Tax Cuts, Trump IRAs, and Trade Wars: Navigating Today's Financial Landscape

July 7, 2025 | Season 7 | Episode 26 The financial landscape is shifting dramatically with President Trump"s newly signed "Big Beautiful Bill" extending the 2017 tax cuts that were set to expire this December. This sweeping legislation keeps the top tax rate at 37% while expanding the estate tax exemption to a generous $15 million per person ($30 million per couple), providing substantial benefits for wealth transfer planning. For everyday Americans, the bill introduces tax exemptions on tips (up to $1,000) and overtime pay (capped at $12,500 for individuals), though these benefits won"t apply to Social Security or Medicare taxes and come with income limitations. Seniors gain a new $6,000 tax deduction, while the SALT cap jumps from $10,000 to $40,000 until 2030—a major relief for residents of high-tax states. Perhaps most intriguing is the creation of "Trump IRAs," government-backed retirement accounts that will receive a one-time $1,000 deposit between 2025-2029. These accounts must invest in index-tracking funds composed primarily of US stocks, with employers able to contribute up to $2,500 without tax implications. Beyond domestic policy, international trade tensions continue brewing. Treasury Secretary Yellen has warned that countries failing to negotiate trade deals by August 1st will face restored April-level tariffs. Meanwhile, financial markets have shown remarkable resilience—the S&P 500 is up 5.5% year-to-date despite significant political polarization and major economic policy shifts. The Federal Reserve now navigates contradictory signals from June"s jobs report: 147,000 nonfarm jobs added (above expectations), but with private payrolls increasing by only 74,000 and 130,000 people leaving the workforce entirely. These mixed indicators have markets anticipating a September rate cut rather than July action. As you consider your investment strategy, note the explosion of ETFs—now exceeding 4,000 on the NYSE compared to just 2,400 listed stocks. While offering advantages over traditional mutual funds, specialized ETF products demand careful scrutiny, particularly leveraged offerings that may not perform as expected over longer holding periods. How will these tax changes and market dynamics affect your financial planning? Subscribe now for ongoing insights to keep you ahead of these transformative shifts. ** For informational and educational purposes only, not intended as investment advice. Views and opinions are subject to change without notice. For full disclosures, ADVs, and CRS Forms, please visit https://heroldlantern.com/disclosure ** To learn about becoming a Herold & Lantern Investments valued client, please visit https://heroldlantern.com/wealth-advisory-contact-form Follow and Like Us on Youtube, Facebook, Twitter, and LinkedIn | @HeroldLantern