Trump says no plan to pull out of NAFTA ‘at this time’

President Trump told the leaders of Canada and Mexico on Wednesday that the United States would not be pulling out of the North American Free Trade Agreement “at this time,” opening the door to future negotiations on the same day that Trump was considering signaling a strong intent to withdraw as a potential way of bringing the parties together at the deal-
making table.

Trump spoke with Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau late Wednesday afternoon after reports circulated during the day that the president was contemplating withdrawing from NAFTA.

“President Trump agreed not to terminate NAFTA at this time and the leaders agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation of the NAFTA deal to the benefit of all three countries,” the White House said in a statement late Wednesday.

News that Trump was weighing withdrawing from NAFTA drew sharp criticism from several Republican leaders, including Sen. Jeff Flake (R) and Sen. John McCain (R). McCain tweeted that Trump “shouldn’t abandon this vital trade agreement.”

Earlier, three people familiar with the matter said Trump is seriously considering signing a document within days that would signal his intent to withdraw the United States from the agreement within six months.

If signed, the letter would begin a formal process that could see the United States exit the 23-year-old trade pact with Canada and Mexico, ratcheting up tensions among neighboring nations.

Signing the document does not require Trump to withdraw from NAFTA after six months, but it is a required step if he plans to eventually do so. The White House is expected to soon take a separate step by signing a letter to Congress that would notify lawmakers of the administration’s intention to renegotiate NAFTA. By taking both steps, the White House would give itself more flexibility to choose a different outcome in several months.

Any move by Trump on NAFTA would not come as a surprise. The president made criticism of NAFTA one of the main topics of his campaign last year, calling the pact “a disaster for our country” and saying it “had to be totally gotten rid of.”

But the NAFTA issue did seem to lose some urgency after the first few weeks of Trump’s presidency as his administration focused on other topics.

“Some people were hopeful that just like he revised his views on NATO, he’d revise his views on this,” said Hoyt Bleakley, associate professor of economics at the University of Michigan. “But clearly he hasn’t.”

In recent days Trump also has taken a harder line with Canada, blasting a recent change in the dairy pricing policy there that mostly dealt with a cheese-making product called ultrafiltered milk. In Wisconsin last week, Trump called Canada’s dairy pricing scheme “another typical one-sided deal against the U.S.” Canada disputed that.

And the Commerce Department said Monday that it would begin charging a tariff on the import of softwood lumber from Canada into the United States, alleging Canada was improperly subsidizing its domestic timber firms.

But there was no panic over the fate of NAFTA in the Calgary offices of the Canadian Cattlemen’s Association, whose members sell and buy plenty of beef cattle across the border.

“This is his typical way of doing things — saying completely unreasonable things as a negotiating posture,” said John Masswohl, the trade group’s director of government and international relations.

Masswohl said he watched how Trump handled issues at the Carrier plant in Indiana and with Ford’s plans to build car models in Mexico. He sees similar rhetoric in Trump’s approach to NAFTA.

“I’ve got to believe this is a negotiating position,” Masswohl said, because the trade pact might need tweaking, but it has been good for both countries.

Separately, the Trump administration Wednesday made another move on trade that seemed aimed at China, launching an investigation into the effect of aluminum imports on U.S. national security interests.

A similar probe, known as a Section 232 investigation, was announced for foreign-made steel last week.

Commerce Secretary Wilbur Ross said Wednesday that Trump would be signing a directive today urging the inquiry.

 

Ross said aluminum was a national security interest because the metal in its high-purity form is used in military planes such as the F-35 and F-18, plus armor plating for military vehicles and combat vessels. Just one U.S. smelter makes high-purity aluminum, producing enough for peacetime military needs but not enough if the country enters into conflicts, he said.

“It’s very dangerous from a defense point of view to have only one supplier of an absolutely critical element,” Ross said.

Only two U.S. smelters are fully operational today, with eight others having curtailed operations or closed since 2015. Imported aluminum accounted for 55 percent of the U.S. market last year, the largest market share ever and a steep increase over recent years, Ross said.

The largest importers of aluminum into the United States are China followed by Russia, United Arab Emirates and Canada, Ross said.

Aluminum imports from China, in particular, have been a focus of the U.S. government for months. Late last year, a bipartisan group of 12 U.S. senators asked for a national security review of Chinese aluminum giant Zhongwang International Group Ltd.’s proposed $2.3 billion purchase of U.S. aluminum products maker Aleris, alleging the deal would damage the U.S. defense industry.

In January, days before leaving office, President Barack Obama launched a World Trade Organization complaint about Chinese aluminum subsidies that, the United States claimed, gave Chinese companies an unfair advantage.

And last month, U.S. producers of aluminum foil — including the kind used to wrap kitchen leftovers — filed an anti-dumping complaint against China, claiming the United States was being flooded with unfair, cheap imports. Foil prices have declined significantly in recent years “due to widespread and significant underselling of U.S. producers’ prices,” according to the complaint.

A couple of weeks later, Trump’s Commerce Department announced that it was investigating those and other unfair trade claims.

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Trump unveils biggest tax reform in over 30 years

WASHINGTON (AP) — President Donald Trump proposed dramatic cuts in the taxes paid by corporations big and small Wednesday in an overhaul his administration says will spur economic growth and bring jobs and prosperity to America’s middle class. But his ambitious plan alarmed lawmakers who worry about ballooning federal deficits.

The plan would also reduce investment and estate taxes aimed at the wealthy. But administration officials said that action on other key tax code elements would ensure the plan would largely help the middle class instead of the affluent.

