Latest news with #OBBB
Forbes
19 minutes ago
- Business
- Forbes
Trump Policies Creating Tug Of War In Markets
In physics, force is an influence that causes an object to speed up, slow down or change direction. It is essentially a push or a pull resulting from the interaction between two objects, as described by Newton's laws of motion. Sometimes forces oppose one another, creating friction or resistance that holds back the movement of an object. This is apt when considering the impacts of the Trump administration's policy agenda, which has generated various opposing forces on economic growth this year. An initial tariff force pushed the S&P 500 Index 18.9% below its February peak in the aftermath of Liberation Day. However, different policy forces expected to positively influence economic and earnings growth in the months ahead helped to pull equities back to new all-time highs by late June. The first of these positive policy forces is the decline of an unfavorable one, with tariff rates coming down from their announced levels on Liberation Day and trade deals beginning to materialize with the U.K., China and Vietnam. Passage of the One Big Beautiful Bill Act (OBBB) has represented a second and larger positive policy force, along with a third in the form of renewed prospects of interest rate cuts from the Federal Reserve. Taken together, the positive forces should outweigh the negative, although the impact from the OBBB and any rate cuts remain future considerations while the tariff headwinds exist today. As a result, the economy could experience a soft patch in the interim, which may already be showing up in housing, business investment and consumption data. We do not believe this soft patch will metastasize into a recession given the coming positive policy forces, primarily from the passage of the OBBB on July 2. For signs of that soft patch, we are keeping an eye on initial jobless claims, which measures the number of first-time filers for unemployment benefits and thus provides a good reading on how many job losses may be occurring at any point in time. We place extra emphasis on this specific indicator due to its strong track record, high frequency (weekly release), and the fact that it typically sees only minor revisions, meaning the data can be largely taken at face value. However, initial jobless claims have followed an unusual seasonal pattern in recent years, with an early summer pickup followed by a drop as back-to-school hiring occurs. As a result, we are focusing on the non-seasonally adjusted initial claims data relative to the same week from prior years, which provides a better reading than the headline and seasonally adjusted figures in our view. Through this lens, the data looks less concerning, and we believe investors should look past the noise emanating from this typical summer swoon. The health of the labor market is likely to remain a key focal point in coming quarters as investors assess the health of the U.S. economy and the prospect for Fed rate cuts. However, the market may need to recalibrate its view regarding the 'normal' level of job growth. The pace of job creation has been slowing since the exit from the pandemic, with a monthly average of 216k in 2023, 168k in 2024 and 130k in the first half of 2025. Looking ahead, consensus expectations are for average monthly job growth of 74k in the second half of the year. A drop below 100k would have been viewed as a negative as recently as a few months ago, but headwinds from DOGE-related layoffs, an aging population and reduced immigration flow all suggest that job creation below 100k may become the 'new normal.' A slowing pace of job gains isn't atypical as an economic cycle matures, but at the same time it also doesn't mean that the cycle has ended. The combination of a soft patch and a maturing cycle could lead to renewed recession fears. This may be amplified by near-term volatility in economic data that is likely to result from the pull-forward and subsequent 'air pocket' in demand that have occurred around tariffs. The primary cause of the negative first-quarter GDP reading was a huge surge in imports as companies and individuals rushed to bring goods into the country ahead of Liberation Day. A rise in imports is a negative for GDP, and in the first quarter the contribution was an astounding -4.7% to overall economic growth. Looking ahead to the second-quarter GDP data that will come out July 30th, imports are likely to plummet as businesses and individuals work through the extra stock/inventory they brought in ahead of the increase in tariffs, which should boost measured GDP as the drag from imports declines. Alternative or 'core' GDP concepts such as Real Final Sales to Private Domestic Purchasers, which strips out volatile trade (imports and exports) and inventories, along with government spending, which is less relevant to equity markets, are likely to provide a better near-term reading on the underlying health of the U.S. economy. This measure has been running at 2.6% over the past two years and the