Practical analysis for investment professionals


US Tax Reform: Taking Care of Business

As 2017 enters its final quarter, the White House and US Congress are trying to tackle a key Republican pledge from the 2016 elections: comprehensive tax reform. A major aspect of the preliminary proposal: a reduction in corporate tax rates. Joachim Klement, CFA, explores the potential costs and benefits of such a policy in the first installment of his two-part analysis of US tax reform.

Corporate Taxes Matter, But Not in the Way You Think

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.

Don’t Forget Taxes When Comparing Dividend Yields

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.

Book Review: We Are Better Than This

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.

Financial Decision Making: The Key to Your Clients’ Retirement Security (Video)

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.

The Financial Economists Roundtable Weighs in on Financial Transaction Taxes

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.

Demystifying the IRA Recharacterization Option (Podcast)

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.

How Not to Bungle a Trust: A Checklist for Investment Trustees

Lawsuits involving estates and trusts are on the rise. Here are 10 tips for trustees to bear in mind to avoid litigation.

Time Series Analysis, Taxing the Wealthy, and GDP Growth

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.

The US Fiscal Cliff: Assessing the Impact

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.

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