Following bipartisan support in Congress, in January 2020 President Trump signed the United States, Mexico, and Canada Trade Agreement (USMCA). The USMCA effectively modifies rather than replaces the North American Free Trade Agreement (NAFTA), the original trade agreement between the three nations implemented in 1994. Mexico has ratified the new trade deal, while the Canadian […]
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Unfortunately, the coronavirus has become an increasing global health concern. As the death toll and number of people infected with the coronavirus rises, the global outbreak has also influenced financial markets. Financial markets hate uncertainty. Uncertainty can lead to market declines and significant increases in market volatility. When September 11 occurred it not only had […]
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Summary and Future Challenges The United States has enjoyed a prolonged period of economic growth; a record period of economic growth. Since 2010 economic growth has continued, the unemployment rate decreased to a 50-year low, and the stock market has generally increased reflecting the strong economy. The economic growth has largely been driven by factors […]
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Number 5: Drivers of The Stock Market The S&P 500 index is a benchmark index for measuring the performance of the U.S. stock market. It is a diversified index that contains the stocks of 500 relatively large companies (large cap) in an array of industries. Stock prices reflect expectations of future corporate profitability – more […]
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Number 4: The Yet to be Paid Increasing Costs of the Federal Deficit and Debt The Federal Deficit The federal budget deficit refers to U.S. federal government spending exceeding government income. According to the Congressional Budget Office, Government spending totaled $4.1 trillion in 2018; government revenues were $3.3 trillion, contributing to a deficit of roughly […]
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Number 3: The Timing of Those Tax Cuts Part of what made the recent tax cuts unique is that they occurred in a growing economy with near historic lows in unemployment. Prior to 2018, recent tax cuts occurred when the economy was struggling and unemployment was relatively high. In the current economic recovery, the payroll […]
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Number 2: What’s Been Driving Economic Growth A country’s economic growth is measured by the change in real gross domestic product (GDP). GDP measures the value of goods and services by a country over a given timeframe (typically quarterly or annually). GDP includes four components: 1) Consumer spending, 2) Investment spending, 3) Government Expenditures, and […]
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Our last blog looked at how taxes changed in 2018, specifically the tax cuts for individuals and corporations. This blog will take a look at the economy – including how those tax cuts and other factors impacted the economy, and what is likely to impact the economy going forward. The blog is split into six […]
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The most significant changes from the 2018 tax bill under President Trump impacted corporations. The significant benefits to corporations included the following: a reduction in the statutory corporate tax rate from 35% to 21%, 2) capital spending (spending on property, plant, and equipment) could be immediately expensed rather than depreciated, and 3) the taxation of […]
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Beginning in 2018, tax law changed under President Trump, with the most significant changes and reductions occurring to corporate taxes. The new tax law keeps the seven tax brackets that existed under President Obama, with the bracket amounts adjusted slightly. However, the tax rates that apply to each tax bracket were generally reduced. This was […]
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