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'Flation
There is a lot of talk in the world about the various "flations" - inflation, deflation, stagflation. Below are some charts illustrating various historical 'flation data trends.
Click to enlarge each chart.
Civilian Labor Force Participation Rate
US Capacity Utilization: Manufacturing
BDIY
US Capacity Utilization: Manufacturing
CPI-U All Items
Consumer Inflation - Official vs Shadow States
M2 Money Stock
Velocity of M2 Money Stock
Taxes
"I am not evading tax in any way, shape or form. Now of course I am minimizing my tax and if anybody in this country doesn’t minimize their tax they want their heads read because as a government I can tell you you’re not spending it that well that we should be donating extra."
Kerry Francis Bullmore Packer – 1991
With the government spending more money than it brings in – taxes are going to continue to be a plague against investors. In the chart below, the blue line shoes Federal tax spending as a % of GDP, the red line, Federal tax receipts as a % of GDP. These “alligator jaws” are wide and will need to narrow. This means increased fees and taxes for high-income earners and wealthy individuals.
However history shows that changing the top tax bracket rate does not greatly alter the amount of taxes as a % of GDP.
Making sure we have the proper structure and ownership of investments is going to be important going forward as the government is going to want more of everything we own. Here are some important tax numbers:
Top Marginal Rate – 39.6%
Single > $400,000
Married > $450,000
Medicare Tax Rate 1.45% increased to 2.35%
Single > $200,00
Married, > $250,000
Also subject to Medicare Surtax
Investment Income 3.8%
Click to enlarge each chart.
