Monthly Archives: June 2016

Economy Standards Be Relaxed

Administration officials said the tougher standards would protect the environment and strengthen the economy at the same time.

The targeted fuel efficiency would dramatically reduce vehicles’ greenhouse-gas emissions, the administration said, and would save consumers money thanks to greatly reduced spending on gasoline, encourage innovation, increase the global competitiveness of U.S. auto makers and create jobs in the auto industry.

All those arguments are still made today by supporters of the fuel-efficiency mandates.

But opponents say the standards are hurting consumers by driving up the price of cars. And the environmental impact, they say, isn’t enough to justify those costs. The auto industry, these critics argue, can thrive and remain innovative without the government setting stringent efficiency mandates.

Thomas J. Pyle, president of the Institute for Energy Research, argues for scaling back the standards. Carol Lee Rawn, who directs the transportation program at Ceres, an advocacy group that promotes sustainable business practices, says the standards must be maintained.

YES: They Make Cars More Costly, With Little Environmental Gain

By Thomas J. Pyle

Buying a car is one of the most important decisions a family makes, and for many it’s a struggle to balance safety, affordability and their preferences for looks, size and other features.

Unfortunately, federal fuel-efficiency mandates are making these decisions more difficult by driving up the costs of new vehicles by thousands of dollars.

Indeed, in many cases it is now impossible for people to buy the car they want or need—or, in some cases, to buy a new car at all. They simply can’t afford it.

In effect, bureaucrats in Washington have decided for them what kind of car they can drive.

It’s time to scale back the regulations and return the decision of what type of vehicle to buy where it belongs—with the consumer.

Cars that consume less fuel are a great choice for many people, but for others, especially for families with small children, larger vehicles like minivans and SUVs are a necessity, not a luxury. These vehicles give families much more transportation flexibility, which is critical when trying to balance caring for children and work responsibilities.

Reality check on your retirement savings

You probably didn’t realize it, but the third week in October was National Retirement Security Week.

Before you write it off as just another one of those useless “branded” calendar items like National Muffin Week, think of it this way: This is the perfect time to do a reality check on your retirement savings plans.

This was actually the 10th anniversary of Save for Retirement Week, established as part of the Pension Protection Act of 2006, which, among other things, allowed companies to automatically enroll employees in 401(k) plans. That legislation been credited with dramatically increasing the number of workers participating in those plans nationwide. This is also the time of year that companies have their annual benefits and 401(k) open enrollment. That’s why it’s a perfect time to do that financial checkup.

Spencer Williams, president of the Retirement Clearinghouse in Charlotte, N.C., says you should think of the week as a reminder — much like a grocery list. “It reminds us what we are supposed to do. We live in a really busy world. It’s a little extra nudge.”

State Street Global Advisors, one of the nation’s largest managers of defined contribution assets, has a few tips to help in your checkup.

Max out your employer’s match. Don’t leave money on the table. If you can’t afford to meet the match, slowly increase your contribution over time.

Increase the amount you are saving. Ideally you should save 15 percent of your salary.

Check out the resources provided by your employer. Many are now offering financial wellness programs that come with financial education, financial coaching and long-term planning aids and other resources.

If you are over 50, take advantage of catch-up provisions. You can contribute an additional $6,000 to you retirement plan, or up to $24,000 this year

Don’t borrow from your 401(k), as tempting as it may be. Start an emergency savings fund to help get you through emergencies.

Consolidate your retirement savings from previous jobs into your current job’s plan.

Trump really raise taxes on the rich

Throughout his run for the presidency, Donald Trump has frequently talked about raising taxes on rich people. He has never actually put forth a plan to do so. Every outside analysis of his tax plan finds it would reduce taxes for the highest-earning Americans, and by a substantially higher percentage than it would for the poor and the middle class.

Trump doesn’t challenge those estimates. Instead, he falls back on a time-honored politician’s move: He emphasizes one part of his plan that could, possibly, end up raising taxes on some rich people. That move was on full display in the second presidential debate, when an undecided voter named Spencer Moss asked him, “What specific tax provisions will you change to ensure the wealthiest Americans pay their fair share in taxes?”

“One thing I’d do is get rid of carried interest,” Trump said, referring to a tax break favored by many private equity investors on Wall Street. He then digressed into attacking his opponent, Hillary Clinton, for being in the pocket of the rich and powerful, and for not doing more as a senator from New York to end their tax breaks. “She never will change,” Trump said. “We are getting rid of carried-interest provisions.”

Clinton was incredulous. “Well, everything you’ve heard from Donald is not true,” she said, adding: “His plan will give the wealthy and corporations the biggest tax cuts they have ever had.”

It’s easy to see why Trump wants voters to think he’s raising taxes on the rich, even as he stresses his tax cuts for businesses and the middle class. It’s a popular position. In April, Gallup reported that nearly 6 in 10 Americans think their federal income taxes are too high. More than 6 in 10 said upper-income Americans are not paying their “fair share” in taxes.

The problem is that Trump simply is not proposing a tax hike on the rich. He’s not even proposing a tax hike on most hedge-fund managers. A variety of other items in Trump’s plans could negate the effects of eliminating carried-interest provisions for the high earners who benefit from them now. He proposes to cut the top marginal income tax rate, and he might — this is unclear, because Trump’s team still has not fully detailed this part of his plan — allow many partners at investment firms to pay a 15 percent business tax rate on their profits.

That 15 percent, by the way, is the rate Trump wants big corporations to pay on their income taxes, down from 35 percent today. He has been consistent on this point, pledging that such a cut will boost competitiveness and spur investment and economic growth. He touted that proposal in both debates, with no equivocation — even though it is hardly a crowd-pleasing move. In the Gallup poll, two-thirds of all respondents said corporations are not paying their fair share of taxes.