August 16th, 2025 - Navigating Tax Changes and Market Resilience

This week, The Van Wie Financial Hour focused on tax implications and market dynamics. They emphasized the impacts of recent tax legislation on different income groups, particularly highlighting how senior citizens might benefit from deductions related to Social Security. The discussion underscored the confusion around media portrayals of the law, arguing that it provides tax benefits for most individuals, contrary to some narratives.

Transcript

Steve Van We 0:00

It's Saturday morning, it's 10 o'. This is the Van We Financial Hour. I'm Steve Van We.

Robert 0:03

Clock.

Adam Van We 0:06

I'm Adam Van We.

Joey Loss 0:07

And I'm Joey Loss.

Steve Van We 0:08

Look at their full house today. Or triple to draw to or whatever. Anyway, we're all back together and raring to go on a yet another in our long string of beautiful northeast Florida Saturday mornings. Doesn't get much better than this. And once again I think we have enough things to talk about that would probably last for the rest of this day and maybe into tomorrow. But we've only got an hour. We'll talk about what we want to talk about for that hour. Unless you would rather talk about something else and you just pick up the phone and dial 904-222-8255

Steve Van We 0:47

and we will put you on air or answer your question or both. Whatever suits you. We're not difficult to get along with around here, believe me. To all the regulars. Thanks again. I was listening to Angela on the way and talk about being all those years on the radio and all those Saturdays and we're not far behind her a little bit. But we're. Where are we 11 point something years now? Are we in 12 or 11? I never remember that.

Adam Van We 1:15

This is show 547. Six or something.

Steve Van We 1:19

Okay. There you go. Wow.

Joey Loss 1:20

Joe Rogan, look out.

Adam Van We 1:21

That's right.

Steve Van We 1:22

No kidding. I'm funny. We're not paid like he is. Isn't it?

Joey Loss 1:27

I think we're still waiting on that.

Adam Van We 1:28

Spotify call any day now.

Steve Van We 1:30

Yeah, I think you're right about that. Anyway, you know, it, it does not seem possible but you keep showing up, so do we. And if you're new to the show, if you're new to the show, we will of course welcome you with open arms and we hope that you try to stick around. If you like it, if you learn things and you like it, then you'll tell a friend. And that's how this works. Now normally we would go right to a market rap. I'm going to just tell you it was a good week and we'll get to it. But first there is an age old rule that we established in the first show we ever did that says callers go to the head of the line.

Steve Van We 2:10

Good morning, Robert.

Robert 2:12

Hey, good morning. I catch you guys on the radio and I'm in Palm Springs, California.

Steve Van We 2:19

Nice.

Robert 2:20

And I'm a senior citizen and I'm out here in the mountains and it's, it's beautiful. I'm sitting at the Starbucks and I thought I'd call you guys because I'm a little confused. I'm trying to figure out this old, beautiful new bill that they came up with as a senior. Is this gonna hurt me or is it gonna help me? There's a lot of misinterpretation

Robert 2:42

and information floating around, you know, and everybody wants to sink Trump on what he does. But if you guys could go through the thing for. I imagine there's other seniors that are as confused as I am. So if you could have somebody go through that, it would be great because, you know, you get piece bits and pieces here and there.

Steve Van We 3:02

Well, I'm going to say you are absolutely right. And then I'm going to pass it on to the younger generation and tell you why you are absolutely right. Whoever wants to open it up.

Joey Loss 3:15

So where to start? Firstly, great question. And you know, tax brackets being lower generally helps everybody. So I think that that's a good thing. And then one of the biggest things, particularly for seniors, is there's a lot of talk about eliminating the tax on Social Security. That was done in sort of a sideways fashion. So the taxes on Social Security still remain, but for seniors there's an additional bonus deduction available which effectively for over 50% of Social Security recipients, eliminates any tax that they would otherwise pay on Social Security. So that was a big boost for a big portion of the senior population.

Robert 3:57

What do you have to do to qualify for that?

Adam Van We 3:59

Be older.

Joey Loss 4:00

Be older and don't have so much income from other sources that you phase out.

Steve Van We 4:05

I'll throw in a kicker on that one, too. You don't even have to have started drawing your benefits yet because the way it was done, it was done through an additional personal tax deduction on top of the standard deduction. And it's 6,000 for each person in your household that's 65 or over. Even if you don't start collecting until somewhere between after 65 and up to 70, you still get it. So as Joey says, not exactly a one to one thing, that it didn't specifically eliminate taxes on Social Security. Those weren't the words, that was the effect. But it helped all of us who are 65.

Robert 4:45

Is that a $6,000 benefit? You said per person?

Steve Van We 4:52

I. Is your radio on?

Robert 4:56

No, that's. That's a car going by. I'm sorry.

