In the previous report on April tax collections we saw the huge surge in withholding taxes. It foreshadowed the surprise gain in the April jobs report. Don't be surprised if there's more of the same in May. The jobs report surveys are based on the week including the 12th of the month. The surge in withholding lasted through the end of April, and has continued in May. But make no mistake, at this stage of an expansion, "good news" is bearish. It will encourage the Fed to move to real tightening, not just the phony interest rate increases. Real tightening would mean shrinking the balance sheet.
April Tax Collections Part 2 - Contradicting the Strength in Withholding
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David Stockman’s Contra Corner isn’t your typical financial tipsheet. Instead it’s an ongoing dialogue about what’s really happening in the markets… the economy… and governments… so you can understand the world around you and make better decisions for yourself.
David believes the world -- certainly the United States -- is at a great inflection point in human history. The massive credit inflation of the last three decades has reached its apogee and is now going to splatter spectacularly.
This will have lasting ramifications on how governments tax and regulate you… the type of work you and your family members will have available and what you get paid… the value of your nest egg… and all other areas comprising your quality of life.