cancel
Showing results for 
Search instead for 
Did you mean: 
     
Highlighted
Participant ○

Re: Election Results Uncertainty and the Market

I am not so much cincerned who will be president on how that well affect the market. What I will be watching is Congress and its new mind set on how to pay for entitlements and government. There are some suggestions concerning capital gains, corp. tax rates etc. that could move the needle and affect stock valuations. Interest rates will remain low. 

0 Kudos
Highlighted
Frequent Contributor

Re: Election Results Uncertainty and the Market

Since we face the possibility of Executive change once every 4 years and Legislative change every 2 years I do not see that much difference from this one and any of the other 15 Executive Elections that have occurred in my lifetime. I'm not planning to time the market based upon who may or may not win this or any other election. That is JMHO.   

Capital
Highlighted
Frequent Contributor

Re: Election Results Uncertainty and the Market


@NuEnglander wrote:

I am not so much cincerned who will be president on how that well affect the market. What I will be watching is Congress and its new mind set on how to pay for entitlements and government. There are some suggestions concerning capital gains, corp. tax rates etc. that could move the needle and affect stock valuations. Interest rates will remain low. 


Just how many of these changes will affect the bottom 98% of taxpayers even if there is regime change inside the beltway? Change in Corp tax rate only has affect on stocks in the first year.Corps adjust after that.  And what is the new mind set on how to pay for government? And what is an entitlement? Certainly not SS which is paid for by FICA taxes on employees and employers.

Highlighted
Participant ○

Re: Election Results Uncertainty and the Market

A question. What is an entitlement? Anyway I used that phrase to include HEW, medical care paid for the government etc. correctly or incorrectly. Tax code in my opinion will affect a multitude of retirement plans that will include anyone who has one, even if they are in the 98%, even beyond the first year.
0 Kudos
Highlighted
Frequent Contributor

Re: Election Results Uncertainty and the Market


@Intruder wrote:

And what is the new mind set on how to pay for government? And what is an entitlement? Certainly not SS which is paid for by FICA taxes on employees and employers.


Sorry, but social security is an entitlement program.  All entitlement programs are paid for by some sort of taxes.  According to the Balance there are four main entitlement programs: social security, Medicare, unemployment insurance, and workers compensation.  They separate entitlement programs from welfare programs such as Medicaid, food stamps, etc.

https://www.thebalance.com/welfare-programs-definition-and-list-3305759

Even the Cambridge dictionary calls social security an entitlement.

https://dictionary.cambridge.org/us/dictionary/english/entitlement

Other places call welfare an entitlement.

https://singlemotherguide.com/federal-welfare-programs/

Basically entitlements are government money you get because you exist (sometimes there are income requirements) not because you completed a job and earned it.

I have no idea what the new mindset is for taxes.  It has always been tax someone else, not me.

Highlighted
Frequent Contributor

Re: Election Results Uncertainty and the Market


@Mustang wrote:

@Intruder wrote:

And what is the new mind set on how to pay for government? And what is an entitlement? Certainly not SS which is paid for by FICA taxes on employees and employers.


Sorry, but social security is an entitlement program.  All entitlement programs are paid for by some sort of taxes.  According to the Balance there are four main entitlement programs: social security, Medicare, unemployment insurance, and workers compensation.  They separate entitlement programs from welfare programs such as Medicaid, food stamps, etc.

https://www.thebalance.com/welfare-programs-definition-and-list-3305759

Even the Cambridge dictionary calls social security an entitlement.

https://dictionary.cambridge.org/us/dictionary/english/entitlement

Other places call welfare an entitlement.

https://singlemotherguide.com/federal-welfare-programs/

Basically entitlements are government money you get because you exist (sometimes there are income requirements) not because you completed a job and earned it.

I have no idea what the new mindset is for taxes.  It has always been tax someone else, not me.


You can call it an entitlement program but workers consider it to be a retirement program that they contribute to which is why Congress has rejected changes, e.g., 2005 proposal by Bush 43 to allow workers to direct 50% of their contributions into equity investments. 60 million retirees receive SS benefits and 160 M are covered by SS. Funding shortfall can be solved by raising max income subject to FIA tax to 500k.

Highlighted
Participant ○○○

Re: Election Results Uncertainty and the Market

Been there done that. In Jan 2017 we reduced our equity allocation from 60% to 40%.

