What's up - graham, it's guys here, so i hope you're sitting down for this, because we got a lot to talk about today. First of all, it looks like the irs has been listening to an awful lot of sting lately, because it's apparent that they took inspiration from the lyrics every breath you take and every move you make i'll, be watching you when they ask lawmakers to require banks to Report all activity in excess of 600 a year, meaning the irs would be able to track all the money that goes into and out of your bank account paypal and zell and then make sure you pay the correct amount of taxes you owe. On top of that, there's now a growing proposal to create a new tax on index fund. Investing the stock market is said to be slowly deteriorating, while nearly half of all s p 500.

Small cap stocks are down more than 20 percent from their all-time highs. At the same time, an event known as the stock market quadruple witching is here, even though it sounds like it should be a feature film on netflix consumer prices are finally beginning to come back down and, lastly, we need to talk about how this 101 year old Is still working on a lobster boat with no plans to retire anyway, let's talk about exactly what's going on the problem with tracking bank accounts and taxing index funds, why the stock market could be poised for significantly more volatility and then, finally, what you could do with This information to make you money all of that and more on this episode of the economy still makes absolutely no sense, no matter how much you try to tax it, oh and just as undeniable proof that smashing the like button absolutely does make a difference. Last week i told everybody that i would invest 10 cents in amc for every like that video gets and now, with 26 044 likes. Here's me investing 2605 in amc to keep up my side of the deal, but if you appreciate that type of transparency, just do me a favor and hit the like button again for the youtube algorithm.

Thank you guys so much and with that said, let's begin to start. We should probably just talk about the most controversial topic first, and that would be a new push by the irs that would require banks and peer-to-peer payment services to report customer activity. If you have more than 600 dollars of the transactions over the course of a year, which, let's be real as pretty much everybody - and some say this is, as i quote - absolute madness that violates consumer privacy. Now much of this discussion surfaces around the three and a half trillion dollar infrastructure package and finding a way to pay for it.

After all, we can't just print money to pay for things while sweeping the 28 trillion dollar national debt under the rug, so the most likely source of revenue is gon na come from taxes. The problem, however, is that our current economy runs on a perpetual deficit, which means we consistently spend more money than we take in which theoretically could carry on indefinitely. As long as we have the resources to make the minimum payments see, countries are not operated like people who have to pay down their debt once they reach baby step two of the ramsay method, and if a country really wants to pay off their debt, they could Just magically create more money and be done with it, but in this case, as long as the united states can continue paying interest to their bond holders, investors and foreign governments, the amount of debt they take on is somewhat of a non-issue to the rest of the Economy, however, short-term spending is another topic altogether to pay for things like roads, bridges and infrastructure that helps our economy grow over time. That burden falls on the taxpayer to make up the difference, and that's where we get into the problem.

The issue is that we have what's called a tax gap, meaning there's a big void in between the amount of money the irs should be receiving versus, what's actually paid, and this happens for three reasons: either people just straight up, don't file their tax return or they File but they don't pay the full amount of tax owed or they under report, their income and that's said, to make up 352 billion of the united states, 441 billion dollar tax gap. This could be that people have money coming in under the table. They miscategorize expenses, or they say they make less money than they actually did and right now the irs does not have the proper resources to track everybody down, but this new proposal would give them almost all the ammunition they need to see exactly what you're doing and Then look for discrepancies between how much money you say you make versus how much of it actually went through your account. Think of it.

This way, if the bank reports that you have a hundred thousand dollars being received, but you report that you only have an income of twenty thousand dollars a year, that mismatch could trigger an audit to investigate the situation further. On top of that, payment, apps like venmo and zell, do not report your activity to the irs, regardless of how much money you send and receive. They simply leave that up to you to report in good faith in terms of how much tax you say you owe, but this new bill would aim to clamp down and change that, and the treasury was reported as saying providing the irs. This information will help improve audit selection, so it could better target its enforcement activity on the most suspect evaders.

