The House Ways and Means Committee, the beginning point of all tax legislation in Washington, released Tax Reform 1.0 last Thursday 11/02/17. The financial impact of the 429-page bill, officially called the “Tax Cuts and Jobs Act,” will be compiled in the coming weeks, but the multiple moving parts of the legislation make it very difficult to describe the bill in our 30-second sound bite world. Many of the proposed changes from the Republican Party expire within 10 years because in order to use the “reconciliation” process (requiring just a simple majority vote), the tax reform plan cannot “on paper” add to our country’s deficit beyond a 10-year time frame. Lawmakers generally agree that tax reform, last accomplished in 1986, is a great idea but just don’t try and do it in their back yard. The elimination of a tax deduction or credit that benefits some other group is a step in the right direction. But any suggestion to do away with a tax deduction or credit that currently benefits their own world is labeled as a hardship that will not be tolerated. The “markup” of the House bill begins this week (source: BTN Research).
Jerome Powell was named by President Donald Trump last week to replace Janet Yellen as Federal Reserve Chair when her term ends in February 2018. Ironically, even as Yellen exits as Fed Chair she can remain as a voting member of the Board of Governors until 2024 if she chooses to serve out her current 14-year term (source: Federal Reserve).
The jobless rate in the USA was 5% in October 2005, doubled to 10% by October 2009, and now has come full circle to 4.1% in October 2017. The last time our nation had an unemployment rate that was lower than 4.1% was in December 2000 or almost 17 years ago (source: Department of Labor).
Notable Numbers for the Week:
1. MORE AND MORE RENTERS - The 111.4 million households that existed in the United States on 9/30/09 were split between 75.3 million owners and 36.1 million renters. The 119.1 million households in the United States on 9/30/17 were split between 76.2 million owners and 42.9 million renters (source: Census Bureau).
2. LESS RUSH TO DRILL - Since peaking at 958 operating oil rigs nationwide as of Friday 7/28/17, the number of oil rigs in use in the United States has declined in 11 of the last 14 weeks (including the last 5 weeks in a row) to 898 operating rigs as of Friday 11/03/17 (source: Baker Hughes).
3. MAKE IT EASY - 68% of plan sponsors of defined contribution retirement plans offer automatic enrollment for their new employees today (source: Alight Solutions).
4. TIGHT BUDGET - 34% of American households headed by seniors at least age 65 receive 90% or more of their annual income from their Social Security retirement benefits (source: GAO).
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