Week 11 – 17 Dec 2017

watch Nightly Business Report Monday Tuesday Wednesday Thursday Friday 27 min.
watch Best of Bloomberg Technology 48 min. watch Bloomberg: Tax Bill

Status of Republican Tax Bill Bloomberg Reuters

Fiscal Impact

Estimated to add about $1.5 trillion to the national debt over the next decade, or roughly $1 trillion after accounting for economic growth.

INDIVIDUAL TAX

Individual Tax Rates (Note: Individual rate cuts would expire after 2025.)

  • Current law: Seven rates, starting at 10% and reaching 39.6% for incomes above $418,401 for singles and $470,701 for married, joint filers.
  • Proposed: Seven rates, starting at 10% and reaching 37% for incomes above $500,000 for singles and $600,000 for married, joint filers.
Tax Rate Joint Filers Single Filers
10% $0 to $19,050 $0 to $9,525
12% $19,050 to $77,400 $9,525 to $38,700
22% $77,400 to $165,000 $38,700 to $82,500
24% $165,000 to $315,000 $82,500 to $157,500
32% $315,000 to $400,000 $157,500 to $200,000
35% $400,000 to $600,000 $200,000 to $500,000
37% $600,000 and above $500,000 and above

Individual Alternative Minimum Tax

  • Current law: Individual AMT can apply after exemption level of $54,300 for singles and $84,500 for married, joint filers, and the exemptions phase out at higher incomes.
  • Proposed: Increase the exemption to $70,300 for singles and $109,400 for joint filers. Increase the phase-out threshold to $500,000 for singles and $1 million for joint filers. The higher limits would expire on 1 Jan 2026.

Standard Deduction and Personal Exemptions

  • Current law: $6,350 standard deduction for single taxpayers and $12,700 for married couples, filing jointly. Personal exemptions of $4,050 allowed for each family member.
  • Proposed: For 8 years beginning in 2018, the standard deduction increases to $12,700 from $6,350 for individuals and to $24,000 from $12,000 for married couples under the legislation. The personal exemption of $4,050 is repealed.

Pass-Through Deduction

  • Current law: Pass-through businesses, which include partnerships, limited liability companies, S corporations and sole proprietorships, pass their income to their owners, who pay tax at their individual rates.
  • Proposed: Owners could apply a 20% deduction to their business income, subject to limits that would begin at $315,000 for married couples of qualified business income for joint filers (or half that for single taxpayers) of pass-through businesses such as partnerships and sole proprietorships. For income above that threshold, the legislation phases in limits that produce an effective marginal tax rate of no more than 29.6%.

Individual State and Local Tax Deductions

  • Current law: Individuals can deduct the state and local taxes they pay, but the value is subject to certain limits for high earners.
  • Proposed: Individuals can deduct no more than $10,000 worth of the deductions, which could include a combination of property taxes and either sales or income taxes.

Mortgage Interest Deduction

  • Current law: Deductible mortgage interest is capped at loans of $1 million.
  • Proposed: For residences bought from 1 Jan 2018, through 25 Dec 2025, the deduction for mortgage interest is capped at $750,000 in home loan value. After 31 Dec 2025, the cap will revert to $1 million in loan value. The deduction for interest on home equity loans is suspended.

Medical Expense Deduction

  • Current law: Qualified medical expenses that exceed 10% of the taxpayer’s adjusted gross income (AGI) are deductible.
  • Proposed: Reduce the threshold to 7.5% of AGI for 2017 and 2018.

Obamacare Individual Mandate

  • Current law: An individual who fails to buy health insurance must pay penalties of $695 (higher for families) or 2.5% of their household income — whichever is higher, but capped at the national average cost of the most basic, low-premium, high-deductible plan.
  • Proposed: Repeal the penalties.

Child Tax Credit

  • Current law: A $1,000 credit for each child under 17. The credit begins phasing out for couples earning more than $110,000. The credit is at least partially refundable to qualified taxpayers who earned more than $3,000.
  • Proposed: Double the credit to $2,000 and provide it for each child under 18 through 2024. Raise the phase-out amount to $500,000, and cap the refundable portion at $1,400 in 2018.

Estate Tax

  • Current law: Applies a 40% levy on estates worth more than $5.49 million for individuals and $10.98 million for couples.
  • Proposed: Double the thresholds so the levy applies to fewer estates. The higher thresholds would sunset in 2026. Indexes the new exemption level for inflation after 2011.

CORPORATE TAX

Corporate Tax Rate

  • Current law: 35%
  • Proposed: 21%, beginning 1 Jan 2018.

Corporate Alternative Minimum Tax

  • Current law: Applies a 20% rate as part of a parallel tax system that limits tax benefits to ensure that profitable corporations pay at least some tax. Companies must calculate their ordinary tax and alternative minimum tax (AMT), and pay whichever is higher.
  • Proposed: Repealed.

