Trump proposes cutting payroll tax to 0% for rest of year

[Honeyman]

The market LOVED the proposal.

Not so much....we're now in a bear market.

[Rate This]

The market LOVED the proposal.

Not so much....we're now in a bear market.

Off nearly 1500.. futures for Thursday off another 1100... no bottom in sight.

[MWmetalhead]

The rate cut would be for employers and employees alike.

Some employers are seeing profits impinged, so from that standpoint, this tax holiday might prove helpful. It may help some companies who are "on the margins" stay in compliance with debt service or financial covenant requirements, thereby stabilizing financial markets.

I do not like the potential harm this could cause to the social security or medicare trust funds, however. Also, I doubt consumers will suddenly run out and buy a bunch of merchandise, book vacations, or invest in equities NOW because they suddenly have more money in their pocket for a limited period of time. If they are staying home due to coronavirus fears, they'll continue to stay home.

Maybe Trump thinks accumulation of extra money in people's bank accounts will lead to a quicker rebound once coronavirus abates? That idea may have merit.

I think payroll taxes need to be increased (I like the idea of raising the income limits) starting next year or the following year to compensate for any detrimental impact caused by the proposed tax holiday. Another idea could be to temporarily raise the capital gains tax - we all know the market will rally big time at some point - to replenish the loss of cash flow to the SS and Medicare trust funds.

BTW, the erosion to my brokerage and retirement account balances is far larger - by a factor of at least 10 at the moment - than the money I would gain from this proposed payroll tax holiday.

[MWmetalhead]

Trump's comments a short while ago to reporters were stupid.

$30 per bbl oil prices are NOT a good thing.

Energy companies and vendors lose money hand over fist at those prices. Commercial banks will see big profit forecast misses and an increase in underperforming and nonperforming assets. This will constrain the flow of financial capital.

[Rate This]

Trump's comments a short while ago to reporters were stupid.

$30 per bbl oil prices are NOT a good thing.

Energy companies and vendors lose money hand over fist at those prices. Commercial banks will see big profit forecast misses and an increase in underperforming and nonperforming assets. This will constrain the flow of financial capital.

He really doesn’t have any knowledge of economics despite having a degree in it... that’s kind of instructive as relates to his ability to combat this effectively...

[audiophile]

Trump's comments a short while ago to reporters were stupid.

$30 per bbl oil prices are NOT a good thing.

Energy companies and vendors lose money hand over fist at those prices. Commercial banks will see big profit forecast misses and an increase in underperforming and nonperforming assets. This will constrain the flow of financial capital.

Fracking companies lose money, but not refiners and vendors/distributors.

Distributors make about a flat 10 cents a gallon.

[MWmetalhead]

Midstream companies lose money when E&P companies are unable to make good on take-or-pay agreements.

Vendors in my context include engineering and surveying firms and oil field service companies. Those companies filed bankruptcy by the hundreds during the 2015 - 2017 downturn.

Most refineries are owned by integrated companies with plenty of exposure to other portions of the supply chain. Don't believe me? Check their stock prices!

[TC Talks]

I have business in Snyder Texas which has been going crazy with the new oil economy. I got word today that every new site has been stopped. Only producing sites are operating.

[Rate This]

Down another 2352 or 10%... worst one day drop since the infamous one in 1987...

[Turkeytop]

Down another 2352 or 10%... worst one day drop since the infamous one in 1987...

Capitalism. How's that working out for ya?

[Rate This]

Down another 2352 or 10%... worst one day drop since the infamous one in 1987...

Capitalism. How's that working out for ya?

For those of us wanting to get in when the tide is low... so far so good...

[Turkeytop]

Times like these make me glad I'm a socialist. I can sleep easy at night.

[MWmetalhead]

I have business in Snyder Texas which has been going crazy with the new oil economy. I got word today that every new site has been stopped. Only producing sites are operating.

Exactly. First thing to go is capex for exploration activities or completion of new wells. Next thing to go is spending for workovers of existing producing wells.