Tax Battle Heats Up!

Stocks/Bonds Year-To-Date

The stock and bond market returns so far in 2021 have surprised most.  With all of the issues we’ve discussed here, and others, stocks have resiliently enjoyed nice gains so far this year.

Year-To-Date, here are the numbers:

  • Dow Jones 17.1%
  • S&P 500 22%
  • Nasdaq 19.7%
  • Russell 2000 16.8%
  • Foreign Stocks 13.6%
  • Emerging Mkt Stocks 3.6%

Bonds on the other hand, have been challenged year-to-date:

  • 10 Year US Treasury (2.6%)
  • S. Bonds (.8%)
  • Global Bonds (2.1%)
  • Muni Bonds 1.5%

The unemployment rate stands @ 5.2%

GDP Gross Domestic Product (6/30/21) @ 6.6%

I suggest saving this blog and comparing the numbers to the results on December 31st, 2021!

235,000 Jobs Filled

Last Friday, the experts were expecting the US to have increased the number of jobs filled by over 700,000.  This was a big miss, however quickly being dismissed, because of the Delta Variant cases peaking (we hope so).

This week starts the beginning of a new phase.  Children are back to school (mostly) and the additional unemployment benefits have expired.  It’s no secret that airline travel, outside of this past weekend, has abated with people being cautious to see what happens over the next month or so…

It will be interesting to see if those who were collecting extended unemployment benefits actually start accepting employment.  If so, that will be a huge positive as there are still as many jobs available as job applicants.  Sometimes, you just can’t have the “perfect” job and you need to do what you need to do…….

Tax Battle Heats Up!

The House of Representatives are at work, trying to balance passing the $4.6 Trillion spending bills and figuring out how to pay for them.  $4.6T is a ton of money.  If much of that is passed and revenue is raised to pay for most, the impact will certainly be significant.  Just depends on where you stand on the issue.

The administration wants to increase corporate taxes from 21% to 28% and impose higher taxes on revenue made outside of the United States.  Watch out for this, because if the tax here is higher than overseas, more jobs and factories could move out.  I’ve read that increasing the 21 to 28% will increase revenue by about 1 trillion over 10 years.

I’ve read over the long weekend there is finally a little more clarity to President Biden’s top tax bracket.  He desires to increase the highest tax bracket from 37% to 39.6%. Here are the specifics we’ve been desiring:

If you are filing single in 2021, to reach the beginning of the 37% bracket, your taxable income needs to be over $523,600.  If the President has his way, the new higher 39.6% will be reached when your income reaches $452,700.

If you file a joint return in 2021, to reach the beginning of the 37% bracket, your taxable income needs to be over $628,300.  The new higher 39.6% will be reached when your income reaches $509,300.

Please keep in mind, when any tax brackets change, typically all brackets are impacted.

There are many other areas Congress is targeting to raise revenue that will impact most all of us one way or another.

Here is a link to our 2021 Key Financial Data which provides an abundance of information about our current tax structure.  If the $4.6 T (or a great portion) is passed, I’ll be curious to compare our upcoming 2022 Key Financial Data to 2021, and then assess the impact and planning opportunities.


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