We thought the new POTUS was going crash the markets.

Wrong!

0 Kudos
Highlighted
Contributor ○

Re: Election Results Uncertainty and the Market

There was an FT analysis which said there is no correlation between the party of the President and the stock market. 

Historically markets have performed better during democratic presidents. But that seems to be more by chance.

If same party takes both houses and the white house then it could be different.

0 Kudos
Highlighted
Explorer ○○○

Re: Election Results Uncertainty and the Market


@Intruder wrote:

@Mustang wrote:

@Intruder wrote:

And what is the new mind set on how to pay for government? And what is an entitlement? Certainly not SS which is paid for by FICA taxes on employees and employers.


Sorry, but social security is an entitlement program.  All entitlement programs are paid for by some sort of taxes.  According to the Balance there are four main entitlement programs: social security, Medicare, unemployment insurance, and workers compensation.  They separate entitlement programs from welfare programs such as Medicaid, food stamps, etc.

https://www.thebalance.com/welfare-programs-definition-and-list-3305759

Even the Cambridge dictionary calls social security an entitlement.

https://dictionary.cambridge.org/us/dictionary/english/entitlement

Other places call welfare an entitlement.

https://singlemotherguide.com/federal-welfare-programs/

Basically entitlements are government money you get because you exist (sometimes there are income requirements) not because you completed a job and earned it.

I have no idea what the new mindset is for taxes.  It has always been tax someone else, not me.


You can call it an entitlement program but workers consider it to be a retirement program that they contribute to which is why Congress has rejected changes, e.g., 2005 proposal by Bush 43 to allow workers to direct 50% of their contributions into equity investments. 60 million retirees receive SS benefits and 160 M are covered by SS. Funding shortfall can be solved by raising max income subject to FIA tax to 500k.



Unfortunately, they will probably wait until it is running out of funds, or obviously going to very soon.   Then they  will use the cover of its emergency status to justify doing something.   At that point the solutions will probably be much more painful that what they would be now.   

0 Kudos
Highlighted
Explorer ○○○

Re: Election Results Uncertainty and the Market


@galeno wrote:

Been there done that. In Jan 2017 we reduced our equity allocation from 60% to 40%.

We thought the new POTUS was going crash the markets.

Wrong!


I did the same thing, but only reduced my equity allocation by about 5% which is my SOP.   (I described it in more detail in a previous post.)  Actually I did this a day or two after the election, not at inauguration   Waited about four or five months and then increased back to the original allocation.  I remember futures dropping like a rock on election night. 

0 Kudos
Highlighted
Frequent Contributor

Re: Election Results Uncertainty and the Market


@OpenMind wrote:

@Intruder wrote:

@Mustang wrote:

@Intruder wrote:

And what is the new mind set on how to pay for government? And what is an entitlement? Certainly not SS which is paid for by FICA taxes on employees and employers.


Sorry, but social security is an entitlement program.  All entitlement programs are paid for by some sort of taxes.  According to the Balance there are four main entitlement programs: social security, Medicare, unemployment insurance, and workers compensation.  They separate entitlement programs from welfare programs such as Medicaid, food stamps, etc.

https://www.thebalance.com/welfare-programs-definition-and-list-3305759

Even the Cambridge dictionary calls social security an entitlement.

https://dictionary.cambridge.org/us/dictionary/english/entitlement

Other places call welfare an entitlement.

https://singlemotherguide.com/federal-welfare-programs/

Basically entitlements are government money you get because you exist (sometimes there are income requirements) not because you completed a job and earned it.

I have no idea what the new mindset is for taxes.  It has always been tax someone else, not me.


You can call it an entitlement program but workers consider it to be a retirement program that they contribute to which is why Congress has rejected changes, e.g., 2005 proposal by Bush 43 to allow workers to direct 50% of their contributions into equity investments. 60 million retirees receive SS benefits and 160 M are covered by SS. Funding shortfall can be solved by raising max income subject to FIA tax to 500k.



Unfortunately, they will probably wait until it is running out of funds, or obviously going to very soon.   Then they  will use the cover of its emergency status to justify doing something.   At that point the solutions will probably be much more painful that what they would be now.   