Steve Van We 4:59

Oh, it must. Must have quit the subwoofer.

Adam Van We 5:04

Yeah, a little early in California for.

Steve Van We 5:05

That, but a little bit.

Robert 5:07

We were, we were dancing a little bit.

Adam Van We 5:12

The other.

Robert 5:12

Because of the six thousand dollar benefit. You just.

Steve Van We 5:16

There you go.

Adam Van We 5:17

Yeah. It's, it's really a nice thing. And if you haven't started claiming Social Security but you are retired and not working, think Roth conversions because that just gives you more room before you start getting taxed on those. You might get some free money out of it.

Joey Loss 5:31

Yeah, I mean, we're.

Steve Van We 5:33

Sorry, go ahead.

Robert 5:33

We're retired, collecting Social Security and we have a pension. So I think that's going to, may not be such a good benefit for me, but that's okay.

Adam Van We 5:41

It's still going to benefit you, though. And then on top of the tax brackets staying the same as they have been through from the 2017 bill, instead of reverting to the, the pre, the Obama era tax brackets, which were higher, you also get the benefit of them being wider. And so that is helpful as well because that's just more income than you can have at 10% and 12% before you jump up into the 22% bracket. So the, it's really a good thing. Combine that with the standard deduction, you're probably, as an older couple can make, I don't know, 100 and I haven't figured it out exactly.

Steve Van We 6:21

I don't have the number exactly yet either.

Adam Van We 6:22

Probably six figures, though, before you get taxed at 22%.

Robert 6:26

Oh, yeah, yeah, yeah, yeah. It's okay.

Steve Van We 6:31

The problem, what we're doing is citing examples of what it's going to do to impact you personally. The problem lies in media, politicians, et cetera. This thing is so maligned. And it starts with the most basic presumption. And that basic presumption in Washington is that real tax brackets are the ones from 2017. Now, I say real tax brackets are the ones that we've been paying for the last seven years and are still paying now. But depending how you approach the argument, if you go into it and say, well, the correct tax bracket for, let's say me should be 28, but it's only 22. Well, right off the bat we have a problem because that's a big cost to the government. And when you look at the way government defines cost, it is just an atrocious thing because it starts with the assumption that all of your money is their money and whatever they let you keep is a gift, which they call a tax expenditure. And it means it's money they can't spend because they're not going to get it from you. That's an attitude problem as well as a delivery problem. We've only got a few seconds left. If you're going to keep listening to the show right after the break, going to do a market wrap. And then I'm going to go right back into this topic. I got a lot to say about it and I'm not very happy about most of what I'm going to say, which suits me fine. I hope it will you. So if that's good, we appreciate it. And we'll talk to you after the break and call back if you want to. Thanks. This is the Van WE Financial Hour. Go nowhere. Welcome back to the Van We Financial Hour. I'm Steve Van.

Adam Van We 8:27

We're Adam Van.

Joey Loss 8:28

We're just Joey Law.

Steve Van We 8:29

And as usual, we do have a trivia question this week brought to you by Paul Lloyd at First Coast Alarm, where you can call Paul at 904-636-7888.

Steve Van We 8:42

There's a big disparity which we've discussed virtually every week lately, between growth and value investing. Growth being the companies that are generally newer. They're growing like crazy. They reinvest everything they make back in the business to grow it bigger and bigger and bigger. Then they don't pay any dividends. And then there's that other side of the coin for the older mature companies called value companies, which pay dividends. Now, a lot of us who are older really like the value side of the coin because it gives us a monthly income that is very handy. And if the value doesn't change like crazy for a while, we don't care about that nearly as much as just keeping a steady income thing going. But it's been widely reported over the past several years that value just knock the lights or growth will knock the lights out of value as an investment. So we took a look at one of them and I think you might be a little bit surprised at the outcome here. If you look at one of the more boring asset classes to invest in, it's consumer staples, that means things people have to buy. I was a Wisconsin boy, so I always use Kimberly Clark. People got to use diapers and stuff like that, that kind of company. Well, they have on paper really performed terribly according to the the comparison with growth. So what would you do in this century? So it would start on the first day of this particular century. If you took every dividend and reinvested it on the day it was paid, what would happen to your investment results? A, you know it's going to go up because you're reinvesting money, right? What percentage better would it be if you reinvested all your dividends? And I'll tell you why that's important once we get There.

Adam Van We 10:45

Wait, so, all right, clarify that question.

Steve Van We 10:48

Okay. If, if you were to hold a value stock, or let's say a value like the, the whole sector of consumer staples. And every dividend that was paid when. Reinvested in new shares when the, when it was paid over the course of this century, how much would it.

