| SPONSORED  A historic financial mania is coming. It’ll open a unique new investment vehicle on a scale he hasn’t seen since 1994, which could double your money 6 different times if you get positioned immediately.
Click here to learn more (and get 4 free recommendations). |
If Trump Says...
Take a drink if you hear Donald Trump utter any of the following words or phrases:
- "Weaponization"
- "Fake news"
- "Best [fill in the blank] evah"
- "Unfair"
- "Rigged"
- "No president has ever [fill in the blank] as me."
- "No tax on tip"
If Biden Says...
And take a drink if you hear Joe Biden say any of the following:
- "Convicted felon"
- "Student-loan forgiveness"
- "MAGA"
- "Working-class Americans"
- "Scranton"
- Any variation of "Billionaires need to pay their fair share"
- Or anything utterly nonsensical like "lying, dog-faced pony soldier" or "God save the queen"
This is going to be a night to remember while we use alcohol to ease the pain these two undesirables unleash on us in 90 minutes… and on the economy over the next four years.
This is The Freeport Society. We believe that you're capable of making your own choices. So we trust you will play this game with me – should you choose to – responsibly. I don't want to be responsible for your death by alcohol poisoning.
In all seriousness, though, let's parse one of those phrases I expect we'll hear from Trump tonight…
"No tax on tips."
The Only Tax Cut in History I Oppose
My view on taxes is simple: Any tax rate higher than zero is excessive and abusive.
I exaggerate... but only slightly.
America has a long anti-tax tradition. Taxes under British colonial rule were estimated at a paltry 1% to 1.5%... and that was enough to provoke open revolt and lead to an independence movement (the results of which we celebrate a week from today).
A resistance to taxes is in our blood as Americans.
Lower income taxes?
Yes!
Lower property taxes?
Damn right!
Lower sales taxes?
I demand it!
I can credibly say I have never seen a proposed tax cut that I opposed.
Until now.
In his recent rallies, Trump has taken to calling for the elimination of taxes on tipped income. I'm not sure how this became a rallying cry, as I wasn't aware that America's waiters and waitresses were an identifiable voting bloc. Yet "no taxes on tips" appears to be this election's equivalent of "no taxation without representation."
Let's start with the obvious…
Most tip income is already untaxed because it goes unreported. When I was (allegedly) paid cash tips in my youth, I (allegedly) never reported any of it as income. And it's safe to assume I wasn't (allegedly) the only one. Giving a tax break on something that already mostly escapes taxation is a meaningless gesture.
But let's get more fundamental. Like it or not, the tax code is also a policy tool. When the government raises taxes on something, they encourage less of it. That's bad if you're talking about income tax. You don't want to incentivize people to work less.
But high taxes on cigarettes were viewed as a tool to encourage people to quit smoking (or go broke maintaining their vice). Likewise, offering tax breaks on things like 401(k) plans incentivizes people to save more.
Now, as a libertarian, I find this kind of governmental paternalism distasteful. But it's basic economics and it works. The tax code shapes behavior.
So, by eliminating the tax on tips, Trump would be incentivizing more tipping.
Has the man lost his mind? (That's a rhetorical question, in case you feel obliged to answer it.)
| SPONSORED  On August 19th, just weeks from now, I expect the biggest presidential election shock since 1968.
Forget about Donald Trump... And forget about Joe Biden... Instead, I believe the unexpected is barreling toward America. And I believe the aftermath will transform this country forever.
Click here now to see the evidence I’ve gathered. |
When I was a child, back when dinosaurs roamed the earth, the standard rate for tipping in a restaurant was 12%. Sometime around middle school, 15% became customary. And then one day, overnight, it jumped to 20%. Today, leaving a 20% tip is considered an insult.
At the same time, menu prices have consistently risen over the decades due to inflation. So, service workers naturally see pay increases in line with cost-of-living increases. Had there been no tip increase, a waiter making 12% today would be earning a lot more than they would have during my childhood because they'd be getting 12% on a much higher bill.
So why has the expected tip rate doubled?
Do waiters work twice as hard today as they did 40 years ago? (Again, rhetorical.)
Your guess is as good as mine. All the same, I won't begrudge a good waiter or waitress their living. If they're hustling and providing good service, great! Give 'em their due.
But why am I now prompted to tip at Starbucks... or the local sandwich shop... or even the taco truck across the street?
I'm ordering at a counter... no one is really serving me... and half the time I have to wipe down my own table. What service, exactly, am I tipping for?
Tipping has crept into every corner of the retail economy. The tip line is ubiquitous on every payment screen in America, and last time I checked, service hadn't materially improved.
If tipping becomes tax free, then we're going to see even more of it than we do today. Companies will be incentivized to lower worker wages on everything from dry cleaning to garbage collection to the "tipping wage" of $2.13 per hour with no commensurate reduction in prices to customers. We'll all end up paying 20% more for everything... making today's intolerable inflation even worse.
That is insanity.
Not to pick on Trump, of course. Biden has a long list of his own poor policy decisions with all of their unintended consequences. But we'll cover those another day.
In the meantime, get your drink of choice ready before the show – er… debate – starts at 9.
Then come back tomorrow so we can work on protecting and growing our wealth.
Think of this election as a giant meteor hurtling toward the earth. Yes, it may very well kill most of us. but if you have your underground bunker prepared and fully stocked, you have a chance of surviving.
To life, liberty, and the pursuit of wealth.
Oh, and salud.
 |
| Charles Sizemore
Chief Investment Strategist, The Freeport Society P.S. I suggest keeping a couple of extra bottles of your favorite adult beverage handy. There is a good chance that Trump or Biden's performance at tonight's debate could be the catalyst either party needs to add a surprise candidate to the roll. Our Freeport Society friend Louis Navellier has a good idea of who he thinks the Democrats will likely replace Biden with. If that comes to pass, we're in serious trouble. Louis shares his theory of who could take the podium in place of dear, old Joe in this video . I encourage you to watch it now. Once you have the details, you're going to want a drink early. |
| |
| |
没有评论:
发表评论