The White House has yet to spell out how much of a hole the tax cuts could create in the federal budget, maintaining that the resulting economic growth would reduce — if not eliminate — the risk of a soaring deficit.

The outlined changes to the tax code are the most concrete guidance so far on Trump’s vision for spurring job growth.

“The president owns this plan; don’t be mistaken,” said Gary Cohn, director of the White House National Economic Council.

Treasury Secretary Steven Mnuchin, joined by National Economic Director Gary Cohn, speaks in the briefing room of the White House in Washington, Wednesday, April 26, 2017. (AP Photo/Carolyn Kaster)

Cohn said Trump and his administration recognize they have to be “good stewards” of the federal budget. But the plan as it currently stands could cause the federal deficit to climb, unless it sparks a massive and lasting wave of growth that most economists say is unlikely.

The threat of a rising budget deficit could erode support for the plan among lawmakers in Trump’s own Republican Party. Administration officials intend to hash out additional details with members of the House and Senate in the coming weeks for what would be the first massive rewrite of the US tax code since 1986.

“We know this is difficult,” Cohn said. “We know what we’re asking for is a big bite.”

As Cohn and Treasury Secretary Steven Mnuchin explained it in an interview, the plan would reduce the number of personal income tax brackets to three from seven: rates of 10 percent, 25% and 35%. It would double the standard deduction for married couples to $24,000, while keeping deductions for charitable giving and mortgage interest payments. The administration plans to provide tax relief for families with child care expenses, too, although the specifics have yet to be included.

On the other hand, the proposal would also trim other deductions utilized by wealthier Americans. This would include deductions for state and local tax payments, a change that could alienate support from lawmakers in states such as California and New York with higher state taxes.

“It’s not the federal government’s job to be subsidizing the states,” Mnuchin said.

The administration has emphasized that the plan was focused on simplifying the tax code and helping middle class Americans. The median US household income is slightly above $50,000 (NIS 182,000) annually.

Still, the proposal could reduce the tax burden for the wealthy as well.

It would also repeal the estate tax, the catch-all alternative minimum tax and the 3.8% tax on investment income from President Barack Obama’s health care law. The proposal has yet to be vetted for its precise impact on top earners, as several details are still being determined.

On the corporate side, the top marginal tax rate would fall from 35% to 15%. Small businesses that account for their owners’ personal incomes would see their top tax rate go from 39.6% to the proposed corporate tax rate of 15%. Mnuchin stressed that the change for small business owners — a group that under the current definition could include doctors, lawyers and even major real estate companies — would be done to ensure that wealthier Americans could not exploit the change to pay less in taxes.

Trump to propose large increase in deductions Americans can claim on their taxes

President Trump on Wednesday plans to call for a significant increase in the standard deduction people can claim on their tax returns, potentially putting thousands of dollars each year into the pockets of tens of millions of Americans, according to two people briefed on the plan.

The change is one of several major revisions to the federal tax code that the White House will propose when it provides an outline of the tax-overhaul pitch Trump will make to Congress and the American people as he nears his 100th day in office.

Trump will call for a sharp reduction in the corporate tax rate, from 35 percent to 15 percent. He will also propose lowering the tax rate for millions of small businesses that now file their tax returns under the individual tax code, two people familiar with the plan said.

These companies, often referred to as “pass throughs” or S corporations, would be subject to the 15 percent rate proposed for corporations. Many pass throughs are small, family-owned businesses. But they can also be large — such as parts of Trump’s own real estate empire or law firms with partners who earn more than a million dollars annually. The White House is expected to pursue safeguards to ensure that companies like law firms can’t take advantage of this new tax rate and allow their highly paid partners to pay much lower tax bills.

Trump’s proposed tax changes will not all be rolled out Wednesday. White House officials are also working to develop an expanded Child and Dependent Care Credit, which they hope would benefit low- and middle-income families facing substantial burdens in paying for child care. Trump had touted a tax measure for child care during the campaign, but it was criticized as not significantly benefiting families of modest means.

White House officials think these changes will give Americans and companies more money to spend, expand the economy and create more jobs.

The existing standard deduction Americans can claim is $6,300 for individuals and $12,600 for married couples filing jointly. The precise level of Trump’s new proposal could not be ascertained, but it was significantly higher, the two people said, who spoke on the condition of anonymity because the plan has not yet been made public.

During the campaign, Trump proposed raising the standard deduction to $15,000 for individuals and $30,000 for families.

Like other parts of Trump’s tax proposal, an increase in the standard deduction would lead to a large loss of government revenue.

A standard deduction works like this: If a couple filing jointly earns $70,000, they deduct $12,600 from their income, adjusting their income to $57,400. They then would pay taxes on the $57,400 in income, not the $70,000 they earned. Increasing the standard deduction would reduce their taxable income, ensuring that they can keep more of their money. A taxpayer who claims the standard deduction cannot also itemize deductions for items such as mortgage interest or charitable giving. But if the standard deduction is large enough, many would be likely to bypass the itemized deduction.

The nonpartisan Tax Policy Center estimated last year that if Trump raised the standard deduction as much as he proposed during the campaign, about 27 million of the 45 million tax filers who itemized their tax breaks in 2017 would instead opt to take the standardized deduction, creating a much simpler process.

This would also match one of the goals outlined by Treasury Secretary Steven Mnuchin. He has said that filing taxes has become too complicated for many Americans and that his goal would be for many Americans to be able to file their taxes on a “large postcard.”