SS trust fund can pay 100% of benefits until 2033. Fica wages can always be raised from current 138k limit to 500k to fully fund SS benefits. How painful will that be since only 7% of workers make over 138K?

 

Highlighted
Explorer ○○○

Re: Election Results Uncertainty and the Market


@Intruder wrote:

@OpenMind wrote:

@Intruder wrote:

@Mustang wrote:

@Intruder wrote:

And what is the new mind set on how to pay for government? And what is an entitlement? Certainly not SS which is paid for by FICA taxes on employees and employers.


Sorry, but social security is an entitlement program.  All entitlement programs are paid for by some sort of taxes.  According to the Balance there are four main entitlement programs: social security, Medicare, unemployment insurance, and workers compensation.  They separate entitlement programs from welfare programs such as Medicaid, food stamps, etc.

https://www.thebalance.com/welfare-programs-definition-and-list-3305759

Even the Cambridge dictionary calls social security an entitlement.

https://dictionary.cambridge.org/us/dictionary/english/entitlement

Other places call welfare an entitlement.

https://singlemotherguide.com/federal-welfare-programs/

Basically entitlements are government money you get because you exist (sometimes there are income requirements) not because you completed a job and earned it.

I have no idea what the new mindset is for taxes.  It has always been tax someone else, not me.


You can call it an entitlement program but workers consider it to be a retirement program that they contribute to which is why Congress has rejected changes, e.g., 2005 proposal by Bush 43 to allow workers to direct 50% of their contributions into equity investments. 60 million retirees receive SS benefits and 160 M are covered by SS. Funding shortfall can be solved by raising max income subject to FIA tax to 500k.



Unfortunately, they will probably wait until it is running out of funds, or obviously going to very soon.   Then they  will use the cover of its emergency status to justify doing something.   At that point the solutions will probably be much more painful that what they would be now.   


SS trust fund can pay 100% of benefits until 2033. Fica wages can always be raised from current 138k limit to 500k to fully fund SS benefits. How painful will that be since only 7% of workers make over 138K?

 


I'll have to do some research into your response.  So you are saying that they could even wait until 2033 to increase from 138k to 500k, and it would take care of the shortfall?

0 Kudos
Highlighted
Frequent Contributor

Re: Election Results Uncertainty and the Market


@OpenMind wrote:

@Intruder wrote:

@OpenMind wrote:

@Intruder wrote:

@Mustang wrote:

@Intruder wrote:

And what is the new mind set on how to pay for government? And what is an entitlement? Certainly not SS which is paid for by FICA taxes on employees and employers.


Sorry, but social security is an entitlement program.  All entitlement programs are paid for by some sort of taxes.  According to the Balance there are four main entitlement programs: social security, Medicare, unemployment insurance, and workers compensation.  They separate entitlement programs from welfare programs such as Medicaid, food stamps, etc.

https://www.thebalance.com/welfare-programs-definition-and-list-3305759

Even the Cambridge dictionary calls social security an entitlement.

https://dictionary.cambridge.org/us/dictionary/english/entitlement

Other places call welfare an entitlement.

https://singlemotherguide.com/federal-welfare-programs/

Basically entitlements are government money you get because you exist (sometimes there are income requirements) not because you completed a job and earned it.

I have no idea what the new mindset is for taxes.  It has always been tax someone else, not me.


You can call it an entitlement program but workers consider it to be a retirement program that they contribute to which is why Congress has rejected changes, e.g., 2005 proposal by Bush 43 to allow workers to direct 50% of their contributions into equity investments. 60 million retirees receive SS benefits and 160 M are covered by SS. Funding shortfall can be solved by raising max income subject to FIA tax to 500k.



Unfortunately, they will probably wait until it is running out of funds, or obviously going to very soon.   Then they  will use the cover of its emergency status to justify doing something.   At that point the solutions will probably be much more painful that what they would be now.   


SS trust fund can pay 100% of benefits until 2033. Fica wages can always be raised from current 138k limit to 500k to fully fund SS benefits. How painful will that be since only 7% of workers make over 138K?

 


I'll have to do some research into your response.  So you are saying that they could even wait until 2033 to increase from 138k to 500k, and it would take care of the shortfall?


