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An interesting bit of data (“Higher Capital-Gains Tax Wouldn’t be as Scary as it Sounds”)

edited April 25 in Other Investing
“Only 25% of U.S. equities are owned by U.S. taxable investors, with the remaining 75% held by people and entities not subject to capital gains levies, such as pension plans and other retirement accounts, endowments, and foreign investors ... (according to UBS).”

From Randall W. Forsyth - Barron’s April 26, 2021

Comments

  • I heard years ago on NPR that less than half of tax filers end up actually paying. That's due to credits and deductions, of course. Yet we continue, seemingly forever, to dance around the bigger problems. And what if some or many of those deductions and credits became moot because our society became more equitable, generally, eh?
  • edited April 24
    (This one will probably run off the tracks - though wasn’t the intent.)


    * I’ll roughly summarize a second interesting tidbit from Forsyth this week:

    - Private pension funds have done well lately, now being on average 98.4% fully funded - up 17% from July 2020. There’s 2 reasons. First, the hot equities markets / Second, the increase in interest rates which allows the pension funds to inject higher expected bond returns into their formulas.

    - Pension funds can lock in these advances in funding by selling equities and buying bonds at relatively higher rates than before (which might help explain why rates reversed and headed down recently).

    - Public pension plans haven’t done as well as the private, starting from a worse position. However, there’s wide disparity, with the better ones currently 90+% fully funded.

    - The incentive for public plans to sell equities in favor of bonds is therefore less.

  • edited April 24
    Not too worried about it since it only affects those with 1 million+ in annual income. ADD: Unfortunately IMHO they have lawyers and accountants who will play the game to avoid most of it.
  • @hank ; I was wonder if the article,From Randall W. Forsyth - Barron’s April 26, 2021, had anything to say about union pension funds ? My local union has been trying for a number of years to raise the total funded % up. It seems at contract time more money is added, but seems only to keep the fund just above the needed level.
    Sorry to stray from topic.
    Thanks , Derf


  • Most years, my (private) pension fund likes to boast about how well its investments are doing. And most years, we get a lousy 2% raise.
  • edited April 24
    Derf said:

    ”I I was wonder if the article,From Randall W. Forsyth - Barron’s April 26, 2021, had anything to say about union pension funds?”

    @Derf - Sorry, no mention of union pension funds. The weekly Forsyth column tends to ramble, hitting on a lot of different topics - but not delving deeply into any.

    BTW - He used the term “corporate pension fund” (not “private” as I earlier stated). That 98.4% figure is just for the 100 largest among them. I’d quote lines if possible, but can’t pull up much of the article on the web. Kindle subscriptions can’t be cut / pasted - at least based on many attempts over the years to do it.
  • Crash said:

    Most years, my (private) pension fund likes to boast about how well its investments are doing. And most years, we get a lousy 2% raise.

    uh

    wtf is lousy about a 2% raise?
  • edited April 24
    @Crash
    You want some "whine" with that cheese?

    Most years, my (private) pension fund likes to boast about how well its investments are doing. And most years, we get a lousy 2% raise.
    Point 1. You have a pension with a COLA. Really Cool.
    Point 2. You have a pension. Cool.
    Point 3. Some folks have a pension w/o COLA. Not cool
    Point 4. Many folks have no pension. Not cool at all.

    The Beach Boys would sing that you should be feel'in, "Good Vibrations".

  • @davidmoran @catch22 "You want some "whine" with that cheese?"
    Yes, all valid points. I'm luckier than most. MY point is: if the pension fund's investments grow by 8% or whatever, why wouldn't we get a raise in the neighborhood of... say, 6%? Jeez. SOME years, we do better than that customary 2% COLA. But that's not happened in the past decade or so.

    Yer not gettin' that cheese by ME, "Meat."
    https://getyarn.io/yarn-clip/0b882df6-df18-4299-9a13-64be3436dd4c
  • @ hank : thanks for the reply.
    Derf
  • having a pension is different from owning a mutual fund, but you know that
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