White House officials including Vice President Pence also met late Tuesday with congressional leaders and said they wanted to pass a tax-code overhaul through a process known as “reconciliation,” a person familiar with the meeting said, which means they could achieve the changes with only Republican votes.

They also said they were going to push for steep cuts in tax rates but would be willing to raise some new revenue with other changes to the tax code. The White House on Wednesday is expected to reiterate this openness to new revenue without getting into specifics of which tax changes it would seek, as that could create a fierce corporate blowback based on which exemptions could be cut.

 

Congressional Republicans praised President Trump’s ambitious effort to overhaul the tax code and slash corporate income tax rates to 15 percent.

But they cautioned that some parts of the plan might go too far, illustrating the challenges the president continues to face in his own party as he seeks political support for one of his top domestic priorities.

Sen. Orrin G. Hatch (R-Utah) and Rep. Kevin Brady (R-Tex.), who head Congress’s tax-writing panels, said they were open to Trump’s plan to push forward with sharp cuts in the rates that businesses pay but suggested that changes might be needed.

“I think the bolder the better in tax reform,” said Brady, who chairs the House Ways and Means Committee. “I’m excited that the president is going for a very ambitious tax plan.”

Hatch, meanwhile, said the White House appears to be “stuck on” the idea that certain small businesses, known as S corporations, should have their tax rates lowered to 15 percent, just like large businesses. S corporations pay the same tax rates that individuals and families pay, with a top rate of close to 40 percent.

“I’m open to good ideas,” Hatch said. “The question is: Is that a good idea.”

Meanwhile, Democrats denounced the 15 percent corporate tax rate and criticized Mnuchin, who said that faster economic growth would generate enough new tax revenue to compensate for the corporate rate cuts.

Asked whether the 15 percent target was workable, Sen. Sherrod Brown (D-Ohio) told reporters: “It is, if you want to blow a hole in the federal budget and cut a whole lot of things like Meals on Wheels and Lake Erie restoration and then lie about the growth rate of the economy.”

He said that the Trump administration would have to do something “huge” such as scrapping mortgage interest deductions, adopting a border adjustment tax or relying on “outrageously inaccurate projections.”

The Trump tax package has won the support of most of the business community, but divisions remain.

The biggest winners from the corporate tax cut would include companies in industries such as retailing, construction and services that have had trouble taking advantage of the loopholes in the existing tax code.

 

The list of losers from tax reform could include technology companies, domestic oil and gas drillers, utilities and pharmaceutical firms that have been adept at playing the current system by using loopholes to deduct interest payments, expense their equipment and research, and transfer profits to foreign jurisdictions with lower tax rates. Under the Trump plan, many of those tax breaks would be eliminated in return for lowering the rate.

“Retail companies are the ones who pay closest to the rate of 35 percent,” said Len Burman, a fellow and tax expert at the Urban Institute. “They can’t ship their profits overseas. They can’t take advantage of the research and experimentation credit.”

A study of 2016 data for all profitable publicly listed companies by Aswath Damodaran, a finance professor at New York University’s Stern School of Business, showed that U.S. firms pay vastly different income tax rates.

On average, engineering and construction firms, food wholesalers and publishers paid about 34 percent. At the other end, oil and natural gas companies paid 7 to 8 percent on average.

“The U.S. tax code is filled with all kinds of ornaments” that help the oil and gas industry, said Damodaran. A decades-old depletion allowance, for example, allows companies to deduct money as a natural resource is produced and sold. This comes on top of other deductions for various expenses.

A Treasury Department study last year based on tax returns for 2007-2011 showed that debt-laden utilities paid only 10 percent in taxes, while construction firms and retailers paid 27 percent.“Retailers pay a higher effective tax rate of any sector in the United States,” said David French, the head of government relations at the National Retail Federation. “But the devil is in the details.”

With many key pieces of the Trump tax plan still missing, French is worried that Trump might propose something to offset the lost revenue from cutting the corporate tax rate to 15 percent. A border adjustment tax, such as the one House Speaker Paul D. Ryan (R-Wis.) favors, would more than offset the benefits of a rate cut to 15 percent, French said, “while others would see their taxes go to zero.”

 

French said that he expects a middle-class tax cut and business tax reform, but he does not expect Trump to unveil a complete package with offsetting items. “I don’t think that’s going to be in the president’s plan,” French said. “I expect it will be big-picture, high-level, without a lot of details.”

“There are so many special interests involved,” said Ed Yardeni, an investment strategist and president of Yardeni Research. “This is going to be a real test of whether he’s going to be able to drain the swamp or whether he’s going to pump more water in.”

Among the other big losers could be companies such as utilities or cable companies that have accumulated large debts and currently can deduct interest payments. A lower tax rate would make those tax deductions less useful.

In a report to investors in December, a team of JPMorgan analysts said that “we see reform to the corporate tax code as currently envisioned . . . as an overall net negative” for big utilities. The analysts said that because the utilities had large amounts of debt, they would be hurt more than other companies.

A big corporate tax cut could also create a crisis for individual income taxes. Without a matching cut in individual income tax rates, individuals would be able to change the structure of their pay checks so that the payments went through limited liability companies that would pay no more than 15 percent under the business tax cut, a rate far lower than the top individual rate of 39.6 percent.

That’s similar to what basketball coach Bill Self did after Kansas exempted entrepreneurs from paying taxes and eliminated the business tax. Self, the coach of the University of Kansas Jayhawks, put about 90 percent of his pay package into a corporate entity to sidestep the taxes he would have paid if it were all considered simply salary, according to a report by radio station KCUR-FM.