Adam Van We 10:58

Okay.

Adam Van We 11:08

When you say this century, are you talking about from January 1, 2020? No, the last hundred years? Like, what do you mean?

Steve Van We 11:14

I'm not the 21st century. From 2000.

Adam Van We 11:17

From. I'm sorry, I meant 2000.

Steve Van We 11:19

I said 2020

Steve Van We 11:22

looks at me like I'm crazy. But yes, I'm talking about that in this century, how much better would your investment have performed if you reinvested all the dividends?

Adam Van We 11:32

Okay. In the consumer staples sector, yes.

Steve Van We 11:34

And there's, and there's two major points to be made once the answer is gotten. So if I, if we get up to about a minute and a half left in the show and nobody's gotten it, I'll, I'll lay the whole thing out. It's very interesting and really gives you something to think about. All right. Good deal.

Adam Van We 11:47

Good. Let's talk a little bit about the market and the, this bull market. If you had to use a word to describe it, I would pick resiliency because it just keeps trudging along and going up. It's, I mean, even in the face of what on its surface appeared to be pretty bad news this week, I just thought for sure by this time in August we would have seen some volatility and we just haven't.

Steve Van We 12:14

A lot of records set this weekend.

Adam Van We 12:16

Yeah. Even the Dow Intraday. Intraday. It didn't cross on the closing basis, but, yeah, pretty incredible. But that was in the face of a pretty terrible PPI report that came out on Thursday. It showed an increase of 0.9% month over month versus 0.2% expected. And also then that brought the yearly number up to 3.3% year over year. Producer price index inflation. That's not the right number that we were looking for. We're looking for 2% and we're at 3.3. And that actually the PPI has been trending down. So that was kind of a shock. So obviously the media jumped on it. They, of course, blamed tariffs. But if you really dig into the port, into the report, I think you'll see something different. The really weird thing, though, was that day on Thursday, the futures, of course, plummeted when they saw that news. But then throughout the day, people started buying and the market ended up closer. I mean it was down, but it wasn't down big. It was, it's kind of a non.

Steve Van We 13:23

Event and now saved a few of its up points too. So it's not an all time record. But it was green.

Adam Van We 13:31

Yeah, it did. It did end up green. And on Friday, which while the rest of the market was down, that, that was a different story though. I get to that in a minute. The strangest part of that PPI report was that energy and food prices, two things that have been trending down recently, were the reasons that the report was so high. Energy was up 0.9% in July and food was up 1.2%.

Adam Van We 13:54

So why do I say that it wasn't tariffs? Because it sounds like tariffs. Right? That would be my first assumption, of course, but that's not right. Goods prices are up just 1.9% year over year while services are up 4% year over year. So services are actually driving seeing more inflation than goods. If it were tariffs, it would be goods that were up more and services would not be. So this is something different. The other thing is that this is one bad report. The. There's been a series of really good producer price index reports. One month does not make a trend. And so let's see what happens next month before we really draw any conclusions. The other thing is that food and energy, notoriously very volatile categories. And of course we're, they're kind of seeing them be volatile is not anything that we shouldn't expect. They are volatile categories. So let's, I, I just don't want to get ahead of ourselves and say look, this is what's happening. Let's take another, another month and, and see if there's the start of a trend there. It is interesting.

Adam Van We 15:05

The market ended this week up just under 1% on the S P. It was at 0.8% on the NASDAQ. And for once the Dow actually led the way higher. We kind of alluded to it gained when the others were down. This gain on Friday was actually brought to you by Warren Buffett, a name that you probably have heard recently because he decided to retire. But he still has an outsized influence on what happens in the market. Well, his company, Berkshire Hathaway did a disclosure recently. Turns out that he took a big share in UnitedHealthcare, a stock that has been down about 40% this year ever since their CEO got gunned down on the streets of Manhattan. And it's been a lot of things have come to light about the company. Their denial rate has been extremely High for claims. Everyone's been really down on that stock and the healthcare sector in general has been pretty terrible. And so when people saw Buffett start to buy that company, they all jumped in. The stock jumped 10, 13% on Friday. And so that was an interesting thing that happened. Also.

Steve Van We 16:12

The Dow takes a big stake in something. We're talking a big.

Adam Van We 16:16

Oh yeah, it was like 5 million shares or something at 300 bucks or 64 ounce porterhouse. It's a, it was a big deal. Yeah. It was also revealed in that same disclosure that he took a stake in Dr. Horton, a home builder. That's another sector that's been really down this year. So something to think about, Lamar, Advertising, a company I'm not familiar with, and then Nucor, another one I'm not familiar with.

