The midterm elections are currently dominated by two incompatible assumptions. Democrats think Trump’s low approval rating and the rash of Republican congressional retirements will lead to a big string of victories for their party. Republicans hope that growing economic confidence, underpinned by the White House’s policies, will win out. The big X-factor is now the stock market, which has been gutted over the last few days, a fact which could rattle the economic confidence of Americans. Democrats need 24 seats in the House to take back a majority. Many suspect they will win 30.
FINSUM: Trump and the Republican party are up against history (the party of the President typically does poorly in midterms), and now possibly the markets and economy.
This week’s news has been rife with articles on President Trump and his apparent push to try to firm special counsel Mueller over the summer. Now Bloomberg has put out an article commenting on the implication of such an effort (if it is true). In a balanced view, Bloomberg says that such behavior, even if true, would not add to any obstruction of justice case against Trump, and that any problems it would cause would be on the political side, not the legal one.
FINSUM: To be honest, we are perplexed by the firestorm over this. Trump did not have Mueller fired. Simply looking into it, even if true, doesn’t seem to constitute anything.
There is no doubt about it, the midterm elections of this year are going to be an enormous challenge for the Republican party. As the election in Alabama last month showed, the tide has swung politically, and many Republicans looking at reelection are facing tough campaigns or have resigned rather than run and lose. Examples of the challenge abound, such as Republican congressman Frelinghuysen from New Jersey, who is facing his first real test in 23 years. History also doesn’t suggest a favorable result, as the midterm election often acts as a referendum on the White House. Democrats got beaten in the midterms after both Clinton and Obama’s elections.
FINSUM: With Trump’s approval rating quite low, it does seem like a lot of the public might retaliate against the party by voting against their GOP congressional candidates.
The new tax plan goes into effect in 2018, which means there is very little time to take the steps necessary to minimize clients’ tax bills for next year. This is the last month where taxpayers can deduct more than $10k in state and local taxes, so it is wise to file before the end of this month a fourth quarter estimated tax payment. Tax loss harvesting may also be difficult because the market did so well this year, so better to get it done soon. Getting more charity donations done before the end of the year would be wise too, says Barron’s. Here is a link to the article with all the advice: https://www.barrons.com/articles/what-wealthy-americans-should-do-to-prepare-for-upcoming-tax-changes-1513809349?mod=hp_penta&
FINSUM: Good piece, and important to pay attention to right now given how little time there is.
After almost a year of effort, Trump and the Republican party finally have a major legislative victory to celebrate. While the tax cuts are quite contentious among the public, they are now set to be official and only await President Trump’s signature to become law. The major cut to corporate taxes was widely applauded as a way of keeping US industry competitive versus other developed donations, but the cuts to personal income and the benefits to wealthy Americans are not well-regarded.
FINSUM: We think the corporate tax cut was a fantastic idea and will replace a horribly dysfunctional US corporate tax policy. On the individual cuts, they will certainly benefit all Americans, but to varying degrees. Given how the economy is doing (well), it does seem unnecessary to give such extensive cuts to the very wealthiest (especially without closing the carried interest loophole). But then again, democracy is a give and take game.