Broadcast EView
- 6 days ago
- 11 min read
Wide Ranging Perspectives and Views for Managing Retirement Assets.
LayLine Broadcast EView
LayLine Asset Management Inc
Harry J. Campbell III, CMT
3/17/26
Update: The Watch
Last month in the Broadcast EView I listed several areas that I was closely watching for indications for the economy and the markets. Of particular relevance is how quickly things are happening in the economy and markets. Below are updates on the subjects discussed last month.
AI: I’m watching for indications to see if (1) all the doom and gloom for jobs and many businesses will actually come to be or (2) will we witness AI providing new opportunities for employees, businesses and governments.
Update: Couple of observations. I’m seeing many layoffs in the shipping and logistics corners of the economy. This is an area that will be benefitted by AI ability to analysis so much more information, faster, to determine the best combinations of loads and routes. Also seeing layoff announcements from many tech companies as they incorporate AI into the process of writing code. Some of the giant social media companies are laying off a large percentages, up to 30% or more, of their workforce as AI handles more of the current work load. What we haven’t seen (too early in the transition) are the new jobs, that we don’t know exist yet. The delay between the reduction in the old economy jobs and the addition of the new economy jobs will define the degree of economic pain coming up.
Jobs Outlook: Between AI potential to obsolete many jobs, an older population demographic issue, and less immigration available for jobs, there are going to simply be fewer employees available in the US. However, when combined with the potential productivity gains from AI, perhaps the US economy can operate with fewer employees and still manage to expand at a good pace.
Update: The latest jobs report was by most accounts, very disappointing. The unemployment rate rose to 4.4%, nonfarm payrolls decreased by 92,000, and December jobs were revised lower by 65,000 jobs to a negative 17,000 jobs. January jobs were up 126,000. In other words, and until the next revision, for the past three months the total number of jobs created was only 17,000, or about 6,000/month. Based on the jobs data from the past couple of months, outside of healthcare, jobs are not only becoming hard to find but also difficult to hold on to.
Economy Expansion: Current GDP (gross domestic product) estimates for the near future (one year out) are indicating a steady, if not a slightly lethargic economy with 1.8% annual GDP growth for 2026 (2025 annual GDP growth was 1.5% - 1.9%).
Update: The most recent GDP estimate for the 4th quarter is now down to 0.7%, or about half of the prior estimate of 1.4%. While that is certainly not the direction of growth we would like to see, drawing a conclusion from the 4th quarter considering the government shutdown (still a large part of the economy), is challenging and misleading at best. That said, we are not seeing the general economic growth that many hoped for at this point in the AI cycle.
Supreme Court Tariff Decision: An adverse ruling for the Administration will instill considerable chaos in the international trade and financial ecosystem. It will take some time for the US put something else in place and delays will further complicate international trade.
Update: The court did rule against the legality of the process used to impose the first round of tariffs in 2025. The fight for refunds and financial relief from the tariffs will take quite some time to play out. In the meantime, another round or form of tariffs are being put in place, with different legal status. We will see. Regardless, combining the new tariffs with the dislocations in international trade from the war with Iran, will make it near impossible to ascertain the net effects of the new tariffs and refund/relief process on international trade anytime soon.
Mid-Term Elections: If the current political structure remains roughly the same, I would expect more of the same for the markets and economy. If the political structure shifts dramatically one way or the other, the markets and economy will have to work through considerable change and uncertainty, something that few markets or economies are good at handling.
Update: It's way to early for any update in this area.
Harry
LayLine Broadcast EView
LayLine Asset Management Inc
Harry J. Campbell III, CMT
2/17/26
The Watch
Here are a couple of areas of interest that I have been intently watching, looking for signs as to how our economy and markets will respond as these areas of interest develop over the next year or so.
AI: So far, watching the development of AI (artificial intelligence) has been, and will likely continue to be, worth the price of admission. It looks to me that AI will dramatically effect, in ways we can’t foresee as of yet, most if not all of the corners of the economy. To state the obvious, those effects will be challenging for some and an opportunity for others. I’m watching for indications to see if (1) all the doom and gloom for jobs and many businesses will actually come to be or (2) will we witness AI providing new opportunities for employees, businesses and governments.
Jobs Outlook: From my vantage point, it looks to be too early to draw any investable conclusions related to the jobs market, its size, and composition. Between AI potential to obsolete many jobs, an older population demographic issue, and less immigration available for jobs, there are going to simply be fewer employees available in the US. However, when combined with the potential productivity gains from AI, perhaps the US economy can operate with fewer employees and still manage to expand at a good pace.
