Team Trump unveils sweeping tax reform plan
The Trump administration on Wednesday released the outlines of what it called “the biggest tax cut” in US history — a plan that included huge cuts for businesses and the elimination of deductions for state and local income taxes for individuals.
In a White House briefing, Treasury Secretary Steven Mnuchin and national economic director Gary Cohn offered some details of the sweeping reform plan.
“We are going to cut taxes and simplify the tax code by taking the current seven tax brackets we have today and reducing them to only three brackets: a 10 percent bracket, a 25 percent bracket and a 35 percent bracket. We’re going to double the standard deduction. So that a married couple won’t pay any taxes on the first $24,000 of income they earn. So in essence, we are creating a zero tax rate, yes, a zero tax rate for the first $24,000 that a couple earns,” Cohn said.
The plan would also eliminate the federal income-tax deduction allowed for state and local taxes — a provision that would hit high earners in high-tax states, including New York, New Jersey and Connecticut. The only itemized deductions that would be preserved under the plan would be for home mortgage interest and charitable contributions.
More than a third of Europeans and Americans would be happy to go without cash and rely on electronic forms of payment
The study, which was conducted in 13 European countries, the United States and Australia, also found that in many places where cash is most used, people are among the keenest to ditch it.
Overall, 34 percent of respondents in Europe and 38 percent in the United States said they would be willing to go cash-free, according to the survey conducted by Ipsos for the ING bank website eZonomics.
Twenty-one percent and 34 percent in Europe and the United States, respectively, said they already rarely use cash. The trend was also clear. More than half of the European respondents said they had used less cash in the past 12 months than previously and 78 percent said they expected to use it even less over the coming 12 months.
Payment systems such as contactless cards and mobile-phone digital wallets have become so prevalent the issue has become political in some countries. Cash-loving Germans, for example, have been concerned that a move by the European Central Bank to phase out the 500 euro note by the end of next year is the start of a slippery slope.
America’s Rich Get Richer and the Poor Get Replaced by Robots
America’s working class is falling further behind. The rich-poor gap the difference in annual income between households in the top 20 percent and those in the bottom 20 percent -- ballooned by $29,200 to $189,600 between 2010 and 2015, based on Bloomberg calculations using U.S. Census Bureau data.
Computers and robots are taking over many types of tasks, shoving aside some workers while boosting the productivity of specialized employees, contributing to the gap. “Technological developments have increasingly replaced low- and mid-skilled jobs while complementing higher-skilled jobs,” said Chad Sparber, an associate professor and chair of the economic department at Colgate University.
This shift is predicted to continue. About 38 percent of U.S. jobs could be at high risk of automation by the early 2030s, according to a study by PricewaterhouseCoopers LLP. The “most-exposed” industries include retail and wholesale trade, transportation and storage, and manufacturing, with less-educated workers facing the biggest challenges.
Companies’ use of temporary and part-time employees to cut costs also may be widening the disparity, with wage growth failing to keep up with rising residential and basic-necessity expenses. As the divide grows, hardships increase for the bottom 20 percent. Affordable housing, for example, is in short supply nationwide, forcing workers to find shelter further from their jobs and endure lengthier and costlier commutes. Rental costs rose nationally by 3.9 percent in March from a year earlier, according to the Labor Department.
U.S. Congress may seek one-week funding extension to avert shutdown
The U.S. Congress inched toward a deal to fund the government through September but was preparing to possibly extend a midnight Friday deadline in order to wrap up negotiations and avoid an imminent government shutdown.
The one-week extension would give leading Republicans and Democrats “a little breathing room” to finish negotiations and present their plan for spending around $1 trillion through the rest of the fiscal year to rank-and-file lawmakers, according to a House of Representatives source familiar with the talks. Negotiators were racing against the clock to clear away remaining disputes in the massive spending bill.
One of those disputes, over a Democratic demand for the continuation of healthcare subsidies helping millions of low-income people afford Obamacare, appeared to be resolved. Two other sources familiar with the negotiations said the White House had assured Democrats the administration would continue the program, at least for the time being.
Republicans in Congress have said they do not want to disrupt the landmark 2010 Affordable Care Act, popularly known as Obamacare, that expanded healthcare to millions of Americans while they craft legislation to repeal large parts of the program and replace it with a different healthcare system.
