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Gold Hits New Highs as China Increases Its Reserves

Gold prices reached a new record high of over $2,300 per ounce, driven by central bank purchases, geopolitical tensions, and speculation about Federal Reserve monetary policy. The metal, valued for its rarity and physical properties, is seen as a safe haven and a hedge against market and global risk. Central banks, led by China, Poland, and Singapore, have been actively buying gold. China, in particular, has significantly increased its gold reserves for the 17th consecutive month, with its gold holdings now accounting for 4.3% of its official foreign exchange reserves. This move is seen as part of a broader strategy to diversify assets and reduce dependence on the U.S. dollar, especially in light of recent geopolitical events and sanctions. The actions of central banks and the value of the U.S. dollar will continue to be key factors influencing gold prices. Read More.

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The Impact of a $1,000 Tax Increase on Middle-Class Families

Middle-class families with children in the U.S. are facing a tax hike when filing their taxes this year. Due to historically high inflation, the real value of the child tax credit has eroded, resulting in an approximate $950 increase in federal income taxes for a family with three children making at least $42,000 compared to what they paid in 2018. This tax increase is especially burdensome for parents whose wages barely keep up with inflation. The child tax credit is not indexed to inflation, unlike most of the tax code, leading to a disproportionate burden on working families.

The blame for this tax hike is bipartisan, with Republicans failing to index the child tax credit to inflation in the Tax Cuts and Jobs Act and Democrats contributing to inflation through excessive spending in 2021. A simple fix would be to increase the maximum child tax credit by about $300 per child and index it to inflation moving forward. However, a bill currently being considered by the Senate, which has already passed the House, would not address the tax hike on middle-class families this year but would increase benefits for lower-income families who already receive significant government support.

The bill also aims to restore investment incentives for businesses and stop fraudulent payments in the Employee Retention Tax Credit program. While these are important goals, the bill's approach to expanding benefits for lower-income families without addressing the tax hike on middle-class families is criticized for potentially discouraging work and marriage and unfairly burdening the middle class. Read More.