Current Affairs
February 18, 2025
State Taxes 2025
Comparing 2025 State Individual Income Taxes Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. Their significance in public policy is further enhanced by individuals being actively responsible for filing their income taxes, in contrast to the indirect payment of sales and excise taxes. The trend continues: Last year continued the historic pace of income tax rate reductions. In total, 28 states enacted and/or implemented individual income tax rate reductions since 2021.Here’s where things currently stand: 27 states and DC have graduated-rate income taxes. 14 states have flat income taxes. 8 states levy no individual income tax at all. Top marginal rates span from 2.5 percent in Arizona and North Dakota to 13.3 percent in California. (California also imposes a 1.1 percent payroll tax on wage income, bringing the all-in top rate to 14.4 percent as of 2024.) 
February 13, 2025
EVERCHEM UPDATE: VOL. 13 – TCPP Tariff Tango
In the latest installment of international trade drama, the United States has slapped anti-dumping and countervailing tariffs on Chinese suppliers of TCPP—the flame retardant that helps keep spray foam insulation from becoming spray foam bonfires.
Fun Fact – this entire episode was generated by AI:
– the voice over
– all videos
– the music
– the script/article was written by ChatGPT and refined by me
– the photos on the article
(I still had to edit the video, I’m not out of a job just yet)
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February 13, 2025
More Anti Dumping Drama–Now on MDI
AD/CV Duties Sought on Methylene Diphenyl Diisocyanate
A petition filed Feb. 12 alleges that methylene diphenyl diisocyanate from China is being sold at less than fair value in the U.S. and benefiting from countervailable subsidies. The alleged average dumping margins range from 305.81 percent to 507.13 percent.
The product subject to this petition is used the production of polyurethanes for many applications, including the manufacture of rigid polyurethane foams used for home and refrigerator insulation, coatings, adhesives, binders and sealants. It is commonly called polymeric, monomeric, or modified MDI and is also known as methylene bisphenyl isocyanate, 4,4’-diphenylmethane diisocyanate, methylene di-p-phenylene ester of isocyanic acid, and methylene bis(4-phenyl isocyanate), among others.
MDI consists of an aromatic polyisocyanate material whose composition includes two or more isocyanate groups (i.e., functional groups containing a nitrogen atom, a carbon atom, and an oxygen atom bonded together) attached to one or more benzene rings (i.e., flat, symmetrical molecules made up of six carbon atoms arranged in a hexagonal ring) that are joined by methylene bridges (i.e., a carbon atom bound to two hydrogen atoms and connected by single bonds to two other distinct atoms in the rest of the molecule).
The petition covers MDI (1) irrespective of whether it has gone through a distillation process, (2) regardless of acid content, reactivity, functionality, freeze stability, physical form, viscosity, grade, purity, molecular weight, or packaging, (3) that has been processed in a third country, including by commingling, diluting, introducing or removing additives, or performing any other processing that would not otherwise remove the MDI from the scope if performed in the subject country, and (4) that is commingled or blended with MDI from sources other than China.
The petition does not cover (1) mixtures of MDI with other materials when the combined MDI component comprises less than 40 percent of the total weight of the mixture, (2) partially reacted MDI when its nitrogen-carbon-oxygen content is less than 10 weight percentage, or (3) any separately packaged polyol that would not fall within the scope if entered on its own.
MDI is currently classifiable under HTSUS subheadings 2929.10.8010 and 3909.31.0000 and may also be entered under subheadings 3506.91.5000, 3815.90.5000, 3824.99.2900, 3824.99.9397, 3909.50.5000, 3911.90.4500, 3920.99.5000, and 3921.13.5000.
The Department of Commerce and the International Trade Commission will next determine whether to launch AD and CV duty and injury investigations, respectively, on this product. There are strict statutory deadlines associated with these proceedings, so affected companies that wish to protect their interests should contact Sandler, Travis & Rosenberg as soon as possible.
February 6, 2025
Residential Furniture Update
Residential furniture orders slump in November, cautious optimism for 2025
February 4, 2025 | 3:02 pm CST
Photo By Spacejoy on Unsplash
HIGH POINT, N.C. — New residential furniture orders fell 9% in November compared to the same period in 2023, according to the January issue of Furniture Insights. This decline follows a relatively flat October and marks a return to the downward trend observed from May through September. Approximately 40% of the survey participants reported increased orders in November compared to a year ago.
However, new orders were up 5% compared to October 2024 figures although down slightly for the year-to-date, noted Mark Laferriere, assurance partner at Smith Leonard, the accounting and consulting firm that produces the monthly report.
November shipments were down 1% compared to 2023 figures, and flat with October 2024. Year to date through November 2024, shipments were down 7% compared to 2023. Backlogs were down 10% compared to November 2023, but up 1% from October 2024 “as current new orders outpaced shipments during the last month.”
“Receivable levels were up 1% from October 2024, but down 4% from November 2023, both of which are materially in line with the respective shipment trends, given normal timing differences with collections,” Laferriere noted. “Inventories were consistent with October 2024 at up 1% and down 4% from
November 2023, which are in line with prior periods and current operational levels,” he added.
On a seasonally adjusted basis, sales at furniture and home furnishings stores were up 2.3% in December compared to the previous month and up 8.4% from December 2023. However, sales were down 2.2% for the year to date December 2024, compared to the same period for 2023 on an unadjusted basis, according to the January Furniture Insights.
Future projections are difficult, Laferriere said, without knowing the extent of the impact tariffs will have on the furniture industry, housing and the overall economy. Domestic manufacturers, especially those with “hybrid operations,” will be impacted through their outsourcing of materials and components.
