Latest news with #KentSmetters
Boston Globe
5 days ago
- Business
- Boston Globe
US July budget deficit up 20% year-over-year despite record Trump tariff income
If tariffs fail to deliver on Trump's pledge to improve the government's balance sheet, the American public could be faced with fewer job options, more inflationary pressures and higher interest rates on mortgages, auto loans and credit cards. The budget deficit is the annual gap between what the US government raises in taxes and what it spends, over time feeding into the overall national debt. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up A Treasury official who spoke on the condition of anonymity to preview the data said overall increased spending is in part due to a mix of expenditures, including growing interest payments on the public debt and cost-of-living increases to Social Security payouts, among other costs. This comes as the federal government's gross national debt creeps up to the $37 trillion mark. Advertisement While organizations like the Committee for a Responsible Federal Budget say that tariff income can be a stream of meaningful revenue — estimated to generate about $1.3 trillion over the course of President Trump's four-year term in office; some economists like Kent Smetters of the University of Pennsylvania's Penn Wharton Budget Model say tariffs are likely to result " in only modest reductions in federal debt." Advertisement In June, the Congressional Budget Office estimated that President Trump's sweeping tariff plan would cut deficits by $2.8 trillion over a 10-year period while shrinking the economy, raising the inflation rate and reducing the purchasing power of households overall. But revenue estimates are also difficult to predict as the president has changed his tariff rates repeatedly and the taxes declared as part of an economic emergency are currently under appeal in a US court. A Treasury official did not respond to an Associated Press request for comment on when the US could begin to see tariff revenue start to put a dent in the deficit. Treasury Secretary Scott Bessent said last month on Fox Business Network's 'Mornings with Maria' that the administration is 'laser-focused on bringing this deficit down.' The Trump administration expects to make more trade deals with other nations, including China and other major economies. For instance, on Monday, Trump extended a trade truce with China for another 90 days, which preserves the 30 percent tariffs he had imposed as a condition for negotiations. The previous deadline was set to expire at 12:01 a.m. Tuesday. Trump posted on his Truth Social platform that he signed the executive order for the extension, and that 'all other elements of the Agreement will remain the same.' Beijing, at the same time, also announced the extension of the tariff pause, according to the Ministry of Commerce. Advertisement ___ Associated Press writer Josh Boak contributed to this report.
Yahoo
16-07-2025
- Business
- Yahoo
4 Bath and Beauty Items To Stock Up on Now in Case of Tariff-Induced Product Shortages
It's no secret the U.S. introduced new tariffs on imports from China, the European Union and many other countries. While rates have fluctuated, ranging from a baseline of 10% to as high as 145% on certain Chinese goods earlier this year, per Reuters, it's clear that global supply chains are under pressure. According to the Personal Care Products Council, trade policies that raise costs on imported materials could impact the affordability and availability of everyday essentials like toothpaste, shampoo and moisturizer. Be Aware: Try This: If there are bath and beauty products you use daily, now might be a good time to grab an extra bottle or two. Here are four categories that could be most impacted by trade disruptions and rising costs. Many skincare products rely on ingredients that are sourced globally. For example, Volza trade data shows the U.S. imports most of its hyaluronic acid from China, India and France. Products that rely on imported ingredients could become more expensive or harder to restock if global sourcing or shipping delays persist. In an interview with Glamour, Kent Smetters, professor at the Wharton School of Business, said consumers could pay up to 20% more for beauty and skincare products on average due to tariffs. Check Out: Toothpaste and mouthwash are part of a global supply chain. According to Volza, the U.S. imported over 57,000 shipments of toothpaste between late 2022 and late 2023, primarily from Mexico, India and China. While import dependence alone doesn't guarantee disruption, it leaves these products more exposed to rising shipping costs or changing trade policy. In January 2025, Reuters reported Colgate-Palmolive (one of the largest oral care brands in the U.S.) is already taking steps to adjust its sourcing and reduce the potential impact of new tariffs on toothpaste imported from Mexico. While the extent of future price or supply changes remains unclear, keeping an extra tube or brush head on hand might help avoid last-minute shortages or cost spikes. Haircare items like shampoo, conditioner and treatments often rely on global supply chains for both ingredients and packaging. 