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May Week 4 Up Big
Week four of May was quite the reversal from week three, with independent retailers reporting their same store sales were up 5.07 percent compared to the same period in 2015. Despite the big bump in the last week of sales, May concluded down overall. May 2016 sales were down 0.9 percent compared to last year.
The Bureau of Labor Statistics released its May unemployment report last week and the results were some of the most discouraging as we’ve seen in years. Employers added just 38,000 jobs during the month. Even if you ignored a strike by Verizon workers, who took 40,000 away from the total, job gains would still be under 80,000 for the month. These workers returned to work in early June and will be included in this month’s gains.
There wasn’t much comfort in the reduction in the unemployment rate to 4.7 percent, as this was mainly due to a sharp decrease in the size of the labor force. While one bad month for jobs isn’t necessarily a sign of a larger trend, it’s concerning when the news is as poor as we’ve seen since 2010, when we were still climbing out of a steep recession. We’ll look to June to reverse course.
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| Same Store Sales
% Change from last year
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| Same Store Sales – Previous Months
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BGBC Partners, LLP Tax Update
Presidential Candidates’ Tax Plans (Part II) In last week’s Tax Update, we examined Hillary Clinton’s tax proposals. This week we will look at Donald Trump’s.
Let’s start with Individual Tax Matters. Donald Trump proposes the following:
Tax rates would be:- 0% for single filers earning up to $25,000, married filers earning up to $50,000, and heads of household earning up to $37,500
- 10% for single filers earning $25,001 to $50,000, married filers earning $50,001 to $100,000, and heads of household earning $37,501 to $75,000
- 20% for single earners earning $50,001 to $150,000, married filers earning $100,001 to $300,000, and heads of household earning $75,001 to $225,000; an
- 25% for single filers earning $150,000 and up, married filers earning $300,001 and up, and heads of household earning $225,001 and up.
The long-term capital gains and dividends rates would be:
· 0% for taxpayers in the 0% and 10% income tax rate brackets;
· 15% for taxpayers in the 15% income tax rate bracket; and
· 20% for taxpayers in the 25% income tax rate bracket
According to Mr. Trump's website, with these reductions in rates, "many of the current exemptions and deductions will become unnecessary or redundant." His plan also calls for "steepening the curve" of the "PEP" and "Pease" limitations. Taxpayers in the 10% brackets will keep "all or most" of their current deductions, those in the 20% bracket will keep "more than half" of their current deductions, and those in the 25% bracket will keep "fewer" deductions. Two of the most popular deductions, charitable giving and mortgage interest deductions, will remain unchanged for everyone. Mr. Trump would also allow individuals to fully deduct health insurance premium payments.
As far as Business Tax Matters, the Trump proposals include:
Mr. Trump's tax plan would cut the corporate tax rate to 15% and also create a new "business income tax rate" within the "personal tax code" (i.e., because pass-through entities are subject to taxation under individual rates) that would match the 15% corporate tax rate for pass-through businesses and freelancers. Other business tax reforms include- Reducing or eliminating deductions and loopholes serving special interests
- Providing a one-time deemed repatriation of corporate cash held overseas at a 10% rate.
- Ending deferral of taxes on corporate income earned abroad
- Reducing or eliminating corporate loopholes that "cater to special interests," as well as "deductions made unnecessary or redundant" by the new lower rates, and phasing in a "reasonable cap" on the deductibility of business interest expenses.
Regarding Estate Tax Matters, Mr. Trump would modify the estate and gift tax system by: Mr. Trump's tax plan would eliminate the estate tax Other tax reform proposals of Mr. Trump include- Ending the current tax treatment of carried interest. A carried interest is the structure whereby an investment fund manager obtains capital gain treatment for their services; some believe this should be ordinary income.
- Repealing the Affordable Care Act.
I’m sure we’ll be hearing more from the candidates as we move through the conventions and closer to the November election, but hopefully this provides you with a sufficient overview as you weigh the candidates and their policies.
BGBC Partners, LLP is a full service certified public accounting and business consulting practice.
For more information, contact Brad Bell, CPA or Steve Reed, CPA/ABV/CFF at BGBC Partners, LLP (317-633-4700).
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| For More Information,
Contact Mark Ehleben
877-435-9400 x1402
marke@fmssolutions.com
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