first-quarter reading was consistent with the lower end of that trend at 1.9%. In the coming quarters, tariff distortions should give way to tailwinds from positive policy forces, namely the tax cuts included in the OBBB. The legislation is expected to generate a peak fiscal impulse of approximately 1% of GDP in 2026, on top of the extension of the 2017 Tax Cuts and Jobs Act tax cuts. Individual tax cuts should begin to be felt by early fall as withholding tables are adjusted for no taxes on overtime or tips, while the bulk of the impact will occur in the first half of 2026 when individuals complete their tax returns. However, corporate tax filing season actually occurs in the fall (September 15 corporate deadline) and many of the OBBB corporate tax provisions are retroactive to January 1, meaning the corporate tax impacts are likely to begin appearing this quarter. These include expensing for factories and a larger R&D credit, both of which should help spur economic growth. The OBBB is not cost free — the Congressional Budget Office (CBO) estimated that the initial version proposed by the Senate would add $3.3 trillion to the deficit over the next 10 years, leading to renewed fears about federal debt sustainability. While the final cost of the bill will be different, it appears unlikely to be less than the $2.8 trillion in revenue the CBO estimates tariff changes will bring in over the same period. Although the U.S. deficit is on an unsustainable path, we believe the outlook over a five-year investable horizon is manageable, meaning these concerns are likely to flare up but remain secondary in the coming years. Jeffrey Schulze, CFA, is Director, Head of Economic and Market Strategy at ClearBridge Investments, a subsidiary of Franklin Templeton. His predictions are not intended to be relied upon as a forecast of actual future events or performance or investment advice. Past performance is no guarantee of future returns. Neither ClearBridge Investments nor its information providers are responsible for any damages or losses arising from any use of this information.
Yahoo
4 hours ago
- Business
- Yahoo
Who Qualifies for the New Senior Tax Bonus — and How Much Could You Get?
The passage of President Donald Trump's One Big Beautiful Bill (OBBB) will directly affect many seniors' tax returns — offering a significant deduction that could leave more money in eligible retirees' pockets. But, like most tax breaks, it comes with specific qualifications and an expiration date. Find Out: Read Next: Here's what older Americans need to know about who qualifies, how much you might get and how to claim it. This new deduction is only available for a limited three-year window, starting with 2025 taxes and phasing out after the 2028 tax year. To qualify, be sure to meet these criteria: Age: You must be at least 65 years old. Income: Your modified adjusted gross income (MAGI) must be less than $175,000 if filing individually. Married couples filing jointly can both claim the deduction if both spouses are 65 or older and their combined MAGI is less than $250,000. Learn More: Eligible individuals can deduct up to $6,000, and married couples who both qualify can deduct up to $12,000. This deduction is in addition to the standard senior deduction most already qualify for — currently $1,600 for married couples and $2,000 for single filers who aren't surviving spouses. This deduction starts to phase out as income rises above certain levels: $75,000 for individuals $150,000 for joint filers For every dollar above those thresholds, your deduction decreases by 6%. Once your MAGI hits the full cap, the deduction disappears entirely. For example, if a single filer has a MAGI of $100,000, that's $25,000 over the threshold. Multiply that by 6% and you'll lose $1,500 of the deduction — bringing your benefit down to $4,500. This deduction doesn't force you to choose between itemizing or taking it. Eligible seniors can claim the full deduction even if they itemize. For example, if your itemized deductions total $30,000, you can add the $6,000 senior deduction to bring your total to $36,000 in write-offs. Start by calculating your combined income, which includes: Adjusted gross income (AGI) Tax-exempt interest income Half of your Social Security benefits It's important to note: The bill did not eliminate taxes on Social Security benefits, despite some expectations. Here's how that still works: Single filers with combined income between $25,000 and $34,000 pay tax on up to 50% of benefits. Joint filers between $32,000 and $44,000 face the same. Above those ranges, up to 85% of benefits may be taxable. Only filers below $25,000 (single) or $32,000 (joint) avoid taxation on Social Security. While not permanent, this new deduction delivers meaningful short-term tax relief for millions of seniors, especially those on fixed or limited incomes. If you're 65 or older in 2025, make sure you talk to your accountant before filing taxes. Even partial savings could help stretch your retirement dollars further in the years ahead. More From GOBankingRates Warren Buffett: 10 Things Poor People Waste Money On This article originally appeared on Who Qualifies for the New Senior Tax Bonus — and How Much Could You Get? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14 hours ago