Steve Van We 16:38

He also very familiar with Nucor. I did business with them in the 80s, a lot of business, millions of dollars. They invented continuous cast steel. Where you could make steel on the site. So if, for instance, they were going to, they were going to supply Birmingham steel products or something like that, or foundries or, or other kinds of manufacturing in Birmingham, they would build the Comcast plant kind of right next to these things. And the input, the difference is the input to regular Bessemer steel is largely iron ore and the input to a continuous casting system is scrap metal. So you deliver your scrap to the plant, it goes in and they make steel out of it. And then they don't have to ship the gross weight of steel to the customer. You just throw it on a truck and send it over. That's the big deal. Nucor was very successful and still is, by the way.

Adam Van We 16:40

Okay.

Adam Van We 16:48

Okay.

Adam Van We 17:39

Okay. They also dropped T Mobile from their portfolio. So if you're in T Mobile, may want to take a look at that too. That was. But yeah, that, that really helped the Dow. As you know, the dow is only 30 stocks and it's a price weighted index. When you have high price stock like United Healthcare taking a real dive, it drags the whole index down. And, and conversely, when it jumps, you're gonna see that index jump as well. So that was what the deal was on Friday. There's been actually a decent sector rotation into healthcare and home builders recently. That is a great sign for the bull market. We talk a lot about breadth on the show and this is really what we mean. You need not just the mag 7 stocks to go up, you need the whole market to go up. During a bull market. That's the sign of a really healthy bull market. Seeing people rotate out of high flying sectors and put money into healthcare and homebuilders. That's a great sign. I'm not going to say that, that, that it's a, it's a real thing yet because one week does not make a trend. But if that were to happen, I think you could really see this bull market continue on for quite some time. We're over a thousand days deep already and, and that is right near the median length. But the ones that make it over a thousand days tend to go a lot longer. So up to, I think there was one occasion that lasted over 4,000 days.

Steve Van We 19:04

Yeah, that's quite a little bit of difference from the 40 or wherever we are now. So, yeah, I think there's a whole bunch of upside out there that you might see it this year. Even a lot, lot of it will be attitudinal and some of it will be actual results oriented. Of course we've got to get the inflation under control. But what you pointed out, what's been happening here is not the tariff inflation. And I was actually kind of amazed watching the news Friday and again this morning. I didn't hear many people talking about tariffs. I thought it would be all over because they're going to just blame Trump for everything. It'll be tariffs. But that's not so in the service sector.

Adam Van We 19:31

No.

Adam Van We 19:46

Well, they were too busy telling how he didn't make a deal with Putin, so. Yeah.

Steve Van We 19:50

Exactly. Right. Right. I guess you got to pick your, your arguments or, or your finger pointing moments. All right, well, we're going to take another quick break. We'll be back and then we're going to dive back into all of this stuff. So don't go anywhere. This is the Ban We Financial Hour. Welcome back to the Bandwidth Financial Hour. I'm Steve Van We.

Adam Van We 20:09

I'm Adam Van We.

Joey Loss 20:10

And I'm Joey Loss.

Steve Van We 20:11

And I want to remind everyone that lines are open 904-222-22-8255

Steve Van We 20:17

and the trivia question is still out there. What percentage improvement would you have seen in your investment results in the consumer staples sector this century by reinvesting all the dividends? Because that just doesn't seem to get into the average reporting. That's the first part of one of my points about this whole thing. Okay. Okay. Adam has a couple more things he'd like to wrap up in the market and then I'm going to dig back.

Adam Van We 20:44

Into Bob's question One, one interesting thing sent in by a avid listener in Cincinnati, our friend Craig Beechler.

Steve Van We 20:53

A lot of people out there know him?

Adam Van We 20:55

Yep. He says that Nucor Steel was one of the examples used in Jim Collins book Good to great about how they reinvented themselves and found great success through innovative discipline management and innovative use of mini mills. Unique culture of pay for performance and employee ownership. Just an interesting note.

Steve Van We 21:17

Someday we got a couple minutes I'll tell you about when we lost a load of Nucor Steel and it was found about two weeks later on a side road in a trailer, a truck trailer, 18 wheeler that the guy had just unhooked, dumped it on the side of the road, quit his job and went home. We had customers who wanted it yesterday. That's funny. That was pretty funny. Wasn't Nucor's fault. It was an independent driver. Anyway, there lots of fun stories from back then.

Adam Van We 21:48

Just wanted to touch on two two other topics from my market wrap. One was the housing market. I think everyone can kind of feel that it's a little bit stalled out right now. Just not a lot happening. Active listings have been surging for the last three years, although over the last three months they, they've actually trended sideways. So a little bit of reversal of that trend. During that time, new listings have actually barely increased, meaning that houses are selling slower than they were three years ago. Average time on market has gone from 30 to 40 days to 60 to 70 days. And this is, this is across the US so not local to the to Florida or even the Southeast. During that three year period, median listing price per square foot has been essentially floating flat. That was interesting. I did not realize that house prices have been stagnant for three years. I thought they had been going up, but the data would tell you otherwise.

