skip to Main Content

October 2, 2017

Domestic stocks continue to advance.  The S&P 500, representing 78% of the total US stock market capitalization, finished September 2017 at its highest closing value ever.  The stock index is up +14.2% YTD (total return), the final piece of a +346% bull market advance that began 8 ½ years ago.  Equity investors would be thrilled with an “average” 4th quarter performance for stocks: the S&P 500 has averaged a +4.9% gain since 1992, posting a positive 4th quarter in 20 of the last 25 years (source: BTN Research).

The US economy grew by +3.1% in the 2nd quarter 2017, i.e., quarter-over-quarter growth rate expressed as an annualized result.  That’s the best 3-month performance for the USA since the 1st quarter of 2015.  America can boast of a $19.25 trillion economy, the largest in the world (source: Commerce Department).

The Trump White House released last Wednesday (9/27/17) the starting point for what could be major tax reform.  The proposal, titled a “Unified Framework for fixing our Broken Tax Code,” was only 9 pages long.  Among the numerous recommendations: the elimination of the individual deduction for state and local taxes, including property taxes.  Taxpayers in just 2 states (California and New York) utilize 33% of the deduction (by dollar) and just 6 states get 51% of the deduction’s use.  Nationwide, just under 92% of the economic benefit of the state and local tax deduction flows to taxpayers with gross incomes in excess of $100,000 (source: Internal Revenue Service).

 

Notable Numbers

NO DROPS – The S&P 500 has experienced 10 drops of at least 5% during its bull market run that will reach 103 months in length in just 1 week (10/09/17) but none since 2/11/16 or 19 ½ months ago (source: BTN Research).

A TRILLION A YEAR – The national debt as of 9/30/07 was $9.008 trillion.  The national debt as of Thursday 9/28/17 was $20.204 trillion.  Thus, the national debt has increased $11 trillion over the last 10 fiscal years, i.e., fiscal years 2008-2017 (source: Treasury Department).

TAX REFORM TARGET – 28% of individual tax returns that were filed for tax year 2014 took an itemized deduction for state and local taxes (Form 1040, Schedule A, line 5).  22% of individual tax returns that were filed for tax year 2014 took an itemized deduction for home mortgage interest expense (Form 1040, Schedule A, line 10).  22% of individual tax returns that were filed for tax year 2014 took an itemized deduction for charitable gifts made by cash or check (Form 1040, Schedule A, line 16).  There were 148.6 million tax returns filed for tax year 2014 (source: Internal Revenue Service).

GOT YOUR BACK JACK – Employers paid on average 70% of the annual cost of family coverage for health insurance in 2017, an economic benefit not taxed back to the employee (source: Kaiser Family Foundation).

brokerCheck-bar-logo
brokerCheck-bar-logo
Back To Top