“Whenever a lower rate is imposed on one kind of economic activity versus another, that low-rate activity all of a sudden becomes a lot more important,” Burman said. “A lot of tax sheltering was done to make ordinary income look like capital gains.”

He added, “An associate professor in the Kansas philosophy department probably pays a higher tax rate than Bill Self.”

But if Trump cuts individual income taxes to match the cut in corporate rates, that would create an enormous shortfall in tax revenue and a ballooning of the budget deficit.

Trump’s Tax Plan: Low Rate for Corporations, and for Companies Like His

President Trump plans to unveil a tax cut blueprint on Wednesday that would apply a vastly reduced, 15 percent business tax rate not only to corporations but also to companies that now pay taxes through the personal income tax code — from mom-and-pop businesses to his own real estate empire, according to several people briefed on the proposal.

The package would also increase the standard deduction for individuals, providing a modest cut for middle-income people and simplifying the process of filing tax returns, according to people briefed on its details. That proposal is opposed by home builders and real estate agents, who fear it would diminish the importance of the mortgage interest deduction. And it is likely to necessitate eliminating or curbing other popular deductions, a politically risky pursuit.

As of late Tuesday, the plan did not include Mr. Trump’s promised $1 trillion infrastructure program, two of the people said, and it jettisoned a House Republican proposal to impose a substantial tax on imports, known as a border adjustment tax, which would have raised billions of dollars to help offset the cost of the cuts.

With that decision, Mr. Trump acceded to pressure from retailers and conservative advocacy groups, but the move could deepen the challenge of passing a broad tax overhaul in Congress, where concern about the swelling federal deficit runs high. His plan would put off the difficult part of a tax overhaul: closing loopholes and increasing other taxes to limit the impact of tax cuts on the budget deficit.

Republicans are likely to embrace the plan’s centerpiece, substantial tax reductions for businesses large and small, even as they push back against the jettisoning of their border adjustment tax. The 15 percent rate would apply both to corporations, which now pay 35 percent, and to a broad range of firms known as pass-through entities — including hedge funds, real estate concerns like Mr. Trump’s and large partnerships — that currently pay taxes at individual rates, which top off at 39.6 percent. That hews closely to the proposal Mr. Trump championed during his campaign.

But Mr. Trump’s decision to extend the corporate tax cut to real estate conglomerates like his own will give Democrats a tailor-made line of attack.

“Yesterday, we learned President Trump wants to slash the corporate tax rate, even though corporations already dodge most of their tax responsibilities while making record profits,” said Frank Clemente, executive director of the liberal Americans for Tax Fairness. “Today, we find out it’s even worse. In trying to slash taxes for ‘pass through’ business entities, Trump is seeking to dramatically reduce his own tax bill.”

The people who were briefed on the plan spoke on the condition of anonymity before a formal announcement that Mr. Trump has said will come on Wednesday, three days before he reaches the 100-day mark in office with nothing to show for his promises to cut taxes or revamp the health care system.

The border adjustment tax may be revisited later but was considered too controversial to include now.

Spokeswomen for the White House and the Treasury Department declined to comment on the details of the plan before Wednesday’s announcement, which is expected to contain only broad principles, leaving unanswered crucial questions about the financing of the package and the process for advancing it through Congress.

Emerging from a meeting at the Capitol where he briefed Republican congressional leaders on Tuesday evening, Treasury Secretary Steven Mnuchin said participants had “very, very productive discussions” and were united in their desire to accomplish a tax overhaul this year.

The broad contours of the plan seemed to please conservatives who had worried in recent weeks that Mr. Trump, who has dropped or modified many of the major proposals of his campaign, was drifting away from the plan he had laid out for voters.

“Conservatives are going to be very happy with this plan, because it achieves a lot of the objectives that we’ve wanted: lower business taxes, simplification and not a major tax increase that is unacceptable,” said Stephen Moore, an economist at the Heritage Foundation who advised Mr. Trump’s campaign and helped craft his tax proposal.

But Mr. Moore conceded that finding ways to offset the large revenue reductions envisioned in the blueprint would be a challenge.

“That’s the unknown right now, is whether there is some sort of pay-for for any of this,” he said.

Government officials crafting the tax plans are aware of the math problem, one of the people involved in the proposal said, but they see the 15 percent corporate tax rate as a compelling starting point for negotiations. Mr. Trump may yet reveal other tactics for replenishing lost tax revenue, someone who has been briefed on the plans said.

But the final plans remain very much in flux. At midafternoon on Tuesday, for instance, it was still not clear whether personal income-tax rate cuts or an increase in the standardized deduction for individuals would be part of Wednesday’s announcement.

The demise of the border adjustment tax was met with relief by Republicans in the Senate, who had been cool to it from the start.

On Tuesday, Senator John Cornyn, Republican of Texas, said it was safe to conclude that the provision was “not going anywhere” because of skepticism in the Senate.

But Mr. Cornyn described Mr. Trump’s plan to cut the corporate income tax to 15 percent as “pretty aggressive,” with unknown consequences for the deficit.

Other Republican senators appeared ready to embrace a tax proposal that adds to the deficit in the name of jump-starting the economy. Republicans appear intent on using parliamentary rules that would block Democrats from filibustering the plan in the Senate, but would also put a time limit on the tax cuts.

“I’m open to getting this country moving,” said Senator Orrin G. Hatch of Utah, chairman of the powerful Senate Finance Committee. “I’m not so sure we have to go that route, but if we do, I can live with it.”

