2019年8月20日
The Trump administration is considering a tax cut for millions of workers to boost the economy
Several Trump administration officials are weighing whether to propose a temporary payroll tax cut to inject more consumer cash into a weakening economy. Tens of millions of working Americans pay the 6.2% tax, which the federal government levies on wages to fund Social Security, Medicare, and other social insurance programs. Seventy-seven per cent of tax filers in the US are projected to pay some amount of payroll tax in 2019.
During the 2018 fiscal year, the federal payroll tax generated $US1.17 trillion, or around 6 per cent of the nation’s gross domestic product, according to the Center on Budget and Policy Priorities. Lower-income Americans pay more of their incomes in payroll taxes, given its a regressive tax. White House discussions to possibly press for a payroll tax cut comes as fears of a recession mount within Trump’s inner circle of aides, and as they pursue ways to salvage confidence in the economy.
The payroll tax cut was last temporarily reduced to 4.2% in 2011 and 2012, and the Obama administration allowed it to reset back up in 2013.
Bitcoin has become an unlikely safe haven as global turmoil has rocked markets
As escalating trade tensions between the US and China have whipsawed markets and stoked fears of an economic recession, some investors are seeing cryptocurrencies in a new light. Bitcoin in particular has become more appealing to investors because it’s not directly exposed to the political forces underlying market turbulence.
That insulated nature helped bitcoin reach recent multi-month highs as trade-war turmoil sparked a vicious global equity sell-off. To that end, bitcoin is not subject to the same forces as normal currency. This is why people who feel less trust towards the government see it as an alternative.
“It’s helpful that it’s volatile in a way that’s not connected to other assets,” said Evan Kuo, CEO of Ampleforth, a digital asset protocol said. “There’s been almost 10 years of data to suggest that the coin has almost no risk exposure to precious metals, commodities, equities, currencies, and so on.” In Venezuela and Argentina, two countries where political tensions have led to inflation and poor economic conditions, bitcoin trading has picked up.
Even though US markets have been up and down as of late, he is still very bullish on equities for the next five to 10 years, he said. The best strategy, then, is to “hold, wait it out and have the long term view of the markets and the economy,” he said. “It’s an exceedingly good time to buy into equities today if interest rates are low for the long term.”
Stagnant wage growth is forcing record number of Aussies into the workforce
The Australian Bureau of Statistics (ABS) noted last week that the proportion of Aussies working or looking to work — the participation rate — had never been higher. “Over the previous year, there had been a particularly notable increase in the participation rates of women aged between 25 and 54 years and workers aged 65 years and over.”
“Some of the factors that could be contributing to these trends, including slow income growth, improvements in health and greater flexibility in the labour market,” the RBA said. With inflation having long-outpaced wages, it’s no secret that households are increasingly struggling from the rising cost of living.
As the health of the general population improves, they’re more capable than ever of holding down a job past 65 years of age. The other big one is that workplaces are increasingly aware of the need to be flexible, helping more Australians juggle family and work commitments.
That’s why despite the economy adding a surprise 41,000 jobs in July, the unemployment rate won’t budge from 5.2%.You look at that forecast and you have to wonder just how much the Reserve Bank’s going to have to do in order to really push the economy where it needs to go. It needs to get wages growth up to and above 3%. It need to get inflation back to 2.5% and certainly, another two rate cuts doesn’t appear as though it’s going to be enough to do that.
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