Tax Cuts

[BabyJandJDaddy 139]

Not interested in political debate here.  Just curious about you all.  Just saw my paystub for my paycheck I get tomorrow.  $60 more take home pay than my last pay check.  That'll be $1560 more in take home pay for my family this year.  I was told the cut wouldn't take place until February, so I was surprised to see it this early. Has anyone else seen the cut yet?

[mdn82 25,510]

Yes


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[Brass Cannon 24,297]

Possible didnt look to close my take home pay is less but my insurance went up by quite a bit. 

My take home after everything is 2/3 of my check 

[JSHoosier 19,913]

Mine's about the same, or a little more taxes taken out.  Insurance didn't change much.

[Stuhoo 79,863]

A slightly better paycheck for me.

Where are our Kelley School posters? 

I'm curious as to potential inflationary effects of the cuts. If that happens it will negate any positive effect quickly, and as a 52 year old will hurt me when my post-retirement income remains relatively stagnant. If it doesn't create inflation it's a minor thing, but a nice one.

[Schreckbagger 620]

My IRA gained $5k yesterday....Yeah baby.

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[triple 408]

53 minutes ago, Stuhoo said:

A slightly better paycheck for me.

Where are our Kelley School posters? 

I'm curious as to potential inflationary effects of the cuts. If that happens it will negate any positive effect quickly, and a s a 52 year old will hurt me when my retirement income remains relatively stagnant. If it doesn't create inflation it's a minor thing, but a nice one.

Kelley grad here and a few years behind you in age, but close enough.  FWIW I've  started de-risking my portfolio, although I'm not in a rush. My plan is to do it in several steps over the first half of the year, as I believe we'll start seeing market corrections in Q3-4.  It's hard to imagine inflation not ticking up.  That said, everything I'm reading indicates moderate increases for the next couple of years with concerns for the 3-5+ year timeline, as the short term jolt from the cuts wears off and the debt implications become more prominent.  

[Alford Bailey 12,363]

Barring a major disruption I think we have good times ahead. No real warning signs in the near future. Im long on great American companies. When the pullback comes buy more. Many "experts" were predicting a pullback a few years ago around 14000 by the way.

[gazelle1 34]

I wouldn't worry about inflation here...that would be more of a concern if we were adding "new" money to the money supply (i.e. printing more money). The tax cut just puts back in your pocket money that is already being circulated, earned, etc.

Stock market is going to go up and down, impossible to predict when. Invest if you can, have a plan, don't pay high fees, and stick with it for the long term and you can make money.

Disclaimer: For any finance nerds out there, yes there are a lot more things that can cause inflation (or deflation) that we could debate, along with the pros and cons of the tax bill. Just saying that you probably shouldn't worry about inflation because of this.


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[Brass Cannon 24,297]

21 minutes ago, gazelle1 said:

I wouldn't worry about inflation here...that would be more of a concern if we were adding "new" money to the money supply (i.e. printing more money). The tax cut just puts back in your pocket money that is already being circulated, earned, etc.

Stock market is going to go up and down, impossible to predict when. Invest if you can, have a plan, don't pay high fees, and stick with it for the long term and you can make money.

Disclaimer: For any finance nerds out there, yes there are a lot more things that can cause inflation (or deflation) that we could debate, along with the pros and cons of the tax bill. Just saying that you probably shouldn't worry about inflation because of this.


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IIRC the money supply will increase due to the increase in the money multiplier which will lead to inflation. How much is up for debate. 

[gazelle1 34]

2 hours ago, Brass Cannon said:

IIRC the money supply will increase due to the increase in the money multiplier which will lead to inflation. How much is up for debate. 

So the money multiplier is a factor of the fed's required reserve rate and how much the bank is loaning out. If your thought is that the tax cuts will create a more of an incentive for corporations and people to take out loans to invest in their homes, businesses, or whatever, that would increase the money supply due to the money multiplier. That's a good point, but I don't think it's a concern you should have. It wouldn't be meaningful inflation and if that's really happening the economy would really be rolling and the other positive affects would outweigh the inflation IMO.

Regardless, interest rates are so low right now that the federal reserve has a lot of room to fight it. Curious though if you saw something on inflation concerns - I've heard a lot of pros and cons to the tax bill but this is a new one to me, would love to check out the article.

New taxes haven't hit my paycheck though - I've been told February and I'm looking forward to it.

[Josh 12,603]

Health insurance went up this year for the first time in years, so any increase in pay was negated by increase in insurance rates. Most people at work's paychecks haven't changed while some have actually gone down. But hey, the executives are making more money.

[ALASKA HOOSIER 11,257]

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[Stuhoo 79,863]

6 minutes ago, ALASKA HOOSIER said:

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Thanks for those sophisticated economic intricacies, Alaska!  ;)

 

[ALASKA HOOSIER 11,257]

I thought you guys would enjoy.

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