Most analysts say the notion that Mr. Trump’s tax cuts will pay for themselves is unrealistic. A Tax Foundation analysis concluded this week that, on its own, a 15 percent corporate tax rate would reduce federal revenue by about $2 trillion over a decade. To make up for those losses without raising taxes elsewhere, the economy would have to become 5 percent larger.

Senator Roy Blunt, Republican of Missouri, said he was also open to tax cuts with an expiration date if that was the only way to get them passed without Democratic support, pointing to President George W. Bush’s cuts.

“You look at the tax cuts from 2002 and 2003 — well over 90 percent of them became permanent law,” Mr. Blunt said.

Democrats have criticized Republicans for failing to engage with them on a tax overhaul. Senator Ron Wyden of Oregon, the ranking Democrat on the Finance Committee, said he would be open to working with Republicans on a plan that would bring home corporate profits parked overseas and use some of the funds to pay for infrastructure.

But Senator Mitch McConnell of Kentucky, the majority leader, said on Tuesday that he intended to pass tax legislation through budget rules that would block a filibuster. He accused Democrats of being more interested in “wealth transfers” than in spurring economic growth.

So far, the Senate has taken a back seat in tax discussions. The abandonment of the border adjustment tax will deal a blow to the comprehensive rewrite of the tax code championed by Speaker Paul D. Ryan and Representative Kevin Brady of Texas, the chairman of the Ways and Means Committee.

Mr. Brady said Tuesday that he would press ahead with the import tax, not merely because it would make up for lost revenue but because it would protect American jobs.

However, he acknowledged that his goal of producing legislation before summer was slipping.

“I’m less focused on the month than on the year for tax reform, which would be this year,” Mr. Brady said.

T-Mobile profit rises, but customer growth slows

T-Mobile US Inc. lured customers away from bigger phone companies at a slower rate than in previous quarters, ahead of what analysts expect to be a busy merger season.

The No. 3 carrier in the U.S. by subscribers ended its first quarter with 1.1 million more of them, bringing its customer base to 72.6 million. The net additions included 798,000 postpaid phone subscribers, the types of accounts that wireless companies find most profitable.

But those gains were smaller than the 2.1 million customers and 933,000 postpaid phone subscribers that the company added in the fourth quarter.

Starting Thursday, telecommunications companies will be allowed to resume merger discussions, following a quiet period in which such talks were banned because of the Federal Communications Commission’s airwaves auction.

In a conference call with analysts, T-Mobile Chief Executive John Legere said he expects consolidation in the U.S. market, though he didn’t detail his own company’s plans.

“There’s this huge pent-up energy because it’s been over a year since they could have conversations,” he said, adding there are some combinations “we would be interested in taking a look at” under the right circumstances.

T-Mobile was the top bidder in the FCC auction, pledging $8 billion toward airwaves it said it would use to improve its network as soon as this year.

T-Mobile on Monday posted a first-quarter profit of $698 million, up from $479 million a year earlier.

Its revenue rose 11% to $9.6 billion.

T-Mobile’s earnings have generally climbed in recent years thanks to its discounts and marketing campaigns that have drawn customers away from larger rivals AT&T Inc. and Verizon Communications Inc.

Verizon last week blamed heavy competition for its first-ever quarterly loss of lucrative postpaid subscribers — those who pay at the end of each monthly billing cycle — partly because of pressure from unlimited data plans. Verizon said the customer losses eased after it followed T-Mobile and others with its own unlimited plan.

T-Mobile slightly raised its 2017 estimate for branded postpaid net customer additions to between 2.8 million and 3.5 million, up from its earlier target range of 2.4 million to 3.4 million.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com

Trump Vows to Unveil Tax-Cut Plan Next Week, Surprising Staff

WASHINGTON — President Trump promised on Friday that he would unveil a “massive” tax cut for Americans next week, vowing a “big announcement on Wednesday,” but he revealed no details about what is certain to be an enormously complicated effort to overhaul the nation’s tax code.

Mr. Trump offered his tax tease in an interview and again during remarks at the Treasury Department on Friday afternoon as he raced to stack up legislative accomplishments before his 100th day in office at the end of next week.

His announcement surprised Capitol Hill and left Mr. Trump’s own Treasury officials speechless as he arrived at the Treasury offices to sign directives to roll back Obama-era tax rules and financial regulations. Earlier in the day, when reporters asked Steven Mnuchin, the Treasury secretary, how far away a tax overhaul proposal was, he said he could not give an answer. “Tax reform is way too complicated,” he said.

Mr. Trump told The Associated Press in the interview that his tax reductions would be “bigger, I believe, than any tax cut ever.” But he faces an enormous fight among clashing vested interests as Congress tries to rewrite the tax code.

Starting that fight next week is further complicated by Mr. Trump’s hopes to revive the Republican health care plan that collapsed last month. And it would mean trying a tax overhaul as his White House faces the prospect of a government shutdown if lawmakers cannot agree on a funding bill by April 28.

The details of Mr. Trump’s tax plans remain the subject of intense speculation, with stock markets regularly gyrating when White House officials discuss the subject. Since taking office, the president has suggested that he wants to enact the deepest cuts to individual and corporate tax rates in history.

But despite Mr. Trump’s statement on Friday that his tax overhaul “really formally begins on Wednesday,” White House officials quickly cautioned against high expectations that Mr. Trump would provide the legislative text of a detailed tax plan next week.

Instead, a senior administration official said the president would release only the “parameters” that Mr. Trump expected a tax plan to follow in the long congressional debate that would surely follow. Another official said the information released next week would be more like a “broad” outline. Wall Street, which tends to celebrate tax cuts, barely reacted; the Standard & Poor’s 500-stock index was down 0.3 percent Friday.