Economy Expansion: Current GDP (gross domestic product) estimates for the near future (one year out) are indicating a steady, if not a slightly lethargic economy with 1.8% annual GDP growth for 2026 (2025 annual GDP growth was 1.5% - 1.9%). I’m watching closely for signs that increased productivity from AI adoption can accelerate GDP growth, even with fewer employees and without pushing inflation up.
Supreme Court Tariff Decision: We will know soon how the Court will decide on the legality of current US tariffs. A ruling in favor of the Administration and things stay continue in place as is. An adverse ruling for the Administration will instill considerable chaos in the international trade and financial ecosystem. It will take some time for the US put something else in place and delays will further complicate international trade.
Mid-Term Elections: Regardless of political affiliation, this mid-term election cycle is going to be more stimulative than most mid-term elections. Looking out to next fall, if the current political structure remains roughly the same, I would expect more of the same for the markets and economy. If the political structure shifts dramatically one way or the other, the markets and economy will have to work through considerable change and uncertainty, something that few markets or economies are good at handling.
Like in sailboat racing, one needs to be on the lookout and watch for shifts in the wind and be ready to act on them.
Harry
LayLine Broadcast EView
LayLine Asset Management Inc
Harry J. Campbell III, CMT
1/20/26
Effective Income Tax Rates
(originally published 4/15/25, updated for the 2025 senior deduction)
I thought it would be appropriate as we approach tax day to examine what we actually pay as a percentage of our income in Federal taxes, referred to as an effective tax rate. With so many variabilities to the tax code, for this discussion, only the standard deduction, the 2025 senior deduction, married filing status, and published tax brackets rates will be considered. This discussion is only meant to provide some understanding of what an effective tax rate is, and not to provide a thorough understanding of effective tax rates. Please contact an accountant for your specific circumstances. Income brackets, tax bracket rates, senior and standard deduction are for 2025.
Starting with the income and tax bracket rates. It’s important to recognize that a particular tax rate only applies to the income in that tax bracket. I.e., the 12% tax bracket rate only applies to income between $23,851 to $96,950. Here are the first two tax brackets for a married filer for 2025 and the taxes on the maximum income of that income bracket.
Income Bracket Tax Bracket Rate Taxes
$0 to $23,850 10% $2,385 ($23,850*.10)
$23,851 to $96,950 12% $8,772 ($73,100*.12)
So, before considering the effect of the standard and senior deduction on effective tax rates, consider on an income of $96,950, the taxes due would be $11,157 ($2,385+$8,772). This results in an effective tax rate of 11.5% ($11,157/$96,950)
Now let’s consider the effect of the standard deduction, and for seniors (65 and older) the $6,000 senior deduction, on the effective tax rate. The standard deduction in 2025 for those filing as married is $30,000. Married seniors filing joint get an additional $12,000 deduction ($6,000 for each spouse), for a total of $42,000 deduction. For all intents and purposes this means that married filers don’t pay federal income taxes on the first $30,000 of income and married senior filers don’t pay on the first $42,000 of income.
On an income of $96,950 used in the above example, taking the standard deduction for married filers of $30,000 would leave a taxable income of $66,950 ($96,950-$30,000) and taxes of about $7,557 ($2,385 plus 12% on $43,100 ($66,950 - $23,850) = $5,172), resulting in an effective tax rate of 7.8% ($7,557/$96,950). For seniors with an income of $96,950, taking the $42,000 deduction would reduce taxable income to $54,950 ($96,950-$42,000) and taxes of about $6,116, resulting in an effective tax rate of 6.3% using the same math.
In summary, without any deductions on $96,950 the effective tax rate for a married filer would be 11.5%. Figuring in the standard deduction it moves down to about 7.8% and with both the standard deduction and the senior deduction the effective tax rate is around 6.3%, substantially lower than the 12% stated tax rate for an income of $96,950.
Take a look for yourself. When you get your 1040 Tax Return back, divided your adjusted gross income (line 11a on IRS Form 1040) by your taxable income (line 15 on IRS Form 1040). This is a close and simple approximation of your effective tax rate.
Harry
LayLine Broadcast EView
LayLine Asset Management Inc
Harry J. Campbell III, CMT
12/16/25
Happy Holidays and Best Wishes to You and
Your Family in the New Year!
This will be the last EView for 2025, I'm looking forward to getting back at it in the New Year.
Thanks,
Be safe!
Harry
LayLine Broadcast EView
LayLine Asset Management Inc
Harry J. Campbell III, CMT
11/18/25
Capital Gains Taxes, Revisited
As stated in the disclosures below, neither LayLine nor myself provide tax advice. This Broadcast EView is aimed at providing some basic background on the taxation of Capital gains. Two things to consider for this topic: this conversation only pertains to capital gains on stocks and bonds and it only considers tax rates for single and married filers. Go to IRS Topic # 409 Capital Gains and Losses for more information.
