Can Republicans Actually Make the Trump Tax Cuts Permanent?
Release Date: 07/09/2025
Vanguard--4 to 5% Stock Market Growth Over Next 10 Years (Should You Change Your Retirement Strategy?)
The Power Of Zero Show
In this episode of the Power of Zero Show, David McKnight looks at headlines, such as those from Vanguard, BlackRock or Morningstar, that have predicted a dismal forecast for stock market returns over the next decade. Since such articles predict 4-5% annual growth for the next decade, many investors are pondering whether they should take some chips off the table. Back in 2015, those same institutions and companies stressed that valuations were too high and that, since the markets had a great run, it couldn’t possibly continue anymore. Vanguard forecasted 4-6% returns, BlackRock predicted...
info_outline
Should You Take Social Security Early Given the Scary Trust Fund Report?
The Power Of Zero Show
The 2025 Social Security Trustees Report is out and the news is bleak. This episode of the Power of Zero Show looks at the potential repercussions if nothing changes by 2033. If things don't improve, Social Security will face a cash flow deficit that triggers a 23% across-the-board benefit cut - and that's one year earlier than predicted. But that's not all… in fact, it gets far worse, says host David McKnight. The system is already $72.8 trillion in the red, an unfunded liability that's twice the size of the national debt and $10 trillion worse than 2024. This is by no means a temporary...
info_outline
The Vindication of Indexed Universal Life and Fixed Indexed Annuities: What the Ernst & Young Study Finally Proves
The Power Of Zero Show
Ernst & Young recently came out with a new updated study, which is likely to scandalize mainstream financial experts like they did with their 2021 study. Back then, they asked the question, “Is the stock market-only retirement approach really the strategy that gives you the highest levels of income and the best outcomes over a 30-year retirement?” In their new study, on the other hand, they substituted Indexed Universal Life for Whole Life, and Fixed Index Annuities for Deferred Income Annuities – a move that led to unexpected and spectacular results. Host David McKnight...
info_outline
Can Republicans Actually Make the Trump Tax Cuts Permanent?
The Power Of Zero Show
President Trump’s proposed Big Beautiful Bill (BBB), which has been getting everyone’s attention of late, is the topic of this episode of The Power of Zero Show. Host David McKnight points out that the “crown jewel” of the BBB is the extension of the 2017 Trump tax cuts. The 2017 Tax Cuts and Jobs Act (TCGA) brought about cuts to individual income taxes, corporate taxes, and a dramatic expansion of the estate tax exemption. While corporate tax cuts were made permanent – going from 35% to 21% – the tax cuts for individuals and estates had an expiration date. If the status quo...
info_outline
Doug Andrew: Consider Rolling Your IRA into an IUL (Good idea?)
The Power Of Zero Show
David McKnight addresses Doug Andrew’s recommendation of turning your IRA into an IUL. David agrees with some of Andrew’s views, including his objection to rolling a 401(k) into an IRA, and then leaving it there until you die. Given the exploding national debt, most experts predict that taxes 10 years from now will have to rise dramatically to keep the U.S. solvent… Doug Andrew lists Indexed Universal Life as his “favorite financial vehicle because of liquidity, safety, predictable rates of return, and tax-free growth”. David is skeptical of advice that denigrates every tax-free...
info_outline
Financial Collapse in 3 Years?
The Power Of Zero Show
This episode of The Power of Zero Show revolves around a recent Ray Dalio video in which he issued warnings about the U.S. debt crisis. In the clip, Dalio appears to be giving America three years to get their act together and to right the fiscal ship of state. Dalio mentions the draft of his new book that goes through the mechanics of the debt – and highlights the supply-demand problem he believes will occur if the deficit doesn’t go from the current 7.2% of GDP to about 3% of GDP. Dalio touches upon what people should do when there isn’t an adequate supply-demand balance. He believes...
info_outline
Will Safe Harbor Rules Protect You If You Do a 4th Quarter Roth Conversion?
