(CNN) There’s a long list of reasons why Republicans’ plan to overhaul the nation’s tax system is going to be complicated this fall.
(CNN) There’s a long list of reasons why Republicans’ plan to overhaul the nation’s tax system is going to be complicated this fall.
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.
The White House will release on Wednesday the “broad principles and priorities” of their plans to overhaul federal taxes, a White House official said Friday night, downplaying expectations that the Trump administration would reveal key details underpinning the plan.
President Trump said earlier Friday that he would release new information about his plan to overhaul the tax code on Wednesday, a sign that he is trying to accelerate one of his most ambitious campaign promises even though key specifics remain undetermined.
“We’ll be having a big announcement on Wednesday having to do with tax reform,” Trump said Friday while visiting the Treasury Department. “The process has begun long ago but it really formally begins on Wednesday.”
Addressing Treasury Secretary Steven Mnuchin, Trump said, “So, go to it.”
A White House official who spoke on the condition of anonymity told The Washington Post on Friday night that while the president did plan to make an announcement on tax reform next week, it will be broad in nature.
“[W] e will outline our broad principles and priorities,” the official said. “We are moving forward on comprehensive tax reform that cuts tax rates for individuals, simplifies our overly-complicated system and creates jobs by making American businesses competitive.”
Trump’s statement earlier on Friday had caught many congressional aides — and even some administration officials — off guard, as they thought they were working on a slower timetable.
With his unexpected comments, Trump has jolted the process forward as he tries to breathe new life into an effort that risked becoming bogged down like other campaign priorities.
But if he only issues the broad outline of a plan, he could further complicate lawmakers and many in the business community, who have been hoping the White House would weigh in on key questions, such as how it plans to tax imports or whether it will pursue the elimination of any tax deductions.
Trump plans a major cut in tax rates, focused on simplifying the tax code for individuals and families, lowering the corporate tax rate and a large tax cut for the middle class. He has also said he wants to create some sort of “reciprocity” tax that imposes a tariff-like tax on imports from countries that have tariffs against the United States.
Earlier Friday, Trump told the Associated Press in an interview that the tax cuts he would propose would be “massive” and perhaps the biggest of all time.
Mnuchin has worked on the tax plan for months, but details have remained fluid, with White House officials considering a range of options in how they restructure the tax code. White House National Economic Council Director Gary Cohn suggested Thursday that many of the details were still in flux during comments he made to the Institute of International Finance.
Trump has said a big tax cut will boost economic growth, help companies invest, and lead to more job creation. But Democrats and some Republicans have said any cut in rates should be offset by the elimination of tax breaks to prevent the changes from widening the budget deficit.
Mnuchin said Thursday that the tax cuts would essentially pay for themselves because there would be so much economic growth that it would bring in new revenue to the Treasury Department.
Both Trump and Mnuchin have promised that the overhaul of the tax code they are planning would be the biggest since the Reagan administration.
During the campaign, Trump proposed cutting the corporate tax rate from 35 percent to 15 percent, and he also wants to cut the rates individuals and families pay. He has said he wants a big tax cut for the middle class, though many politicians define “middle class” differently.
“People can’t do their returns,” Trump said Friday. “They have no idea what they are doing. They are too complicated.”
Many congressional aides were caught by surprise from Trump’s announcement, as White House officials have expressed that they were working hard on a plan but nowhere near ready to provide new information. Lawmakers have been anxiously waiting for more details of Trump’s plan for weeks.
“I appreciate the President’s leadership and strong commitment to comprehensive tax reform,” House Ways and Means Committee Chairman Kevin Brady (R-Tex.) said Friday. “Ways and Means Republicans are ready to work with President Trump and his team on reforms that will grow our economy, create jobs, and increase paychecks.”
The release will come during a critical period for Trump. House Republicans are also working on plans to vote to repeal the Affordable Care Act next week, and Congress must vote by Friday to continue funding the government or there will be a partial shutdown.
