Morgan Stanley: No US-China trade deal means global recession. Analysts at the multinational investment bank said yesterday that if talks between the two countries fall apart and the US imposes 25 percent tariffs on $300 billion of Chinese goods, “We see the global economy heading towards recession.” The firm predicts that this would lead the Fed to cut interest rates to zero within 12 months.
Shoe companies to President Trump: Don’t raise the tariffs. Over 170 companies including Nike and Adidas signed a letter to President Trump warning that “the proposed additional tariff of 25 percent on footwear would be catastrophic for our consumers, our companies, and the American economy as a whole.”
Trump can’t block Mazars from giving Congress his financial records. A federal district judge ruled that Trump can’t block the accounting firm Mazars USA from turning over his financial records to the House Oversight and Reform Committee, at least while litigation over the matter continues. Trump’s lawyers tried to block the request by claiming it was politically motivated but Judge Amit Mehta ruled, “It is not for the court to question whether the Committee’s actions are truly motivated by political considerations.” Trump has vowed to appeal.
The IRS audit rate has fallen again. The IRS released its newest Data Book, which reports that in fiscal year 2018 the agency collected nearly $3.5 trillion and processed over 250 million tax returns and other forms, and issued $464 billion in tax refunds. The Wall Street Journal takes a closer look (paywall) at the IRS audit rate, which fell from 0.62 percent in 2017 to 0.59 percent last year. It was the seventh consecutive annual decline in audits of individual tax returns.
Alice Rivlin made state and local governments better, too. TPC’s Tracy Gordon and Richard Auxier reflect on the broad impact she had as a champion of federalism—or balanced power among federal, state, and local governments.
Soda taxes: A net good, says a team of economists. Researchers from New York University, the Wharton School at the University of Pennsylvania, and the University of California at Berkeley reach the conclusion in two National Bureau of Economic Research papers released yesterday. They estimate that a nationwide soda tax would yield $7 billion in net benefits to society each year.
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