The common assumption is that lower tax rates should increase corporate profits, share prices, investment, and consumption, and thus lift the entire economy. Unfortunately, this is not quite how it happens in the real world.
In their overzealous efforts to chase yield, investors often fail to consider the tax implications involved in owning dividend-focused investment products. The tricky thing about dividend income is that not all of it is taxed the same way.
The author conveys a deep appreciation of the workings of the US fiscal machine and how fiscal policy — government spending and tax revenue policy — affects every aspect of the economy. Most likely to interest financial analysts are the chapters that function as an instruction manual on the mechanics of fiscal policy. They draw on a large body of data and insightful analysis yet engagingly written in layman’s terms rather than economic jargon.
William Reichenstein, CFA, explains the key concepts of tax-efficient investing and how it affects an investment decision. He also suggests easy adjustments that a wealth manager can make that would have a big impact on the client.
Proposals to tax financial transactions are popular now, and many concerns motivate these proposed taxes. Although many members of the Financial Economists Roundtable recognize and respect these concerns, they believe that governments should be extremely wary of imposing or increasing financial transaction taxes, which can have highly negative consequences with respect to the revenue raised.
Navigating tax strategies can be particularly tricky to begin with, and the flurry of advice following the IRS’s relaxation of Roth IRA recharacterization rules (which removed the restrictions on higher-income individuals converting their IRAs) caused no small amount of confusion in the financial community.
Lawsuits involving estates and trusts are on the rise. Here are 10 tips for trustees to bear in mind to avoid litigation.
With all of the variables in play, practitioners can be easily led astray when interpreting the results of time-series studies. A recent controversial paper on the relative economic value of tax cuts, provides an excellent example of why analysts must be alert to the challenges of multiple regression with time-series variables.
If Congress maintains the current tax and spending policies, we will get more of the same economy we have experienced for the past three years (all else being equal). But what if Congress lets the fiscal cliff hit? Ron Rimkus, CFA, assesses the impact.
President Barack Obama swept to victory on Tuesday, securing four more years in the White House. Now what? What does the outcome mean for taxable investors and what should you and your clients be thinking about between now and the end of the year?
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