One reason overhauling the tax code is so difficult is because it is very difficult to do it without dramatically widening the deficit. Many lawmakers want to cut taxes, but cutting tax rates leads to a big drop in revenue, which makes the deficit larger unless there is a sharp contraction in spending. Trump has proposed to boost spending, at least in the short term, and many budget experts believe the tax plan he offered during the campaign would grow the federal debt.
President Barack Obama proposed lowering the corporate tax rate several years ago, but he also proposed raising taxes on the wealthiest Americans as a way to offset some of the lost revenue. This led to major blowback from many Republicans who saw it as a way of raising taxes. He also proposed limiting the deductions that the wealthiest Americans could claim, something that was also rejected.
Trump administration officials have said they will propose limiting some tax breaks, but this is not expected to be a big component of their plan. Instead, they are going to assume future economic growth caused by the tax cuts will create trillions of dollars in new revenue, a controversial assumption that many GOP congressional aides on Capitol Hill have cautioned against.
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.
Last week—following criticism from bipartisan Congress members, citizens, press, and advocacy groups like the White Coat Waste Project, a nonprofit that seeks to eliminate cruel, wasteful and unnecessary taxpayer-funded animal testing—the U.S. Department of Agriculture began to reverse course on its unjustifiable animal welfare database blackout. It started by restoring documents about government and other animal laboratories. This is a crucial resource, but we’re still fighting systemic government transparency failures about $15 billion in wasteful taxpayer-funded experimentation on dogs and other animals.
Months before the recent USDA purge—a scandal first exposed by WCW—we released “Spending to Death,” a report documenting cruel and unnecessary government dog experiments, and a troubling abundance of secrecy about the practice and what it costs.
As reported in the Washington Post, we used the now-notorious USDA animal welfare database to reveal that agencies—including Veterans Affairs, the National Institutes of Health and others—subjected more than 1,100 dogs to experiments in 2015. The USDA data indicated that this number had increased from the year before, and that one quarter of these dogs were subjected to experiments involving pain and distress. These basic figures are not available elsewhere, so it’s encouraging that USDA is in the process of restoring access to these documents. For non-federal animal laboratories, the database also includes evidence of any abuses documented by government inspectors, which can be grounds for losing taxpayer funding.
However, beyond the animal use numbers on the USDA site (which notably exclude mice and rats, who comprise 95 percent of animals used in laboratories), other publicly-available details about how dogs and other animals are used are scarce. It is estimated that across the nation, federal agencies are funding the abuse and death of tens of millions of animals in laboratories every year.
We did triangulate some information to determine that government agencies are purchasing months-old beagle, hound and mutt puppies and subjecting them to abuses including forced heart attacks and tick infestations. But overall, with very few exceptions, the agencies using tax money for painful and deadly dog experiments fail to disclose what they are doing, how much they are spending, the purpose or the outcome. In many cases, it appears agencies intentionally omit or obscure information to prevent scrutiny.
Our top recommendation in the report: “Provide Transparency.”
A beagle confined in standard caging in a U.S. laboratory awaits his eventual torture and death. Federal agencies subjected more than 1,100 dogs to experiments in 2015 alone. An estimated 100 million animals are tortured and killed by agencies across the nation each year. (image: White Coat Waste Project)
Thankfully, we attracted the attention of Congress. Citing our work, a bipartisan group led by Reps. Ken Calvert (R-CA) and Dina Titus (D-NV) asked the Government Accountability Office to conduct an audit of systems for public disclosure about federally-funded animal experiments. In their December GAO request, they wrote: “Such transparency and accounting deficiencies prevent assessments by Congress and the public of the cost-efficiency and effectiveness of what we estimate to be a multi-billion-dollar government enterprise.”
