Optimal Capital’s Post

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Let's get the read from our money panel. Gary Kalpana, Francis Newton Stacy Francis Newton, Let's start with you. Well, it's it's been a pretty good run with those low taxes. It's been a great run. And this thing is The thing is, is that the low taxes have enabled the consumer to remain strong and have enabled the consumers to take on more and more and more credit card debt. And taking on that credit card debt has kept things liquid. The consumer remaining strong has kept the economy going despite the fact that the Fed is tightening. And I tell you, those consumers are getting stretched and stretched and stretched and what's going to break this thing, you raise their taxes. How much of that consumer enthusiasm do you lose, Gary? And let's be clear, they keep saying expiring the tax cuts will only hit the wealthy? Well, when you let it expire, it hits everybody. There's no peace mealing this. It'll hit Aunt Mary and Uncle Bob to the richest person in the country. And I must tell you, with a government that's debt laden with a credit card, you should skyrocketing love and hate between the economy is a very thin line and it is really worrisome and some of the other. Proposals. They're coming out with sheer insanity. If he asked me, you know, Francis, knowing there would be an insult to injury in many ways, that Americans are now grappling with inflation that spiked to a 40 year high, the pace of it picking up yet again, and then perhaps next year to have to face on top of that a higher taxes, a smaller paychecks. Yeah, along with potentially, you know, if they ever pay their student debt or, you know, interest rates on credit cards that are, you know, plus 20%, you know, you can only stretch them so far. And the thing was, is that Joe Biden always promised that the taxes wouldn't go up on people making under $400,000. And if these tax cuts expire, just as Gary says, that isn't the case. And we have a bifurcated economy. You know, the lower 60% are living paycheck to paycheck. They can't afford to buy homes. They're having to rent. Those costs are going up and if their taxes go up, I fear that the consumer is gonna fall off. And if the consumer falls off or whatever percentage of that consumer you get defaults, you you back yourself into a credit situation that's not worth the risk. You know that bifurcation, Gary, It probably has never been worse, at least certainly in in my adult lifetime did data I'm seeing the very rich have gotten extraordinarily wealthier because they own assets that do well in these high interest rate and in periods and a lot of economists bunch everyone together, they did this aggregate data and they say what are you guys talking about? The consumer is strong. Take a look at this. But policies are made on that. Or politicians push through policies based on what? The economist bunching everyone together. So you take 10 people barely making and throwing 1 billionaire and it looks like we're all doing OK. Yeah, I just love government statistics that they throw at us and are not real world. Real world is what are people are paying for at the supermarket for insurance, for healthcare and so many other things. And you know, we're talking about, you know, getting rid of the tax cuts, the proposals for long term capital gains going from 20 to 44, insane wealth taxes, worldwide unrealized capital gains they're proposing as Reagan once said. That moves. Tax it. Yeah, And I think Miss President Biden pretty much gets it. We got 30 seconds. Francis Newton, Stacy. Taxing unrealized gains. That's just that opens up the door to something that sounds just a pure disaster. Do you think it would ever come to that? Well, I hope it never does come to that because it's just fundamentally unfair. You know, you could be taxed at a time when something's really high and it could sell off and you'd still paid those taxes and it just eats further and further. And what it's gonna do is these very wealthy people who keep investing, who keep the economy rolling through their investments and providing capital for these endeavors in the American economy, AI, tech, all the things that we're enjoying, they're not going to want to invest. I mean, you know, it's going to just change the risk calculation entirely we're talking about. Passing everything, Gary. That moves and that doesn't move. Also, Francis Newton Gary, thank you both.