"Scott Bessent, the incoming Treasury secretary, made this argument: “Tariffs can’t be inflationary because if the price of one thing goes up, unless you give people more money, then they have less money to spend on the other thing, so there is no inflation.”"
That's quite the tone-deaf statement from Bessent. As a member of the billionaire class, he will be insulated from any personal financial hardship resulting from Trump's tariffs.
"Some tariff supporters go a step further, arguing American consumers will even benefit from tariffs. Why? If domestic manufacturers suddenly have a price advantage relative to foreign competitors, it stands to reason that they’ll gain market share and, in turn, they’ll hire more workers at higher wages."
First, over the years, domestic vehicle manufacturers and their suppliers have taken steps to increase automation in production facilities, and will continue along that path as technology continues to improve and manufacturers try to reduce their dependence on labor. Whether or not there would be a net increase in hiring depends on the time frame being measured. Second, tariffs will concentrate vehicle sales among a limited number of large domestic manufacturers. This decreases competition, and will likely result in increased prices. With regard to new companies entering the market, it is very difficult to scale a start-up without government assistance. Tesla was struggling until it started benefitting from tax incentives. China subsidizes its domestic electric vehicle manufacturing. Third, the "U.S. domestic" manufacturing supply chain consists of vehicles and parts manufactured and assembled in many different countries. Quality will suffer during any transition period due to cost, inexperience and a steep learning curve among new suppliers and assemblers. Replacing the current system would take years, if not a decade or more. In the meantime, vehicles and parts will be in short supply, and again, prices for new/used vehicles and repairs will go up. And that's without retaliatory tariffs. That's economics.
Recommend reading the interview of David Himmelstein regarding Medicare Advantage (link below). It gives another perspective on Medicare Advantage plans. Spoiler alert - he's not a fan. He also co-authored an excellent article in JAMA Network, linked below as well, but it's behind a paywall. https://fair.org/home/its-time-to-take-medicare-advantage-off-the-market/ https://jamanetwork.com/journals/jamainternalmedicine/article-abstract/2819817? I did a lot of research before electing to get a Medicare supplement plan G, and if you can afford it, it's a good option, especially as medical expenses typically increase with age. If you have any other lettered plan other than plan G (or plan F, which is no longer sold), make sure to ask if the medical practitioner accepts Medicare assignment (not just "Medicare"). And it has to be the specific practitioner, not the practice itself. The receptionist answering the phone won't make the distinction; best to talk to the billing department or practice manager. That way you can avoid the excess billing charge (aka "balance billing") from providers who don't accept Medicare assignment, but will see people insured by Medicare. Also, some states have put restrictions on balance billing. See the article below, current as of 2022, so some things may have changed. https://www.aarp.org/health/medicare-qa-tool/define-term-medicare-assignment.html
Martin, I build a spreadsheet each year as well, including Form 1040 and the relevant supporting forms and worksheets. I use the drafts the IRS issues in late summer (have had to use the prior year's forms for state taxes in some years). The original motivation was to calculate how much of my IRA I could transfer to my Roth IRA in any given year without triggering IRMAA and other undesirable consequences. To that end, I have additional columns where I can change assumptions and do pro forma calculations. It also allows me to fine tune the final estimated tax payment in January. But, as you point out, the other benefits are a better understanding of the impact of financial decisions I might make, as well as changes in federal and state tax laws. That being said, I still use tax software to file the return, in case I missed anything. For many filers with relatively simple returns, the IRS has all the data it needs to create a return and make it available to the that taxpayer. Ideally, a system like that would remove a lot of the individual stress, along with the filing mistakes people make. Of course, the tax software lobby would fight it unless the software providers could realize equivalent revenue from this kind of program.
https://www.pbs.org/newshour/show/dreading-taxes-countries-show-us-theres-another-way
A bit off topic, but switching among the different Medicare supplemental lettered plans may also trigger an underwriting review. I'm a fan of traditional Medicare + supplemental insurance, but people need to choose wisely when first given the choice (in my mind, that would be supplemental plan G).