A companion letter to the GAO from Senators Cory Booker (D-NJ), Jeanne Shaheen (D-NH) and Elizabeth Warren (D-MA) stated:
Transparency about federal spending on animal research is especially critical given some evidence suggesting that such research is often wasteful and inefficient. … Government transparency and accountability are cornerstones of our democracy. The public has a right to know how federal agencies spend their tax dollars and whether this spending improves American lives. Congress must also have access to this information in order to assess the effectiveness of government programs and prevent waste, fraud and abuse.
For instance, since 2000 there has been an interagency government program charged with facilitating the reduction and replacement of expensive and inaccurate animal testing for chemical toxicity with more efficient alternatives like cell-based tests and computer models. However, the 15 federal agencies that participate in the program do not report how many animals are used in tests they conduct or require, so there is no way to measure the progress of this important effort. Even the head of the program recently stated, “We need a way to measure success quantitatively.”
To address this problem, earlier this month bipartisan Congress members introduced the Federal Accountability in Chemical Testing (FACT) Act. With over 30 Republican and Democratic cosponsors, the common-sense bill improves existing biennial reporting requirements so that agencies must include the number of animals they use, their species, and for what tests.
A WCW review conducted in support of the FACT Act uncovered unnecessary, multi-million-dollar government tests that involve poisoning animals with massive force-fed doses of herbal supplements sold for sexual dysfunction, cosmetics ingredients and even components from green tea and french fries.
As members of Congress expressed in their requests to GAO, transparency about taxpayer-funded animal experiments is critical to identifying waste and abuse.
The NIH laments that 90 percent of drugs that work in animal tests fail in humans because they are dangerous or ineffective. In the agency’s current Strategic Plan, it writes, “animal models often fail to provide good ways to mimic disease or predict how drugs will work in humans, resulting in much wasted time and money while patients wait for therapies.” Still, 47 percent of the agency’s $32 billion budget is spent on animal experiments.
At an NIH lecture last year titled, “Inefficiency and Waste in Biomedical Research,” the former President of the American College of Epidemiology reported that as much as 87.5 percent of biomedical research—especially animal experimentation—is flawed, redundant or completely unnecessary.
This is clearly cause for a serious reappraisal of research funding decisions. Yet, when we asked via a Freedom of Information Act request, NIH could not even determine what other federal agencies it funds animal experimentation at.
Americans may disagree on many things, but this isn’t one of them. A recent Lincoln Park Strategies poll of 1,100 voters found that a supermajority—73 percent of Republicans and 68 percent of Democrats—want more transparency about taxpayer-funded animal experiments.
USDA restoring its animal welfare database is a start, but major reforms are still needed to ensure transparency and accountability about billions in wasteful government spending for outdated and unnecessary experiments on dogs and other animals.
Visit FACTact.org to urge Congress to support the bipartisan Federal Accountability in Chemical Testing (FACT) Act (HR 816) to increase transparency about government animal testing.
Democratic presidential nominee Hillary Clinton has promised to fix Social Security without reducing benefits – which means, by raising taxes. As she stated in her final debate appearance against Republican Donald Trump:
“What we want to do is to replenish the Social Security Trust Fund … from either raising the cap and/or finding other ways to get more money into it. I will not cut benefits. I want to enhance benefits for low-income workers and for women who have been disadvantaged by the current Social Security system.”
But Clinton’s proposed tax increases on the rich would boost revenues by far less than she imagines because of rarely-discussed interactions with other parts of the tax code. The Congressional Budget Office should analyze Social Security reform proposals using a budget-wide approach that captures all the effects of raising Social Security taxes.
For much of the Democratic primary campaign, Hillary Clinton practiced strategic ambiguity on Social Security. While she explicitly opposed certain reforms, such as raising the retirement age or cutting Cost of Living Adjustments, she left unclear whether she might agree to reducing benefit growth for higher-income retirees. Indeed, her leaked emails, which spoke favorably of the Simpson-Bowles budget commission, might indicate private support for a compromise that included benefit reductions for middle and high earners while protecting the poor.
