Economy

US House Republicans unveil broad package of tax cuts

Published

2 years ago

June 10, 2023

Republicans in the U.S. House of Representatives on Friday unveiled a series of new tax breaks aimed at businesses and families while proposing to reverse some of President Joe Biden’s legislative victories, including credits to spur the sale of clean-burning electric vehicles.

Three related bills were introduced on Friday with the goal of moving the legislation through the House Ways and Means Committee next week. That is when the Joint Committee on Taxation also is expected to release its analysis of the package.

White House spokesperson Karine Jean-Pierre termed the proposals a “tax scam” and alleged that “(Republican) priority isn’t reducing the deficit or out-competing the world, their priority is giving handouts to rich special interests and corporations at the expense of everyone else.”

Democrats already were focusing on whether the tax legislation could add to the ballooning federal debt.

“These policies will provide relief for working families, strengthen small businesses, grow jobs, and protect American innovation and competitiveness,” Ways and Means Chairman Jason Smith said in a statement.

The committee said there are hundreds of billions of dollars worth of provisions included. Some are expansions of tax breaks while others eliminate or roll back existing ones, such as Biden’s electric vehicle credit.

Representative Richard Neal, the panel’s senior Democrat, said Republicans were “laying the groundwork for even bigger cuts in 2025” when provisions of the 2017 tax law expire. The measure introduced on Friday, Neal said, would usher in “retroactive corporate tax cuts, next-to-nothing for the most vulnerable children and families, and sneaking in favors for Big Oil.”

Republicans, who control the House, introduced the proposals days after Biden, a Democrat, signed into law legislation Republicans sought to begin addressing the rapidly-growing debt with about $1.3 trillion in spending cuts.

The law was coupled with an urgently needed increase in U.S. borrowing authority by suspending the debt limit through Jan. 1, 2025.

Under the proposed legislation, married couples filing jointly would receive a $4,000 “deduction bonus” for two years that the committee said would potentially help up to 107 million families who take the standard deduction.

The legislation also would significantly increase the way businesses could claim depreciation deductions, raising the threshold to a permanent $2.5 million from the current $1 million that was contained in the Republicans’ broad 2017 tax cut package.

Other provisions include an expansion of tax benefits for small start-up enterprises to “S Corporations,” while eliminating some “red tape” that small businesses experience related to contract workers.

Democrats on the Ways and Means panel are expected to offer amendments to the bill, including a permanent expansion of an expired portion of the Child Tax Credit that lifted nearly 4 million children out of poverty in just one year during the coronavirus pandemic. Republicans have opposed the measure.

Any bill that emerges from the House would likely face stiff opposition in the Democratic-controlled Senate.

Economy

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

Published

12 months ago

December 26, 2023

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.

The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.

Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.

“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.

Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.

“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.

The bank will next convene to set its benchmark rate on Feb. 16.

The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.

Economy

China identifies second set of projects in $140 billion spending plan

Published

12 months ago

December 25, 2023

China identifies second set of projects in $140 billion spending plan

© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo

SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.

With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.

The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.

China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.

The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.

“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.

The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.

($1 = 7.1315 renminbi)

Economy

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

Published

12 months ago

December 25, 2023

Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.

“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.

Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.

“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.

The bank will next convene to set its benchmark rate on Feb. 16.

The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.