I use TT to file, but also created a spreadsheet to calculate federal and state taxes. I pay the safe harbor amount for estimated taxes for the first three installments, and then in December use the relevant draft IRS tax forms and tax tables to update the spreadsheet rows for the current tax year (state forms aren't available until January, so I have to use the prior tax year line items updated with current tax year data). This allows me to fine tune the amount I have to pay in estimated taxes for the January installment. I always overestimate a bit as a buffer. Also lets me play around with different typical end of year tax planning strategies, like Roth conversions and hypothetical realization of capital gains/losses, etc., with the effects displayed in side-by-side columns. For the next year, I just make a copy of the previous year's worksheets and modify them for that year's data and changes.
Have used The Complete Retirement Planner for the past three years. It's a good basic program and it allows you to provide different investment and expense assumptions. The developer is very responsive to questions and gets back right away, usually the same day. It's spreadsheet based (need Excel 2016 or later) and not flashy like the big names, but it doesn't need to be for what I use it for, which is to make sure financially I'm in good shape going forward. Another plus is that the data stays on your computer, vs. residing on someone else's server.
https://www.completeretirementplanner.com/
Any search engine will pull up multiple sources and examples of these types of discrimination by the entity in question. Here are two (of many) examples:
https://www.forbes.com/forbes/2007/0723/080.html?sh=6163b2b55971
https://www.facingsouth.org/2012/08/chick-fil-as-history-of-workplace-discrimination
Have thought about getting a new car, but I do feel good about my older Honda Accord whenever any of the following occur: The annual auto insurance premium notice arrives.
The annual motor vehicle registration renewal arrives.
No monthly loan payment.
I look at my simple dashboard with its minimal distractions.
I read an article about data tracking and security vulnerabilities in newer vehicles.
We can replace certain broken parts relatively inexpensively. Note that I said I feel good about my car. Don't view that as being better or worse than someone who drives something "new and fancy", with the following exception - when the person in the expensive vehicle is driving aggressively, seems to have a well-developed sense of road entitlement, or is otherwise acting like a j*rk. Case in point, two Maserati Quattroportes going over 100 mph, weaving in and out, passing everybody on a busy highway with a 65 mph speed limit? Not impressed.
Nice article and rationale. I've been chipping away at my IRA account balances by doing Roth conversions each year. I use the IRS draft versions of the relevant tax forms to update a spreadsheet that allows me to do pro forma tax calculations regarding various conversion scenarios. Just finished this year's calculations. This, in conjunction with a retirement planning spreadsheet that I also update annually, gives me peace of mind. Don't like "surprises" at tax time, nor down the road :)
Comments
Post: Trading Arguments
Link to comment from December 16, 2024
Recommend reading the interview of David Himmelstein regarding Medicare Advantage (link below). It gives another perspective on Medicare Advantage plans. Spoiler alert - he's not a fan. He also co-authored an excellent article in JAMA Network, linked below as well, but it's behind a paywall. https://fair.org/home/its-time-to-take-medicare-advantage-off-the-market/ https://jamanetwork.com/journals/jamainternalmedicine/article-abstract/2819817? I did a lot of research before electing to get a Medicare supplement plan G, and if you can afford it, it's a good option, especially as medical expenses typically increase with age. If you have any other lettered plan other than plan G (or plan F, which is no longer sold), make sure to ask if the medical practitioner accepts Medicare assignment (not just "Medicare"). And it has to be the specific practitioner, not the practice itself. The receptionist answering the phone won't make the distinction; best to talk to the billing department or practice manager. That way you can avoid the excess billing charge (aka "balance billing") from providers who don't accept Medicare assignment, but will see people insured by Medicare. Also, some states have put restrictions on balance billing. See the article below, current as of 2022, so some things may have changed. https://www.aarp.org/health/medicare-qa-tool/define-term-medicare-assignment.html
Post: Medigap pricing question
Link to comment from September 7, 2024
Martin, I build a spreadsheet each year as well, including Form 1040 and the relevant supporting forms and worksheets. I use the drafts the IRS issues in late summer (have had to use the prior year's forms for state taxes in some years). The original motivation was to calculate how much of my IRA I could transfer to my Roth IRA in any given year without triggering IRMAA and other undesirable consequences. To that end, I have additional columns where I can change assumptions and do pro forma calculations. It also allows me to fine tune the final estimated tax payment in January. But, as you point out, the other benefits are a better understanding of the impact of financial decisions I might make, as well as changes in federal and state tax laws. That being said, I still use tax software to file the return, in case I missed anything. For many filers with relatively simple returns, the IRS has all the data it needs to create a return and make it available to the that taxpayer. Ideally, a system like that would remove a lot of the individual stress, along with the filing mistakes people make. Of course, the tax software lobby would fight it unless the software providers could realize equivalent revenue from this kind of program. https://www.pbs.org/newshour/show/dreading-taxes-countries-show-us-theres-another-way
Post: Beyond Our Grasp
Link to comment from June 22, 2024
A bit off topic, but switching among the different Medicare supplemental lettered plans may also trigger an underwriting review. I'm a fan of traditional Medicare + supplemental insurance, but people need to choose wisely when first given the choice (in my mind, that would be supplemental plan G).
