Recently in a videotaped interview with Politico reporters Anna Palmer and Jake Sherman, Florida Senator Marco Rubio went into full Grinch mode and recommended Medicare and Social Security changes. Not to worry, Rubio assured his audience his vision would not “impact current retirees or people about to retire.” Senator, it doesn’t work that way. Since Medicare Part A and Social Security are “pay as you go” changing the system for future beneficiaries affects current recipients; it is simple arithmetic.

People who want to slash America’s social safety net pit generations against each other. Don’t be a sucker. Often workers with young children have insufficient life or disability insurance. An untimely death or misfortune can turn a future beneficiary into a current one overnight. I’m not condemning anyone; I speak from personal experience. We, like most young parents, were underinsured when our children were dependents. Social Security provides a term insurance-like benefit. If you don’t collect, you are still alive. Remember libertarian darling Ayn Rand took Social Security and Medicare.

The tax bill, as currently written, has lumps of coal for investors, too. The most egregious one for me is the “First in, First out” (FIFO) requirement. Currently, investors have a variety of options to minimize taxes when selling securities. Take the case where someone bought Apple decades ago and made subsequent purchases over the years. Currently, they can choose to sell the shares with the lowest gain, but the new law requires them to sell their oldest shares first. When mutual funds caught wind of the proposal, they howled so much Congress gave them a break but excluded individual investors. A mutual fund can choose which tax lot works best for them, but a mutual fund investor can’t. It sounds preposterous, but I’m not making this stuff up.

In a Morningstar column (December 8, 2017) John Rekenthaler warns small business owners may be less inclined to sponsor 401K plans. The tax plan allows small business owners a lower tax rate on “flow-through” distributions, and a lower overall rate means less incentive to defer current income. In fact, contributions to 401K plans may be taxed at a higher rate when owners take required distributions. As the Texas Troubador, Ernest Tubb sarcastically sang, “Thanks, thanks a lot.”

Rekenthaler speculates the tax law could depress home values. As written, property tax deductions have a $10,000 limit plus both the House and Senate versions crimp the ability to write off mortgage interest. The National Association of Realtors argues these provisions could cause home prices to fall as much as 10 to 30 percent. How these changes affect local prices and demand will take time to figure out. But regardless, tax laws can have unintended and unexpected consequences. Google “Smoot Hawley Tariff.” Ho, ho, ho.

You can’t always get what you want but Buz Livingston, CFP can help you get what you need. For specific recommendations visit us online at or come by our office in Redfish Village, 2050 Scenic 30A, M-1 Suite 230.