Financial News

[illinilaw08]

Again, it's more about the concept than the specific numbers, but maybe it's graduated. Sales tax on cars is 3% at 20K, 6% at 50K, and 10% at 100K, or something like that.

 

You can buy a new Camry/Fusion for around 22K, so in a sense it is somewhat of a luxury to be able to afford anything substantially more than that.

 

The numbers are way low (have you looked at the cost of a minivan or real estate?), but the concept is interesting.

 

If you have the disposable income to afford a private plane or a yacht, a luxury tax probably isn't preventing you from purchasing that status symbol. As you reach into areas where the middle class spends (cars, real estate and jewelry), the federal "luxury" tax might have an impact on overall consumption (I'll try to squeeze another couple years out of my minivan; I'll wait a couple years to try to upgrade my home, etc). Remember that consumption and spending is a good thing.

[Jenksismyhero]

Again, it's more about the concept than the specific numbers, but maybe it's graduated. Sales tax on cars is 3% at 20K, 6% at 50K, and 10% at 100K, or something like that.

 

You can buy a new Camry/Fusion for around 22K, so in a sense it is somewhat of a luxury to be able to afford anything substantially more than that.

 

If you're cutting taxes on 120k car purchases (volume, not price) , and increasing it on 5k car purchase, you're going to drop your tax revenue. I'm sure the vast majority of car purchases are under 20-25k.

 

And when was the last time you looked at those cars? 22k will give you the absolute base 4 cylinder, 2wd type model with no features.

[bigruss]

If you're cutting taxes on 120k car purchases (volume, not price) , and increasing it on 5k car purchase, you're going to drop your tax revenue. I'm sure the vast majority of car purchases are under 20-25k.

 

And when was the last time you looked at those cars? 22k will give you the absolute base 4 cylinder, 2wd type model with no features.

Not to be a stickler, but you can get a well equipped Sonata for around that price because of their rebates.

[Jake]

Let's all gather round and read the Gospel of Wealth

[StrangeSox]

That's a good start, thanks. Though I don't think there needs to be an filed exemption process to prove those things - just base it on asset type, and therefore liquidity. Makes the process more fair and more efficient.

 

And you have to pay interest - I don't like that part. It is a penalty, and I don't feel there should be a penalty for this, since they were basically given a situation and did not do anything wrong.

 

I don't know what the rates are, but an inflation-level of interest seems fair. Otherwise your debt lessens naturally over time.

 

And it's still important, imo, to make the distinction between inheritance taxes and estate taxes. The estate is responsible for these taxes, not your heirs. Maybe a national inheritance tax would be a better way of doing it, but in our current system, the burden falls on the estate.

[Balta1701]

The thing ignored here is...if you want to generate significant revenue from a consumption tax, it needs to go down to levels like "$1000 in Jewelry, $20k cars". If you go to $40k cars, suddenly only a very small portion of the country is paying that tax, and it starts failing as a reasonable revenue generation system unless the tax rate rapidly shoots up to 75%, at which point no one buys the car.

[Y2HH]

The thing ignored here is...if you want to generate significant revenue from a consumption tax, it needs to go down to levels like "$1000 in Jewelry, $20k cars". If you go to $40k cars, suddenly only a very small portion of the country is paying that tax, and it starts failing as a reasonable revenue generation system unless the tax rate rapidly shoots up to 75%, at which point no one buys the car.

 

That's fine for a small added consumption tax at the federal level, which would only be 1-2%.

 

Luxury taxes, however, which is what we are discussing, are astronomically higher than 1-2%.

[Jenksismyhero]

Not to be a stickler, but you can get a well equipped Sonata for around that price because of their rebates.

 

The $1500 rebate basically pays for the sales tax and fees. You're still starting at a base of 21k.

[Cknolls]

http://www.bloomberg.com/news/2012-12-11/-...y-giveaway.html

 

 

I think they need to raise taxes just a little bit.

[StrangeSox]

The Fed announced that it's going to keep money loose until UE hits 6.5% and will tolerate inflation up to 2.5%.

 

http://tpmdc.talkingpointsmemo.com/2012/12...icy.php?ref=fpa

[bmags]

The Fed announced that it's going to keep money loose until UE hits 6.5% and will tolerate inflation up to 2.5%.

 

http://tpmdc.talkingpointsmemo.com/2012/12...icy.php?ref=fpa

 

This is great news.

[StrangeSox]

Actual targets is a nice change.

[bmags]

As a whole, Bernanke has done a pretty good job. It was frustrating since so much of his academia was committed to dealing with a crisis very much like the US (his writing on Japan), and then not following the course suggestions he set in his paper.

