DawgTalkers.net Forums DawgTalk Palus Politicus The Economy Part 2

It seems as though there is less and less of a labor shortage which everyone was complaining about. Millions of jobs have been created and it appears most of them have been filled since there are so many less job openings. That sounds like a job well done and that the falsehood that "people don't want to work" has now been debunked.

Private payrolls increased by 192,000 in April, more than expected for resilient labor market

Job gains were strongest in leisure and hospitality, which posted an increase of 56,000.

https://www.nbclosangeles.com/news/...or-resilient-labor-market/3401703/?amp=1

https://www.reuters.com/markets/rat...ion-dims-hopes-policy-easing-2024-05-01/

Fed leaves rates unchanged, flags 'lack of further progress' on inflation

WASHINGTON, May 1 (Reuters) - The U.S. Federal Reserve held interest rates steady on Wednesday and signaled it is still leaning towards eventual reductions in borrowing costs, but put a red flag on recent disappointing inflation readings that could make those rate cuts a while in coming.
Indeed, Fed Chair Jerome Powell said that after starting 2024 with three months of faster-than-expected price increases, it "will take longer than previously expected" for policymakers to become comfortable that inflation will resume the decline towards 2% that had cheered them through much of last year.

That steady progress has stalled for now, and while Powell said rate increases remained unlikely, he set the stage for a potentially extended hold of the benchmark policy rate in the 5.25%-5.50% range that has been in place since July.
U.S. central bankers still believe the current policy rate is putting enough pressure on economic activity to bring inflation under control, Powell said, and they would be content to wait as long as needed for that to become apparent - even if inflation is simply "moving sideways" in the meantime.

The Fed's preferred inflation measure - the personal consumption expenditures price index - increased at a 2.7% annual rate in March, an acceleration from the prior month.
"Inflation is still too high," Powell said in a press conference after the end of the Federal Open Market Committee's two-day policy meeting. "Further progress in bringing it down is not assured and the path forward is uncertain."

Powell said his forecast remained for inflation to fall over the course of the year, but that "my confidence in that is lower than it was."
Whether there are rate cuts this year or not remains in doubt.
"If we did have a path where inflation proves more persistent than expected, and where the labor market remains strong but inflation is moving sideways and we're not gaining greater confidence, well, that would be a case in which it could be appropriate to hold off on rate cuts," Powell said. "There are paths to not cutting and there are paths to cutting. It's really going to depend on the data."

Despite the uncertainty of the current economic moment, Powell's characterization of rate hikes as "unlikely" cheered investors concerned about a newly hawkish Fed chief.
U.S. stock and bond prices turned higher as Powell preached patience that may delay rate cuts, but also means a high bar for any more hikes. The Fed raised its benchmark policy rate by 5.25 percentage points in 2022 and 2023 to curb a surge in inflation.
Powell's remarks on Wednesday were "notably less hawkish than many feared," said analysts at Evercore ISI. "The basic message was that cuts have been delayed, not derailed."
Investors in contracts tied to the Fed's policy rate increased bets that rate cuts could begin in September rather than later in the year as reflected in earlier market pricing.
BALANCE SHEET
The Fed's latest policy statement kept key elements of its economic assessment and policy guidance intact, noting that "inflation has eased" over the past year, and framing its discussion of interest rates around the conditions under which borrowing costs can be lowered.
"The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably towards 2%," the Fed repeated in its unanimously-approved statement.
That continues to leave the timing of any rate cut in doubt, and Fed officials made emphatic their concern that the first months of 2024 have done little to help the cause.
"In recent months, there has been a lack of further progress towards the Committee's 2% inflation objective," the Fed said in its statement.

The U.S. central bank also announced it will scale back the pace at which it is shrinking its balance sheet starting on June 1, allowing only $25 billion in Treasury bonds to run off each month versus the current $60 billion. Mortgage-backed securities will continue to run off by up to $35 billion monthly.
The step is meant to ensure the financial system does not run short of reserves, as happened in 2019 during the Fed's last round of "quantitative tightening."
While the move could loosen financial conditions at the margin at a time when the U.S. central bank is trying to keep pressure on the economy, policymakers insist their balance sheet and interest rate tools serve different ends.
The Fed maintained its overall assessment of economic growth, saying that the economy "continued to expand at a solid pace. Job gains have remained strong and the unemployment rate has remained low."
Powell reconciled that with the relatively weak, 1.6% growth of gross domestic product in the first quarter by saying that the 3.1% increase in private domestic demand was a better gauge of where the economy stands, with output buttressed by a recent jump in immigration.
Asked about the risk the U.S. was entering a period of "stagflation" with stagnant growth and rising prices, Powell said current conditions are nothing like those seen in the late 1970s when prices were rising more than 10% annually at one point alongside high unemployment.
"Right now we have ... pretty solid growth ... We have inflation running under 3%," Powell said. "I don't see the 'stag' and I don't see the 'flation.'"

If you’re carrying a lot of high-interest debt, the fact that the Federal Reserve once again did not cut interest rates at its Wednesday meeting may be disappointing, if not surprising.

But if you have any savings, the Fed’s unwillingness to lower rates until it sees more consistent progress in inflation data has – and will continue to – put money in your pocket this year if you seek out federally insured accounts with the highest rates.

In 2023, savers made $315.4 billion in interest in deposit accounts, four times the $78.7 billion they earned in 2022, according to Lending Tree’s DepositAccounts.com, which used data from the Federal Deposit Insurance Corporation in its calculations.

