes or the phase-out of child tax credits.

This post was published at Zero Hedge on Dec 11, 2017.

Amazon UK Drivers Reportedly Forced To Urinate In Bottles To Hit 200 Packages A Day Quota

Amazon delivery drivers in the UK are asked to deliver up to 200 packages a day while earning less than minimum wage for agencies contracted by Amazon. The drivers reportedly have to keep schedules so tight they are forced to skip rest breaks and urinate in bottles, according to an investigation by UK’s Sunday Mirror. The report comes weeks after the newspaper reported on brutal work conditions at an Amazon UK warehouses. “If the drivers return to the Amazon depot without having made enough attempts to deliver parcels, or if they can’t work for any reason, they risk having their pay cut, being fined or denied future shifts,” reports the Mirror.
***
The allegations surfaced after investigative reporter Dan Warburton spent a day with an Amazon delivery driver so he could experience the “impossible” schedules that often exceed their 11 hour shifts – a limit mandated by UK law.

This post was published at Zero Hedge on Dec 11, 2017.

Weekend Reading: Recession Risk Hidden In Tax Bill

Authored by Lance Roberts via RealInvestmentAdvice.com,
Since the election, equity bulls have been pinning their hopes on ‘tax cuts’ as the needed injection to support currently elevated stock prices. Stocks have advanced sharply since the election on these expectations, and while earnings have recovered, primarily due to the rise in oil prices, whatever economic growth was to come from tax reform has likely already been priced in.
For some background on our views, both Michael Lebowitz and I have been discussing the tax bills as they are currently proposed since May of this year.
The Spurious Math Of A Tax Cut Rally Corporate Tax Cuts – The Seen & Unseen 3-Myths About Tax Cuts Bull Trap: The False Promise Of Tax Cuts The Conundrum Of Debt, Tax Cuts & The Economy Tax Cuts – The Economic Cure-All Buy The Rumor – Sell The News
We are currently in the second longest economic expansion since WWII. While Republican lawmakers are betting on jump-starting economic growth, the problem becomes the length of the current liquidity-driven expansion. All economic cycles end, and we are already closer to the end of the current expansion than not.

This post was published at Zero Hedge on Dec 8, 2017.

What’s The Best Company To Work For Where You Live?

With unemployment in the US purportedly reaching its lowest level in 17 years (that is, according to the Department of Labor’s flawed household survey) employees who once would’ve been too fearful to leave their jobs are now actively looking for opportunities. With that in mind, many have probably wondered what’s the best company to work for where they live?
Well, HowMuch.com gathered data compiled by Forbes into an infographic to try and map out the best and largest employers in every country.
Forbes recently released a ranking of the best companies in the world using a variety of different perks and benefits, like the quality of food served to employees, parental leave policies or whether companies allow their employees to nap while on the job.
HowMuch mapped these companies by paying attention to their market capitalization to get a feel for how large an organization needs to be to afford such high-quality benefits. One company therefore represents each country, color-coded by market cap. Red countries have an employer worth over $100 billion, and dark blue countries boast relatively small employers under $10 billion.

This post was published at Zero Hedge on Dec 7, 2017.

Here’s Why Trump’s Lawyer Is Denying that Deutsche Bank Got a Subpoena

A lawyer who is part of President Donald Trump’s legal defense team, Jay Sekulow, has denied the news reports that Deutsche Bank has received a subpoena from Special Counsel Robert Mueller’s office for banking records related to Trump and his family members.
In a statement to Reuters, Sekulow stated:
‘We have confirmed that the news reports that the Special Counsel had subpoenaed financial records relating to the president are false. No subpoena has been issued or received. We have confirmed this with the bank and other sources.’
But in the same article that relayed that statement from Sekulow, Reuters’ reporters Arno Schuetze and Karen Freifeld undercut the credibility of Sekulow’s statement by writing the following:
‘A U. S. federal investigator probing alleged Russian interference in the 2016 U. S. presidential election asked Deutsche Bank for data on accounts held by President Donald Trump and his family, a person close to the matter said on Tuesday, but Trump’s lawyer denied any such subpoena had been issued.’

This post was published at Wall Street On Parade on December 7, 2017.

What Is Money? (Yes, We’re Talking About Bitcoin)

Good ideas don’t require force. That describes the Internet, mobile telephony and cryptocurrencies.
What is money? We all assume we know, because money is a commonplace feature of everyday life. Money is what we earn and exchange for goods and services. Everyone thinks the money they’re familiar with is the only possible system of money – until they run across an entirely different system of money. Then they realize money is a social construct, a confluence of social consensus and political force– what we agree to use as money, and what our government mandates we use as money under threat of punishment. We assume that our monetary system is much like a Law of Nature: since it’s ubiquitous, it must be the only possible system. But there are no financial Laws of Nature for money. In the past, notched sticks served as money. In other non-Western cultures, giant stone disks (rai, a traditional form of money on the island of Yap) and even salt served as money.

This post was published at Charles Hugh Smith on WEDNESDAY, DECEMBER 06, 2017.

House Set To Vote On Stopgap Spending Bill Tomorrow

Update (5:30 pm ET): House Republicans are moving ahead with a plan to avoid a shutdown after the House Rules Committee approved a rule change that will allow Republicans to bring a two-week stopgap plan up for a floor vote Thursday, allowing the senate until end-of-day Friday to avoid a shutdown. The plan helped Speaker Paul Ryan override conservative GOP lawmakers who were pressing for a longer extension to get more leverage over Democrats and the Senate.
The decision on a stopgap bill with a Dec. 22 end-date came after Ryan and his leadership team held discussions on overall budget strategy with the leaders of the restive House Freedom Caucus. A formal check of how members would vote on the Dec. 22 deadline came back showing widespread support, said Representative Dennis Ross, a member of the vote-whipping team.
The Freedom Caucus will discuss the stopgap at a meeting tonight, according to a House Republican aide. Votes from the group’s three-dozen members may not be needed if Democrats support the stopgap plan.
As part of the talks, the Freedom Caucus has sought and Republican leaders are weighing a plan to attach the House’s fiscal year 2018 defense spending bill to a second resolution to keep the government funded after Dec. 22, according to Freedom Caucus Chairman Mark Meadows and Representative Mac Thornberry, the Texas Republican who leads the House Armed Services Committee, according to Bloomberg.
* * *
Update: After Trump once again raised the prospect of a shutdown while speaking with reporters following a cabinet meeting today, Nancy Pelosi had a few choice words for the president…

This post was published at Zero Hedge on Dec 6, 2017.