Category Archives: News

Tax Reform: A Work in Progress

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Many businesses which form the backbone of the US economy are worried about the Trump tax reform plan and the possible negative effects it could have on the economy.

Sectors of the US economy such as construction, wind power, and electric cars might experience job shrinkage and harm done if the Republican tax plan is enacted as it is now.

The effects of the tax plan, although only in its earliest stages and nowhere near law, have already been felt in the marketplace. Vestas Wind Systems, the world’s largest manufacture of turbines used in wind power, saw its stock tumble by 9 percent. Tesla, the leading electric car maker had a stock downturn as well, closing lower by 6.8 percent. The Trump plan includes cutting the $7,500 tax break for the purchase of an electric car.

Homebuilders are also up in arms over the tax reform. The National Association of Home Builders are taking aim at the Republican’s proposal to remove the tax credit for mortgage payments. The chairman of the association, Granger MacDonald, said that congress was “ignoring the needs of America’s working-class families and small businesses.”

“The bill eviscerates existing housing tax benefits by drastically reducing the number of homeowners who can take advantage of mortgage interest and property tax incentives,” he said.

Some stocks of homebuilders’ companies lost ground. Toll Brothers fell almost 6%, among the worst casualties.

Others are happy with the plan. The US Chamber of Commerce endorsed the plan cautiously, saying the plan was “exactly what our nation needs to get our economy growing faster”, but “a lot of work remains to be done to get the exact policy mix right.”

Wildfires Burning Across Western USA

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Photo courtesy of the US Department of Agriculture

This year has been a hard one when it comes to natural disasters. Florida, Texas, the Caribbean and beyond were devastated by Hurricane Irma. Southeastern Texas, Louisiana and more suffered from the winds, rain and flooding caused by Hurricane Harvey. In Southeast Asia floods caused by monsoon rain have forced millions to flee and resulted in over 1,000 deaths. But water and wind are not the only deadly vectors mother nature can unleash.

In the United States the western states of California, Oregon, Montana, Washington and more have been enduring raging, fast spreading wildfires producing smoke and ash extending far beyond the confines of the fires themselves. As of September 14, almost 2 million acres were burning, an amount of land equivalent in area to the states of Rhode Island and Delaware put together. That area includes 41 un-contained large blazes under attack by a force of National Guard responders numbering over 25,000; half a battalion of soldiers.

Those two million acres now in flames is only a fraction of the 8 million that has already burned so far this season. More than 500 homes have also been destroyed, and the Forest Service has spent over $1.75 billion fighting these fires this fiscal year. The Interior Department has spent over $391 million.

In ordinary years the autumn would bring relief from summer-prone wildfires, but this year there seems to be no end in sight. One of the explanations for the severity and length of the fires is the severe drought that Montana, Oregon and elsewhere have seen this year. Record high temperatures over the summer completely dried up any regions that had been soaked with snow and rain last winter and spring.

Houston Mayor Says Flooded City Ready for Business

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Saying Labor Day is the deadline, Houston’s Mayor Sylvester Turner says his city, America’s fourth-most populated, will be “open for business” despite mandatory evacuations of flooded homes, billions of dollars in damage, and many parts of town still under water due to Hurricane Harvey, which made landfall in south east Texas on August 25th, 2017.

“Anyone who was planning on a conference or a convention or a sporting event or a concert coming to this city, you can still come,” the mayor said to CBS. “We can do multiple things at the same time.”

Officials are still worried about explosions at a chemical plant damaged by the hurricane, the country’s most devastating in ten years. To ease the danger of further explosions experts performed a controlled burn last Sunday of extremely volatile compounds at the Arkema facility in Crosby. After Harvey’s flooding knocked out generators three trailers caught fire.

The authorities stated that they are continuing to monitor the air quality within a mile and a half radius of the plant, which is outside Houston. People within the vicinity of the chemical plant have still not returned to their homes.

In addition, floodwaters have overcome at least five toxic waste Superfund locations close to Houston, with the possibility that some may have sustained damage. The Environmental Protection Agency has not yet assessed the full extent of the damage.

Favorite New York Hot Dog Recalled as “Health Hazard”

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Over 7 million pounds of hot dogs and sausages are the subject of a recall by a New York meat processor. Most of those recalled were packaged under the well-known New York brand Sabrett.

The recall was spurred by complaints by consumers who encountered small pieces of bone within some of the products, according to the US Department of Agriculture.

Only one case of a “minor oral injury” has been reported due to the extra, unwanted ingredient found in the meat. There were no other reports of injury or illness due to the products, which were produced by Marathon Enterprises Inc., a meat processing establishment located in the Bronx.

The hot dogs were sold across the country, most of them under the Sabrett brand, said the USDA.

“As a fourth-generation, family-owned company, Sabrett takes its responsibility to provide safe foods very seriously with a robust internal food safety program,” Marathon said in a statement posted on its website. “Sabrett deeply regrets any concern or inconvenience this has caused its loyal customers.”

Sabrett brand hot dogs are the very ones sold by vendors all over New York City from pushcarts covered by yellow and blue umbrellas.

The suspicious hot dogs were manufactured from March 17 until July 4, carrying a sell-by date ranging from June 19 to October 6, 2017.

The USDA made the meat subject to a Class 1 recall, meaning that the governmental agency believes the meat to be a health hazard that presents a “reasonable probability” of causing “serious, adverse health consequences or death,” if eaten. The Englewood, New Jersey-based company stated that it is recalling the produce out of “an abundance of caution.”

Tax Reform Plans: A Global Overview

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Tax reform plans are often in the making in different parts of the world.  In this article we examine what is going on in the Philippines, the US and Great Britain.

First, the Duterte administration is moving toward more inclusive economic growth, with an assurance from the business community supporting tax reform plans. The  Comprehensive Tax Reform Program (CTRP) is being put to the BusinessWorld Economic Forum.  Chairman of the Metro Pacific Investments Corporation, Manuel V. Pangilinan, said “CTRP is central to DuterteNomics; it is in fact the catalyst to the government’s 10-point economic program. That is why I believe the business sector should support it.”

Second, it’s quite interesting what is happening with tax reform in America, primarily because of how concise the plan is.  In just one page, Trump outlined possibly the largest tax cut individuals have received (since Reagan’s administration) in his tax code reformation proposal. Should it go ahead, a reduction from seven to three in the current tax brackets would be implemented with rates of 10 percent, 25 percent and 35 percent. a married couple would have nearly double in their deductions and would not even have to any amount of taxes on the first $24,000 income they earn, effectively creating a zero tax rate. Tax breaks for charitable giving, mortgage interest and retirement savings would remain in place.

Trump also is seeking to eradicate state and local tax deductions.  According to the Tax Policy Center, the SALT deduction is one of the largest federal tax expenditures, with an estimated revenue cost of $96 billion in 2017 and $1.3 trillion from 2017 to 2026, in an effort to put an end to the Alternative Minimum Tax (AMT) which calls for over 5 million taxpayers to calculate their liability twice and then pay the higher amount.

Third, when looking at the situation in Great Britain, Theresa May is running on a platform of tax reduction for businesses and working families. She is promising no increase in value-added taxes and a maintenance of plans to cut corporation tax to 17 percent by 2020.