The administration has maintained that middle-income tax cuts, a simplification of personal income taxes, and making business taxes more competitive with other countries are the top priorities. Mr. Trump insisted that his plans were on track and that his strategy to remake the economy would change history.

“This is really the beginning of a whole new way of life that this country hasn’t seen in many, many years,” Mr. Trump said as he sat at the desk of Mr. Mnuchin, near a portrait of Alexander Hamilton, the first Treasury secretary.

He said, “We’ve lifted one terrible regulation after another at a record clip from the energy sector to the auto sector.”

Despite Mr. Trump’s enthusiasm, the directives he signed at the Treasury Department on Friday to review measures put in place by the Obama administration were largely preliminary. As business groups cheered the moves, some skeptics were left questioning whether Mr. Trump was keeping his campaign promises to give working-class Americans a higher priority than Wall Street bankers.

“From our perspective, it is a direction that is dramatically backwards on financial stability,” said Lisa Donner, executive director of Americans for Financial Reform.

The presidential order asks Mr. Mnuchin to review the tax regulations imposed by President Barack Obama in 2016. Those include efforts to clamp down on “corporate inversions” — in which American companies merge with foreign companies to take advantage of lower tax rates abroad.

Viewed alone, undoing the rules would appear to be at odds with Mr. Trump’s campaign pledge to reduce incentives for companies to move overseas to minimize taxes.

Last year Mr. Obama’s Treasury Department, concerned about Pfizer’s $152 billion bid to acquire Allergan, which makes Botox, issued rules to thwart the practice. Among those efforts were regulations to prevent moves like “earnings-stripping,” in which an American subsidiary borrows from a parent company and uses the interest payments on the loans to offset its earnings. It was intended to make the financial relocations less attractive.

The uproar over inversions dogged a number of transactions over the last five years including Burger King’s takeover of the Canadian chain Tim Hortons and the drug maker AbbVie’s planned acquisition of an Irish rival, Shire.

But the major target of the outrage was the Pfizer-Allergan deal, by far the biggest effort by a company to give up its American citizenship to cut its taxes. Pfizer executives braced themselves for opposition from the Obama administration — but were surprised by how aggressively the White House fought the deal. Within a few months, Pfizer and Allergan surrendered and ended their agreement.

Robert Willens, an independent tax consultant, said reversing these rules would be a gift to Wall Street bankers and lawyers who have complained that they have hampered international deal making.

“They’ll be dancing in the streets and jumping for joy,” Mr. Willens said.

Memorandums with the executive order ask Mr. Mnuchin to review the Orderly Liquidation Authority, a tool created by the Dodd-Frank law of 2010 for unwinding financial institutions that are on the verge of collapse. Many banks have hoped that Congress will repeal the system. The administration is examining whether it encourages excessive risk-taking or exposes taxpayers to potential liabilities.

The Treasury is also reviewing the Financial Stability Oversight Council, which designates financial institutions as “systemically important,” better known as “too big to fail.” It requires them to hold more capital in reserve in the event of financial emergencies.

Both provisions, which were part of the Dodd-Frank law, are delayed by a 180-day review by the Treasury.

Democrats warned that Mr. Trump was putting vulnerable middle-class Americans in danger. “Simply eliminating these regulations and putting nothing in their place leaves a hole in the tax system that sophisticated corporations will continue to take advantage of, to the detriment of the country,” said David Kamin, a New York University law professor who worked on the Obama administration’s National Economic Council.

Senator Sherrod Brown, Democrat of Ohio, assailed Mr. Trump for trying to undermine rules that were put in place to protect the economy. “Any actions to undermine these protections encourage Wall Street’s risky behavior and leave taxpayers and our economy exposed to another catastrophe,” he said.

Mr. Brown said that Mr. Trump appeared to be breaking a campaign promise by making it easier for companies to use inversions. “We should be working to lower taxes for hardworking families and workers across Ohio, not helping multimillion-dollar corporations cheat the system to avoid paying their fair share,” he said.

Mr. Mnuchin insisted that would not be the case and argued the tax overhaul legislation plan that they would propose will address the problem of companies moving overseas.

Mr. Trump has shown an affinity for tariffs. He proposed a “reciprocal” tax this month that matches the import taxes other countries impose on American goods.

It remains unclear if Mr. Trump is on board with the “border adjustment” tax that is central to the plan being promoted by Speaker Paul D. Ryan and House Republicans. The concept would allow Republicans to raise more than $1 trillion of revenue, making it possible for them pass legislation without adding to the deficit.

Mr. Trump has been cool to that plan in interviews, and recently his advisers have been making the case that a surging economy, rather than Mr. Ryan’s border adjustment tax, will pay for deep rate cuts.

“The plan will pay for itself with growth,” Mr. Mnuchin said an Institute for International Finance conference on Thursday.

Mr. Trump’s economic team had initially set an August deadline to get tax legislation passed, but that target was delayed to the end of the year after Republicans expended time on their failed health plan.

After The Associated Press reported on Mr. Trump’s accelerated timeline to put out their tax plan, Treasury officials who were awaiting Mr. Trump’s visit to their office smiled broadly and chuckled nervously as they digested news on their smartphones.

But during his visit, Mr. Trump expressed confidence that Mr. Mnuchin and his team were ready to move on a tax overhaul, a mammoth legislative undertaking that has not occurred since 1986. After a brief tour of the building, Mr. Trump praised his Treasury secretary’s financial acumen and said he was sure that Mr. Mnuchin would be among the best to do the job.

