The team thinks all of these factors present a catalyst for investors to enjoy the higher current income versus investment grade and potentially for the yield advantage to compress further leading to modest capital appreciation.
Instead of paying out only investment income to current heirs, a total return unitrust pays a fixed percentage of its total value annually.
Because the trustee doesn't have to rely only on investment income for current payouts, the original money could have been invested, say, 80% in stocks and 20% in bonds.
The IRS admits that it will take over 22 hours to complete current forms if you itemize deductions and have some investment income-three hours more than last year.
America is now running an increasing deficit on its investment income, which will cause America's current-account deficit to widen indefinitely even if a weaker dollar stabilises the trade deficit.
The conflict is especially sharp with a traditional "income rule" trust, a popular format that allocates investment income (say, from bonds) to current heirs and reserves principal for future heirs.
The only bipartisan bill introduced in Congress that seeks to create private investment accounts for Social Security would expose more income to the current 7.65 percent payroll tax.
It is the tax rate at that higher income level, not at his current income level, that will determine whether he undertakes the capital investment, or hires more workers.
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The elderly, many of whom get by on a combination of Social Security and investment income, are suffering more than any other group from our current low-interest rate fiscal environment.
By eliminating the preference afforded these two types of investment income, Bowles and Simpson believed they could retain the progressivity of the current tax code.
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