Government revenue estimates of future tax hikes on the wealthy always overestimate how much dough they will bring in. This is certainly the case with the 1993 Clinton tax hikes. Now why is that? First up is my Reuters compadre, the so-smart-he’s-scary Christopher Swann:
Well, that didn’t take long. Just four months ago, the Financial Accounting Standards Board wisely knuckled under to Ccongressional cajoling and decided to ease its market-to-market valuation rules. But now FASB Chairman Robert Herz and his obscure accountacrats in Norwalk, Conn. are enthusiastically re-embracing “fair value.” They want to expand their application as never before, to include all financial assets, even loans.
So Team Obama is considering a truly horrible plan: to re-imagine Freddie and Freddie as new entities that are just like the current failed ones, but with government taking over all the toxic stuff . Tell it to me WaPo:
A University of Utah study predicts that the percentage of U.S. households that own homes — a number which peaked at 70.4 percent in 2004 and 2005 and is now at 67.4 percent — will drop to about 63.5 percent by 2020. That would be the lowest level since 1985. The reasons are a) smaller households, b) tighter credit, c) green desires thatare pro-renting.
What sort of recovery will the American economy have? With estimates of 3Q growth rising on Wall Street — along with the Dow — here is why the optimism may be overstated. First up is David Rosenberg of Gluskin Sheff (outline by me):
Here is some fun tax information: The top five percent of tax filers in terms of adjusted gross income earned $3.3 trillion and paid $676 billion in taxes in 2007. (That accounted for 61 percent of taxes, by the way.) So if we doubled their average tax rates, America would still be running a budget deficit for years to come. And that assumes no economic impact from the higher tax rates.
Strategist Andy Busch of BMO Capital Markets provides some interesting insights on the situation in North Korea: