Trump And Musk's Public Breakup Is Messy, But It Won't Sink Trump's Tax Bill
Emotional satisfaction, however, might be all Democrats get out of the divorce between Trump and his biggest financial supporter, which gets nastier by the minute. The duo's big, not-so-beautiful breakup is unlikely to significantly harm Trump politically, or meaningfully slow down congressional Republicans' plodding march toward passing the tax-cutting, Medicaid-slashing, deficit-exploding legislation Musk labeled an 'abomination' last week.
Let's start with a basic fact: Musk was very unpopular, and was not doing much to help Trump politically. His favorability stood at just 40%, with 54% of Americans holding an unfavorable opinion, notably worse than Trump's 46% job approval. GOP operatives have long been skeptical the quarter-billion dollars Musk spent on the 2024 election, and which Musk claimed on Thursday were the actual reason Trump won, actually did much to help Republicans reclaim the White House. (In fact, Republicans were ready to scapegoat Musk if Trump lost.)
'Musk did damage to Trump by doing politically unpopular things and by drawing attention off of Trump and making it so when voters think about Trump, they're going to think about Elon,' said Evan Roth Smith, a Democratic pollster at Slingshot Strategies who studied the ways Musk created vulnerabilities for Trump. 'The first few months of an administration can really define how voters feel about it, and Musk was so closely associated with the first weeks and months of this administration.'
So breaking up with Musk is an opportunity for Trump to cast off a toxic political appendage known for unpopular policies like attacking Social Security and enacting indiscriminate federal job cuts. The amputation is unlikely to totally work, but he could make it so both he and other GOP leaders aren't held responsible for Musk's unpopular positions in the future.
'Trump is looking for a really loud breakup,' Roth Smith predicted. 'He's hoping voters will draw some distance between him and Elon. Trump is going to be really dramatic about this.'
At the same time, while Musk's critiques of the bill as a budget-buster ― it would add nearly $3 trillion to the debt over the next decade, according to the Congressional Budget Office ― may give a rhetorical boost to members seeking deeper cuts, like Sens. Rand Paul (R-Ky.) and Mike Lee (R-Utah), Republicans seemed mostly inclined to shrug off his critiques.
'Oh, I don't care. He's got an opinion,' Rep. Tim Burchett (R-Ark.), a man generally willing to upset Republican leaders, said of Musk earlier this week.
Sen. Kevin Cramer (R-N.D.) similarly said lawmakers are reacting to Musk's broadsides against the legislation with shrugs and eye rolls. 'He's an entertaining fellow, I just don't base my policy positions on his tweets,' he told HuffPost.
Musk does not totally lack leverage over House and Senate Republicans. On the social media site he owns, he reminded them Trump's presidency will end in a short 3 1/2 years, while noting he would be around for another 40 (Musk is 53). He's also demonstrated a willingness to spend money on politics, even if the effectiveness of that money ― both in the general election and in a Wisconsin Supreme Court race earlier this year ― is up in the air.
But longtime GOP aides said a contest between Trump and Musk for the hearts and minds of congressional Republicans was no contest at all.
'Let there be no doubt who congressional Rs are going to side with in this skirmish. We don't need to play the 'will Elon sink the bill?' game,' Brendan Buck, a former aide to House Speakers John Boehner and Paul Ryan, wrote on social media.
For all the social media bombast and meme-driven gallows humor of the Musk-Trump split, the story of the South African-born billionaire's apparent ouster is much less novel than it might seem.
'I think Elon Musk is learning a lesson that many people who enter politics as relative novices sometimes take a while to learn,' Roth Smith said. 'Inertia is a powerful force in American politics, and people who seek to upend the normal state of affairs in American politics often find they are the ones who are upended after, as President Trump put it, patience is worn thin.'
