Many of us here are watching our portfolio balances go up, up, and up! For many others, the economic strains are building:
I don’t want to be an El Demonio Downer, here’s some good news - consumers still have plenty of room to leverage themselves…
Yep. That’s the difference in taxation for the idle rich, and the logical result of the Big Reagan Lie and trickle down economics.
The dumbest thing you can do in America, tax-wise, is to work for wage & salary income – even if it’s a $500,000/yr salary. The guy living off investment income or inherited wealth is always going to be better off.
People with a high net worth have a lot less stress than high income earners.
intercst
You keep saying this and yet I had worked for wages my entire life (well, not entirely; I’m not dead yet!) and I’m comfortably retired and often think I actually have too much money! Retired at 67 (FRA) while still working and saved the money. You know someone has to work for a living, right? We can’t all live on investment income; otherwise who does the actual work that needs doing? Your refrain sounds an awful lot like someone who refers to soldiers as losers! People who work for a living don’t deserve your scorn and insults!
So put a cork in it,
JimA
Whoa! I’m still takin’ what they’re given, ‘cause I’m workin’ for a livin’!
I think the point is that our tax system incentivizes the wrong thing.
I’m just explaining the arithmetic of the excessive taxation of wage & salary Income – and the virtually tax-free benefits gifted to the idle “rich”. You are of course free to ignore the information.
Once I learned the arithmetic at about the age of 30, I never worried about raises and promotions, saved and invested a large portion of my gross income, and quit my job as an engineer in the oil & gas industry by age 38 way back in 1994. Few people get rich working uncompensated overtime in hopes of big raises and promotions.
Because of the large difference in taxation and the much higher return on investment capital versus labor, I’ve suffered no diminution in my income as a result of the decision. It’s just nuts that people are voting for this and wondering why they’re falling behind.
intercst
You lose a portion of your audience, people you’re trying to help who are working hard for wage income, when you frame it like that. They’ll take it as them being dumb, and not absorb the rest of your point, which is that the system is dumb.
The system is vicious and clever, and it is our politics that are brilliantly “dumb” inducing. Something like that….
I was going to use “rigged”, but that word has recently lost it’s credibility for some reason.
I think we know the upper leg of the K is carrying the economy. Upper middle class continues to spend—in part due to the wealth effect. Including good stock gains.
Meanwhile consumer stocks continue to struggle. Up scale ones are doing ok but the squeeze has to trim their margins.
You have to wonder if the down leg can continue to grow. Or some glitch stops the up leg.
Recession seems very possible. 30% odds?
