News from the Control Tower: Our weekly curated list of news stories affecting you and your finances.
Hiding in plain sight. –Amanda Vaught
Happening in plain sight all around us are seemingly innocuous things. A one-off might feel like no big deal, but as the one-offs begin to compound, they start to become consequential.
Take for example, the market for temporary license tags issued by car dealers. The lax regulations in New Jersey and Georgia allow NYC drivers to acquire temporary tags, thereby skirting speed cams and red light tickets. More and more drivers blowing off traffic laws means more car accidents and the city will have to change their enforcement tactics.
Same could be said of the market for eel for American sushi. The recent story in USA Today suggests organized crime is behind the illegal eel finding its way into our unagi rolls. Eating just one of a protected species may go without notice, but eat too many and the whole species will collapse.
Speaking of cheats, tax season is very much here. Which one of your neighbors is under-reporting income on their tax return? The new IRS budget allows the agency to increase their audit rates: expect the US government to stop looking the other way.
Meanwhile, some market analysts think that the recent bank failures only revealed a portion of the underlying market turmoil caused by the Fed’s rapid rate hikes. More “naked swimmers” remain to be exposed. Has the commercial real estate market been skinny dipping? The Odd Lots Podcast gives some great background on the stresses there.
Finally, many workers open 401(k)s through a job, switch employers, and then promptly forget about those funds. The New York Times this week walks through what happens to some of those forgotten funds, and how to track down your own.
When taxpayers underreport income, it’s hard to know who’s rich and who’s middle class
“In a 2021 paper, a quintet of economists … studied random audits to determine how much income was being missed. They estimate that 7% of actual income goes unreported among the bottom 50% of taxpayers, but over 20% for the top 1%.”
Millions of workers open retirement accounts, then ignore or forget about them, leaving thousands of dollars unattended. Are you one of them?