For many people, the U.S. Tax Day has arrived, and the annoying commercials will stop. Normally the day falls on April 15th, but we got an extra day due the weekend. Here are some facts on why April 15th is tax day.
The United States during the Civil Warg had a federal income tax. Then it returned permanently with the Revenue Act of 1913. This Act mandated that March 1st was tax day. Interestingly, all taxes collected before the Revenue Act of 1913 came from liquor taxes, and after the act was passed, Income Tax became the chief source of U.S. income. So wy march 1st? After reading through the act itself, the only explanation that I can find was it was arbitrary. Lawmakers at the time decided two months was adequate time to get one’s affairs to see if they owed any taxes.
In 1918, Congress changed the deadline to March 15th, and then again to April 15th in 1954. The extra time, according to Joseph Thorndike, a tax historian with Tax Analysts, was due to the more and more complex tax code that has been enacted since the initial Act.
I ask now, since the Tax Changes that happened last year to simplify our tax code, do you think Congress will move the date back to April 1st? Aprils Fools Day. I bet not.
I ask forgiveness for not being around last weekend. Well needed rest was taken. Now let’s get back to work.
What to Watch for this Week
The economic calendar is normal this week. Most people will be watching the retail and housing numbers throughout the week. Several finance sector stocks reported good earnings last week. However, they failed to raise the market, and there was a feeling of “sell the news.” I wonder if the market already has baked in the strong earnings for last quarter.
- Retail sales declined 0.1% in February on the heels of an upwardly revised 0.1% decline (from -0.3%) in January.
- Excluding autos, retail sales rose 0.2% following an upwardly revised 0.1% increase (from 0.0%) in January.
- Housing starts ran at a seasonally adjusted annual rate of 1.236 million units in February versus an upwardly revised 1.329 million units (from 1.326 mln) in January, which was the highest since October 2016.
- Permits were at a seasonally adjusted annual rate of 1.298 million versus a downwardly revised 1.377 million (from 1.396 mln) in January.
According to Lipper Alpha Insight, as of Last Friday, the first quarter earnings are expected to increase 18.6% from Q1 2017. Excluding the energy sector, the earnings growth estimate declines to 16.9% And, the 26 companies in the S&P 500 that have reported earnings to date for Q1 2018, 70.0% have reported earnings above analyst expectations. This is above the long-term average of 64% and below the prior four quarter average of 72%
U.S., Allies Target Syria. The United States, France and the United Kingdom spent the week discussing the scope and scale of a potential coalition strike on Syria. At 4 a.m. local Syrian time on April 14, the allied powers launched precision airstrikes at chemical weapons development sites and air bases associated with the weapons’ delivery.
North Korea Negotiations Continue. The U.S.-North Korea summit has started to congeal, with signs that both sides are considering options that would make a deal possible.
Vietnam Gives Coast Guard More Power. Vietnam is adjusting its approach to China’s maritime tactics by drafting a bill that will empower its coast guard with greater flexibility on when to open fire at sea.
Volleying Sanctions: U.S. vs. Russia. U.S. sanctions levied against Russian oligarchs on April 6 had a minimal impact on Russia’s currency — the ruble is already rebounding.
A Push for a More (Artificially) Intelligent Europe. Europe is making moves to not get left out in the cold in the race for AI dominance.
Here is a list of the U.S. economic events happenning this week.
Last Weeks Numbers
Review Last weeks numbers here.