Trump says new China tariffs will begin next week. Yesterday, the President said the US will impose 10 percent tariffs on an additional $200 billion in Chinese imports starting on September 24. The White House says the rate will rise to 25 percent by year’s end. Trump also insisted that “China is now paying us billions of dollars in tariffs.” The Treasury Department, he said, is collecting “tremendous amounts of money, which is great for our country.” Tariffs, of course, are paid by American importers, not the exporting country.
National Economic Council Director Larry Kudlow sees prospects for Tax Cuts 2.0. The White House’s top economic advisor told the Economic Club of New York that he does not think that congressional Republicans can pass the second round of tax cuts before the November mid-term elections. But, he said, “it’s a good message,” and adds the GOP “can do a lot more on tax reform going down the road.”
Thirty US states don’t have the cash reserves necessary to weather Year One of a recession. Their financial health improved in 2018, according to a Standard & Poor’s Global Ratings report released yesterday. Yet fewer than half of US states have enough financial reserves to meet spending requirements in the first year of a moderate recession. Only 20 have enough cash to avoid having to raise taxes or cut spending. In a separate report, S&P competitor Moody’s Analytics was slightly more upbeat: It projected that 23 states have enough in their rainy day funds to ride out a recession.
Meanwhile, few Americans are concerned about the economy. A new Gallup poll finds that only 12 percent of Americans cite the economy as the most important issue facing the US. This is down from 17 percent last month. In fact, 55 percent of Americans say the economy is getting better and 64 percent think now is a good time to find a quality job. This isn’t to say Americans are entirely happy: 29 percent say dissatisfaction with the government is the top issue facing the nation.
The billionaire heir managing the National Debt Clock supports higher taxes on the rich. That would be Douglas Durst, son of Seymour Durst, who installed the National Debt Clock in 1989 on one of his buildings off New York City’s Times Square. Why does he support a tax hike? He thinks the nation has a revenue problem. JP Morgan estimates that by the end of this year and for the first time in modern history, total federal debt held by the public ($127,000 per household) will exceed all debt that US households have for mortgages, credit cards, cars, student loans and other personal loans ($126,000 per household). Happy New Year?
Second opinion or sand in the gears? TPC’s Len Burman considers the recent agreement between Treasury and the Office of Management and Budget that allows OMB to review many tax regulations before they’re released. Burman doubts the value of OMB’s review or the need to apply cost-benefit analysis to tax regulations. This new process will be the subject of a TPC forum from 12:30 to 2:30pm on Thursday, September 20, at the Urban Institute. Register here.
If you’d like to tell us about a new research paper or have any comments about the Daily Deduction, TPC’s summary of the day’s tax news, write Renu Zaretsky at [email protected]. You can sign up here to receive the Daily Deduction as an email newsletter every weekday morning (Mondays only when Congress is in recess) at 8:00 am.