“I think Hamilton is tough to beat, but maybe you can do that too,” Mr. Trump said.

The Shocking Reality of a Future of Shrinking Jobs

The jobs reports would have us believe our rebound from the recession is almost complete. The reality is very different. The Economist has some fancy words for it: “Job polarization,” in which middle-skill jobs decline while low-skill and high-skill jobs increase and the workforce “bifurcates” into two extremes of income.

Optimists like to bring up the Industrial Revolution, and the return to better jobs afterwards. But it took 60 years. And job polarization makes the present day very different from two centuries ago, when only the bodies of workers, and not their brains, were superseded by machines.

Most Workers Today Are Underpaid

Most of our new jobs are in service industries, including retail and health care and personal care and food service. Those industries generally don’t pay a living wage. In 2014, over half of American workers made less than $15 per hour, with some of the top employment sectors in the U.S. paying $12 an hour or less.

Worse, most underpaid workers are deprived of the benefits higher-income employees take for granted. A Princeton study concluded that a stunning 94 percent of the nine million new jobs created in the past decade were temporary or contract-based, rather than traditional full-time positions.

Even at high-flying Google, where privileged employees can make six-figure salaries plus thousands more in stock and cash bonuses, about half of the workforce is made up of temps, contractors and vendors.

Just program a few Java applets and make $100,000. How many of us can do that? The demand is there, though, for statistical analysts, data mining specialists, internet security specialists, and a variety of other specialized positions that explain the availability of 10 computing jobs for every computer science graduate.

Others Are Becoming Unpaid 

That would be the people replaced by machines.

Corporations could be training workers in new technologies, but instead they blame our underfunded educational system for worker deficiencies. Said an Apple executive, “The U.S. has stopped producing people with the skills we need.” Another CEO, oblivious to the lack of jobs at anything other than a high-tech level, blustered, “The jobs are there, but the skills are not.”

The Wall Street Journal chimed in: “Many workers who were laid off in recent decades…don’t have the skills to do today’s jobs.”

Meanwhile, the robots proliferate, expanding into once-unimagined areas: robot surgeons, robot chefs, robot security guards, robot news writers, robot teachers that interact with children, robotic nurses that will lift patients and bring them medicine.

Some of the robots are getting more humanlike, sensing the emotions of drivers, for example, and encouraging them to calm down at signs of stress or anger and to stay awake when their eyelids are drooping. The European Parliament is even considering the granting of legal status to robots as “electronic persons.”

So what are the living-wage jobs of the future? Alternative energy and infrastructure repair, certainly, if the politicians of the future care about the needs of human beings, and about the preservation of the earth itself. Solar and wind and other alternative sources are already providing nearly two-thirds of new electricity generation, and many of the jobs in the industry are labor-intensive, offering opportunities for mid-level workers formerly in manufacturing and transportation.

But going beyond that, on a wider plane, and to a level profit-seekers and neoliberals seem incapable of understanding, the elimination of traditional jobs should lead to the opportunity for “higher-value activities” that focus on human interaction. Indeed that is happening now, with the health care industry growing faster than any other industry, and with service-providing sectors projected to capture 94.6 percent of all the jobs added in the next decade. The Economist calls them “caring” jobs.

These are the jobs that deserve higher pay as our population ages. These are the jobs that show the need for cooperation rather than self-serving individualism. These are the jobs that should command respect, now and in the future.

Paul Buchheit is the author of “Disposable Americans” (2017). He is an advocate for social and economic justice. His essays, videos, and poems can be found at YouDeserveFacts.org.

Trump to sign actions on taxes, Wall Street regulation

President Trump on Friday is slated sign three executive actions meant to spark reviews of tax and financial regulations, the latest in the White House’s effort to rethink and potentially roll back federal oversight.

The precise impact of the new actions is unclear, but they could lead to a loosening of restrictions on the way companies are structured and scale back regulations on large financial companies.

Trump will sign all three documents at the Treasury Department, the agency said.

The documents will include an executive order that directs Treasury Secretary Steven Mnuchin to “review significant tax regulations issued in 2016” to see if they “impose an undue financial burden on American taxpayers, add undue complexity, or exceed statutory authority.”

One of the most sweeping tax regulations imposed in 2016 was written by the Obama administration’s Treasury Department and it made it much harder for companies to use a process known as “inversion” to incorporate overseas in places like Ireland so that they could avoid paying U.S. taxes.

A spike in the number of companies using this tax loophole – particularly pharmaceutical firms – outraged U.S. lawmakers from both parties and prompted the Treasury Department to act. But many firms complained that the Obama administration was overstepping its authority. It’s unclear if the inversion rule will be part of the new Treasury review.

Trump will also sign two new memorandums on Friday at Treasury, though they both seem to overlap with reviews that are already underway.

One will direct Mnuchin to review something called “orderly liquidation authority,” Treasury said, which is a regulatory process that requires a process for winding down large, failing financial companies. This review would look at whether an “enhanced bankruptcy authority” would be better than the process established by the Dodd-Frank financial overhaul law. The review also asks Treasury to consider whether the liquidation rules “could lead to excessive risk-taking” by financial companies.

The Treasury Department is already conducting a review of existing financial regulations, however, and it’s unclear how this new memorandum would direct the agency to do anything differently from what it is already considering.

The other presidential memorandum would call for a review of the way the Financial Stability Oversight Council designates certain companies for enhanced financial regulation, a threshold set up by the Dodd-Frank law. Many financial companies and Wall Street executives have complained about this process, but it is another part of the financial regulatory system that was supposed to already be under review.