Why not? It’s just a cash flow problem. There is no minimum funding required For SS benefits. In 1983 the motivation behind congress voting to raise fica tax rates, delay full retirement Age from 65 to 67 and taxation of SS benefits was the reality that the SS trust fund only had sufficient assets to pay three months of benefits.  Every year In June  the SS trustees publish a Report showing the number of years that 100% of SS benefits can be paid.
Where were you in 1983?

Congress could increase the assets in the SS trust at any time by simply increasing the amount of wages subject to FICA tax above the 138k Limit to say $400-500k to build up assets to pay future benefits but that would remove billions of $ from the economy and slow GDP growth.

 , 

0 Kudos
Highlighted
Explorer ○○○

Re: Election Results Uncertainty and the Market


@Intruder wrote:

@OpenMind wrote:

@Intruder wrote:

@OpenMind wrote:

@Intruder wrote:

@Mustang wrote:

@Intruder wrote:

And what is the new mind set on how to pay for government? And what is an entitlement? Certainly not SS which is paid for by FICA taxes on employees and employers.


Sorry, but social security is an entitlement program.  All entitlement programs are paid for by some sort of taxes.  According to the Balance there are four main entitlement programs: social security, Medicare, unemployment insurance, and workers compensation.  They separate entitlement programs from welfare programs such as Medicaid, food stamps, etc.

https://www.thebalance.com/welfare-programs-definition-and-list-3305759

Even the Cambridge dictionary calls social security an entitlement.

https://dictionary.cambridge.org/us/dictionary/english/entitlement

Other places call welfare an entitlement.

https://singlemotherguide.com/federal-welfare-programs/

Basically entitlements are government money you get because you exist (sometimes there are income requirements) not because you completed a job and earned it.

I have no idea what the new mindset is for taxes.  It has always been tax someone else, not me.


You can call it an entitlement program but workers consider it to be a retirement program that they contribute to which is why Congress has rejected changes, e.g., 2005 proposal by Bush 43 to allow workers to direct 50% of their contributions into equity investments. 60 million retirees receive SS benefits and 160 M are covered by SS. Funding shortfall can be solved by raising max income subject to FIA tax to 500k.



Unfortunately, they will probably wait until it is running out of funds, or obviously going to very soon.   Then they  will use the cover of its emergency status to justify doing something.   At that point the solutions will probably be much more painful that what they would be now.   


SS trust fund can pay 100% of benefits until 2033. Fica wages can always be raised from current 138k limit to 500k to fully fund SS benefits. How painful will that be since only 7% of workers make over 138K?

 


I'll have to do some research into your response.  So you are saying that they could even wait until 2033 to increase from 138k to 500k, and it would take care of the shortfall?


Why not? It’s just a cash flow problem. There is no minimum funding required For SS benefits. In 1983 the motivation behind congress voting to raise fica tax rates, delay full retirement Age from 65 to 67 and taxation of SS benefits was the reality that the SS trust fund only had sufficient assets to pay three months of benefits.  Every year In June  the SS trustees publish a Report showing the number of years that 100% of SS benefits can be paid.
Where were you in 1983?

Congress could increase the assets in the SS trust at any time by simply increasing the amount of wages subject to FICA tax above the 138k Limit to say $400-500k to build up assets to pay future benefits but that would remove billions of $ from the economy and slow GDP growth.

"Where were you in 1983?"  Just getting out of college, and probably not thinking about social security. *LOL*  I hope you are right about how easy it would be to fix, but not sure it's as straight forward as you claim.  Like I said I will look into it.  

"Fica wages can always be raised from current 138k limit to 500k to fully fund SS benefits."  I can't help it.  Anytime someone uses words like "always" or "never" I'm initially skeptical. 


 

0 Kudos
Highlighted
Contributor ○○○

Re: Election Results Uncertainty and the Market


@Intruder wrote:

@OpenMind wrote:

<snip>
Unfortunately, they will probably wait until it is running out of funds, or obviously going to very soon.   Then they  will use the cover of its emergency status to justify doing something.   At that point the solutions will probably be much more painful that what they would be now.   


SS trust fund can pay 100% of benefits until 2033. Fica wages can always be raised from current 138k limit to 500k to fully fund SS benefits. How painful will that be since only 7% of workers make over 138K?

 

"The combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds are projected to become depleted in 2035, the same as projected last year, with 79 percent of benefits payable at that time."