As far as my honest thoughts on this i got ta say i'm mixed. On the one hand, i think it's no question that if the goal is to claw back under reported tax income, this would do that quite effectively, but on a bigger picture. I actually think this would lead to higher tax revenues for another reason, and that would be as a scare tactic if the people under reporting their income knew that the irs had all the information to their bank venmo and paypal, they would most likely think twice before Claiming a falsified number on their tax return, but, let's be honest, is that the type of oversight we want and need - and i would say the vast majority of people or pretty much everyone would say no immediately. Banks would probably lose the full faith of their customers.

People would rather transact with cash and cryptocurrencies could see quite a surge as people use them just for the sake of privacy, not to mention some worry about the irs's ability to build, maintain and collect data on millions of americans that could be vulnerable to an attack. Another member of the house voiced his concerns that this plan was a dangerous overreach and runs the risk of turning local banks into extensions of the irs. For myself, i tend to agree that, even though this seems to have the intention of making sure people pay the correct amount of tax, it just comes off too aggressive, and i believe it would have a negative consequence across most of the population as it is now. It was said that 73 of americans trust their financial institution to keep their best interest in mind, while only 50 say the same about the government when it comes to their finances.

Inevitably, if the two begin to overlap, it's not going to bode well for consumer confidence. During a time where financial literacy is probably the most important it's ever been, instead, a better approach might be to toughen up the under reporting penalties in an effort to encourage people to report the correct amount that way people still maintain their right to privacy, but those Who want to report less income are less likely to break the law, because the penalty for doing that is significantly worse than the tax that they could pay up front. But speaking of losing money, like i mentioned before september, tends to be the worst month. Historically, for the stock market - and this month is turning out to be no exception, see how nicely i transition those topics by the way anyway, for those not familiar, this phenomenon is what's known as the september effect and since 1950, the dow jones has declined an average Of 0.8 percent in september, while the s p 500 drops an average of half a percent.

Usually this is all chalked up to a shift in investor behavior, as they go on vacation, raise money for taxes and otherwise place a downward pressure on the market. But this month we're seeing two major changes. The cfra chief investment strategist noted that most stocks have declined more frequently than they have advanced, which is evidence of a weakening market condition. This divergence is also said to indicate a market, that's very vulnerable, to a sell-off.

On top of that, it was found that 15 percent of stocks within the s p 500, are more than 20 below their 52-week highs, while a large portion of mid and small cap stocks are down much further than that, some of this is partially due to covert Related shutdowns, across retail and slowdown of growth in china, as consumers begin to cut back on their spending. The result is that as the economy slows down, businesses see less growth and inevitably that winds up with lower stock prices during a month, which historically, is rather dull for the markets, but secondly, we also have a very unique event happening right now. At the time, i'm posting this video and it's called the quadruple, witching. Alright, even though the name sounds like it should be a feature film, starring, matthew, mcconaughey and keith gill, it's not, but it could help partially explain some of the wild activity in the market lately and here's what you need to know.

The quadruple witching is an event where stock options, stock index options, stock index, futures and single stock futures all expire at the exact same time, causing the market to experience some rather unusual activity. Now i know that sounds extremely confusing, but trust me all. You need to know is this, but all four options expire at the exact same time, the stock market turns into a trading frenzy, as investors decide whether or not to close contracts for new investments or roll them over into something else in the future. With that comes a lot more trading volume towards the end of the day and usually with a bit more volatility.

Overall, though, from all the research that exists, the quadruple witching could be a really eventful day for options, traders and it can lead to more volume in the market. But in almost all situations they do not lead to any meaningful price drop or profit day-to-day, and for probably most of you watching. You won't even notice anything happening today as long as you stay off of wall street bets. But you know what people are noticing another tax proposal that would target index funds and etfs, which make up more than 7 trillion dollars of the stock market.

Anyway, as a quick background, it's no surprise that index fund investing has become wildly popular throughout the last decade. Quickly becoming one of the most touted investments for everyday investors to passively build their wealth, but now those index funds are coming under attack. The senate finance committee chairman recently proposed an etf tax on in-kind transactions which historically have made index funds a very tax-efficient way to invest, and if this new tax goes into effect, it could have a serious implication throughout the entire index fund market and your money to Understand how it works. Just imagine this an index fund tracks the entire s p 500, and then they could sell shares through a middleman representing that equivalent amount like with spy and when you buy something like spy you're, not going and buying 500 different stocks.

