Impact of Recent Tax Legislation

Everything is in constant reinvention, global dynamics, your industry, your organization, which means your workforce must continuously adapt. But it's hard to make confident workforce decisions if your data is fragmented, and it's hard to keep your workforce ready when your processes are slow. Cornerstone is your intelligence platform for workforce readiness. With the insights leaders need, the skills development people want, and AI agents that make action easy, cornerstone. The intelligence to know, the wisdom to act. Learn more at csod . com slash human ai . This podcast is supported by Raymond James, a financial firm offering wealth management, banking, and capital market services that are inspired by people. Before Raymond James financial advisors build plans, they build relationships so they can craft individual strategies designed to achieve priorities and pursue what's possible. That's the power of personal. Disclosures at Raymond James. com Raymond James and Associates Inc. member NYSE SIP What's ahead for the USMCA and what's behind the drop in unemployment . From Marketplace in Washington, I'm Kimberly Adams. The U. S. Mexico Canada agreement was the deal that replaced NAFTA six years ago. The three countries had until yesterday to decide whether to extend it another sixteen years , Canada and Mexico were on board, but the US decided it didn't want to do that. Marketplaces Kayleigh Wells explains what's going to happen next . The agreement didn't expire yesterday. It just starts a countdown clock to fix whatever problems the countries want to fix before it does expire in ten years . Duncan Wood is with the nonpartisan think tank the Wilson Center. We're entering into a period of what we would call managed uncertainty. When the US signed this deal, President Trump promised more domestic manufacturing jobs, better wages in Mexico, and the US would shrink its trade deficit. Not only have those things not happen, but in fact the opposite. Lori Wallach, who directs the RETHINK Trade Program at the American Economic Liberties Project, says the trade deficit got worse, Mexican manufacturing wages are still lower than in China, and lots of jobs are still getting lost to other countries . I think there would be bipartisan support for a good North American deal that actually does the things President Trump promised. Still, the auto industry in particular has relied on the trade deal for easier cross border manufacturing. The US has the leverage to get more concessions from the other two countries, says Simon Lester with the Baker Institute at Rice University. They've got specific demands for US dairy products into Canada or they'd like to change Mexican energy legislation to be more favorable to US companies. Lester says Canada's and Mexico's goals are more straightforward. Ease up on the tariffs. I'm Kayleigh Wells for Marketplace . The monthly federal jobs report is out and employers added fifty seven thousand jobs in June, lower than the expected one hundred fifteen thousand and less than half of the revised job gains for May. Unemployment fell to four point two percent due to more people leaving the workforce, not necessarily more job creation. Economist Julia Coronado, founder of Macropolicy Perspectives, explains. Well, we would like to think it's strong jobs, but we know that that number was actually subdued. So what we saw was people dropping out of the labor force. In particular in June, it was young people leaving the labor force driving the unemployment rate down. So not a real signal of strength there. That was Julia Coronado with macro policy perspectives. Everything is in constant reinvention, global dynamics, your industry, your organization, which means your workforce must continuously adapt. But it's hard to make confident workforce decisions if your data is fragmented, and it's hard to keep your workforce ready when your processes are slow. Cornerstone is your intelligence platform for workforce readiness. With the insights leaders need, the skills development people want, and AI agents that make action easy , cornerstone, the intelligence to know, the wisdom to act. Learn more at csod com slash human ai . This podcast is supported by Raymond James, a financial firm offering wealth management, banking, and capital market services that are inspired by people. Before Raymond and James's financial advisors build plans, they build relationships so they can craft individual strategies designed to achieve priorities and pursue what's possible. That's the power of personal. Disclosures at Raymond James. com Raymond James and Associates Inc. member NYSE SIP . We're continuing our look at how the twenty twenty five tax and spending law is playing out now that we're one year in. One selling point for the law from its supporters was that it would lower taxes for small businesses. I asked Andrew Louts, Director of Tax Policy at the Bipartisan Polic y center, whether that actually happened . We have some early evidence both in corporate income tax receipts and in individual income tax receipts that small businesses are taking advantage of some of these provisions early on. And I mention individual income tax receipts because what some Americans don't know is actually the vast majority of businesses in the country file their taxes individual owners of the business. These are called pass through businesses. They include S corporations, partnerships, LLCs, a lot of business types that people are familiar with. And again, we have early evidence that some of these provisions full deductions, full and immediate deductions for research and development, full and immediate deductions for machinery and equipment. If they have a hundred dollar expense, they can take a hundred dollar deduction in that first year rather than having to spread that out over time. That has a real tax benefit for businesses large and small . A tax cut for a business or an individual is also a revenue reduction for the federal government , what kind of impact have we seen on federal revenues as a result of all these changes? It's a great question. So revenue in fiscal year twenty twenty six, the current fiscal year that we're in up about five percent compared to the same period in fiscal year twenty twenty five . Now part of that is due to tariff revenue coming in. Tariff revenue is massively higher this fiscal year than it was last fiscal year , but individual income and payroll taxes are also up. Individual income taxes are up about five percent compared to the year prior. That's mostly due to higher wages and salaries, higher non withheld tax payments , things like capital gains and business income. Now, where we've seen a big decline is actually in corporate income taxes. Those are down about eighty eight billion dollars or thirty percent. And just so we can get the comparison right on the individual side ? Individual income taxes are up about eighty seven billion. Corporate income taxes are down about eighty eight billion . Especially when you're looking at the difference between