'It'll affect makeup, hair care, skin care, anything sold in a bottle,' said Perry Romanowski, a cosmetic chemist, in an interview with Allure. He explained that products made with ingredients like coconut oil and palm oil derivatives are more likely to see price spikes. If you have a go-to shampoo, deep conditioner or styling product, grabbing an extra bottle could help you avoid potential price hikes or stock issues later on. According to Volza, the U.S. imported over 130,000 shipments of bath and body products from countries like China, India and Mexico in the past year. While importing data alone doesn't confirm price hikes, the Personal Care Products Council has warned that tariffs on imported materials may impact both affordability and availability across the personal care sector. If you have go-to body care products, like moisturizing body washes or natural deodorants, it may be worth grabbing an extra bottle in case future costs rise or supply becomes more limited. Having an extra bottle or backup item for your daily-use products can save money and stress later. Focus on long shelf-life items, and always check expiration dates before buying in bulk. Prioritize the products you know you'll use, especially if they contain imported ingredients or come in plastic packaging that could be hit by tariffs. More From GOBankingRates 8 Common Mistakes Retirees Make With Their Social Security Checks This article originally appeared on 4 Bath and Beauty Items To Stock Up on Now in Case of Tariff-Induced Product Shortages Sign in to access your portfolio
The Herald Scotland
03-07-2025
- Business
- The Herald Scotland
Will Trump's tax bill help or hurt you? It may depend on your income
"It's still higher-income households that are the winners, especially those who are alive today," said Kent Smetters, faculty director of the Penn Wharton Budget Model. The analysis also found the Senate's version of the tax bill, which narrowly passed on July 1, would lead to higher deficits and slower economic growth compared to its counterpart from the House. The bill heads to the House for final approval. Trump has asked for a final version on his desk and ready for signature by July 4, but acknowledged the deadline may be "very hard to do" as some House Republicans voice frustrations with changes made in the Senate. Trump's big tax bill is a win. It could also be a big problem for GOP What's different under the Senate version of the tax bill? The legislation, dubbed the "One, Big Beautiful Bill" by Trump, would make the 2017 tax cuts from Trump's first term permanent, increase the child tax credit and introduce other tax cuts, including no taxes on tips or overtime wages. To help pay for the cuts, the government would reduce spending on the Supplemental Nutrition Assistance Program, formerly known as food stamps, and make cuts to Medicaid, a program that provides health insurance to more than 71 million low-income Americans. The version in the Senate has some key differences from the House bill, including: Permanent tax breaks for corporations that allow businesses to deduct the full cost of qualifying investments and research projects immediately, rather than over a number of years. In the House's bill, these tax breaks were in effect from 2025 to 2029. Permanently enhancing the standard deduction, adding $750 for single filers, $1,125 for heads of households and $1,500 for married couples starting in 2025. There was a temporary adjustment in the House's version that added $1,000 for single filers, $1,500 for heads of households and $2,000 for couples from 2025 to 2028. Permanently raising the child tax credit to $2,200 starting in 2026, compared to a temporary increase to $2,500 through 2028 in the House bill. "The Senate one makes things more permanent," Smetters told USA TODAY. "On the one hand, we don't have to revisit the same politics in four years. On the other hand, there's a fiscal cost associated with that. That means more debt and more burdens inherited by future generations." More Americans would also lose Medicaid under the Senate's version, according to the nonpartisan Congressional Budget Office, with an estimated 11.8 million people uninsured by 2034, compared to previous estimates of 10.9 million people under the House's proposal. 5 takeaways: Trump asserts dominance with 'big, beautiful bill' Senate passage Impact on future generations Various analyses suggest Trump's tax bill would reward higher-earning Americans more than their lower-earning counterparts. A June analysis of the House bill by the Congressional Budget Office, for instance, found resources for the poorest would decrease by about $1,600 per year under the legislation, largely due to cuts to Medicaid and food aid - which would be more aggressive under the Senate bill. Meanwhile, the wealthiest would gain about $12,000 on average. Another June report from the Yale Budget Lab suggests the bottom fifth of earners would lose about $560 per year while the top 20% would gain $6,000. But all future generations, no matter their income, would experience lifetime losses, according to the Penn Wharton Budget Model. High-income households are set to lose $5,700 under the Senate's bill, while low-income households would lose $22,000. The report points to a reduced social security net and lower wages as the main drivers. Under the House bill, the Penn Wharton Budget Model projected