Adam Van We 22:43

House prices ran up in 20, 20, 20, 21 and 22, but not since then. It also depends on where you live. As house prices have continued to climb in the Northeast and that is due to lack of supply in some states in the northeast there are 60% less active list listings than there were pre Covid right now, which is was shocking to me. There is not a lack of supply in Florida, Texas and Tennessee. Those are the three highest numbers of more listings than there were pre Covid and that is about 14% higher. So in each of those states or, or a little bit above that.

Steve Van We 23:24

I've noticed it with one particular place in our neighborhood. It just happens to be a house that I walk past every day on my daily afternoon and it has been sold. I've been in my house for 25 years. It's been sold probably four or five times. So kind of Got an idea how the turnover goes and it's very nice. And it's been listed now for longer than I've seen a house listed in our neighborhood than. Long, long time. Like four or five months. Yeah, generally a couple months and you'd see the. The done deal sign on it. So I can tell things are definitely slowing down.

Adam Van We 23:50

Yeah.

Adam Van We 23:56

Yeah.

Adam Van We 23:59

Yeah, it's. It's pretty obvious if you follow the market at all. And I think a lot of that is a people trapped in their houses with low mortgage rates so they don't want to move. Be people waiting on mortgage rates to come down which may or may not happen. Or see people that just can't afford the prices where they are today.

Steve Van We 24:17

Yeah. You know, it's one thing to say you can always refi. The problem is if you can't get into the house in the first place. Then what good is that going to be?

Adam Van We 24:22

Right, exactly.

Adam Van We 24:25

Yeah. And how long are you going to ability to pay that. That higher payment at a higher interest rate. You might feel comfortable with a year of payments but maybe not five years. And you don't know what's going to happen with mortgage rates.

Steve Van We 24:36

We got to get rates down while housing prices do not rise as a counter reaction or whatever.

Adam Van We 24:44

Definitely.

Joey Loss 24:44

I mean as a result of all this the average home buyer age has risen Dr. Dramatically. It's just not possible for. I mean it's. I think it's in the 40s now.

Adam Van We 24:53

Which is great sense because if you owned a house going into Covid you now have all this equity and so you can afford to move. And who owned houses preco. People that were older actually.

Joey Loss 25:03

I amend that. It's 53 last I saw. It's very high.

Adam Van We 25:05

53. Whoa. That's very off the charts high.

Steve Van We 25:09

Yeah, yeah. It used to be 20s and 30s at first, first time buyers and the average is probably then only in the 30s or 40s, but over 50, that's. I don't recall ever having heard anything that high in all the cycles that we've been through in my rather lengthy lifespan. So let's get back to Bob.

Steve Van We 25:34

There's some things that they're so bad you just kind of hardly don't even know where to start. And this is one of them. And I'm going to pick on somebody here because I think they're very biased. There is a website that talks about all kinds of stuff that people like us like to see and do and talk about. It's called Think Advisor and it's all about financial planning stuff and home Buying stuff. Anything has to do with your own money. And they, they have. A few people I've read over the years on and off are good writers, but they have a decidedly liberal bias. And it's not the term liberal and the term conservative are not what I'm getting at. What they have is a left wing political bias. And it's people like these who write articles like the one on my left hand who are really hurting the success of this law and hence the, the people who support it. I'm going to give you an example. Just going through this a little bit. First off, what do you guys think of this headline? Trump Tax law boosts income for wealthy, squeezes poor according to the cbo, is just absolutely false.

Adam Van We 26:55

It has nothing to do with income.

Steve Van We 26:57

No, but it has something to do with the cbo. Whom they just lavish praise on through this whole thing. Of course, that Congressional Budget Office, or as they call it in D.C. the independent nonpartisan

Adam Van We 27:00

Yeah.

Steve Van We 27:13

Congressional Budget Office.

Adam Van We 27:14

Well, to some degree, because they have a archaic set of rules they have to follow. It's not partisan, it's just those are the rules.

Steve Van We 27:21

Except that the lefties tell them what the rules are.

Adam Van We 27:25

Well, I think, I mean, I don't know about that. That's been, that's been set for. We've been complaining about this through Republican and Democrat that we have like, administration.

Steve Van We 27:34

Don't, don't tell me. We haven't had a chance to fix it. We just don't do it. No. Well, I've heard people complain about it, but nobody addresses.