Territorial System

  • Exempts U.S. corporations from U.S. taxes on most of their future foreign profits, ending the present worldwide system of taxing profits of all U.S.-based businesses, no matter where the profits are earned.

Repatriation

  • Current law: The U.S. taxes multinationals on their global earnings at the corporate rate of 35%, but allows them to defer taxes on those foreign earnings until they bring them back to the U.S., or “repatriate” them.
  • Proposed: U.S. companies’ overseas income held as cash would be subject to a 15.5% rate, while non-cash holdings would face an 8% rate.

Expensing Equipment

  • Current law: Businesses must take depreciation, spreading the recognition of their equipment costs for tax purposes over several years.
  • Proposed: Businesses could fully and immediately deduct the cost of certain equipment purchased after 27 Sep 2017 and before 1 Jan 2023 (Year 5). Then the 100% deduction is gradually eliminated over a 3-year period beginning in Year 6.

Clean Energy

  • Leaves in place tax credits for producing electricity from wind, biomass, geothermal, solar, municipal waste and hydropower.

Carried Interest

  • Largely leaves in place the “carried interest” loophole that benefits private equity fund managers and some hedge fund managers, despite pledges by Republicans including Trump to close it. These financiers can now claim a lower capital gains rate on much of their income from investments held more than a year. The new legislation would extend that holding period to three years, putting the loophole out of reach for some fund managers, but preserving its availability for many.

OTHER

Arctic National Wildlife Refuge: Allows oil drilling in Alaska’s Arctic National Wildlife Refuge.

read_this Our full report is made up of the following reports. If you prefer, you can hear each report separately.
read_this The stock market this week Impact
read_this Portfolio indices Impact
read_this Portfolio stocks: AAPL AMZN EBAY FB GOOGL GOOG PYPL TWTR V VMW

read_this The stock market

Market indices

indices

^ Market indices this week (mouseover for 12-month view) Chart: Google Finance

Index 15 Dec 17 Week 8 Dec 17 Month 30 Nov 17 Year 30 Dec 16
S&P500 2,675.81 0.92% 2,651.50 1.07% 2,647.58 19.52% 2,238.83
Dow Jones 24,651.74 1.33% 24,329.16 1.56% 24,272.35 24.74% 19,762.60
NASDAQ 6,936.58 1.41% 6,840.08 0.91% 6,873.97 28.86% 5,383.12

read_this Portfolio Indices

Index performance

indices
^ USD and AUD denominated indices over the past 52 weeks (mouseover for max view) Chart: Bunting

home This week’s performance

Index 15 Dec 17 Week 8 Dec 17 Month 30 Nov 17 Year 30 Dec 16
U S dollar index 3.136 2.38% 3.063 1.49% 3.089 48.96% 2.105
Australian dollar index 4.076 0.54% 4.054 0.44% 4.058 40.77% 2.895

read_this Portfolio Stocks

stocks
^ Performance of portfolio stocks this week (mouseover for year view)

AAPL: Apple, Inc 15 Dec 17 Change 8 Dec 17 home
Friday close $173.97 2.72% $169.37
P/E (historical) 18.91 Change 18.41
P/E (1 year fwd) 15.40 Change 15.14
Market Cap $893.216 bn $23.618 bn $869.598 bn
Target (1 year) NASDAQ analysts’ consensus: $ 192 range: $ 150 to $ 235
Analyst recommendations 18 strong buy, 5 buy, 5 hold, 2 sell, 0 strong sell
Last earnings report Q4/2017 2 Nov 2017
Financials Google Finance
SEC filings Edgar Search CIK 0000320193
AAPL
^ Apple price movements this week (mouseover for 1-year view) Chart: Google Finance

AMZN: Amazon Com, Inc 15 Dec 17 Change 8 Dec 17 home home
Friday close $1,179.14 1.48% $1,162.00
P/E (historical) 299.27 Change 294.92
P/E (1 year fwd) 276.95 Change 273.54
Market Cap $568.195 bn $8.260 bn $559.935 bn
Target (1 year) NASDAQ analysts’ consensus: $ 1260 range: $ 1100 to $ 1525
Analyst recommendations 30 strong buy, 4 buy, 2 hold, 1 sell, 0 strong sell
Last earnings report Q3/2017 26 Oct 2017
Financials Google Finance
SEC filings Edgar Search CIK 0001018724
AMZN
^ Amazon price movements this week (mouseover for 1-year view) Chart: Google Finance

EBAY: Ebay, Inc 15 Dec 17 Change 8 Dec 17 home home
Friday close $38.37 1.91% $37.65
P/E (historical) 5.69 Change 5.59
P/E (1 year fwd) 22.79 Change 22.33
Market Cap $40.080 bn $0.752 bn $39.328 bn
Target (1 year) NASDAQ analysts’ consensus: $ 38 range: $ 34 to $ 45
Analyst recommendations 10 strong buy, 1 buy, 14 hold, 2 sell, 0 strong sell
Last earnings report Q3/2017 18 Oct 2017
Financials Google Finance
SEC filings Edgar Search CIK 0001065088
EBAY
^ Ebay price movements this week (mouseover for 1-year view) Chart: Google Finance