Igor Bobic and Arthur Delaney contributed reporting.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
29 minutes ago
- Yahoo
Volex's (LON:VLX) Upcoming Dividend Will Be Larger Than Last Year's
The board of Volex plc (LON:VLX) has announced that it will be paying its dividend of $0.03 on the 5th of September, an increased payment from last year's comparable dividend. This takes the annual payment to 1.2% of the current stock price, which unfortunately is below what the industry is paying. While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Volex's stock price has increased by 87% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. Before making this announcement, Volex was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow. Looking forward, earnings per share is forecast to rise by 12.1% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 18% by next year, which is in a pretty sustainable range. View our latest analysis for Volex It is great to see that Volex has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2019, the annual payment back then was $0.0241, compared to the most recent full-year payment of $0.0614. This means that it has been growing its distributions at 17% per annum over that time. Volex has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle. The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Volex has grown earnings per share at 21% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend. In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock. Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Volex stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Trump signs ‘One Big Beautiful Bill' into law: What that means for your money
President Donald Trump signed the so-called One Big Beautiful Bill (OBBB) into law Friday, a budget that will have far-reaching repercussions on millions of Americans' bank accounts, for better and worse. The legislation is extensive, including hundreds of provisions that touch everything from individual rates to student loans to the estate tax. It attempts to pay for the included tax breaks by slashing spending on social safety net programs like Medicaid and nutritional benefits, as well as green energy programs. Even with these cuts, it is expected to add $3.1 to $3.5 trillion to the national debt over the next 10 years. Along with provisions directly affecting Americans' personal finances, it earmarks hundreds of billions of dollars for the president's deportation efforts. It also creates a dual-class tax structure: one for citizens and their families, and another for those with at least one immigrant member, regardless of whether they are documented or not. Various analyses of the bill's provisions find it will benefit wealthy Americans far more than lower-income earners. In fact, after-tax-transfer income for the lowest-earning 20% of Americans drops by an estimated $245 next year, increasing to a loss of $1,385 annually by 2033, according to the Penn Wharton Budget Model (PWBM). Future generations are also 'uniformly worse off,' according to PWBM. 'All future generations experience one-time welfare losses, ranging from -$22,000 for the lowest income quintile to -$5,700 for the highest,' the analysis reads. 'A middle-income child born today would see a $9,800 loss.' The Yale Budget Lab finds similar outcomes: It estimates changes to taxes and Medicaid and SNAP would lead to a $700 decrease in income for the lowest 20% of earners, while the top 1% would see a $30,000 increase. Republicans say it will have positive effects throughout the economy. 'There's a view that there's a lot of potential economic growth from the bill that will have a positive impact on the economy,' says Marc Gerson, member at Miller & Chevalier and former majority tax counsel for the U.S. Ways and Means Committee. The legislation, which totals almost 1,000 pages, is far-reaching, and the details of how many provisions will be implemented still need to be worked out. For example, while it calls for no federal taxes on some tips and overtime, the IRS still needs to write those regulations for businesses and individual taxpayers to follow. All that said, exactly how it will affect people is unknown at this time. Additionally, many of the individual tax cut provisions are temporary, lasting generally through 2028 (this differs by provision, though, and will be noted if the information is available). Here's what financial advisors and experts say Americans need to know about the OBBB now. The bill makes permanent certain provisions from the 2017 Tax Cuts and Jobs Act (TCJA), including lower individual tax rates compared to what was in place before then: 10%, 12%, 22%, 24%, 32%, 35%, 37%. That said, these rates have been in place since the 2018 tax year, so many taxpayers are already accustomed to them. It also eliminates personal and dependent exemptions, and some itemized deductions while keeping the doubled standard deduction (compared to pre-TCJA). Under the bill, the standard deduction for 2025 is $15,750 for single taxpayers, $31,500 for joint filers, and $23,625 for heads of household. 