Adam Van We 27:39

No one has ever addressed this.

Adam Van We 27:43

No, not in, not in terms of like creating a new bill that would get rid of the bird rule and things like that.

Steve Van We 27:48

Well, I don't think that the C bill can be fixed. I think it has to be disbanded and then they can develop something else. But that, that's just kind of an aside. But this is, according to me,

Steve Van We 28:02

journalism at its worst. I have here. So what does it say? Well, first off, President Donald Trump's tax and spending law will deal a financial blow to the poorest Americans. CBO says, but the law will boost the income of wealthier households. Recent polls show a majority of voters disapprove of the tax law. Well, if you just read those three things, I would say, well, yeah, big.

Adam Van We 28:29

Big tax laws are never popular. It doesn't matter who passes them. If it's Obama, if it's Trump, they're never popular.

Steve Van We 28:37

And actually, that was an argument that was waged during the debates on this thing. But Trump wanted to get it all out of the way and had the media come down on our side. In other words, the correct side. By the way, for those of you who don't know, that's the definition of correct is what we all believe. My definition for this hour. Yeah, absolutely. But anyway,

Joey Loss 29:00

It's definitely true.

Steve Van We 29:05

it says the poorest 10% of households will lose an average of about twelve hundred dollars in resources per year,

Steve Van We 29:15

amounting to a 3.1% cut in their income, according to the analysis of the. The omb.

Adam Van We 29:26

That is, that, that doesn't even make sense. That sentence doesn't make sense for one.

Steve Van We 29:31

It does not. They're not going to lose anything. What they would have lost without this bill is they would have all had a tax increase of about $2,400.

Adam Van We 29:41

Yeah.

Steve Van We 29:42

Now how you can turn that into lose $1,200 in resources.

Adam Van We 29:47

But what resources is he even talking about? Of course not.

Steve Van We 29:50

They didn't bother. No. All right, let's go to the highest 10%. We'll see about a 13,600 boost in resources research.

Adam Van We 30:03

He keeps using that word like it's like we're talking about a tax law and he's talking about resources. That makes it sound like he's. You're losing food stamps or something.

Steve Van We 30:11

I don't. Kind of. Kind of like princess bride, isn't it? I do not think that that word means what you think it means. All right. Earners in the middle will see their annual resources grow about 800 to $1,200 on average. Okay, that's understated, but it's correct.

Steve Van We 30:33

The average person on the street is going to benefit from this thing. You have to benefit because a, you're getting an increase in your tax with bracket and you're not getting a tax increase. So you're still paying the low rates and you're getting an extra deduction on or an extra part of your standard deduction. Most people aren't going to be paying much for taxes, believe me. So the hit to poorer families will largely result from loss of benefits from social spending programs. So there's your resources.

Adam Van We 31:09

Yeah, I knew that's why he was using the word. Because the bottom 50% doesn't pay taxes now. They can't get a tax cut. No, you just can't do it.

Steve Van We 31:10

Oh, of course.

Joey Loss 31:17

You're a married family. I mean, you got to make over. It's got to be close to 50,000 in taxable income before you pay a dollar agree tax. I mean, it's. But I'm just sitting here quietly listening, trying to find what the point is, you know.

Steve Van We 31:25

Which means you got to make a.

Steve Van We 31:31

Well, it doesn't get any better.

Joey Loss 31:33

Yeah.

Steve Van We 31:36

We got to take a break here first. Second, I'll dig back into this thing. But the poorer families will result from the spending programs. Okay. You can kind of wrap your brain around that little bit. All right. Much more when we come back after a short break. So don't go anywhere. We'll be right back. This is the Ban WE Financial Hour. Welcome back to the band WE Financial Hour. I'm Steve Van Wee.

Adam Van We 31:55

I'm Adam Van We.

Joey Loss 31:56

And I'm Joey Loss.

Steve Van We 31:57

And I want to remind everybody again, the lines are open. 904-222-8255.

Steve Van We 32:03

Trivia question. By what percentage would your investment results have improved over the century if you reinvested all of your dividends in the sector of consumer staples? It's a large number people. You're going to like it. All right, back to what this article is telling us. Why this, this essentially is the story of why the bill is unpopular because this is what people read. This is what they hear. This is, this is just a mouthpiece for all the people in D.C. and all the people in the mainstream media. Media who don't like this because whatever Trump does is bad. So they have to go 180. It's so bad they have to support crime in the streets now because Trump doesn't. This is bad. So let's go back here. The lower ones, they're going to see a decrease, decrease in their, what's the word? Resources. The way they do that, they, they are cutting out tens of thousands of people from benefits that they don't deserve. Illegals do not get benefits. It's the law of the land. The Clinton era, those things were changed and brought them in. And we've had several chances to get rid of them. We never did it. Well, now we're doing it. In fact, I'm going to say a quick happy birthday to the Social Security program which turned 90 this week. It still looks pretty good, doesn't it? Yeah. Not too white.