30 is the new 20 -- that's the economy’s fault
“Sorrow makes us all children,” Ralph Waldo Emerson once wrote. But if he were alive today, he would probably be blaming the economy. Living with parents, staying in school forever and not starting families until late in life aren’t just tropes of America’s favorite TV shows, they’re some of the defining attributes of today’s young adults, according to Census data.
The bureau looked at people aged 18 to 34 -- roughly corresponding to the millennial generation -- and compared them with people who were in that age bracket in 1976. It found that young Americans today are taking far longer to reach goals that have long been understood as markers of adulthood, like moving out of their parents’ homes, getting married or having children.
In 1976, nearly half of young adults had accomplished the four traditional “markers of adulthood:” entering the labor force, leaving their parents’ home, getting married and having a child. In 2016, only 24 percent had done so. It’s more common for today’s young adults to live with a parent than to live with a spouse. In fact, living with parents is the most common arrangement for 18- to 34-year-olds.
And Americans’ understanding of just how “adult” an adult needs has changed, too. With young people finishing school later and taking longer to find work, they’re putting off families -- and putting less importance on them.
Hensarling Says Dodd-Frank Has Made Banks Even Bigger
Why Even Full-Time Workers Struggle With Expenses
Unemployment is low, inflation is historically low and even wages are perking up, leading many observers to believe the U.S. economy is humming along nicely. So why do many Americans say they are struggling?
A new book born of meticulous, years-long research offers a fresh insight into this burning question. Month-to-month swings in income, even for those with full-time jobs, are often the cause of Americans” financial anxiety, claim the authors of “The Financial Diaries: How Americans Cope in a World of Uncertainty.”
For a stunning number of American households, both income and expenses swing 25% or more in either direction on a regular basis, leaving many families scrambling on a month-to-month basis, even if things don’t look so bad annually, the authors argue in their book and a Harvard Business Reviews essay.
Economic data tends to examine broad movements; even at its most micro, it tends to identify years-long trends. Researchers Jonathan Morduch and Rachel Schneider had a sense government statistics were missing things, so they went nano. They spent 12 months getting 235 families to track every single dollar going in and out — 300,000 cash flow events in all. The product of their painstaking research offers perhaps the clearest view yet of why even middle-class Americans find themselves living with deep economic anxiety. The book even offers up a new term — “precarity,” or precarious economic volatility — to describe the plight of everyday Americans.
These Americans will never get Social Security benefits — and we don’t mean millennials
Today’s young people fear that they will never see Social Security benefits. The reality is, 3% of elderly Americans already don’t.
The three main groups of people who never receive Social Security benefits include infrequent workers (44.3%) who do not have sufficient earnings to qualify for the benefits, immigrants who arrived in the U.S. at 50 or older (37.3%) and therefore haven’t worked long enough to qualify for the benefits, and non-covered workers (11.4%), such as state and local government employees. A little less than 7% of “never beneficiaries” were individuals who were expected to get Social Security benefits, but died before receiving them, according to a 2015 Social Security Administration report.
What’s worse, most Americans may not realize how much they will — or will not — receive in Social Security benefits, said Bill Meyer, chief executive of Social Security Solutions, a software provider that strategizes how to claim Social Security. Social Security benefits are based on earnings history from the past 35 years — “The onus is on the individual retiree that the Social Security Administration has the right information,” Meyer said.
Social Security benefits are hotly contested, specifically how — or even whether — those benefits will be distributed in the future. Young Americans say they’re not confident they’ll ever collect Social Security benefits (81% of millennials didn’t think so, at least, according to a recent Investopedia survey) but current near retirees may also be at risk. In December, the House Ways and Means Social Security Subcommittee introduced a bill that would “save” Social Security by cutting benefits for above-average earners, eliminating the cost-of-living adjustment for individuals who make more than $85,000 (and $170,000 for couples), and increasing the full retirement age to 69 from 66.
Why Fed May Take a Summer Breather on Rate Hikes
In its latest US Economic Viewpoint report, Bank of America says that Fed Chairman Janet Yellen and the central bank are likely to take the summer off when it comes to announcing a rate hike at its June meeting. But don't be fooled. BofA analysts see the Fed announcing rate increases five times between now and the end of 2018.
The Federal Reserve Board will instead focus on interest rate normalization this year, likely boosting rates only twice and waiting until 2018 to start trimming its $4 trillion balance sheet, BofA says. Shrinking the portfolio too quickly or in the wrong way could disrupt the markets, many investors say.