But pressured by Sen. Bernie Sanders’ progressive challenge, last May Clinton relented and stated her opposition to all Social Security cuts. On top of that, Clinton has proposed targeted benefit increases.
That leaves Clinton with only tax hikes to fix Social Security’s $11 trillion-plus long-term deficit. Unsurprisingly, Clinton has not specified precisely how she would impose these taxes. But she hasendorsed both of the main tax increases included in Sanders’ Social Security plan: imposing the Social Security tax on earnings above the current $118,500 cap and applying Social Security taxes to investment income in addition to wages. And Sanders’ proposals have been scored by Social Security’s actuaries, giving us an idea of what we might be looking at under Clinton-led Social Security reforms.
To start, Sanders proposed making all earnings over $250,000 subject to the 12.4% Social Security payroll tax, a proposal that is consistent with Mrs. Clinton’s pledge not to raise taxes on Americans earnings under $250,000. But since this $250,000 threshold would not be indexed for inflation or wage growth, by the mid-2030s all earnings would be subject to Social Security taxes. Second, Sanders would effectively apply the 6.2% employee-side payroll tax to investment income, by raising the Affordable Healthcare Act’s 3.8% investment surtax to 10%.
SSA’s actuaries estimated that these tax increases could together fix Social Security’s 75-year funding shortfall, if Sanders didn’t divert such a large share of the funds toward broad-based benefit expansions. Without tax increases of this size, Mrs. Clinton could not keep her pledge to not only resist all benefit cuts but even expand Social Security benefits.
But that’s not the end of the story. What the SSA actuarial analysis does not show is that Mrs. Clinton’s proposed tax increases would significantly reduce other tax revenues. Here’s why.
Eliminating the payroll tax ceiling would require workers and employers to each pay an additional 6.2% tax on all earnings above the ceiling, currently $118,500. Both the SSA actuaries and the Congressional Budget Office assume that when employers are hit with an additional payroll tax they will over time reduce employees’ wages to cover the increased cost, consistent with economists’ view that employees ultimately “pay” for employer-provided benefits through lower wages.
A new filing by the Trump campaign for the Federal Election Committee reveals the campaign has received $1.6 million in taxpayer money to fly U.S. Secret Service agents on a plane owned by—you guessed it—Donald Trump.
According to Politico, the agency always reimburses presidential candidates and other officials for the cost of traveling with the candidates. The difference is although the Secret Service has reimbursed the Clinton campaign some $2.6 million, Trump owns the plane he travels on through TAG Air Inc. As Politico notes, “the government is effectively paying him.”
“It’s just another example of how the Trump campaign has taken an unprecedentedly large amount of its money and spent it at Trump-owned facilities,” campaign finance lawyer Brett Kappel told Politico.
It was also revealed last week that the Trump campaign has spent some $8.2 million on Trump-owned businesses throughout the campaign. The candidate, who famously said he could be the first presidential candidate to “run and make money on it” is proving that sentiment true. In March, he famously held a “press conference” at his golf course in Florida which essentially just acted as a de facto informercial for the hotel.
Trump wines, water, and steaks on display at the Trump press conference tonight. pic.twitter.com/iDYpo57XHZ
— Katy Tur (@KatyTurNBC) March 9, 2016
“The campaign has used known quantities as far as event space, air travel and accommodations, and has fulfilled all FEC requirements throughout the campaign,” the Trump campaign claimed Thursday, adding any reporting to the contrary is “misleading and flat-out wrong.”
But the receipts speak for themselves, and while Trump’s taxpayer-funded Secret Service detail pays the Trump campaign for flights—and accommodations at Trump’s hotels—the U.S. government will continue to cut checks that go directly into Trump’s pockets.
WASHINGTON — Donald Trump, the presumptive Republican nominee in the race for the White House, fought Sunday to stem several controversies including his relationship with women and his refusal to release his tax returns.
The billionaire real estate mogul and his backers hit back at a New York Times article that detailed Trump’s complex and contradictory history with women.