 

That said, we are such better hands than so many companies. I'm only jealous of Israels central bank, Swedens and Australias. Good work Chicago Fed Chief Charlie Evans as well.

[Balta1701]

As a whole, Bernanke has done a pretty good job. It was frustrating since so much of his academia was committed to dealing with a crisis very much like the US (his writing on Japan), and then not following the course suggestions he set in his paper.

 

That said, we are such better hands than so many companies. I'm only jealous of Israels central bank, Swedens and Australias. Good work Chicago Fed Chief Charlie Evans as well.

Bernanke should have put this statement out 3.5 years ago.

[bmags]

Bernanke should have put this statement out 3.5 years ago.

 

Yes, but better late than never.

[Balta1701]

Yes, but better late than never.

Well there is a downside too...Bernanke's successfully convinced most of the financial industry that the Fed's actions aren't helping and that they should pull back, since his piecemeal moves haven't been big enough since 2009.

[southsider2k5]

Well there is a downside too...Bernanke's successfully convinced most of the financial industry that the Fed's actions aren't helping and that they should pull back, since his piecemeal moves haven't been big enough since 2009.

 

That might be the first time I have seen three trillion in buybacks referred to as "piecemeal".

[Balta1701]

That might be the first time I have seen three trillion in buybacks referred to as "piecemeal".

That's how big of a hole your guys blasted.

[southsider2k5]

That's how big of a hole your guys blasted.

 

I love urban legends.

[Balta1701]

I love urban legends.

$10 trillion housing bubble that exploded = urban legend.

 

Did I miss this part?

[NorthSideSox72]

$10 trillion housing bubble that exploded = urban legend.

 

Did I miss this part?

How did his "guys" create the housing bubble? Plenty of blame to go around on that, very little of which falls to listed equity markets.

 

[kapkomet]

$10 trillion housing bubble that exploded = urban legend.

 

Did I miss this part?

 

 

If you want reality, Clinton really accelarated the housing bubble... somehow, though, you're going to ignore that factual piece of information.

[StrangeSox]

More on the LIBOR Scandal, UBS edition

 

 

Call me naive, but after the Barclays revelations, I actually thought that I couldn’t be shocked about the extent of Libor manipulation. Boy, was I wrong. I could quote all 40 pages of the FSA notice fining UBS for Libor fraud: this is far, far worse than simply understating UBS’s borrowing costs so as to make investors think the bank was healthy. In fact, a lot of the fraud was designed to move Libor up rather than down: whatever the traders could make the most money manipulating.

 

The FSA concludes, quite explicitly:

 

UBS’s misconduct is, although similar in nature, considerably more serious than Barclays’ because it was more widespread within the firm, being exacerbated by the control failings, in particular the inherent conflict of interest in its submission function. More individuals, including Managers and Senior Managers, participated in or knew about the manipulation and there were more instances of individual manipulation, across more currencies. Furthermore, the extent to which UBS colluded with others was significantly greater and involved financial rewards being paid to Broker Firms.

 

The latter point is key: UBS didn’t just manipulate its own submissions, but actively attempted to manipulate other firms’ submissions as well. And at points the bribery was so explicit as to beggar belief that anybody would ever communicate such things on the record:

 

If you keep 6s [i.e. the six month JPY LIBOR rate] unchanged today … I will f***ing do one humongous deal with you … Like a 50,000 buck deal, whatever … I need you to keep it as low as possible … if you do that …. I’ll pay you, you know, 50,000 dollars, 100,000 dollars… whatever you want.

Other fines, for other banks, are sure to follow this one — but if Barclays was dreadful and UBS was much worse than Barclays, it’s hard to imagine that anybody has clean hands here. You want to know why pretty much the entire financial sector is still trading at less than book value? This is why: the number of investors who trust the banks is now zero, and banking seems to have become a game of picking up fraudulent nickels in front of a relentless justice-department steamroller. (And for good measure there are all the civil suits as well: the $1.5 billion that UBS is paying today is just a down-payment on the all-in cost of its Libor fraud.)

 

it would be nice to see some of these criminals go to jail

[bmags]

More on the LIBOR Scandal, UBS edition

 

 

 

 

The latter point is key: UBS didn’t just manipulate its own submissions, but actively attempted to manipulate other firms’ submissions as well. And at points the bribery was so explicit as to beggar belief that anybody would ever communicate such things on the record:

 

 

 

 

it would be nice to see some of these criminals go to jail

 

THEY"LL NEVER GO TO JAIL BECAUSE THE CIA HAS THEIR KIDS COMMITTING MURDER TO DISTRACT PEOPLE FROM TEH STAND

[Balta1701]

it would be nice to see some of these criminals go to jail

Hell, if laundering billions of dollars in drug money puts no one in jail, why would this?