- Business
- Yahoo
TD Cowen Downgrades TPI Composites (TPIC) to a ‘Hold' but Echoes High Production Volume
TPI Composites, Inc. (NASDAQ:TPIC) is one of the best green energy penny stocks to buy right now. On July 8, TD Cowen downgraded the stock to a 'Hold' from a 'Buy' and cut the price target to $1 from $2. The adjustment comes amid concerns about mounting policy risks and capital structure. A close-up of renewable energy turbines capturing the power of a windy sky. The research firm is wary that the Offshore Backup Bipartisan Budget (OBBB) will have a significant impact on TPI Composite operations. That's because the legislation will do away with product tax credits after 2027, which could trigger a substantial dip in demand for the company's wind blades. Nevertheless, the research firm is bullish on the company securing production volumes through 2025. The new orders are expected to provide some form of stability for the business. TPI Composites, Inc. (NASDAQ:TPIC) designs, manufactures, and supplies composite wind blades for the wind energy market. It is the largest independent manufacturer of composite wind blades globally. While we acknowledge the potential of TPIC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Most Popular AI Penny Stocks to Buy According to Billionaires and 10 Best Defensive Stocks to Buy in a Volatile Market. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Newsweek
21 hours ago
- Business
- Newsweek
Trump's Big Beautiful Bill Could Sting Seasonal Workforce, Experts Warn
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The Trump administration is set to introduce new fees for visa applicants coming to the United States, including seasonal workers, prompting fears that beach towns and resorts could lose out. Under President Donald Trump's One Big Beautiful Bill Act (OBBB), a new $250 Visa Integrity Fee will be charged, starting next year. While reportedly refundable, organizations that support temporary workers and cultural exchange visitors from Latin American and Asian countries are warning that cost could be enough to prevent temporary immigrants from applying for J-1 and other temporary visas. "Even a 10 or 20 percent reduction in program participation would have a significant impact on the seasonal hospitality industry across the country," Kasey Simon, president and responsible officer of United Work and Travel, which works as a J visa program sponsor, told Newsweek. "We're talking hotel housekeepers, student workers inside of a restaurant, lifeguards, amusements. Everything would be affected." Newsweek reached out to the Department of Homeland Security (DHS) and State Department for comment via email and contact form Tuesday morning. Why It Matters While the Trump administration has been clear that it wants to increase immigration security by tightening checks, experts have warned that increasing fees will put off legal visitors and workers, while also making it harder for immigrants in the U.S. already to navigate the legal system. Travelers hand documents to airline staff at Miami International Airport during Memorial Day weekend on May 24. Travelers hand documents to airline staff at Miami International Airport during Memorial Day weekend on May 24. GIORGIO VIERA/AFP via Getty Images What To Know Upward of 300,000 people come to the U.S. each year on J-1 visas to work in a variety of roles like au pairs, camp counselors and medical staff, as well as those working summer jobs at resorts, in beach towns and at tourism hotspots. As of this month, the cost of applying for a J-1 visa is $185, per the State Department, and United Work and Travel is concerned that additional fees will place a heavy burden on low-income workers seeking a U.S. visa. According to Simon, for two of the main countries his organization works with—Jamaica and the Dominican Republic—the extra fees would likely be the equivalent of a monthly wage for some applicants. Those who take temporary jobs under the program—from hotel cleaning roles to camp counselors—often cover jobs Americans cannot, Simon noted, because they are available for longer periods of time. For example, they can arrive just before summer peak and work through Labor Day. What Is the Visa Integrity Fee? The Visa Integrity Fee was introduced in the OBBB as part of wider immigration changes that released extra funding for U.S. Immigration and Customs Enforcement (ICE) and added new fees to specific visa and immigration benefits. "In general -- In addition to any other fee authorized by law, the Secretary of Homeland Security shall require the payment of a fee, equal to the amount specified in this subsection, by any alien issued a nonimmigrant visa at the time of such issuance," the bill reads. The fee is set at $250 for the first year, and it would be refunded to