Capital Commerce
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Wall Street: Say Goodbye to the Bush Tax Cuts
Continue reading… 0 CommentsAre taxes going up? Goldman Sachs sure thinks so. Here are some key takeaways and predictions from a brand-new political analysis by the investment firm:
1) [After the 2008 elections], there will be Democratic majorities in Congress of roughly 55 seats (counting independents) in the Senate and roughly 240 seats in the House, up from 51 and 232 today. ... [Our] working assumption is that Hillary Clinton is more likely to win the White House than any other candidate.
2) Marginal tax rates on high-income earners are likely to increase...through a combination of allowing the 33 percent and 35 percent brackets to revert back to 36 percent and 39.6 percent respectively, and increasing the rate paid under the alternative minimum tax for higher income earners, which is currently set at 28 percent.
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Recession Fears Continue to Fade
Continue reading… 0 CommentsThe current economic boom continues to amaze (some) with its resiliency—despite the mortgage mess and housing implosion. The well-respected forecasting firm Macroeconomic Advisers is looking for third-quarter gross domestic product to come in at a robust 3.4 percent, while JPMorgan is looking for 3 percent plus, saying that "recent economic news has...been comforting." In fact, its economists now think the economy is so strong that the Federal Reserve is probably done cutting short-term interest rates.
Trade is a big reason for the good news. As economic consulting firm Global Insight puts it: "Major export markets in Canada, Latin America, the Middle East, and Asia continue to demonstrate very solid growth. Taken in conjunction with the much lower level for the U.S. dollar, this is expected to propel exports higher and provide solid underpinnings for the continuation of the business cycle expansion through 2008."
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Budget Numbers Show It's a Weird Time to Raise Taxes
Continue reading… 0 CommentsSo the fiscal 2007 federal budget deficit, according to new numbers from the Office of Management and Budget, is $163 billion. Not a particularly big number for a $13 trillion economy. In fact, it works out to a scant 1.2 percent of gross domestic product. More interesting, the latest budget numbers reveal that tax receipts rose from 18.5 percent of GDP in fiscal 2006 to 18.8 percent of GDP in fiscal 2007. That level of receipts is above the 40-year historical average of 18.3 percent. Generally, when that happens, it creates an environment for tax cuts. Oh, here, by contrast, is the latest news from Congress via the Politico website:
By now, everyone knows Rep. Charles B. Rangel is poised to introduce the "mother" of all tax reforms, the biggest and most expensive tax code overhaul since 1986. But what they don't know is how the New York Democrat plans to pay the more than $1 trillion price tag—and that uncertainty is fueling rampant speculation from Capitol Hill to K Street.
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Republicans Aren't Addressing Economic Worries
Continue reading… 0 CommentsThroughout the entire GOP presidential debate Tuesday night in Dearborn, Mich., I was waiting to hear two things. First, whether any of the candidates would be able to connect with the 64 percent of voters—according to the latest Gallup Poll—who think the economy is lousy, because of annoyance about high gas prices, angst about globalization and outsourcing, or worries that their home is dropping in value. And with the housing market likely to stay weak throughout much of next year and unemployment slowly ticking up, it really seems unlikely that by November 2008 that poll number is going to flip dramatically to the positive.
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Hillary Lays Out Her Economic Plan
Continue reading… 0 CommentsHillary Clinton gave a lengthy economic policy speech Monday. A few things popped out at me when I gave it a read this morning:
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Job Numbers Show the Economy Can Take a Punch
Continue reading… 0 CommentsMortgage meltdown. Credit crisis. Yet the U.S. economy keeps rolling. I've called it the Rocky Balboa Economy in the past. But then again, the "Italian Stallion" got knocked down from time to time. This boom, while it's taken plenty of hard shots, always manages to stay on its feet.
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Why 2008 Is Looking Like 1992 for Republicans (Update No. 2)
Continue reading… 1 CommentIt's certainly debatable whether the mortgage meltdown and credit crunch will push the economy into recession. I don't think so. But you could make the case that key 2008 battleground states are already in a downturn.
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The Recession That Didn't Happen
Continue reading… 0 CommentsAs every day goes by, it's beginning to look more and more as though the economy is going to avoid an outright recession, despite the housing downturn and credit crunch. Some slowing to be sure, but no shrinkage.
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Clinton's $20 Billion 'Baby Bond' Idea Is Overkill
Continue reading… 0 CommentsHillary Clinton is mulling over the idea of giving every child born in the United States a $5,000 "baby bond" from the government to help pay for future costs of college or buying a home. During a recent forum hosted by the Congressional Black Caucus, Clinton argued that wealthy people "get to have all kinds of tax incentives to save, but most people can't afford to do that." (GOP presidential hopeful Mitt Romney pushes an alternative approach, making all middle-class saving completely tax free.)