'If you don't qualify for new tax benefits, your tax outcome may look similar to last year's since many provisions under the TCJA are being made permanent,' notes TurboTax. For the super wealthy, the bill makes permanent the doubling of the estate tax exemption from the TCJA. For decedents dying in 2026 and beyond, up to $15 million (and $30 million for couples) is exempt from the federal estate tax, and this exemption will be indexed for inflation. That mostly benefits individuals with estates in excess of $7.5 million, says Jane Ditelberg, director of tax planning at Northern Trust Wealth Management, the old exemption amount. 'Locking in the $15 million exemption indefinitely brings certainty to families planning major wealth transfers,' says Ditelberg. 'For more than two decades, taxpayers have faced a moving target, with the applicable rules changing depending on the year of death. This takes that risk off the table.' Under the bill, the child tax credit is increased from $2,000 per child to $2,200, and is subject to annual inflation increases. The bill requires the taxpayer claiming the credit, the taxpayer's spouse, and the child to have Social Security numbers. In place of eliminating taxes on Social Security, Americans 65 or older will see a temporary 'bonus' deduction of up to $6,000 on their income taxes. This will be available to single filers making a modified adjusted gross income up to $75,000, or couples making up to $150,000, for tax years 2025 to 2028. Car buyers will be able to deduct up to $10,000 of interest per year on new auto loans. This is limited by income: it phases out for single filers with incomes above $100,000 (and $200,000 for married couples). It also only applies to cars assembled in the United States. This is available for those who itemize and those who do not. The bill provides above-the-line deductions for some tip income and overtime pay for certain workers, fulfilling one of Trump's campaign promises. That said, there are important restrictions to keep in mind about both. Those with tip income can deduct up to $25,000 for qualified tips from their federal tax bill, phasing out for those with income above $150,000. This is in place for tax years 2025 to 2028. 'It's essential to understand that this deduction doesn't directly reduce your taxes dollar-for-dollar, and your actual tax savings will depend on your tax rate,' notes TurboTax. Those earning overtime pay can deduct up to $12,500 ($25,000 for married couples filing jointly), depending on income. Like the tipped income provision, this is available for tax years 2025 through 2028 and phases out for income above $150,000. Because many tipped workers are low-income, almost 40% already don't pay federal taxes on their tips, says Meg Wheeler, certified public accountant and founder of The Equitable Money Project. Additionally, tipped workers should know they will still technically owe state and employment taxes like Social Security and Medicare on their tips—it's still reportable income. This is not a total exclusion from paying taxes. 'We know that lots of tipped workers don't necessarily report all of their tips. So just even right there, that will be an interesting shift,' says Wheeler. 'I also am curious about whether or not this pushes more employers or even more employees to want to move to a tipped model, because they think this is helpful.' Gerson says these provisions—which the IRS will need to write guidance on before they are implemented—may create additional discrepancies on how workers are taxed in the same workplace. That can lead to headaches for business owners, as well as create tension among employees who are compensated differently. 'If you take a restaurant, you have some people who are tipped and will benefit from the exclusion, and then you have people that aren't tipped and won't benefit from it,' he says. 'It just has an impact on workforce dynamics. Some people [may] no longer want to be salaried because they can get in overtime.' The bill makes a number of changes to the federal student loan program starting in 2026, many of which will make payments higher for borrowers. The bill reduces the number of income-based repayment plans, phasing out the Income-Contingent Repayment (ICR), Pay As You Earn (PAYE) and Saving on a Valuable Education (SAVE) plans starting in July 2026. Current borrowers will have two years to switch to a version of the Income-Based Repayment (IBR) plan, the standard repayment plan, or the Repayment Assistance Plan (RAP), a new offering. New borrowers, meanwhile, will only be able to enroll in the RAP. 'Many existing borrowers will see higher monthly payments under these new plans, though the current iteration of the bill at least allows more time to change plans,' says Kate Wood, loans expert and writer at NerdWallet. 'As of now, student loan forgiveness still appears to be on the table, though RAP requires up to 30 years of repayment first, a longer repayment timeline than any current plan.' One of the big differences, says Wheeler, is that RAP has a minimum monthly payment. This is different from some of the current income-based repayment plans, which allow some borrowers to pay very low amounts or nothing at all, depending on their earnings. 'Now, all of a sudden they have to jump up to this minimum just because that's the rule, that's the law,' says Wheeler. 