A Stalled Housing Market and Marijuana “Tax Addicts”
“Upper middle-priced single family home sales (less than $650,000.00) in the 70175 zip code and surrounding areas are dead.
“5 to 10 year old homes were purchased for 25% off a few years ago (previously priced less than $800,000.00) and are now sitting on the market sometimes for over a year, even though they are offered for another 20% off the purchase price.
“These are homes that cannot be built new for double the selling price and are in great neighborhoods. Good luck if you bought the home new!”
Another reader from the New Orleans area confirms real estate’s not booming everywhere:
“In 2011, St. Charles was named the number one place in the country for families in the annual survey by Family Circle magazine.
“The magazine says the west suburb has good neighbors, affordable housing and a giving spirit.
“What happened in the last 7 years? Never-ending higher taxes and a mass exit by the owners that can afford to move to a more competitive state.”
Coinciding with feedback we received about the brisk seller’s market in suburban Indianapolis:
“During a short 30-mile trip south on I-75 to Dayton, Ohio, we saw not less than six ‘NOW HIRING’ signs.
“Probably points out two sides of the sword: The economy is surging ahead, at least in the Midwest, and quality hires are increasingly difficult to find.
Last, on the topic of marijuana as a gateway drug, this is pithy:
“Marijuana is the gateway drug for tax addicts seeking taxes.
“They like to tax what people are addicted to like cigarettes, alcohol, marijuana, and earning a living…populations that won’t stop the activity in order to get out of paying the tax (a win for politicians).
“It’s working so far, except for those earning a living–they turn to the black market (under-the-table) or government subsidies which further encourage unemployment.”
To be fair, there’s no evidence marijuana’s addictive. Not physically, anyway.
More to the point, we’re not naive to think state’s would legalize marijuana without the tax revenue. Taxes probably will be the tipping point for the federal government, too.
What’re your thoughts on the “tax addicts” in Washington? Especially after reading what’s below.
Send your opinions to, TheRundownFeedback@SevenFigurePublishing.com.
Your Rundown for Thursday, August 31, 2018…
More Tax Relief Means Addition by Subtraction
Say what you will about President Trump, one thing’s clear. The guy doesn’t like taxes.
We’ve already had round one of cuts with the GOP’s Tax Cuts and Jobs Act of 2017 — the biggest tax overhaul since 1986.
So far, we know the TCJA has been outstanding for corporations, reducing their liability from 35% to 21%.
For everyday Americans, the president aimed to streamline filing taxes down to a postcard.
We don’t think it’ll be that simple. But tax brackets were adjusted and more generous allowances made for standard deductions and child tax credits.
The perks of state and local deductions (SALT), on the other hand, were limited.
The $10,000 cap is going to hurt high-tax states like New York, New Jersey and Connecticut where SALT deductions can double that cap.
Think it’s a coincidence the states listed above are blue states? Some would say that’s retributive.
But here’s something red and blue states can both get behind…
Yesterday, we saw this Bloomberg headline: “Trump Says He’s Thinking About Indexing Capital Gains to Inflation.”
This is something Trump’s been kicking around with Treasury Secretary Steve Mnuchin. Specifically, whether the Treasury Department has the authority to make this change without Congressional approval.
It certainly sets the cognitive wheels in motion: pegging capital gains to the rate of inflation.
We started looking for a real-world example of what this would look like. We found it at the Washington Examiner.
“If someone bought $100,000 worth of stock in 1975 and sold it for $1 million today, they would owe the federal government taxes on $900,000.
“If the administration indexed capital gains to inflation, the total taxable gains would fall to around $700,000.”
Saving $200,000 in capital gains would move the needle for a lot of folks.
We can’t help but think this move has something to do with the election cycle.
As we get closer to 2020, Trump’s going to curry favor with his red-state base and — maybe — make nice with blue states.
Cutting capital gains taxes would be a start.
Turning to the markets this morning…
Market Rundown for Fri. August 31, 2018
S&P 500 futures are down to 2,897 at the time of writing.
Oil’s down slightly to $70.11.
Gold’s up to $1,210.10.
Bitcoin’s down $65 this morning to $6,913.98
Send your comments and questions to, TheRundownFeedback@SevenFigurePublishing.com.
We’re off Labor Day; we’ll circle back on Tuesday. Have a great weekend.
For the Rundown,
P.S. Something I want to share with you from Ray Blanco…
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