Joey Loss 32:57

They use resources.

Adam Van We 33:28

Showing some signs.

Joey Loss 33:31

Greatest anti poverty program of all time, though.

Adam Van We 33:33

Yeah. I, I don't, I think we're all in agreement that Social Security is a good program. Just has some major flaws right now.

Steve Van We 33:38

Absolutely.

Steve Van We 33:41

It needs to be saved. And the first way you save is by taking 275, 000 illegals off the rolls. And then it's a good start. Yeah. And then another, it was 110,000 for people over age 120.

Adam Van We 33:47

Yeah.

Adam Van We 33:54

Yeah. And I don't know, it wasn't clear to me if any of those people were receiving checks. They didn't say.

Joey Loss 33:58

It was more of an archive.

Steve Van We 34:00

Yeah, most likely true. Point is, why are they there?

Adam Van We 34:04

Yeah, they shouldn't have been, obviously.

Steve Van We 34:06

I wonder how many of those didn't get wiped out, because maybe they'd get taken off of voter roll somewhere. Yeah, I'm just tunneling through.

Adam Van We 34:12

I don't know.

Steve Van We 34:17

Never know. All right, let's see. It includes much of Trump's economic agenda. It extends his 2017 income tax cuts, while it implements a number of new and expanded breaks, including a higher cap on federal deductions for state and local taxes, an advanced child tax care credit, and no taxes on tips and overtime payments. Does that sound bad?

Joey Loss 34:46

It almost sounds like you're trying to encourage working class families to grow.

Adam Van We 34:51

Yeah, I agree.

Steve Van We 34:52

Which, of course, is the ultimate solution to the ultimate problem.

Adam Van We 34:55

Right.

Joey Loss 34:56

So that's another story, I think a clear distinction. I mean, you're pointing at it, but I'm just going to say it literally is. There's two parts that are being conflated into one big mush right now. In this article, you have the tax law, which clearly drops taxes for virtually everybody. Otherwise they would have just said less taxes or higher taxes. But they're using the word resources because they're bringing in the other piece of the bill, which address, which addressed benefits that were going to big groups of people, which has been cut down. And as you talk about that idea that groups are being now excluded from certain income programs.

Joey Loss 35:36

The unemployment program has a work requirement component. You have to at least be seeking work, you know, and it doesn't go on forever. So the idea that this is unusually cruel to me doesn't really make sense.

Steve Van We 35:46

That's why they quit counting you as unemployed if you don't look for work. So it sounds better, right? There are 7 million guys out there right now of working age with no dependents at home, no particular reason. They can't go to work. They just won't. 7 million.

Adam Van We 36:00

Yeah, that is true.

Joey Loss 36:02

So it always. It just feels silly to me that I've not heard people raise a huge political stink about the idea that there's a seeking work requirement for the unemployment program. But then over in this other area where people have never saw.

Steve Van We 36:14

I think it's a little touchy to put it out there too far in public because everybody looks at them and says, I really don't think that's a problem.

Joey Loss 36:22

Right. And somehow in this other area, it's a big problem.

Steve Van We 36:25

I remember 100 years ago or so watching an episode of West Wing, and Alice and Janney was in there. They were all Democrats, of course, in the West Wing, and somebody was talking to her about tax cuts and how the other side liked them and we had to get rid of them. And she looked at him, said, I kind of like tax cuts. It was very funny. It used to be a well written and well played show.

Adam Van We 36:49

The other dishonest thing about this is that it's saying that you've increased income for upper income people by $13,000 is false. You have not increased their income by a dollar. What you've done is you've allowed them to keep more of what they already.

Steve Van We 37:04

Made compared to what we would have taken away.

Adam Van We 37:07

Right. It's just not. It's. It's intellectually dishonest to call it that.

Steve Van We 37:11

Yep.

Joey Loss 37:12

And if I could step back for one second. Sure. Like, I want to just remind everybody of the atmosphere around this tax bill. We have a $37 trillion deficit. And so Trump and the administration and Congress, they're looking at this and they're saying, how do we defeat this? How do we make progress on it? And there's three ways out. One, you can dramatically increase taxes today. It's very shortsighted, likely going to slow down the economy and then shoot yourself in the foot later. Number two, you can print a ton of money every time that's ever happened. Everybody's unhappy because their dollars are worth less. And then the third one is you create an environment where business can flourish, people can get more jobs, want to spend more money, and, and you raise tax revenue that way for the long term, that's the door that they grow.

