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stout
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Member since Sep 2006
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White House considering tax incentive for more Americans to buy stocks, sources say
quote:

As part of a forthcoming package of proposed tax cuts, the White House is considering ways to incentivize U.S. households to invest in the stock market.

The proposal would see a portion of income become tax-free for investment purposes.

The Trump administration is considering several proposals as part of forthcoming economic stimulus package


quote:

The proposal, one of many new tax cuts under consideration, would see a portion of household income treated as tax-free for the purposes of investing outside a traditional 401(k). Under one scenario, a household earning up to $200,000 could invest $10,000 on a tax-free basis, although officials noted these numbers are fluid.

“Nothing’s ruled out,” said one senior administration official. “Nothing’s been ruled in, either.”

The development comes as President Donald Trump seeks reelection this fall. He has sought to distinguish himself from his potential Democratic rivals by accusing of them of pursuing “socialist” policies while he has touted tax cuts and deregulation under his administration.


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Chad504boy
New Orleans Saints Fan
Member since Feb 2005
138093 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
selling stocks today.


LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
19276 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
I'd like to see congress enhance the retirement savings credit. Make it actually useful.


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111
southernelite
McNeese State Fan
Dallas
Member since Sep 2009
51194 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
quote:

selling stocks today.


Why?


Upperdecker
LSU Fan
St. George, LA
Member since Nov 2014
20995 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
Would increase the stock market value as money comes in. But I fully embrace an idea to make stupid people understand that investing their money is a good idea. I think it would be better to do it through 401k or Roth plans though


Weekend Warrior79
LSU Fan
Member since Aug 2014
4430 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
Wonder how this would affect TOD accounts, and would only apply to the investments directly in stocks or if mutual funds would fall under the same consideration.


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Weekend Warrior79
LSU Fan
Member since Aug 2014
4430 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
quote:

But I fully embrace an idea to make stupid people understand that investing their money is a good idea

Don't know if this will help them, about 25% of the employees at my company still won't invest in the 401(k). A few are making decent money and have minimal bills (car note, low rent...), but will try to brag about how much they have sitting in savings & CDs.


Chad504boy
New Orleans Saints Fan
Member since Feb 2005
138093 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
quote:

Why?


i can't buy if its already in it.


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16
buckeye_vol
Ohio State Fan
Member since Jul 2014
32453 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
quote:

could invest $10,000 on a tax-free basis, although officials noted these numbers are fluid.
There was previously a plan for a Roth-like universal savings account, which I thought was awesome (instead of having to save/invest for a specific reason).

This sounds similar, but I hope it’s not exclusive to stocks. Even though that’s where I would put the money, I don’t think it’s a good idea to only favor a specific asset class since people have different needs/goals/timelines that may not fit only asset class, plus I think this make an asset bubble more likely than otherwise.
This post was edited on 2/14 at 2:38 pm


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50
molsusports
Ohio State Fan
Member since Jul 2004
30810 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
What I would prefer is the ability to save in a 401k more like an IRA. If you could just dial up Fidelity or Vanguard and choose to invest up to 50k a year in a Roth 401k no matter who your employer was that would improve my ability to save for retirement.

I don't need tax credits either. The value of stocks is already inflated enough. But if the law allowed me to save more money more easily that would be awesome.


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castorinho
Oklahoma Fan
13623 posts
Member since Nov 2010
66172 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
quote:

Don't know if this will help them,
This is where I'm at. This will just give another vehicle to the smart people already investing and looking for tax breaks.


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70
OleWarSkuleAlum
Alabama Fan
Member since Dec 2013
8483 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
frick all that. They just need to index LTCG to inflation. The President can do this unilaterally. Why hasn’t he done it yet?!?


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08
oklahogjr
Arizona State Fan
Gold Membership
Member since Jan 2010
28826 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
quote:

selling stocks today.


shouldnt you be buying more so when money comes on you ride the wave?


MrJimBeam
New Orleans Saints Fan
Member since Apr 2009
3828 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
He’s a little.....














Slow


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30
Ric Flair
LSU Fan
Charlotte
Member since Oct 2005
10700 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
Trump should allow pretax payments of student loans as well.



oklahogjr
Arizona State Fan
Gold Membership
Member since Jan 2010
28826 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
quote:

Trump should allow pretax payments of student loans as well.

thats a true game chsnger for a lot of people honestly.

id love to see that although i dont have loans so doesnt help me.


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10
JohnnyKilroy
New Orleans Pelicans Fan
Cajun Navy Vice Admiral
Member since Oct 2012
22641 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
I really don't understand why this isn't a slam dunk thing they can get passed asap. It's an easy win that would help millions.


Puffoluffagus
LSU Fan
Savannah, GA
Member since Feb 2009
4455 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
I mean I'm all about having more tax advantaged methods for investing/saving etc. But I have to imagine this mostly helps high earners.

You're either in a position where you're already maxing out IRAs/401ks etc, and need more places to put money.


Or youre at a job that doesn't offer a 401k and your limited to an IRA. In which case, We can't even get people to fund an emergency savings account, let alone budget for money to go into the stock market for tax advantages.


boomtown143
LSU Fan
BR
Member since May 2019
1841 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
quote:

I mean I'm all about having more tax advantaged methods for investing/saving etc. But I have to imagine this mostly helps high earners.


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10
buckeye_vol
Ohio State Fan
Member since Jul 2014
32453 posts

re: White House considering tax incentive for more Americans to buy stocks, sources say
quote:

I really don't understand why this isn't a slam dunk thing they can get passed asap. It's an easy win that would help millions.
Well I see a couple of potential issues.

The first issue, might just be my confusion, but I don’t understand what they mean by taxed when withdrawn as well.”
quote:

Money put into the account would be done so on an after-tax basis, and taxed when withdrawn as well; but any accumulation of profits during the investment timeframe, known as capital gains, would not be taxed.
So is it’s invested after taxes (like a Roth) and then taxed again on withdrawals except for capital gains, doesn’t that imply that I’m paying taxes TWICE in the contributions, presumably at the higher ordinary income rate?

Is that’s the case, then I would rather put it into a taxable account and pay lower capital gains (if long-term), because it would take a would take a considerable amount of time and growth to match the contribution amount, just to match the same taxable amount, and then even more time and growth for the savings on the capital gains tax liability to match the savings on the contribution income tax liability.

And the other issue is that with no tax deduction for contributions, the only people who would benefit from the tax free capital-gains withdrawals (unless it’s short-term) are those with a high enough taxable income to meet to have a long-term gains tax liability. And that means it would provide disproportionate benefit to those earn a higher income, and the benefit will decrease as income decrease. And on top of that, those who earn a higher income will have a disproportionate ability to invest (more discretionary income).

So if withdrawals of contributions are taxed, it may not even be benefit at all. And if not, it still might not provide much benefit for most people, if any.

Personally I think that they should allow for a pre-tax deduction and tax fee withdrawals of contributions and gains. And even if that meant they would lower the contribution limit and/or phase out the deduction as income increased (provides more pre-tax savings to those with less capital gains tax savings), that would be much better than what they proposed.


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