STATE OF ECONOMY AND TAXES
State of Economy and Taxes. This was the headline in President Trump’s recent State of the union speech. While the economy was the centerpiece of the speech, he also touched upon the Tax Cuts and Jobs Act, and its impact on the economy. While his administration has often been mired in controversy on other issues the country’s economic gains last year give the White House something to crow about–and campaign on heading into next year’s presidential election. At the same time, Mr. Trump has also taken economic policy in unorthodox– and sometimes unpredictable–directions as he has in challenging China and even longstanding American allies on trade. Here are some key measures of the economy’s performance. State of economy and taxes.
The economy grew at the fastest rate in 13 years. GDP growth for 2018 is estimated to be hear 3 percent–the target that the president’s economic team has set as a benchmark for success. While the government is still finalizing estimates for economic growth last year, most economists, as well as the Federal Reserve, project it at roughly 3 percent–that would be the fastest rate since 2005. Most experts also think that economic growth peaked in late 2018 and is now slowing to a moderate, though still respectable pace. GDP is an important gauge of economic growth, but for individuals it tends to matter a lot less than whether they can find gainful employment. So how is the labor market doing ?
Job creation has been strong by any metric. Employers added 2.4 million jobs in 2018, the strongest pace for hiring since 2015. The unemployment rates for African-Americans and Latinos while near record lows, rose slightly in recent months to 7.1 percent and 4.9 percent respectively. The black unemployment rate is double the rate for white Americans. The last time unemployment was below 4 percent, as it is now, was in 2000. Still, the labor market isn’t perfect. Nearly 40 percent of the adult population isn’t working-that’s much higher than it’s been in previous expansions.
A better measurement of the Trump Tax Cuts and Jobs Act would be the long term impact on the debt, and how it all unwound due to the mismanagement of the Covid crisis. After the economy tanked, millions who had gained employment then lost those jobs. The net was a negative jobs performance under the Trump years. Many Americans now have record debt, including tax debts. They would be wise to contact a Tax Resolution Company and inquire about the IRS Fresh Start Program. They should ask about every option for Tax Relief in the IRS code, not just in the Fresh Start Program, which doesn’t offer every option. A good Tax Professional can do that.