The Power Of Zero Show
David McKnight looks at why many people wait until the fourth quarter to do a Roth conversion, the potential penalties, and what can be done to avoid having to pay underpayment penalties to the IRS. David begins the episode by highlighting the fact that a lot of investors wait until Q4 before they do a Roth conversion – and they prefer to pay taxes on it in cash instead of simply having the taxes withheld by the IRS. From a mathematical standpoint, it’s the correct thing to do because it allows you to get 100% of the converted dollars into your tax-free account. However, if you didn’t...
info_outline
How to Avoid the Roth Over-Conversion Trap
The Power Of Zero Show
In today’s episode, David McKnight focuses on whether you should do a Roth conversion, how much you should convert per year, and whether it’s possible to over-convert to Roth. David explains that an effective tax rate is the actual percentage of your income that you pay in taxes after accounting for deductions, exemptions, and credits. For David, the only reason you should do a Roth conversion is if you believe that your effective tax rate in retirement will be higher than your marginal tax rate today. David touches upon a couple of reasons why your effective tax rate in retirement could...
info_outline
The Problem with Target Date Funds
The Power Of Zero Show
David McKnight looks at Target Date Funds (TDFs) and why their set-it-and-forget-it approach to investing is NOT something you should rely on. David kicks things off by explaining how TDFs work, including why they tend to be a popular option for novice investors. While it sounds like an excellent approach, David points out two major flaws. “A lot of the problems with TDFs come down to sustainable withdrawal rates in retirement,” says David. The 4% Rule consists of you being able to withdraw 4% of your day one balance in retirement, adjusted every year thereafter for inflation....
info_outline
I've Maxed Out My 401(k), Now What?
The Power Of Zero Show
In this episode of the Power of Zero Show, host David McKnight discusses the scenario in which you have maxed out your 401(k) and are wondering where you should invest the rest of your money. The episode kicks off with David addressing the type of 401(k)s you should be investing in first. There are two types of 401(k)s: the traditional pre-tax 401(k) and the Roth 401(k). Should you go for a traditional 401(k) or a Roth 401(k)? It all depends on whether you think your tax bracket is likely to be lower or higher in retirement… With the national debt set to hit $62 trillion by the year 2035,...
info_outlinePresident Trump’s proposed Big Beautiful Bill (BBB), which has been getting everyone’s attention of late, is the topic of this episode of The Power of Zero Show.
Host David McKnight points out that the “crown jewel” of the BBB is the extension of the 2017 Trump tax cuts.
The 2017 Tax Cuts and Jobs Act (TCGA) brought about cuts to individual income taxes, corporate taxes, and a dramatic expansion of the estate tax exemption.
While corporate tax cuts were made permanent – going from 35% to 21% – the tax cuts for individuals and estates had an expiration date.
If the status quo stays unchanged, those tax rates will revert back to their 2017 levels on January 1st, 2026.
David goes over how Republicans could make the tax cuts permanents through some outside the box accounting techniques.
Since Republicans don’t have a supermajority in the House or Senate, they would have to rely on a special Senate process known as Budget Reconciliation.
A few fiscal conservatives such as Representative Thomas Massie and David Schweikert, as well as Senator Susan Collins and Rand Paul may not be on board with such an approach…
Their main concern? The fact that making these tax cuts permanent would add between 4.6 and 5.5 trillion dollars to the national debt over the next 10 years.
David addresses the single greatest obstacle preventing Republicans from making the Trump tax cuts permanent: the Bird Roll.
The Bird Roll states that budget reconciliation bills cannot increase the federal deficit beyond the budget window, which is typically 10 years.
In other words, to make the tax cuts permanent, Republicans would have to find a way to pay for them.
Cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamps Program), as well as tariffs on imports are how Republicans are trying to go about things.
Some Republicans suggest that the tax cuts won’t increase the national debt over the next decade and beyond, for the fact that they’ll actually spark economic growth.
According to the Congressional Budget Office, the cost of the 2017 tax cuts was $1.9 trillion over an eight-year period, while the tax cuts themselves only increased revenue by about $400 billion.
As David stresses, “The Tax Cuts and Jobs Act of 2017 ended up increasing the debt by about $1.5 trillion, meaning that the tax cuts were in no way self-financing.”
If Trump tax cuts were to be made permanent, it will almost certainly increase the likelihood that taxes will have to skyrocket by the year 2035.
According to a Penn Wharton study, when the country’s debt-to-GDP reaches 200%, we’ve passed the point of no return.
If that were to happen, no combination of raising taxes or reducing spending would arrest the financial collapse of the nation.
Former Comptroller General of the Federal Government, David M. Walker, has even suggested that tax rates could have to double to keep the U.S. solvent.
This means that even if Republicans make the tax cuts permanent, they will have to raise taxes eventually…
For David, this may lead to Congress being forced to raise taxes in dramatic fashion in 2035 in an effort to avoid a financial apocalypse in 2040.
David believes that, if you have the lion’s share of your retirement savings swirling away in tax-deferred accounts like 401(k)s and IRAs, you should take advantage of what’s likely going to be 8 to 10 years more of historically low tax rates.
Mentioned in this episode:
David’s national bestselling book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
PowerOfZero.com (free video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com