That’s because, after so many years of paltry interest rates, the Fed’s rate-hike campaign that began in 2022 made it possible for savers to earn inflation-beating yields on their US domestic deposits, including bank and credit union savings accounts, certificates of deposit and money market accounts.

At the same time, yields on Treasury bills have also been very competitive with the higher rates banks are offering and are equally low risk.

https://www.dailymail.co.uk/news/ar...ital-gains-tax-rates-joe-biden-plan.html

Biden wants to pass a HUGE capital gains tax hike. Some states will have over 50% tax rates

Vote this fool out of office.

Joe going after that fair share!

You mean everybodies share. People rely on their 401ks for retirement. Joe wants to steal everybodies retirement money.

So how much would that tax rate be for "average people"? It's certainly not the figure you were suggesting................

Biden Calls for Doubling Capital Gains Tax

President Biden wants to increase the capital gains tax rate and have the wealthy pay a “fairer” share.

President Biden’s $7.3 trillion FY 2025 budget released last month, proposes several tax changes aimed at wealthier taxpayers, including a minimum tax on billionaires, a near doubling of the capital gains tax rate, and an increased Medicare tax rate.

This budget proposal comes as the IRS says it has recently collected (through ramped-up enforcement) more than $500 million in unpaid taxes from delinquent millionaires and "wealthy tax cheats."

The White House says the President's budget, which also contains several tax breaks for those with lower and middle incomes, including new homebuyer tax credits, would reduce deficits by nearly $3 trillion over ten years.

Biden capital gains tax increase

The capital gains tax rate for long-term capital gains, assets held for more than one year, is at most 20%. Capital gains are the profits you make from selling or trading an asset. The tax rates that apply to a particular capital gain (i.e., capital gains tax rates) depend on the type of asset involved, your taxable income, and how long you held the property before it was sold.

Biden’s FY25 budget proposal would nearly double that capital gains tax rate to 39.6%. That proposed capital gains rate increase would apply to investors who make at least one million dollars a year.
44.6% capital gains proposal?

You may have heard about a proposed 44.6% capital gains rate in a budget footnote. That rate is a separate proposal that if ever approved, would apply only to those with high net investment and taxable income.

The rate supposes an increase of the net investment income tax rate to 5% above the $400,000 threshold with an increased top ordinary rate of 39.6%.
'Carried interest loophole'

The Biden budget proposal also revives the debate over the so-called carried interest loophole. Currently, asset managers can treat certain compensation they receive as capital gains, which means that a significant portion of their income is taxed at a much lower rate than if it were treated as wages.

Under Biden’s budget proposal, that compensation would be treated as ordinary income for federal income tax purposes to end the carried interest loophole.
Medicare tax

President Biden is proposing a tax increase for people making more than $400,000 a year to help shore up the Medicare program. That income threshold would be based on wages, salary, and capital gains.

Biden's FY25 budget proposes to increase the Medicare tax rate to 5% from the current 3.8%.

According to federal data, more than 60 million people use Medicare, which provides health insurance for people over age 65.
The number of people using Medicare is expected to grow, which has caused concern over the long-term viability of Medicare and other programs like Social Security.

The White House says that this tax increase would extend the life of the Medicare Trust Fund by at least 25 years, without cutting benefits. However, like the capital gains tax proposal, the Medicare tax rate increase is not likely to find enough support to pass this year, given Congressional divides and the upcoming election.
Income tax rate

President Biden wants to increase the top income tax rate for wealthier taxpayers.

Under Biden’s budget proposal, taxpayers making $400,000 would be taxed at a top rate of 39.6%.
The current top tax rate, tied to inflation-adjusted tax brackets, is 37%.
The proposed tax rate change would reverse the so-called Trump tax cuts in the Tax Cuts and Jobs Act.

Note: The Biden budget is merely a proposal that given the state of play on the Hill is not likely to gain Congressional support to pass this year. So, the seven tax rates you are familiar with i.e., 10%, 12%, 22%, 24%, 32%, 35%, and 37%, apply. (The income tax brackets associated with those rates are adjusted yearly for inflation.)
Biden budget tax increase for billionaires

President Biden also wants to impose a minimum tax on billionaires. Some of the rationale behind this “wealth tax” is that wealthier taxpayers are often able to shield a good portion of their income from tax. That’s partly because the wealthy usually grow their wealth through investments, which are taxed at lower rates than earned income. Earned income (which includes wages and salaries) is typically the main source of money for taxpayers with lower and middle incomes.

The billionaire tax in Biden’s budget proposal would be a minimum of 25% for households with net worth exceeding $100 million.
For comparison, according to the White House, the wealthiest taxpayers in the United States reportedly pay an average 8.2% tax rate.

Capital gains taxes on real estate: 1031 like-kind exchanges

Biden's FY25 budget would also close what the administration calls the “like-kind exchange” loophole. Under current 1031 like-kind exchange rules, real estate investors can defer paying tax on gains from certain real estate deals as they keep investing (reinvesting the proceeds) in that real estate.

The White House says "this amounts to an indefinite interest-free loan from the government," and that "real estate is the only asset that gets this sweetheart deal."

https://www.kiplinger.com/taxes/biden-calls-for-doubling-capital-gains-tax-rate

So all it really does is restore the tax rate back to where it was before trump's tax cut.

They can't retire! Who will pay for all the terrorists' college loans??

The new Biden 44.6% Cap Gain increase will pay for the terrorist's indoctrination. Vote this fool out of office.

It will help support the "Stand back and stand by" indoctrination as well.

Eve, I know you may struggle with facts, but a responsible POTUS, trying to offset spending USED to be something GOPers looked for…