BofA quotes Fed Vice Chairman Stanley Fischer as saying, "As we continue to discuss and eventually implement policies to reduce our balance sheet, we will have to continue to monitor market developments." Or, as BofA's own analysts put it in their report, "The Fed does not want to surprise the market, preferring to dribble out details, thereby allowing the Fed to test the market reaction."
BofA anticipates that economic data will not be strong enough in June to warrant a rate hike at that time, but that increases will be approved at the Fed's September and December meetings. After those increases, the Fed Funds Rate target range would be 1.25% to 1.50%.
Will Trump Tax Plan Be Bad News For Gold?
Chipotle's latest crisis: its payment system has been hacked
The sour taste of Chipotle's food-borne illness problems still lingers, and now there's another fly in the salsa. The chain's payment system has been hacked.
Chief Financial Officer Jack Hartung revealed news of the hacking during a conference call with Wall Streeters. He said it was apparently going on between March 24 and April 18 before the company found out about it.
“Because our investigation is continuing, complete findings are not available, it’s too early to provide further details on the investigation,” Hartung said, according to published reports.
That's about all the company is saying so far. Hartung did promise that the company will notify customers who may have been affected by the breach once it learns more about specific restaurants that may have been affected and the exact timeframe for each.
US Oil Bankruptcies Up 2,650% As Pain Continues
It seems that from an observer’s point of view, the US onshore oil bust that began back in 2014 is starting to come to an end. As oil prices have ticked steadily higher over the past six months, companies have started to spend on well development once again, and the number of active rigs operating is increasing but oil bankruptcies are still high ….. to say the least.
The US active land rig count climbed 28 rigs to 824 rigs the week ended April 14, according to RigData. The last time the US horizontal rig count was above 700 rigs was about two years ago on April 3, 2015. And increased activity is putting upward pressure on rig prices, the first sign that the market is starting to tighten. During the first quarter, the average day rate increased by 3.5% to $14,600, according to RigData, the biggest quarter-to-quarter jump since the previous post-bust recovery in 2010.
However, while some companies are starting to drill again, it seems others are still struggling to keep the lights on.
According to the first quarter 2017 issue of the Haynes And Boone, LLP Oil Patch Bankruptcy Monitor, During the month of January, four E&P companies filed for bankruptcy with cumulative debt of approximately $3.2 billion. Meanwhile, in the month of February, one E&P company filed for bankruptcy with cumulative debt of $2.3 billion. As of February 20, 2017, five producers have filed bankruptcy in 2017, representing approximately $5.5 billion in cumulative secured and unsecured debt. This total may pale in comparison to the cumulative $79.7 billion in secured and unsecured debt tracked by the report since the beginning of 2015, but compared to the same period last year, bankruptcies are up significantly.
Study: Young Americans unwilling to work high-paying construction jobs
Sometimes, the stereotypes are true. No generation has faced harsher stereotypes than millennials. And while Red Alert has defended young Americans from many baseless criticisms, a new study seems to prove one millennial stereotype to be real.
A poll from the National Association of Home Builders (NAHB) of young Americans ages 18-to-25 shows that almost no millennials want a career in construction — a high-paying industry. 64 percent of these millennials said they wouldn’t even consider working in construction if you paid them $100,000 or more.
74 percent of young adults know what career field they want to pursue, and of these millennials, just 3 percent want a career in construction trades. What’s more stunning is that of the 26 percent who don’t know what career they want, 63 percent of these undecided millennials said there was “no or little chance regardless of pay” that they would work in construction trades.
The most popular trades among these undecided millennials are business/management, technology/IT, medical, marketing, and media — none of which are hard labor-intensive. In fact, NAHB further questioned these undecided adults and asked them why they wouldn’t consider construction trades. Half of them said they wanted “a less physically-demanding job.” 32 percent said, “construction work is difficult.”
This bubble finally burst. Which one’s next?
Like so many other high-flying Silicon Valley startups, Clinkle was supposed to ‘make the world a better place’. Founded in 2011 by a guy barely out of his teens, the company picked up early buzz after proclaiming they would disrupt mobile payments. Or something.
Silicon Valley venture capital firms were apparently so impressed with the idea that they showered the company with an unprecedented level of cash. (Given that investing in an early stage company is high-risk, investors might provide a few hundred thousand dollars in funding, at most. Clinkle raised $25 million.)
The company went on to burn through just about every penny of its investors’ capital. There were even photos that surfaced of the 21-year old CEO literally setting bricks of cash on fire. At the end of the farce, Clinkle never actually managed to build its supposedly ‘world-changing’ product, and the website is now all but defunct. This is rapidly becoming a familiar story in Silicon Valley.
