October has been National Financial Planning month, and we were recently reminded of an exchange between Alice and the Cheshire Cat, in Alice’s Adventures in Wonderland:
"Would you tell me, please, which way I ought to go from here?"
"That depends a good deal on where you want to get to," said the Cat.
"I don't much care where--" said Alice.
"Then it doesn't matter which way you go," said the Cat.
"-so long as I get SOMEWHERE," Alice added as an explanation.
"Oh, you're sure to do that," said the Cat, "if you only walk long enough."
As we explained on our YouTube channel a few months ago, a fundamental part of financial planning is making sure that you are oriented correctly, to the destination that makes sense for you and your goals. Increasing complexity, in products and information, makes Achieving Simplicity® in your financial lives more valuable than ever. We’re grateful that we can help orient you in your journey.
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Dune: Part 1 premiered last week. We watched it at home, but if a movie ever deserved the big screen treatment, this is the one. It’s a visual feast, and the movie was enjoyed by readers and nonreaders of the classic book.
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We do learn of situations when older persons are taken advantage of by family members or caregivers. This case from California is especially egregious. If you are ever concerned about the financial well-being of a loved one, don’t be afraid to ask direct questions.
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Do you think Facebook is biased against people of your political persuasion? So do the people on other side of the spectrum. A recent study looks at the “hostile media phenomenon,” and it reminds us of the way many of us think sports broadcasters are biased against OUR team. The picture below tells a similar story:
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Q: What do you think of the “billionaire’s tax?”
A: The proposal by Senator Wyden is complicated, targeting a very small number of American taxpayers. The expected revenue is significant, with much of it generated in the first years.
The key word in that sentence is “expected.” There are unintended consequences of any proposal and this may incentivize alternatives to publicly-owned companies. If the next Elon Musk knows that he could avoid billions in taxes by keeping his company public, he might choose to do that. In other words, it may work for a while, but not forever.
And this is part of the problem with such a narrow target for revenue generation. Even if you think that such concentrations of wealth are bad for society and unfair, targeting a small number of people this way is very bad policy. In a persuasive post on the subject, Aswath Damodaran wrote:
As a general rule, taxes that are broad based and affect most people are more likely to deliver predicted revenues than those that affect a narrow subset of the population, and the billionaire tax is about as narrowly focused as tax law gets. You may have little sympathy for the seven hundred or so billionaires affected by these taxes, but you should also recognize that these individuals also have the most resources to find ways to minimize the impact of these laws. In fact, not only is an army of tax lawyers, accountants and investment vehicles being created while the law in being written, but I would not be surprised if they are providing input on its actual form.
He explains that other tax policies that started small, like the Alternative Minimum Tax, eventually included many, many taxpayers. As the revenue from this tax declines, it would be easy for Congress to push the threshold further and further down.
So we are cautious about its ability to do what they expect, and concerned about the strategy as a way of addressing our continued, bipartisan deficit spending.
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Advisory Services offered through Lowry Financial Advisors, Inc., a Registered Investment Adviser. Securities and additional advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. Advisory services offered through Lowry Financial Advisors, Inc, are separate and unrelated to Commonwealth. Lowry Financial Advisors, Inc. is located at 12921 SW 1st Rd, Suite 215, Tioga, FL 32669. 352-333-7990
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Lowry Financial Advisors is the only advisory firm that helps its clients reach their goals through The Achieving Simplicity® Experience™, providing clarity and confidence in their personal and financial lives.
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