Post: Which is better, traditional Medicare or Medicare Advantage?
Link to comment from June 22, 2024
Jonathan, wishing you and your family peace and strength on your journey.
Post: The C Word
Link to comment from June 15, 2024
I use TT to file, but also created a spreadsheet to calculate federal and state taxes. I pay the safe harbor amount for estimated taxes for the first three installments, and then in December use the relevant draft IRS tax forms and tax tables to update the spreadsheet rows for the current tax year (state forms aren't available until January, so I have to use the prior tax year line items updated with current tax year data). This allows me to fine tune the amount I have to pay in estimated taxes for the January installment. I always overestimate a bit as a buffer. Also lets me play around with different typical end of year tax planning strategies, like Roth conversions and hypothetical realization of capital gains/losses, etc., with the effects displayed in side-by-side columns. For the next year, I just make a copy of the previous year's worksheets and modify them for that year's data and changes.
Post: The Downside of Up
Link to comment from March 16, 2024
Have used The Complete Retirement Planner for the past three years. It's a good basic program and it allows you to provide different investment and expense assumptions. The developer is very responsive to questions and gets back right away, usually the same day. It's spreadsheet based (need Excel 2016 or later) and not flashy like the big names, but it doesn't need to be for what I use it for, which is to make sure financially I'm in good shape going forward. Another plus is that the data stays on your computer, vs. residing on someone else's server. https://www.completeretirementplanner.com/
Post: Faulty Assumptions
Link to comment from February 21, 2024
Any search engine will pull up multiple sources and examples of these types of discrimination by the entity in question. Here are two (of many) examples: https://www.forbes.com/forbes/2007/0723/080.html?sh=6163b2b55971 https://www.facingsouth.org/2012/08/chick-fil-as-history-of-workplace-discrimination
Post: Prophet Motive
Link to comment from February 4, 2024
Have thought about getting a new car, but I do feel good about my older Honda Accord whenever any of the following occur: The annual auto insurance premium notice arrives. The annual motor vehicle registration renewal arrives. No monthly loan payment. I look at my simple dashboard with its minimal distractions. I read an article about data tracking and security vulnerabilities in newer vehicles. We can replace certain broken parts relatively inexpensively. Note that I said I feel good about my car. Don't view that as being better or worse than someone who drives something "new and fancy", with the following exception - when the person in the expensive vehicle is driving aggressively, seems to have a well-developed sense of road entitlement, or is otherwise acting like a j*rk. Case in point, two Maserati Quattroportes going over 100 mph, weaving in and out, passing everybody on a busy highway with a 65 mph speed limit? Not impressed.
Post: A Time to Spend
Link to comment from January 13, 2024
Nice article and rationale. I've been chipping away at my IRA account balances by doing Roth conversions each year. I use the IRS draft versions of the relevant tax forms to update a spreadsheet that allows me to do pro forma tax calculations regarding various conversion scenarios. Just finished this year's calculations. This, in conjunction with a retirement planning spreadsheet that I also update annually, gives me peace of mind. Don't like "surprises" at tax time, nor down the road :)
Post: Running Up the Tab
Link to comment from December 13, 2023