How will the new tax bill affect you? Click here to read about the implications for consumer and business behavior, impact on growth, unemployment, wages, interest rates and earnings.
Source: J.P. Morgan Asset Management
"I believe the risk of nuclear contamination to your portfolio is low. North Korean leader Kim Jong Un is an evil dictator, but he is not suicidal, and understands that launching an attack against the U.S., or one of its allies would result in a swift U.S. military response that would destroy him and his regime." Click here to read more.
Source: Matthews Aisa
"Companies are in expansion mode in the US, according to a quarterly survey of finance executives." The CPA Outlook Index is at 79, which indicates that there will be continued revenue growth in 2018. Click here to read more.
House Republicans today released the details of their plans to overhaul the U.S. tax code. (See the full House bill and House summary. ) WaterStone has put together a quick a rundown of key provisions in the proposal that we thought might interest you:
- Chops the corporate tax rate from 35% to 20% permanently, not temporarily as was earlier considered.
- Businesses would lose the ability to deduct certain executive compensation above $1 million, which they can now do for performance-based pay.
- Tax-exempt bonds could no longer be used to build professional sports stadiums.
- Sets a top 25% rate for pass-through businesses such as S corporations and partnerships. The plan includes complicated guardrails that limit people from turning what would otherwise be wage income taxed at up to 39.6% into business income taxed at a lower rate.
- New limits on corporate interest deductions, which would be capped at 30% of earnings before interest, taxes, depreciation and amortization, which is a measure of cash flow. Real-estate firms and small businesses would be exempt from that limit.
- Creates a new one-time tax on overseas profits set at 12% for cash holdings and 5% for illiquid holdings, a provision meant to force companies to repatriate overseas profits. Creates a new 10% tax on U.S. companies’ high-profit foreign subsidiaries, calculated on a global basis, but active overseas profits wouldn’t otherwise be taxed.
- Reduces seven individual income tax brackets to four at 12%, 25%, 35% and 39.6%.
- Top tax bracket set for married couples earning $1,000,000 per year and individuals earning %$500,000. Bottom tax bracket extends up to $90,000 for couples and $45,000 for individuals.
- The proposal doesn’t change the top tax rates on capital gains and dividend income.
- The bill would preserve head-of-household filing status, often used by single parents. The standard deduction for that group is midway between individuals and married couples.
- Nearly doubles individual standard deduction to $24,400 for married couples and $12,200 for singles in 2018.
- Increases child tax credit from $1,000 in 2017 to $1,600 plus $300 for each taxpayer, spouse and non-child dependents.
- Places new limit on home mortgage-interest deduction at loans up to $500,000, down from $1,000,000, but existing loans would be grandfathered.
- The estate-tax exemption, set for $5.6 million per person and $11.2 million per married couple, would double immediately. The tax would be repealed starting in 2024.
- Keeps 401(k) existing plan rules largely intact.
- Repeals the alternative minimum tax
- Repeals an itemized deduction for medical expenses.
- Repeals the tax credit for adoption.
- Repeals the deduction for student-loan interest.
The Innovest August Market Commentary covers three main topics this month:
1. The impact of Hurricane Harvey
2. The Debt Ceiling
3. Home Values versus Inflation
Click here to read the Market Commentary.
By the end of September Congress must pass a bill to keep the government running. The bond market is reacting to the potential situation that could arise if a bill is not passed, and the government runs out of funding. Click here to read more.
Source: Business Insider
"With the recent convergence of a transformative set of technologies, economies are entering a new era in which artificial intelligence (AI) has the potential to overcome the physical limitations of capital and labor and open up new sources of value and growth." Click here to read more about the future of Artificial Intelligence.
"A new working paper from the National Bureau of Economic Research shows refugees provide a net contribution to the economy through the taxes they pay over time, countering the notion that they are a drag on the economy due to a reliance on social benefits." Click here to read more about the implications of immigration.
China has an inverted yield curve which has, in the past, been a signal that a recession is coming. What does this yield curve indicate about China's economic outlook? Click here to read more.
Elections, terrorist attacks and wars can send stock, bond and other markets into violent spasms. Some of these geo-political events tend to have relatively inconsequential and short-term impacts on economies and financial markets. However, other events can have significant medium- to long-term ramifications. “Politics Matters – Sometimes” explores how long-term investors can discern which events tend to have lasting and long-term impacts on the markets. Click here to read more.
Source: CFA Institute
Click here to read an article from the New York Times, that talks about the Elder Concierge industry. Baby boomers who need extra income are taking part-time jops to help older people live independently.
Source: New York Times
The GOP Health Care bill passed in the House last week. Now the Senate will get the bill. Click here to read more about the bill and the changes that could affect employers.
Source: Society for Human Resource Management
There is much going on geopolitically. Click here to read about tensions in North Korea, elections in France, tax reform in the U.S., an early general election in the United Kingdom and economic growth in China.
Student loan debt is a huge concern for many millennial workers. Not only are financial worries a distraction but they also cause anxiety and sometimes even prevent employees from contributing to their retirement. Click here to read more.
Source: Employee Benefit News
With President Trump in the White House and a Republican Senate and House of Representatives, there are many potential changes that could occur to impact employee benefits. Click here to read more.
Source: Groom Law Group