FB: Facebook, Inc 15 Dec 17 Change 8 Dec 17 home home
Friday close $180.18 0.66% $179.00
P/E (historical) 34.92 Change 34.69
P/E (1 year fwd) 30.44 Change 30.74
Market Cap $523.569 bn $3.429 bn $520.140 bn
Target (1 year) NASDAQ analysts’ consensus: $ 213 range: $ 140 to $ 230
Analyst recommendations 24 strong buy, 3 buy, 0 hold, 0 sell, 0 strong sell
Last earnings report Q3/2017 1 Nov 2017
Financials Google Finance
SEC filings Edgar Search CIK 0001326801
FB
^ Facebook price movements this week (mouseover for 1-year view) Chart: Google Finance

GOOGL: Alphabet, Inc 15 Dec 17 Change 8 Dec 17 home home
Friday close $1,072.00 2.16% $1,049.38
P/E (historical) 35.89 Change 35.13
P/E (1 year fwd) 32.70 Change 32.30
Market Cap $744.828 bn $15.717 bn $729.111 bn
Target (1 year) NASDAQ analysts’ consensus: $ 1150 range: $ 880 to $ 1275
Analyst recommendations 23 strong buy, 3 buy, 4 hold, 0 sell, 0 strong sell
Last earnings report Q3/2017 26 Oct 2017
Financials Google Finance
SEC filings Edgar Search CIK 0001288776
GOOGL
^ Alphabet (GOOGL) price movements this week (mouseover for 1-year view) Chart: Google Finance

GOOG: Alphabet, Inc 15 Dec 17 Change 8 Dec 17 home home
Friday close $1,064.19 2.62% $1,037.05
GOOG
^ Alphabet (GOOG) price movements this week (mouseover for 1-year view) Chart: Google Finance

PYPL: PayPal Holdings, Inc 15 Dec 17 Change 8 Dec 17 home home
Friday close $75.65 3.76% $72.91
P/E (historical) 58.64 Change 56.52
P/E (1 year fwd) 54.20 Change 53.79
Market Cap $90.925 bn $3.294 bn $87.631 bn
Target (1 year) NASDAQ analysts’ consensus: $ 80 range: $ 66 to $ 93
Analyst recommendations 26 strong buy, 3 buy, 6 hold, 0 sell, 0 strong sell
Last earnings report Q3/2017 19 Oct 2017
Financials Google Finance
SEC filings Edgar Search CIK 0001633917
PYPL
^ Paypal price movements this week (mouseover for 1-year view) Chart: Google Finance

TWTR: Twitter, Inc 15 Dec 17 Change 8 Dec 17 home home
Friday close $22.23 5.36% $21.10
Market Cap $16.512 bn $0.839 bn $15.673 bn
Target (1 year) NASDAQ analysts’ consensus: $ 19 range: $ 10 to $ 22
Analyst recommendations 1 strong buy, 0 buy, 17 hold, 8 sell, 0 strong sell
Financials Google Finance
SEC filings Edgar Search CIK 0001418091
TWTR
^ Twitter price movements this week (mouseover for 1-year view) Chart: Google Finance

V: Visa, Inc 15 Dec 17 Change 8 Dec 17 home home
Friday close $113.82 1.08% $112.60
P/E (historical) 40.65 Change 40.21
P/E (1 year fwd) 27.88 Change 27.51
Market Cap $258.236 bn $2.768 bn $255.468 bn
Target (1 year) NASDAQ analysts’ consensus: $ 126 range: $ 98 to $ 139
Analyst recommendations 24 strong buy, 2 buy, 1 hold, 0 sell, 0 strong sell
Last earnings report Q4/2017 25 Oct 2017
Financials Google Finance
SEC filings Edgar Search CIK 0001403161
V
^ Visa price movements this week (mouseover for 1-year view) Chart: Google Finance

VMW: VMware, Inc 15 Dec 17 Change 8 Dec 17 home
Friday close $123.80 3.54% $119.57
P/E (historical) 35.57 Change 34.36
P/E (1 year fwd) 32.16 Change 31.00
Market Cap $49.993 bn $1.708 bn $48.285 bn
Target (1 year) NASDAQ analysts’ consensus: $ 135 range: $ 95 to $ 152
Analyst recommendations 13 strong buy, 3 buy, 10 hold, 0 sell, 0 strong sell
Last earnings report Q2/2018 24 Aug 2017
Financials Google Finance
SEC filings Edgar Search CIK 0001124610
VMW
^ VMware price movements this week (mouseover for 1-year view) Chart: Google Finance

home flag_australia FX: USD/AUD

usd/aud
^ AUD movements against the USD this week (mouseover for 1-year view) Chart: xe.com

Australian economic indicators Trading Economics

Australian economic charts RBA Chart Pack