For the last 6-7 years, Silicon Valley startups have been able to raise unbelievable amounts of cash. Yet so many of those companies haven’t managed to turn a profit. Ever. There’s some of the big names like Uber and AirBnb which are supposedly worth tens of billions of dollars despite having racked up enormous losses. (Last year ride-sharing company Lyft promised investors that it would cap its losses at ‘only’ $600 million per year. . .)
Google Gives Employees Permission To Walk Out On Their Jobs For Trump Protest
Google is allowing workers to take off from work May 1 to protest President Donald Trump, whether or not they give advance notice. Pro-immigration groups, socialist organizations, labor unions, and hundreds of thousands of workers are planning to walk out on their jobs on International Workers Day to voice their displeasure with the Trump administration, reports Buzzfeed.
“We respect everyone’s choice to act on their beliefs,” a Google spokesperson told BuzzFeed News. “We care deeply about creating an environment at Google where everyone — employees and contractors, engineers, cafeteria workers and janitorial staff — feels comfortable doing so. We’re asking managers to be flexible in accommodating time-off requests and have let our vendor partners know that we support them doing the same.”
Google also encouraged business associates to give their workers the opportunity to take the day off without any retribution. “The move comes after over 40 labor, immigrant rights and community organizations issued a letter to Google, calling on them to make a public commitment to ensure that subcontracted employees working in Google offices would be protected if they chose to participate in May 1 demonstrations or rallies,” Meghan Cohorst, a spokesperson for UNITE HERE, a labor union representing around 270,000 people, told The Daily Caller News Foundation.
It is not very surprising that Google is permitting their workers to walk out on their jobs to demonstrate against Trump. The former CEO of Google, Eric Schmidt, who now serves as the executive chairman of parent company Alphabet, told an audience of employees in January that the Trump administration is “going to do these evil things as they’ve done in the immigration area and perhaps some others.”
Craig Hemke-Markets Held Together With Electronic Bailing Wire & Digital Chewing Gum
Barack Obama’s $400,000 speech to Wall Street sparks liberal blowback
The former leader of the free world is suddenly facing intense criticism. Barack Obama has accepted a $400,000 speaking fee for a Wall Street conference that will be hosted by Cantor Fitzgerald LP, according to a report by Fox Business.
This is almost twice as much as the speaking fees Hillary Clinton charged for three speeches to Goldman Sachs after she left the State Department. She later came under immense criticism during her campaign for receiving so much money to speak to Wall Street firms. According to the Washington Post, her husband and former president Bill Clinton “earned more than $16.3 million for 72 speeches” in 2012 — averaging around $226,000 per speech. CNN also reported he was once paid $750,000 for a speech to telecom firm Ericsson.
Obama will address a health care conference scheduled for September and the 44th president will reportedly be the keynote luncheon speaker for one day of the event. Although Obama has already signed the contract, the early reports indicate that Cantor Fitzgerald is still in the process of coordinating the details with the former president. Obama can still reportedly pull out of the deal if there are scheduling conflicts or if he finds himself on the receiving end of negative publicity. And Obama’s already received boatloads of negative publicity.
“Obama’s $400,000 Wall Street speaking fee will undermine everything he believes in,” wrote Vox’s Matthew Yglesias this week. “To fight the rising tide of populism, mainstream leaders need to raise their ethical game,” he argued.
Boeing Sales Disappoint After Fewest Jet Deliveries Since 2014
Boeing Co.’s sales slumped as jet deliveries fell to the lowest in three years, ahead of the impending debut of a new version of the company’s best-selling plane.
Revenue dropped 7.3% to $21 billion in the first quarter, about $200 million less than analysts had estimated. Weak sales overshadowed a surprise gain in free cash flow as the manufacturer kept costs in check and started to reap a long-awaited payoff from the 787 Dreamliner
The report spotlighted Boeing’s need to make its factories more efficient as it girds for a slowing aerospace market. While the Chicago-based manufacturer raised its forecast for 2017 earnings because of improved tax expectations, it didn’t boost the cash outlook -- a crucial number for investors as aircraft orders fade late in a sales cycle that began more than a decade ago.
“The stock has been a high flier for a while,” George Ferguson, an analyst at Bloomberg Intelligence, said on April 26. “People clearly had high expectations and this was a middling report.”