Above the Fold
Inflation Will Impact IRS Tax Brackets and More
Just as social security recipients are receiving the biggest payment increase in 40 years, taxpayers will also get some “relief” due to the ongoing, above-trend inflation. The Internal Revenue Service will automatically adjust critical tax parameters for the 2023 tax year to reflect inflationary pressures on both income and expenditures. For example, the top marginal tax rate of 37% will now apply to individual incomes above $578,125 and married couples’ incomes above $693,750 starting next year. The adjustments will apply to all tax bracket thresholds. Other areas affected include the estate and lifetime gift tax exclusion, which will increase to $12.92 million from $12.06 million per person, as well as a $1,000 bump in the annual gift tax exclusion. Even the standard deduction, which was already nearly doubled under President Trump, will rise to $27,700 for married couples and $13,850 for individuals, an increase of about 7% from this year. The IRS is also expected to announce changes in income thresholds for retirement accounts, as well as the maximum amount of eligible pretax contributions to 401(k) plans. Many other changes are likely to impact your wallet; it may be a good idea to connect with your financial advisor and tax professional on how the changes might affect you.
Netflix Reverses Course, Works to Capitalize on “Password Sharing”
After two consecutive quarters of subscriber loss, Netflix announced the addition of 2.4 million paying users in the third quarter. Though it seems like a large number, it’s relatively low by historical standards. That said, markets lauded the news and sent shares screaming higher yesterday. Netflix ended the quarter with 223 million subscribers, and CEO Ron Hastings noted a more challenging environment for competition and went on to say “all of these competitors are [likely] losing money on streaming.” The company will be rolling out a cheaper, ad-supported version of its platform, and will introduce a “sharing policy” in 2023 to crack down on password sharing. The program is expected to allow for paid sub-accounts under the main subscriber.
LNG Daily Shipping Rates Hit All-Time High
The costs to move LNG (liquefied natural gas) by ship are skyrocketing and expected to go higher. Driven by Russian supply disruptions and continued demand from Europe and Asia, the cost per day to transport LNG rose to $450,000. While rates can vary depending on the type of ship and route used, the cost increases are substantial as 2021 varied between $30,000 to $300,000 as supply chains remained spotty due to the pandemic. Energy experts see the daily rate rising to $500,000 as colder temperatures drive demand. There are approximately 650 ships that transport LNG globally, which also requires it being cooled to a liquid at roughly -260°F.
Britain is Dealt Yet Another Inflationary Blow
Data released on Wednesday revealed inflation in the United Kingdom rose back into the double digits, registering 10.1% for the month of September. The reading is the highest in decades and solidifies the BOE’s (Bank of England) Monetary Policy Committee likelihood that it will raise its key interest rate for the eighth time on Nov. 3. U.K. leaders are struggling with a plethora of issues, including recession and a lack of confidence in Prime Minister Liz Truss, both from her own party and Britons at large. The BOE has been less aggressive with its rate increases compared to the U.S., with its key interest rate at just 2.25%.
In the Know
A Gaseous History
Natural gas is odorless, colorless and obviously extremely combustible. The rotten egg smell you might be familiar with is an additive called mercaptan (which makes leak detection easier). It’s mostly methane, but can also contain other hydrocarbons such as butane, propane, ethane and naphtha. Historians trace its discovery back thousands of years ago when lightning strikes ignited gas seeping from the earth. The first pipelines were built by the Chinese in 500 BC, and made from bamboo. It was first discovered in America back in 1626 when French explorers found Native Americans igniting gas seeping around Lake Erie. When natural gas is cooled to -260°F, it becomes liquid and its volume is reduced 615 times, creating LNG that’s used around the world in vehicles and by populations that are not pipeline accessible.