“While likely greatly oversimplifying a very complex situation, an additional 10% tariff on Chinese goods would seem manageable given the inflationary pressures the industry has dealt with in the last few years, coupled with the long product pipeline allowing time for companies to make necessary adjustments,” he noted. “What seems more immediately concerning is the potential impact of tariffs on Canadian lumber utilized by the US housing industry as well as Canadian energy and the impact that could have on inflation in general, and specifically, consumer spending, interest rates, and ultimately housing activity that drives the furniture industry.
“This all follows a Vegas market which was largely reported to be positive, an averted port strike last month, as well as recent gains in housing and positive trends at retail.”
Laferriere added, “What makes this situation so difficult are the unknowns, the volatility, and the potential for change/reversals with or without notice, including the potential for tariffs on other Asian countries such as Vietnam and the impact of expected retaliatory tariffs on U.S. exports.
“Those in the industry are certainly smart enough and experienced enough to navigate any playing field, but they just need to know the rules of the game they’re playing. So, while these items are certainly disruptive in the short-term, the industry has dealt with similar situations in the past and we’re hopeful there are still enough things trending in the right direction so that the positive outlook for 2025, especially the second half, will materialize for those who have worked so hard to get to this point.”
February 2, 2025
Tariff Thoughts
All About The New Trump Tariffs, And Why The Hysteria Is Overblown
by Tyler Durden
Sunday, Feb 02, 2025 – 02:35 PM
By Peter Tchir of Academy Securities
Some Tariff Basics
Report after report I read seems to jump straight to either the good from tariffs (getting others to pay our taxes, advantage to American manufacturing, etc.) or to the doom and gloom of tariffs (inflation, trade wars, etc.). While we all understand the basics of tariffs, or at least I think I do, it seems worth spending a minute or two making sure that we are all on the same page.
My understanding is that the importer of a good pays the tariff to the government at the port or place of entry of the good into the country.
So, if you pay $100 for something from Canada or Mexico, you pay a $25 tariff, and your cost has increased to $125.
Which begs the question – who pays the $25 tariff?
One of the first things most importers will do is ask for a reduction in price from the exporter. If I was doing business thinking that something was only going to cost $100 and it now costs $125, I’d try to negotiate my purchase price down.
What I find “interesting” is if the exporter takes a 20% haircut, the price stays at $100. 20%off of $100 is $80. Then a 25% tariff on something for $80 is $20, getting us back to $100.
Step 1 is getting a discount, where even a 10% discount means the tariff only increases costs by 12.5%.
Now let’s look at the FX market (which maybe we should have done before step 1, but it would be a pain to rewrite stuff, and it isn’t really a step, as it is outside the control of the importer and the exporter, though no less important).
Since the summer, the Peso has declined by 20% versus the dollar and since late September, the Canadian Dollar has dropped by around 18%.
Let’s say that back in September, a Canadian exporter was happy to get paid 135 CAD. That translates into 100 USD for the importer. Let’s say that the Canadian exporter is still happy to accept the equivalent of 135 CAD. That drops the USD price to 93 for the importer. Making the “new” cost to the importer, including the tariff, “only” $116.25. This is all moving around in real time and has been a cumulative move, so this is a massive oversimplification, but still relevant.
The currency market is already helping the importer.
Step 2 is for the importer to figure out what amount of profit he is willing to forgo, if any. Assuming the importer was paying $100 it seems reasonable to assume that the price for the consumer is significantly more. For argument’s sake, let’s say the final price was $200. There is distribution and selling costs, etc. that the importer pays to sell the product on to the next leg. Maybe $200 is too high? Possibly, but I’m not sure it is that unreasonable for many finished goods. Now $25 out of $200 is “only” 12.5%. Giving up 12.5% is probably too much, but is 5% reasonable?
So, let’s look at this possibility (which as a whole, doesn’t seem too far-fetched to me).
Negotiate a 10% discount from the Canadian or Mexican exporter. Argue that it is “temporary” but crucial if you don’t want me (the importer) looking for alternative suppliers. Add in that you (the exporter) will also take a hit.
So, the Canadian exporter reduces the cost from 135 CAD to 121.5 CAD (in hopes it is temporary, and they don’t want to risk losing this customer to another provider of such goods).
Due to the big increase in the USD, the cost is only $83.40 (the importer has been making a lot of extra money in the past few months, but that is always a risk and may well have been hedged).
The 25% tariff is $20.85, bringing the total cost to $104.25.
In your planning, as of a month or two ago, you were anticipating a cost of $100. It is now just under $105. Do you raise your final prices, or leave them, at least for a little while, anticipating Canada (or Mexico) will make progress on fentanyl and the tariff will go away? That seems at least plausible, and it might depend on how easy it is for you to raise and lower prices. Is the hit to profit margin, hopefully a temporary one, worth not having to deal with a new supplier?
If the alternative supplier is Canadian or Mexican, they have the same problem.
If the supplier is from elsewhere, presumably there will be some logistics in getting their goods over in time.
The alternative, an American supplier, does look better as they were just given an effective cost benefit, but not really a 25% cost benefit. The dollar strength takes away some of the desire to shift to a domestic supplier. Presumably, the domestic supplier was already more expensive (or not as good, or there is some other reason why they weren’t being used). So, even with the indirect competitive boost, is it worth it?
Read more here: https://www.zerohedge.com/markets/all-about-new-trump-tariffs-and-why-hysteria-overblown
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