But instead you buy one stock that represents ownership of those 500 companies, making it easy for you to buy and sell just like any other stock in the market. However, here is where the magic sorcery begins to take shape. It wouldn't make sense for them to sell out of those stocks and pay attacks every time you want to cash out a spy and take your money to a casino or anytime. They want to slightly rebalance their portfolio to a slightly different allocation.

After all, if that happens, the burden of tax would be on the index fund, which would then have to spread that cost throughout tens of thousands of other investors lowering the overall return, so in most circumstances anytime, they need to rebalance or shift their allocation within the Basket they could exchange a portion of their fund to a middleman and get something else in return and since no cash is transferred, there is no capital gains tax. It would be no different than you making a deal with your buddy to trade. Your 11 shares of ford for his one share of apple and because you traded the stock and didn't sell that didn't trigger a tax. Now, in addition to that, because an index fund can choose which fund they want to exchange they'll almost always choose to get rid of the funds with the lowest tax basis, which means over time their cost basis goes up and their tax obligation goes down right off.

The bat it's an extremely complex topic and i'll link to a video that explains it way better than i did down below in the description for anyone who wants to see it, but in terms of the tax, here's what you need to know. Congress wants to eliminate the index fund's ability to do these like-kind exchanges without paying a tax and now, as a result, index funds would have to pay a tax anytime. They would need to rebalance now from all the articles i read. Most of them make.

It seem like this only applies to the wealthiest institutional investors, but the truth is the fund itself aggregates the total return for anyone invested in the fund, so if they incur tax that gets passed on to you as the consumer, this is honestly a topic that i Spent hours researching - and this was the best i was able to come up with, although the end result seems to be that if this were to pass, then index funds would generate slightly lower returns for their investors, while generating more tax revenue that the irs could spend. On other things, like 2 million dollars to test, if hot tubs can lower stress, yeah, i'm serious, although in terms of what else could go lower those consumer prices are finally beginning to come back down. I'm on a roll with these intros today, anyway, new data shows that the cost of living in august rose the slowest pace in seven months, signaling that perhaps inflation fears have peaked and things are beginning to stabilize. On top of that, the rate of inflation slipped from 5.4 to 5.3, which is the first decline since last october, and that could be very good news for pretty much anybody who buys well anything.

The issue is that throughout the last year, the cost of everything was getting more expensive houses. Building materials used cars, shipping, food, energy, you name it it's more expensive today than it was a year ago, except for tattooed chef, but we'll save that for another time, either way a few months ago. The worry was that, if things continued at the same trajectory for everyday prices, we would eventually get to a point where inflation is out of control. The federal reserve would be forced to step in and raise interest rates and that could drop the market while the cost of borrowing gets more expensive.

But with this data, as things begin to level off, the worst could very much be behind us. We could just very much now be in a waiting period for things to return back to normal. The only looming question now is: how long could that take? After all, there are still supply chain material and labor shortages, keeping prices higher than usual. But with this new data coming out, there could be a light at the end of the tunnel as things continue improving and getting better and better.

Just like this 101 year old who's still working on a lobster boat with no plans to retire. She works with her son max who's 78 years old and together they work full time aboard the ship because they enjoy it. Virginia was quoted as saying that she's been working in the lobster business since she was seven or eight years old and will keep doing that for the rest of her life all right, fine, maybe i'm just trying to butter you up to get that free stock down Below in the description, that's now worth all the way up to a thousand dollars when you use the good gram. So with that said, you guys thank you so much for watching.

I really appreciate it as always make sure to destroy the like button. Subscribe button and notification bell also feel free to add me on instagram. My posts are pretty much daily, so if you want to be a part of it, there feel free to add me there. As my second channel, the gram stefan show i post there every single day - i'm not posting here.

So if you want to see a brand new video from me every single day, make sure to add yourself to that. Oh and one more thing. I also just recently started up a stock information app that has a daily newsletter and tracks all information in the market. So if you want to be a part of it, the link is down below in the description it's called the hungry bowl.

Let me know what you think of it. Thank you so much for watching and until next time.