The republicans and the tax reform

The Republicans try hard to keep their promise and reform the health care system, but things are not at all as easy as they may seem. As we all know, the Trump administration said it loud and clear that one of its goals was to cut taxes in 2017, and now Republicans in Congress are desperate to show that they have no problem doing it. On July 27th leaders from Congress and the White House announced they had come to an agreement on the main ideas of tax reform. Few days later, the White House set out an tough timetable to pass a bill through the House in October and afterwards, the Senate the following month. Yet Republicans are not at all as united as it would be indicated regarding tax policy.
Though tax “reform” is not the best way of putting it. The last true reform, in 1986, under Ronald Reagan, reduced tax rates without many loses in the revenue by dropping out swathes of tax deductions. Crucially, it was a joined effort of all those involved, which made it easier for Congress to take on the interest groups which fiercely defend the benefits they gain from carve-outs. Though both sides seemed open-minded to negotiating, it’s not sure they will be willing to co-operate. The Democrats consider that wealthy Americans must not see any tax cuts—a demand that clashes with all recent comprehensive conservative
The Republicans alone are unlikely to enlarge the tax base much. The administration has shown little interest to accept some expensive tax breaks like those for mortgage interest and employer-provided health insurance, and, for corporations, an important deduction for the interest. All three are defended by very strong lobbies. Only the deduction for state and local taxes seems firmly decided, which mainly benefits residents of high-tax Democratic states such as California and New York. Those who intend to cut taxes criticize callously the corporate-tax system for favouring particular industries. But the biggest such breaks go to domestic manufacturers and oil and gas producers. As President Donald Trump gets caught in the middle and wouldn’t want either abolished. The problem is that the potential tax base actually shrank, because they ruled out a controversial “border adjustment” to the corporate tax, which would have been applied to imports, but also to exports. This situation makes things even more difficult to handle. In order to do it by themselves, Republicans will need to stick united. The procedure allows tax legislation to pass with just 51 votes, but only once a budget is defined. It is all too clear that politicians must bear in their minds the fact that these changes would come with their own costs, before seeing their effects on the well-being of the average Americans.

The American Dollar, is it still safe?

It is quite acknowledged already that then things begin to go bad, and the global economy is down, when trouble is all around and anxiety increases dramatically, those who deal money, but not only them, start thinking about a particular currency, that is the American dollar.

In the context of strong international turbulence, as the American leader Donald Trump launched furious threats on North Korea,  if it continued to menace the United States, global investors sold the dollar. The same phenomena happened in June, as Saudi Arabia and other Arab nations imposed an embargo on Qatar, followed by a serious crisis to the Persian Gulf- an area of intense interest, because of its oil-rich soil. . But the American currency was even more affected in July, after the Russian President Vladimir V. Putin expelled 755 American diplomats which increased even more the level of tension between the two nuclear powers.

In a fact that the dollar remains the main instrument for global trade and it is  highly probable it is going to stay like that for quite sometime. Yet those who work in the field of currency trading begin to realize that  the dollar may be losing some status on the markets, as they struggle to deal with the uncommon measures taken  by the leader of the nation.

 

Taken into account that president Trump is such an unpredictable character and his presidency has been so full of unexpected reactions so far from what national as well as international norm predicts, it is understandable why existing plans had to be readjusted. Furthermore,  the dollar became subject to additional skepticism, making it slip even lower. Some even began worrying about the real strength of the American currency, while others in Europe and Asia built fortunes.

The dollar has in a way become an international medium of expression for the American political environment “At the margin, investors may be a little more cautious in treating the dollar as safe haven,” said Jeremy Cook, chief economist at World First, a London-based company that deals with foreign exchange transactions. “Certainly, the sentiment toward the viability of the Trump administration has not helped. There’s the risk that at 3 a.m., Trump tweets something and the dollar gets hit.”

Even before Donald Trump became president, many investors were buying into the so-called Trump trade, a bet that the new president’s economic plans and measures – like tax cuts and heavy infrastructure spending-   would spur economic growth. This formula worked wonders on the stock market. Also, during the Trump administration, American shares have reached new highs, which is indeed a gratifying thing. We can only hope and pray for a good outcome.

 

Westinghouse reaches deal for $800 million U.S. bankruptcy loan

(Reuters) – Westinghouse Electric Co told a U.S. court on Tuesday the nuclear power company had reached a deal to borrow $800 million after allaying creditors’ concerns that the money would be flowing to non-bankrupt affiliates overseas.

from Reuters: Business News http://ift.tt/2qM04YJ