Good Afternoon Legacy Wealth Alliance Family!
It has been 28 years (1993) since President Clinton pushed through Congress a major federal tax hike. The Biden White House is backing a variety of tax proposals, including higher income taxes for wage earners reporting at least $400,000 of income. Additional taxes may be sought from corporations (raising the top marginal rate from 21% to 28%) and from estate taxes. Fiscal year 2021, i.e., the 12 months ending 9/30/21, will be our nation’s 20th consecutive year with a budget deficit, coming off a record setting deficit of $3.1 trillion for fiscal year 2020. Lawmakers are reluctant to admit that balancing our budget may require higher taxes or lower spending or both (source: Biden White House).
Our nation’s “gross domestic product” (GDP) shrunk by 3.5% last year, the 10th calendar year contraction in the last 7 decades. Following the 9 previous “down” years, the US economy rebounded in the next year with positive growth 7 out of 9 times. The median forecast for the “change in real GDP” during 2021 made by the 11 members of the Federal Open Market Committee (FOMC) was released last Wednesday 3/17/21. Their prediction calls for growth of +6.5% this year. Actual GDP annual growth has been at least +6.5% just once (1984) in the last 50 years (source: Federal Reserve).
As of 9am ET on Friday 3/19/21, 8,327 Americans had died from the COVID-19 virus over the previous 7-day period. That’s the 7th consecutive week of declining pandemic deaths in the US and represents a 64% drop in weekly deaths since Friday 1/29/21, i.e., a decrease in weekly deaths from 23,180 to 8,327 (source: NBC News).
Notable Numbers for the Week:
- MONEY THAT THEY WILL SPEND – 42% of the $1.9 trillion “American Rescue Plan Act of 2021,” i.e., $800 billion out of the $1.9 trillion, is direct support that will be distributed to households in the form of stimulus payments, unemployment benefits and child tax credits (source: American Rescue Plan Act).
- SAME NUMBER ABOVE AND BELOW – 50% of the 153.8 million Form 1040s that were filed for tax year 2018 (a total of 76.9 million returns) reported less than $40,000 of adjusted gross income (source: IRS).
- TEN YEARS APART – Banks repossessed just 1,428 homes nationwide in January 2021. Banks repossessed 78,133 homes nationwide in January 2011 (source: Attom Data Solutions).
- NOT GOING – 2.17 million freshmen started college in the fall of 2020, down 13% (327,513 fewer students) from the 2.50 million freshmen that began college in the fall of 2019 (source: National Student Clearinghouse).
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