“The projections in this year’s report do not reflect the potential effects of the COVID-19 pandemic on the Social Security program. Given the uncertainty associated with these impacts, the Trustees believe it is not possible to adjust estimates accurately at this time,” said Andrew Saul, Commissioner of Social Security."    Link

The solution to address the Social Security shortfall is simple but not easy. There is a reason Social Security (SS) is often referred to as "the third rail of American politics". Fixing the SS shortfall would require increasing taxes, cutting benefits, or a combination of both.

Increase taxes - raise or eliminate the earnings cap for FICA tax  (currently $137,700) or increase overall SS FICA tax (currently 6.2% for employee and 6.2% for employer)
 
Cut benefits - gradually increase full retirement age, change index used to calculate COLA, or implement means-testing 

Generally, Democrats hate benefit cuts while Republicans hate tax increases. There will need to be some sort of compromise. Unfortunately, I don't see that happening in the current environment.

0 Kudos
Highlighted
Frequent Contributor

Re: Election Results Uncertainty and the Market


@OpenMind wrote:

@Intruder wrote:

@OpenMind wrote:

@Intruder wrote:

@OpenMind wrote:

@Intruder wrote:

@Mustang wrote:

@Intruder wrote:

And what is the new mind set on how to pay for government? And what is an entitlement? Certainly not SS which is paid for by FICA taxes on employees and employers.


Sorry, but social security is an entitlement program.  All entitlement programs are paid for by some sort of taxes.  According to the Balance there are four main entitlement programs: social security, Medicare, unemployment insurance, and workers compensation.  They separate entitlement programs from welfare programs such as Medicaid, food stamps, etc.

https://www.thebalance.com/welfare-programs-definition-and-list-3305759

Even the Cambridge dictionary calls social security an entitlement.

https://dictionary.cambridge.org/us/dictionary/english/entitlement

Other places call welfare an entitlement.

https://singlemotherguide.com/federal-welfare-programs/

Basically entitlements are government money you get because you exist (sometimes there are income requirements) not because you completed a job and earned it.

I have no idea what the new mindset is for taxes.  It has always been tax someone else, not me.


You can call it an entitlement program but workers consider it to be a retirement program that they contribute to which is why Congress has rejected changes, e.g., 2005 proposal by Bush 43 to allow workers to direct 50% of their contributions into equity investments. 60 million retirees receive SS benefits and 160 M are covered by SS. Funding shortfall can be solved by raising max income subject to FIA tax to 500k.



Unfortunately, they will probably wait until it is running out of funds, or obviously going to very soon.   Then they  will use the cover of its emergency status to justify doing something.   At that point the solutions will probably be much more painful that what they would be now.   


SS trust fund can pay 100% of benefits until 2033. Fica wages can always be raised from current 138k limit to 500k to fully fund SS benefits. How painful will that be since only 7% of workers make over 138K?

 


I'll have to do some research into your response.  So you are saying that they could even wait until 2033 to increase from 138k to 500k, and it would take care of the shortfall?


Why not? It’s just a cash flow problem. There is no minimum funding required For SS benefits. In 1983 the motivation behind congress voting to raise fica tax rates, delay full retirement Age from 65 to 67 and taxation of SS benefits was the reality that the SS trust fund only had sufficient assets to pay three months of benefits.  Every year In June  the SS trustees publish a Report showing the number of years that 100% of SS benefits can be paid.
Where were you in 1983?

Congress could increase the assets in the SS trust at any time by simply increasing the amount of wages subject to FICA tax above the 138k Limit to say $400-500k to build up assets to pay future benefits but that would remove billions of $ from the economy and slow GDP growth.

"Where were you in 1983?"  Just getting out of college, and probably not thinking about social security. *LOL*  I hope you are right about how easy it would be to fix, but not sure it's as straight forward as you claim.  Like I said I will look into it.  

"Fica wages can always be raised from current 138k limit to 500k to fully fund SS benefits."  I can't help it.  Anytime someone uses words like "always" or "never" I'm initially skeptical. 


 


As you may not be aware , there have been proposals by congresspersons to make all wages subject to FICA tax without any limits on the dollar amounts. Under current law all wages are subject to the 1.45% Medicare tax without limit.

 

0 Kudos
Announcements