each applicant as long as they leave the U.S. once the visa term expires, and they do not seek unauthorized work. If an individual opts to stay in the country and apply for a longer-term visa or green card, it is unlikely the fee will be reimbursed. Tourists take photos of the Statue of Liberty aboard a ferry to Liberty Island in New York City on February 13, 2023. Tourists take photos of the Statue of Liberty aboard a ferry to Liberty Island in New York City on February 13, 2023. Getty Images Will ESTA Be Affected? It does not appear that tourists eligible for the Visa Waiver Program, or Electronic System for Travel Authorization (ESTA), will need to pay the additional fee, but the cost is rising from $21 to $40. The U.S. Travel Association warned that even this increase could hurt tourism numbers. What People Are Saying Simon, in his interview with Newsweek: "There are some positives here. It does encourage compliance and lawful conduct for participants ... and it does help to fund the U.S. immigration system and process, and we all want that as well." U.S. Travel Association President and CEO Geoff Freeman, in a statement early this month: "Raising fees on lawful international visitors amounts to a self-imposed tariff on one of our nation's largest exports: international travel spending. These fees are not reinvested in improving the travel experience and do nothing but discourage visitation at a time when foreign travelers are already concerned about the welcome experience and high prices." The House Judiciary Committee, in a May press release: "President Trump and House Republicans are committed to restoring immigration integrity and enhancing national security. The Judiciary Committee's reconciliation provisions, which passed out of our committee, deliver critical resources to advance both priorities." What's Next United Work and Travel is looking for clarification and reassurance from the Trump administration on how the new fee will be implemented, including the refund policy. Check out Newsweek's live blogs for the latest immigration updates.
Miami Herald
a day ago
- Business
- Miami Herald
What you need to know about Trump's 'One Big, Beautiful Bill'
What you need to know about Trump's "One Big, Beautiful Bill" Ever since the first Trump Administration passed the Tax Cuts and Jobs Act (TCJA) in 2017, with most of its provisions expiring on December 31, 2025, observers have speculated about what would happen next. That question was finally answered on July 4, 2025, when President Trump signed the "One Big, Beautiful Bill (OBBB)" into law. His signature legislation makes the 2017 tax cuts permanent, along with several other important provisions. At 870 pages, the OBBB also contains a long list of additional changes that will affect taxpayers for years to come. Wealth Enhancement has broken down the list into some key highlights. Here's what to know about the new tax law. Estate and gift tax exemptions The TCJA doubled the lifetime gift and estate tax exemption, meaning that far fewer families would be subject to federal estate taxes. The expiration of the TCJA would have meant that many more people would face federal estate tax liabilities, but the new law has made the higher exemption amounts permanent. The OBBB increases the lifetime gift and estate tax exemption to $15 million per person ($30 million per married couple) starting in 2026. This will be indexed for inflation annually. This allows families a more long-term approach to wealth transfers without the uncertainty of potential tax increases from expiring tax provisions. People will have greater flexibility in deciding whether to gift during their lifetime or wait until death for the "step-up" in cost basis on assets. Tax cuts made permanent One of the top headlines of the OBBB is the fact that it permanently enacted the tax cuts that were enacted during the previous Trump administration. Federal income tax brackets will remain unchanged at 10%, 12%, 22%, 24%, 32%, 35%, 37%, indexed for inflation. This is a key point for taxpayers across income levels, particularly high-income earners. Without this change, tax brackets were previously scheduled to revert to 2017 levels, adjusted for inflation. This would have resulted in higher taxes for many people. The OBBB did not adjust the corporate tax rate, which was reduced from 35% to 21% when the TCJA was enacted. In addition, the TCJA created a new temporary provision called the Qualified Business Income Deduction (QBI). This 20% deduction was designed to help small business owners who were unable to benefit from the reduced corporate tax rate. Under the OBBB, the 20% QBI deduction for qualified business income (§199A) will remain unchanged and become permanent, along with an extended phaseout range. This will allow more people to qualify for this deduction. Standard deduction The OBBB slightly enhances and permanentizes the increased standard deduction amounts enacted under the TCJA. For 2025, the standard deduction is now $15,750 for individuals and $31,500 for married couples