Capital gains taxes have two major attributes (there are many others) to consider; the length of time a position is held, and the annual taxable AGI (adjusted gross income) of the investor.
(Capital gains are included in Taxable AGI)
Length of Time Position Held:
Short-term Capital gains are considered gains on assets sold that were held for less than one year. They are taxed as ordinary income.
Long-term Capital gains are considered gains on assets sold that were held for more than one year. They are taxed at specific Capital gains rates based on a taxpayers taxable AGI.
The time determining whether a sale is long or short term is measured from the day after a position is bought to the day it is actually sold.
Long Term Capital Gains Tax Rates for 2025:
0% Capital gains tax applies if taxable AGI is less than;
$48,350 for single filers.
$96,700 for married filers.
15% Capital gains tax applies if taxable AGI is between;
$48,351 and $533,400 for single filers.
$96,701 and $600,050 for married filers.
20% Capital gains tax applies when taxable AGI is above the maximum 15% taxable income level.
An important aspect of Capital gains is that you net losses and gains to determine the total capital gains or losses to report on the tax form. First, long-term Capital gains and losses are netted together, then short-term Capital gains and losses are netted together. If both long-term and short-term capital gains are positive, short-term gains are taxed at full income rates and long-term gains are taxed at the Capital gains rate according to your AGI. If there is a loss for one and a gain for the other, they are netted together, lowering the overall Capital gain. If after netting there is a Capital gain, the tax rate that applies is based on whether the net gain is from long-term or short-term capital gains. If there is a Capital loss, either short or long term, only $3,000 of loss can be deducted on the IRS Form 1040, line 7, in a year, even if there are $30,000 in Capital gains losses that year. Capital losses above $3,000 can be carried forward and taken in future years.
The major take away from this is that for taxable AGI less than $48,350 for single filers and $96,700 for joint filers, there is no capital gains tax on assets held for more than a year. As always, before embarking on any tax managed strategy, seek qualified advice from a tax and financial professional that knows your situation.
Harry
LayLine Asset Management Inc
Harry J. Campbell III, CMT
10/21/25
Taxing
With the OBBB (one big beautiful bill) now in place, here are a few (certainly not comprehensive) of the new tax aspects of the bill that go into effect for 2025. Needless to say, but I will, the information provided is not enough to use for preparing tax returns or to be relied on for tax planning. It’s just to shed some light on a couple of the bills new taxing provisions.
Taxes on Social Security
While social security benefits are still technically “taxable”, to some degree, there is a new temporary bonus deduction for seniors for 2025 that will reduce the tax burden. The bonus deduction for seniors, 65 and older, is $6,000 for an individual and $12,000 for couples who are both collecting social security benefits. The bonus deduction is in addition to standard or itemized deductions. The deduction phases out for single filers with modified adjusted gross income (MAGI) over $75,000 and for joint filers with MAGI over $150,000.
Keep in mind that not all of one’s social security benefits are taxable under current law. While the specific calculation to determine the tax on social security benefits is fairly complicated (see IRS publication 915 for the complete calculation), the following provides a rough approximation of the percent of social security benefits that are federally taxed based on various combined income levels. (Combined income = adjusted gross income + tax-exempt income + ½ of your social security benefits).
Social security benefits are not taxed for single filers with a combined income below $25,000 and for joint filers with combined income below $32,000.
Up to 50% of social security benefits are taxable for single fliers with a combined income between $25,000 and $34,000 and for joint filers with combined income of between $32,000 and $44,000.
Up to 85% of social security benefits are taxable for single fliers with a combined income above $34,000 and for joint filers with combined income above $44,000.
Taxes on Tips
There is no tax on “qualified tips” with a maximum annual deduction of $25,000. The deduction phases out with MAGI above $150,000 for single filers and above $300,000 for joint filers.
Taxes on Overtime
There is no tax on “qualified overtime compensation” with a maximum annual deduction of $12,500 for single filers and $25,000 for joint filers. The deduction phases out with MAGI above $150,000 for single filers and above $300,000 for joint filers.
Car Loan Interest
Interest paid on a loan to purchase a “qualified vehicle” may be deducted up to a maximum annual deduction of $10,000. There are several requirements for the vehicle to be “qualified” (search IRS for qualified vehicle) and this deduction does not apply to used vehicles purchased. Deduction phases out with MAGI above $100,000 for single filers and $200,000 for joint filers.
Harry
CMT: Chartered Market Technician
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