Adam Van We 37:28

Right.

Steve Van We 37:55

Your way out as well. Yep, Yep. All right, let's see. To offset some of the cost. The cost. You know, these are costs. The law includes a number of cuts for clean energy initiatives and social spending programs, including Medicaid and food stamps. The costs that are being cut from Medicaid and food stamps are illegal aliens. They're people who don't really qualify but are on them anyway because they don't meet the requirements. And the junk food, which is being cut out of some parts of food stamps. And frankly, I just don't see a problem with any of that. I'm kind of happy about it. All right. Deficit impact. The CBO last month said the bill would add 3.4 trillion to the US deficits over 10 years. Not accounting for dynamic effects Such as potential growth impact. Well, what do you know? They actually talked about progressing along as an economy instead of progressively taxing people. They didn't do anything about it, but they did say, well, this doesn't count. That. They also didn't say that that included their projection of increased taxes at the beginning of next year, which was false because all we did was extend the real taxes.

Steve Van We 39:20

Good morning, Mike. Good morning. What's happening?

Mike 39:21

Good morning.

Mike 39:25

I would have liked to have been a fly on the wall during the conversation between Putin and Trump.

Steve Van We 39:30

You and me and everybody else.

Mike 39:32

Yeah, exactly. I know time is short.

Steve Van We 39:35

Yep.

Steve Van We 39:37

Tell us what you think.

Steve Van We 39:41

Where is he? You're cutting out.

Mike 39:45

Oh. Do you hear me?

Steve Van We 39:46

No. Now we do.

Adam Van We 39:46

Now we lost you.

Mike 39:48

Oh, okay. Very good. All right. We could talk all day about everything, but time is short. Consumer staples, I saw a chart. They have gone. They've. The chart showed that in the last 20 years, they've really increased. I'm going to say 500%.

Steve Van We 40:06

That's not the additional part, but that approximates how much you would have made. In fact, while you're here, I'm going to tell everybody, because we don't really have time to take more calls, your return would have improved 123%,

Steve Van We 40:20

and it would have been within about 4 points of the return on. On the consumer discretionary part, which is the growth part. So my point in general is that the s and P500 index does not factor in dividends. You have to be very careful when you're evaluating performance of things to make sure that everything is accounted for. A lot of people get those dividends and live off them, so of course they're not going to put them back in, but a lot of other people get them and they plow them right back in. It's a good strategy either way, but don't think of them as underperforming over that time.

Mike 40:56

No, not at all. Very quickly, I saw that the average gain in the last century annually was between 7 and 9%.

Steve Van We 41:05

Yeah. Amazing, isn't it? I'll live with that the rest of my life. Thank you, sir. We appreciate it.

Mike 41:07

It is amazing.

Steve Van We 41:15

He's always digging and looking and thinking. Yep, it's fun. All right. Now, there's a whole bunch more to this, but it's not really the point. The last sentence is kind of the kind of the point. I think it says an additional 300,000 people in an average month will lose benefits due to a separate provision.

Steve Van We 41:42

Done.

Adam Van We 41:43

That's due to a separate provision. About what that is, though.

Steve Van We 41:45

Due to a separate we won't talk. No. Oh, we won't do that. Can you imagine people passing this along as journalism? Can you also imagine people who are not well versed in finance and who don't have a lot of time to do what I do and sit around and watch and listen and read and all that stuff, who just hear these things and say, oh, my God, it's for the rich. Now, a quick note on the other article in my left hand. Trump's tax bill has nasty surprise in salt fine print for some rich Americans. And by the way, know what a rich American is now? Under the old buh, buh, buh. $500,000 income. Goodbye, Big Salt Cab up 40,000 start. It goes right back down.

Adam Van We 42:32

My biggest pet peeve, someone who makes $500,000 is not rich. They have a big income. They might have a negative net worth. That's rich. Means you have a huge net worth, not a big income.

Joey Loss 42:44

Oh, my gosh. If you do what we do, you'd be shocked at what you see. I've seen people with $1.5 million incomes and negative no assets, negative $7 million.

Adam Van We 42:52

The big, big hat, no cattle, the.

Steve Van We 42:54

Lack of acceptance of this bill so far. I put 100% on the shoulders of Republicans everywhere who aren't screaming loud enough over all the naysayers and just flat out telling the truth. Why shouldn't you be able to do this when the truth is on your side? People, we got to get this handled. If people had any concept of how good this law was for them, they would probably feel like, I do that. Did they even read it? Because most people in Congress would read it and say, well, that's really good for taxpayers. I can't sign that. Just like they did in 97 with the home sale for 500,000. Much more to come next week. Be here with us and we will be here with you. See you then. This is the band week.