who file jointly. The law also creates an additional "Senior Bonus Deduction" of $6,000 for taxpayers ages 65+, effective in 2025. This provision is temporary and subject to phaseout, but while in effect, it has the potential to create a significant tax planning opportunity for seniors, whether they are utilizing the standard deduction or itemizing their deductions. Itemized deductions Under the OBBB, the standard deduction will receive a temporary enhancement from TCJA levels in 2025. For those itemizing their deductions, state and local taxes (or SALT) were capped at $10,000 under the TCJA. This cap in turn created the Pass Through Entity Tax (PTET) loophole, whereby state and local taxes are paid at the entity levels and passed down to shareholders in the form of a deduction that is not subject to the SALT cap. The OBBB will also increase the SALT cap to $40,000 (subject to phase out) starting in 2025, while keeping the PTET loophole in place. The SALT cap will likely increase the number of taxpayers taking the itemized deduction, especially in states with higher tax rates, such as New York, New Jersey, and California. In addition, the TCJA temporarily capped mortgage acquisition debt at $750,000 and temporarily eliminated miscellaneous itemized deductions. These changes were made permanent by the OBBB. New "above the line" deductions The new tax law is designed to create benefits for taxpayers who receive tips and overtime pay. It allows deductions for qualified tips and qualified overtime compensation. These measures are temporary and subject to phaseouts and caps. These changes could provide significant tax savings for service and hourly employees. However, it's important to note that Social Security and Medicare still apply, so earnings are not entirely tax-free. There is also a new tax deduction of up to $10,000 for car loan interest on new cars assembled in the United States. This deduction is subject to a cap. For taxpayers who make charitable cash donations, there will be a deduction available for non-itemizing taxpayers up to $1,000 (single) or $2,000 (married filing jointly) starting in 2026. Clean energy credits People who are interested in investing in energy efficiency updates for their homes or buying "clean" vehicles need to be aware that green energy tax credits previously scheduled to expire in 2032 will now expire within a year. Clean vehicle credits will now expire on September 30, 2025, while energy-efficient home improvement credits and residential clean energy credits will expire on December 31, 2025. Depreciation The OBBB restores 100% bonus depreciation for property placed in service from January 19, 2025. This is now permanent. Under Section 179, starting in 2026, the maximum deduction amount will increase to $2.5 million (with a phase-out threshold at $4 million). Our tax specialists recommend these strategies: Strategic timing of asset purchases Immediate expensing of qualified propertyMaximize deductions to significantly lower taxable income and tax liabilityConsider combining bonus depreciation and Section 179 for optimized tax benefits Real estate focus: Consider a cost segregation study to help make the most of bonus depreciation by reclassifying assets into eligible categories. Opportunity Zones The new tax law includes changes to Opportunity Zone (OZ) investments. These investment opportunities were created as part of the TCJA as a way for investors to invest in underserved communities in exchange for tax benefits. The new law accelerates the expiration of the current OZs to December 31, 2026 (two years early). It creates a new round of permanent, rolling 10-year designated zones starting in 2027. This strategy offers a 10% step-up in basis for investments held for at least five years. This increases to 30% for qualified rural OZs. For investors who are already invested in Qualified Opportunity Zones, any eligible capital gains invested before January 1, 2027, would be subject to the existing law and, as such, subject to gain inclusion on December 31, 2026. For investors who are considering QOZ investments in the future, these changes and enhancements are a positive sign. Other notable provisions Trump accounts: Tax-preferred savings account for children will provide an initial $1,000 federal subsidy per child born 2024-2028. Health savings accounts: The House proposed major changes in its initial bill, but the Senate did not include these in the final version. Personal exemptions: These have been suspended permanently. Alternative minimum tax: Increased exemption and phaseout thresholds have been made permanent. 529 plans: These educational savings accounts have been expanded to include home schooling and post-secondary credentials (including Certified Public Accountant or Certified Financial Planner). Child tax credit: Slight enhancement ($2,200); this is now permanent. 1099 MISC/NEC reporting requirements: Increased threshold to $2,000. This story was produced by Wealth Enhancement and reviewed and distributed by Stacker. © Stacker Media, LLC.