COMING TO A BOOKSTORE NEAR YOU: ‘COMMUNISM FOR KIDS’

https://www.conservativereview.com/commentary/2017/04/coming-to-a-bookstore-near-you-communism-for-kids

 

They say that the victors write the history. But who writes the fiction?

The Cold Warriors of yesteryear may be asking themselves this very question today.

News recently broke that a reputable publishing house released a book titled “Communism for Kids.” Its author appears to be the archetype of an Obama administration education czar: “Bini Adamczak is a Berlin-based social theorist and artist. She writes on political theory, queer politics, and the past future of revolutions.”

What better literature to which to expose young minds than communist propaganda packaged as a parable, and who better to write it than Ms. Adamczak?

The book’s overview reads in part:

Once upon a time, people yearned to be free of the misery of capitalism. How could their dreams come true? This little book proposes a different kind of communism, one that is true to its ideals and free from authoritarianism. Offering relief for many who have been numbed by Marxist exegesis and given headaches by the earnest pompousness of socialist politics, it presents political theory in the simple terms of a children’s story, accompanied by illustrations of lovable little revolutionaries experiencing their political awakening.

If you thought the old saw about communism leading to soul-crushing and violent collectivism, economic failure, and human misery only because it had never been implemented properly was dead, think again.

Never mind that communism is antithetical to human nature; that it is inherently authoritarian in its squelching of liberty; or that it is Adamczak’s “lovable little revolutionaries” who are always the first ones to lose their heads after the revolution “triumphs.”

This time things will be different, comrades!

The overview continues:

It all unfolds like a story, with jealous princesses, fancy swords, displaced peasants, mean bosses, and tired workers–not to mention a Ouija board, a talking chair, and a big pot called “the state.” Before they know it, readers are learning about the economic history of feudalism, class struggles in capitalism, different ideas of communism, and more. Finally, competition between two factories leads to a crisis that the workers attempt to solve in six different ways (most of them borrowed from historic models of communist or socialist change). Each attempt fails, since true communism is not so easy after all. But it’s also not that hard. At last, the people take everything into their own hands and decide for themselves how to continue. [Author’s note: When the people — as opposed to the state — “take[s] everything into their own hands,” is not that more classical liberalism than communism?] Happy ending? Only the future will tell. With an epilogue that goes deeper into the theoretical issues behind the story, this book is perfect for all ages and all who desire a better world.

What are we to make of this nightmare cast as a fairytale?

First, the Left never stops in its attempt to win the war of ideas. While Venezuela burns and the modern-day gulag of North Korea persists, in the minds of leftist true believers communism is ripe for rebranding. Just as these adherents cling to the idea that there can never be enough government spending to paper over problems, or power to be usurped and wielded to achieve the Left’s infinite flavors of “justice,” so too do they believe that communism remains the road to utopia if executed properly by the right actors.

Have you ever seen “The Black Book of Communism” mentioned in a movie or incorporated into your children’s curriculum?

Second, the Left believes it imperative to take all measures to convert people to their anti-religion as early as possible. Propagandizing our youth is not only fair game, but the right thing to do from their perspective. While there is something sinister about seeking to influence young minds with political messages with which they may not be ready to grapple — and without presenting counter-arguments to boot — this has been the hallmark of such leftist movements for decades. As progressive education luminary John Dewey wrote in one section of his “Democracy and Education” titled “Education as a Social Function:”

We have seen that a community or social group sustains itself through continuous self-renewal, and that this renewal takes place by means of the educational growth of the immature members of the group. By various agencies, unintentional and designed, a society transforms uninitiated and seemingly alien beings into robust trustees of its own resources and ideals. Education is thus a fostering, a nurturing, a cultivating, process. All of these words mean that it implies attention to the conditions of growth. We also speak of rearing, raising, bringing up—words which express the difference of level which education aims to cover. Etymologically, the word education means just a process of leading or bringing up. When we have the outcome of the process in mind, we speak of education as shaping, forming, molding activity—that is, a shaping into the standard form of social activity. [Emphasis mine]

Third, as always, the Left is laser-focused on competing in culture, of which children’s books are just one small piece. This is a space conservatives have ceded for far too long with devastating effect because if you lose the culture you lose the politics. And while we conservatives believe we have superior ideas, the Left understands that the packaging and distribution of such ideas is essential if its worldview is to prevail.

At the beginning of this piece I invoked the adage that the victors write the history. To that end, I would challenge readers to present a “conservative” history book that has been comparably successful to Howard Zinn’s “A People’s History of the United States” in terms of its impact on our culture. Have you ever seen “The Black Book of Communism” mentioned in a movie or incorporated into your children’s curriculum?

Can we really claim that we are the victors in this ideological battle?


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– See more at: https://www.conservativereview.com/commentary/2017/04/coming-to-a-bookstore-near-you-communism-for-kids#sthash.vgNZEU4Y.dpuf

Interview With Nicholas Pride, Presidential Candidate In The Year 2020

Last weekend, I was fortunate to be able to conduct an interview with fellow member and warrior for The Truth Nicholas Pride.  I have known Nicholas for the past 2 years as he has been a member and an administrator in my secret group, Freedom Like A Shopping Cart.  We discussed many issues ranging from Donald Trump, the Federal Reserve, Zionism, Israel, Jewish Supremacy, the Family Unit, so called “gay” rights, pornography, and many other topics.  This was my first ever video uploaded to the website’s YouTube channel but I think it came out as well as it could have been.

Here is a link to Nicholas’ Facebook page: https://www.facebook.com/nicholas.pride.982