A Minimum Tax for the Wealthy

Mr. Warren Buffett made a strong argument in this New York Times article for a minimum tax rate for ultra rich people so some of them will not pay 0% or less than 15% tax rate again. See the article here.
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Why did he say something below? You may want to check the article yourself.

So let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased. The ultrarich, including me, will forever pursue investment opportunities.      

In 1992, the tax paid by the 400 highest incomes in the United States (a different universe from the Forbes list) averaged 26.4 percent of adjusted gross income. In 2009, the most recent year reported, the rate was 19.9 percent. The group’s average income in 2009 was $202 million — which works out to a “wage” of $97,000 per hour, based on a 40-hour workweek. (I’m assuming they’re paid during lunch hours.) Yet more than a quarter of these ultrawealthy paid less than 15 percent of their take in combined federal income and payroll taxes. Half of this crew paid less than 20 percent. And — brace yourself — a few actually paid nothing.

No Free Lunch in Closed-End Funds 

A good article above by Barron's last weekend. 

Can you believe that many high income bond funds are trading 20% to 70% above the NAV? 66% of taxable bond funds and 73% of municipal-bond funds trade above NAV now versus roughly 30% both a year ago and in 2006. 

Investor sentiment could shift, sending shares tumbling. Any hint of rising interest rates would be a concern, as would expectations that the gap between short- and long-term rates might narrow. That would hurt funds relying on short-term borrowing to buy long-term assets.

Household Income Sinks to '95 Level

The income of the typical U.S. family has fallen to levels last seen in 1995, a long and pernicious slide that likely means it will be a generation before Americans regain the peak income levels reached at the close of the '90s.

Social Security

Do you know when to claim your social security? Age 62? 66? or wait until 70?

Do you know that if you wait until 70, you can get 32% more per month and every month ??

Also, do you know that if you divorce and do not marry again, you may be eligible to get half of the social security from you ex?

Read this transcript from Conseulo Mack's show on Social Security.

Mary Beth Franklin, the subject expert, recommends http://www.socialsecuritysolutions.com/

You can also contact mbfranklin@investmentnews.com for tough questions. For the whole article, read them here.

MLPs - High Energy Income

An excellent article in Barrons about MLPs in energy section. See their picks here in MLPs and MLP funds.

Summary:
- MLPs have a great total return, a combination of yield and growth, which is hard to find anywhere else.
- The key to this whole sector is owning the MLPs that raise that distribution over time.
- MLPs are more attractive in low-interest-rate environments.
- The traditional midstream MLP assets include intrastate pipeline systems.
- Retirement accounts: MLP's unrelated business taxable income (UBTI) will make tax filing quite complex. Use MLP funds instead.

Turnaround Story

Mickey Drexler was credited to turn GAP around during the 1990s. Check out his story - Mickey Drexler’s Redemption here.

However, Warren Buffett said " Turnarounds seldom turn. "

Can Ron Johnson in JC Penny do the same thing?

How to Play Energy

A good summary from Barrons this weekend. Check it out here.
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Evan Calio, an energy analyst at Morgan Stanley, wrote recently that many stocks trade "near liquidation value," and the group as a whole is valued at "trough" levels, based on such measures as price to cash flow and reserves relative to enterprise value, which is stock-market value plus debt. He likes stocks that can do well "without commodity support," which is to say rising prices. His favorites include Chevron, Anadarko, and Hess.
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Click the links to read the article and a table .