The paper conducted more than 50 interviews with women associated with Trump and was told of unwelcome advances and plenty of crude commentary on female bodies.
One contestant in the Miss USA pageant, which Trump owned from 1997 to 2015, said that in 1997, the New York tycoon introduced himself and kissed her and other contestants on the lips. He was married to actress Marla Maples at the time.
But Trump also nurtured the careers of several women within his business organization.
One former female Trump executive, Louise Sunshine, had glowing words for her ex-boss.
“He was never a boss. He was a leader,” Sunshine, who worked for Trump for a decade, told CNN. “He taught me. He mentored me.”
Trump also hired Barbara Res as his head of construction in the 1980s, at a time when there were few women in such positions at major construction firms.
She said her boss wanted her to be a “Donna Trump.”
Trump took to Twitter to blast the article.
“The failing @nytimes wrote yet another hit piece on me. All are impressed with how nicely I have treated women, they found nothing. A joke!” read one tweet.
Speaking on Sunday morning talk shows, Republican Party chief Reince Priebus defended his party’s presumptive presidential nominee.
“I don’t think Donald Trump in his personal life is something that people are looking at and saying, ‘Well, I’m surprised that he has had girlfriends in the past.’ That’s not what people look at Donald Trump for. So I think the traditional playbook and analysis really don’t apply,” he told Fox News Sunday.
Trump’s team faced questioning over why he was continuing to refuse to release his tax returns, which is normally expected of presidential candidates.
Trump has said his returns are being audited and he was unable to release the documents until they are finalized.
The audits cover eight years of returns, Trump convention manager Paul Manafort said.
“This is an issue that the media is interested in, not an interest for middle America,” Manafort told CNN’s “State of the Union.”
“Donald Trump will comply when the audit is done.”
He also defended his boss after the Washington Post published last week a 1991 recording of an interview between a People magazine reporter and a supposed spokesman for Trump named John Miller, whose voice closely resembles that of the New York developer.
“Donald Trump says it’s not him, I believe it’s not him,” Manafort said.
However, in 1990, Trump himself acknowledged that he had sometimes posed as his own spokesman.
LONDON — Thousands of protesters were marching on Downing Street in London on Saturday, calling on UK Prime Minister David Cameron to resign amid controversy surrounding his financial affairs uncovered in the “Panama Papers” this week.
The protesters held signs urging Cameron to “go now,” while many wore Panama hats. A few were holding up a paper-made container in the shape of a pig with the prime minister’s photo glued to its face. Others wore pig snouts on their faces.
In his first public appearance Saturday since his admission Thursday night that he had owned shares in a Bahamas-based trust from 1997 to 2010, Cameron said: “It has not been a great week. I know that I should have handled this better, I could have handled this better. I know there are lessons to learn, and I will learn them. And don’t blame No. 10 Downing Street or nameless advisers. Blame me.”
Cameron drew laughs and applause from the sympathetic audience of Conservative Party activists. The British PM had sidestepped persistent questions on the issue for four days with a string of obfuscating statements issued through aides.
Cameron said he would publish his tax returns.
Cameron and his Downing Street office issued four comments regarding the Panama Papers before the premier on Thursday finally admitted he had held shares in his late father’s offshore investment fund.
Cameron admitted he had held a stake in the fund and sold it for around £30,000 (37,000 euros, $42,000), four months before he became prime minister in 2010.
“The facts are these: I bought shares in a unit trust — shares that are like any other sorts of shares and I paid taxes on them in exactly the same way,” Cameron said.
“I sold those shares. In fact, I sold all the shares that I owned, on becoming prime minister.
“And later on I will be publishing the information that goes into my tax return, not just for this year but the years gone past because I want to be completely open and transparent about these things.
“I will be the first prime minister, the first leader of a major political party, to do that and I think it is the right thing to do.”