'I think that's going to be, right off the bat, a huge issue.' It also lowers the limits on graduate school loans, eliminates the federal Grad PLUS program altogether, and caps Parent PLUS borrowing. These changes apply to new loans starting July 1, 2026. While the high cost of graduate school has been a target of people who want to reform the student loan system in the U.S., experts say limiting how many federal loans borrowers can take out won't solve much. Instead, it means they will have to rely on private loans—which have fewer protections for borrowers and potentially higher interest rates—or skip higher education altogether. Those attending professional school for law or medicine may have the most to lose. One of the more contentious aspects of passing the bill was what to do with the cap on state and local tax deductions, or the SALT cap. Trump's 2017 tax bill put a cap of $10,000 on it; that cap has been increased to $40,000. This is one of the most expensive provisions in the bill. Taxpayers in California, Illinois, New Jersey, and New York stand to benefit the most: They account for 40 of the 50 top congressional districts affected by the cap. The cap reverts to $10,000 in 2030. 'It's increased relief, but it is temporary,' says Gerson. 'And so it's something that Congress will have to revisit.' The bill establishes so-called Trump accounts, which are a new type of tax-favored account for newborns. Children born between 2025 and 2028 will receive $1,000. The bill makes dramatic cuts to Medicaid, which is the health care program for low-income, disabled, and some senior Americans. It will also affect those who have Affordable Care Act (ACA) health care coverage. People on Medicaid will face strict new work requirements for able-bodied adults, and eligibility checks will increase from every 12 months to every six months. Estimates put the number of those losing health coverage at around 16 million Americans. 'It's very likely that people will lose coverage even if they still qualify, just due to the administrative burden,' says Kate Ashford, investing specialist at NerdWallet. 'It's also likely that some hospitals in rural areas that rely on Medicaid funding will reduce services or close, meaning that people in those communities may have to travel far or go without care if they get sick or injured.' Americans with ACA health insurance coverage will have to re-verify eligibility for tax credits each year, adding an additional hurdle to renewing. It also does not extend the ACA subsidies that help many Americans afford their coverage. 'If those expire, ACA health insurance costs will go up substantially, placing real stress on people's budgets and potentially resulting in people dropping health insurance,' says Ashford. 'Many immigrants who are legally residing in the U.S. will also lose access to ACA subsidies, forcing many of them to end coverage and raising rates for people who remain on plans.' Allowing the subsidies to expire will also raise costs substantially on small business owners who rely on ACA coverage, says Ashford, as will the Medicaid cuts. She says small business owners and other entrepreneurs may find that health insurance coverage is now too expensive to enter the field. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Nynomic AG's (ETR:M7U) Stock Has Seen Strong Momentum: Does That Call For Deeper Study Of Its Financial Prospects?
Most readers would already be aware that Nynomic's (ETR:M7U) stock increased significantly by 15% over the past month. As most would know, fundamentals are what usually guide market price movements over the long-term, so we decided to look at the company's key financial indicators today to determine if they have any role to play in the recent price movement. Specifically, we decided to study Nynomic's ROE in this article. ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Nynomic is: 3.6% = €3.7m ÷ €103m (Based on the trailing twelve months to December 2024). The 'return' is the amount earned after tax over the last twelve months. One way to conceptualize this is that for each €1 of shareholders' capital it has, the company made €0.04 in profit. View our latest analysis for Nynomic Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. On the face of it, Nynomic's ROE is not much to talk about. Yet, a closer study shows that the company's ROE is similar to the industry average of 4.2%. On the other hand, Nynomic reported a moderate 12% net income growth over the past five years. Taking into consideration that the ROE is not particularly high, we reckon that there could also be other factors at play which could be influencing the company's growth. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio. Next, on comparing Nynomic's net income growth with the industry, we found that the company's reported growth is similar to the industry average growth rate of 11% over the last few years. Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Nynomic is trading on a high P/E or a low P/E, relative to its industry. Nynomic doesn't pay any regular dividends, meaning that all of its profits are being reinvested in the business, which explains the fair bit of earnings growth the company has seen. On the whole, we do feel that Nynomic has some positive attributes. Even in spite of the low rate of return, the company has posted impressive earnings growth as a result of reinvesting heavily into its business. Having said that, looking at the current analyst estimates, we found that the company's earnings are expected to gain momentum. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
