Congress passed the Bipartisan Infrastructure Deal (Infrastructure Investment and Jobs Act) on November 6th. This $1.2 trillion package is one of the largest ever passed, and it represented a key economic milestone for The Biden Administration.
According to the White House, the bill will “rebuild America’s roads, bridges, and rails, expand access to clean drinking water, ensure every American has access to high-speed internet, tackle the climate crisis, advance environmental justice, and invest in communities that have too often been left behind.”
Some of the highlights in the package include $550 billion worth of federal investments in the American infrastructure over the next five years which broadly covers traditional avenues such as roads and bridges while also highlighting digital infrastructures such as broadband and fiber cables.
Other stipulations in the bill touch on taxes, cryptocurrency, and access to the internet for all Americans.
So What About The Tax Implications?
While most economic impacts from the package are indirect, many analysts believe that there could be higher tax implications down the road to maintain the planned spending since there are no new taxes tied to it as written, but there are a few things we know for sure.
There are still parts of the tax plan that have not received Congressional approval in the Build Back Better plan which would be partially paid for with higher taxes. The three biggest drivers would be a minimum corporate tax rate of 15%, a 1% tax on stock buybacks, and a 5% tax on income over $10 million. All of these changes have yet to pass, but there will likely be tax implications in the BBB plan.
Give Better: How to Optimize Your Charitable Contributions Through the Rest of the Year
Donating to charity is a noble and impactful way to leave a legacy and support causes you believe in. You can make the most of your donations by implementing a tax-advantaged approach which can enable you to deduct more from your income and increase your contributions simultaneously. A few tax strategies to implement through the rest of the year include:
- Donating appreciated non-cash assets – If you donate appreciated assets like stocks, you may be able to eliminate or significantly reduce capital gains tax.
- Donate retirement assets – Roth conversions, qualified charitable distributions (QCDs), and charitable deductions can all become effective tax credits for eligible investors.
- Utilize a donor-advised fund (DAF) – Investors who fund a DAF can realize an immediate tax benefit of up to 100% of their donation.
Exchange-Traded Electricity – The Rise of EV Investing
The transportation industry is in the midst of its largest revolution since the internal combustion engine was introduced. Investors are taking the electric vehicle (EV) boom in stride, and there are now many funds and ETFs dedicated to EV investment. Although many of the ETFs in the electric vehicle market are relatively new, most prominent automotive manufacturers such as Ford and GM have all pledged to electrify their fleets over the next decade.
Commercial truck manufacturers are also investing in EV technology for their manufacturing goals, with Renault, Daimler, and Volvo working to electrify their trucks. Billions of dollars are estimated to shift into the EV space, and ETFs such as the iShares Self-Driving EV and Tech ETF (IDRV) and KraneShares Electric Vehicles and Future Mobility Index ETF (KARS) are taking the first steps to enable retail and index investors to diversify their portfolios so they can capitalize on the shifting automotive market.
Jerome Powell Re-elected to Serve as Fed Chair – Can You Teach an Old Dog New Tricks?
President Biden reappointed Jerome Powell to helm the Federal Reserve and tackle macroeconomic issues ranging from inflation to continued pandemic relief. The next item on Powell’s agenda was to launch an innovation hub alongside the New York Federal Reserve, which seeks to improve banking access and future-proof the current banking system.
Powell is well known for his quantitative easing measures implemented during 2020 to stimulate the economy, but his next term is shaping up to look drastically different. The Fed will be partnering with the Bank for International Settlements (BIS), and he believes “In particular, the partnership will support our analysis of digital currencies—including central bank digital currencies.
Many analysts wonder if the United States will adopt a digital currency. The Fed is researching sustainable digital assets and the numerous policy changes that would surely follow any mass acceptance of digital currency.
Jack Dorsey Steps Down as Twitter’s CEO Replaced by Parag Agrawal
Jack Dorsey stepped down as the CEO of social media giant Twitter and was replaced by Parag Agrawal, the former CTO. A unanimous board decision approved Agrawal’s succession. Although Dorsey’s resignation seemed sudden, he stated, “I want you all to know that this was my decision and I own it.”
Dorsey will focus the rest of his time leading his payment processing company, Square. He decided based on his belief that a company does not need to be founder-led for it to be successful. When CNBC broke the news, the company’s stock rose 10% in pre-market trading which is a positive indicator that investors are comfortable with the transition.
…(link)
Articles We’re Reading
How the global chip shortage is boosting US manufacturing … (link)
European stocks close higher as fears ease over omicron Covid variant…(link)
These year-end tax moves may help you save, regardless of what happens in Congress… (link)
Calculating retirement income needs is important, and understanding the math can help… (link)
Market Snapshot
For the Month Ending 11/30/2021 (Cumulative Returns)1
1Source – Morningstar, Inc. Corporate Bonds is presented as the iShares iBoxx $ Investment Grade Corporate Bond ETF. Municipal Bonds is presented as the iShares National Municipal Bond ETF. High Yield Bonds is presented as the iShares iBoxx $ High Yield Corporate Bond ETF. 10 Year Treasury refers to the valuation of a 10 Year Treasury Note, a debt obligation issued by the U.S. Department of the Treasury. Fed Funds Target represents upper limit of the federal funds target range established by the Federal Open Market Committee. Inflation Rate provided for the purposes of this report by the U.S. Bureau of Labor Statistics. Unemployment Rate calculated by the U.S. Bureau of Labor Statistics. WTI Crude Oil refers to the price of a barrel of West Texas Intermediate NYMEX) Crude Oil. Gold – Spot Price relates to the valuation of an ounce of gold, as traded on the NYSE Arca Exchange. U.S. Dollar refers to the U.S. Dollar Index (DXY). All Returns are denominated in USD (United States Dollar), unless otherwise explicitly noted.
Did You Know?
America is the only country that refers to the Autumnal season as Fall. Researchers identified the earliest name for the season as Harvest which later evolved into Autumn sometime in the 1300s.
So where did fall come from?
Poetry!
English poets often added the phrase “fall of leaves” into their prose, and the name stuck. However, England switched back to Autumn during the 1800s as American and British English continued to diverge.
Presented by the Investment Committee of Lake Street, an SEC Registered Investment Adviser
The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This report is not intended to be a client-specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. Diversification does not ensure a profit or guarantee against a loss. There is no assurance that any investment strategy will be successful. Investing involves risk and you may incur a profit or a loss.