The revelations in the Panama Papers, resulting from what the Panamanian law firm Mossack Fonseca blamed on a computer hack launched from abroad, revealed how the world’s wealthy stashed assets in offshore companies.
Pfizer Inc. will be able to permanently avoid paying $35 billion in U.S. taxes by merging with Allergan Plc, according to a report released Thursday by a group that advocates for tax fairness — though a tax and accounting consultant called the number “a little misleading.”
Four Democratic members of Congress joined Americans for Tax Fairness, which is affiliated with labor unions, in a news conference urging President Barack Obama’s administration to use executive authority to deny U.S. corporations tax benefits if they move their tax addresses overseas.
The call comes after Obama’s administration has announced some action to limit the benefits of corporate inversions, in which U.S. companies merge with offshore firms to establish a tax address in lower-tax countries. But those new rules would not affect the Pfizer-Allergan transaction, which would move the new company’s tax address to Dublin but doesn’t meet the technical definition of an inversion.
Pfizer spokeswoman Joan Campion issued a statement that said the merger is “not structured to move jobs out of the United States, where we conduct the majority of our research.” The move will create a “global, R&D-focused company,” she said.
The ATF analysis found that Pfizer could “permanently avoid” as much as $35 billion in U.S. taxes on offshore profit. The number is based on two of Pfizer’s disclosures: first, that as of 2014, it had a deferred tax liability of $21.1 billion; and second, that it has about $74 billion in overseas earnings that it plans to hold there indefinitely.
The analysis credited Pfizer with foreign taxes paid on those earnings, based on a 10-year average of the company’s foreign tax rate, and arrived at an estimated tax rate of 18.7 percent for repatriating the $74 billion — resulting in roughly $13.8 billion in tax. That, added to the $21.1 billion deferred tax liability, yields the $35 billion figure.
Robert Willens, a tax and accounting consultant in New York, said the figure was “probably a little misleading,” largely because there’s no reason to believe that Pfizer would have been returning the $74 billion in offshore earnings to the U.S. “They haven’t given up the ghost there,” he said. But the company would probably be able to continue avoiding payment of the $21.1 billion deferred tax liability, he said.
Willens said Pfizer “would probably still owe some U.S. taxes” but did not elaborate. He added that the main benefit of the $160 billion merger would be Pfizer’s new ability to access some $140 billion in foreign earnings, tax-free, for loans among its affiliated companies. “That’s 100 percent the reason behind this deal,” he said.
Pfizer can access the stockpile because it narrowly escapes Treasury restrictions put in place last fall that were intended to curb the financial benefits of inversions, particularly the tax-free use of offshore earnings through so-called hopscotch loans. The restrictions ban such loans for inverted companies whose existing shareholders wind up owning at least 60 percent of the new entity. Pfizer’s shareholders will own 56 percent of the new company.
Jennifer Blouin, an accounting and tax professor at the Wharton School of Business at the University of Pennsylvania, told Bloomberg that the question of how much U.S. tax Pfizer would avoid by moving to Ireland was probably tied to whether U.S. policymakers allow companies to repatriate their offshore earnings at a reduced tax rate in the future — as lawmakers from both political parties have discussed. She said the total potential loss to Treasury would amount to whatever tax would be owed at that reduced rate, not at the standard 35 percent rate used in the report.
Pfizer brought home $35.5 billion in foreign earnings in 2004 under a one-time repatriation holiday that Congress approved at a rate of 5.25 percent.
For now, Blouin said, “it’s quite misleading to imply there’s a $35 billion revenue loss.” One reason for that, she said, is that Pfizer’s deferred-tax liability is not imminently owed.
“ATF thinks that in the absence of the Allergen transaction that $35 billion will be coming to the Treasury,” she said. “Nope, not going to happen.”
Representatives Lloyd Doggett of Texas, Rosa DeLauro of Connecticut, Mark Pocan of Wisconsin and Jan Schakowsky of Illinois joined the tax group in announcing the analysis.