lifetime losses ranging from $500 for high-income households to $15,800 for low-income households. "The future generations, they're going to be worse off. It doesn't matter where on the income bracket they fall," Smetters said. "Ultimately, someone has to pay for (the tax bill), and we're basically passing it on to the next generation." Slower economic growth While the House version showed a 0.4% gain in GDP by year 10, according to the Budget Model's previous analysis, the Senate's version would yield a 0.3% loss. After 30 years, GDP would drop 4.6% under the Senate bill compared to a 1.5% drop under the House version. Higher deficits Primary deficits are projected to increase $3.1 trillion over the next decade through the Senate's tax bill, compared to roughly $2.7 trillion under the House bill, according to the Penn Wharton Budget Model. Other reports have also found a higher debt load under the Senate bill. The Congressional Budget Office projects it would add $3.3 trillion to the national debt over the next decade, $800 billion more than the House's bill. And a July report from the Yale Budget Lab says the Senate's bill would add $3 trillion to the debt by 2034, compared to an estimated $2.4 trillion under the House bill. How much do lower-income Americans stand to lose? According to the most recent Penn Wharton Budget Model analysis, the lowest-earning households stand to lose after-tax-and-transfer income in both the short- and long-run, while higher earners would see gains under the Senate bill. Those earning less than $18,000 would lose $235 on average in 2027 and $1,380 by 2033. Those earning between $18,000 and $52,999 would lose $75 in 2027 and $1,625 by 2033. Those earning between $53,000 and $95,999 would gain $1,350 in 2027 but lose $130 by 2033. Those earning between $96,000 and $178,999 would gain $3,880 in 2027 and $2,825 by 2033. Those earning between $179,000 and $271,999 would gain $6,615 in 2027 and $4,985 by 2033. Those earning between $272,000 and $400,999 would gain $9,360 in 2027 and $7,670 by 2033. Those earning between $401,000 and $1,019,999 would gain $20,605 in 2027 and $18,645 by 2033. Those earning between $1,020,000 and $4,450,999 would gain $36,020 in 2027 and $29,430 by 2033. Those with an income above $4,451,000 would gain $290,485 in 2027 and $82,255 by 2033. Smetters said figures may be slightly adjusted as more information on specific amendments becomes available.
Yahoo
26-06-2025
- Business
- Yahoo
GOP bill could shift wealth from young to older generations, study finds
The Republican budget package aims to make President Donald Trump's tax cuts permanent while offering a host of new financial breaks. Yet the "big, beautiful bill," as the legislation is dubbed, could also effectively transfer wealth from younger generations to older Americans over their lifetimes, a recent study finds. Long-term, the primary beneficiaries of the GOP bill would be older, wealthier Americans, while younger, middle- to low-income people would see fewer benefits, according to the analysis from the Penn Wharton Budget Model, a University of Pennsylvania think tank that studies the fiscal issues. The group's projection assesses the impact of proposed tax cuts under the bill, as well as reductions in federal programs such as Medicaid and the Supplemental Nutrition Assistance Program, or SNAP, better known as food stamps. Penn Wharton also factors in the long-term fiscal impact of the debt the U.S. would likely have to issue to pay for the bill's tax cuts, the group said. "Somebody has to pay" Younger Americans would bear the brunt of the nation's spiraling debt, Kent Smetters, director of the Penn Wharton Budget Model, told CBS MoneyWatch. "Somebody has to pay — nothing is for free. In this case, that's the future generations," he said. "We have finally reached this inflection point where under any reasonable estimation, younger people are going to be worse off in the future" if the current version of the bill is passed. For example, the bill would cost an infant born into a low-income family $14,100 over their lifetime. This loss stems from factors including reduced social safety net benefits and lower wages resulting from slower economic growth driven by increased national debt and deficits. On the other hand, a high-income 70-year-old stands to gain $120,000 over his remaining years due to the proposed legislation's tax cuts and other benefits, the analysis found. The House narrowly passed the legislation in May. Senate lawmakers are pressing to vote on the measure by the end of the week. The White House took issue with Penn Wharton's analysis. "So-called 'experts' panning the One, Big, Beautiful Bill without a smidge of humility should remember that they made these same exact gloomy predictions about President Trump's tax cuts during his first term – tax cuts that helped usher in historic job, wage, investment and economic growth along with the first decline in wealth inequality in decades," White House spokesman Kush Desai told CBS MoneyWatch. Biggest winners Like Penn Wharton, other researchers have said the Republican bill is likely to benefit wealthy Americans at the expense of people lower down the ladder. The measure would likely reduce the financial resources available to the lowest-earning 10% of U.S. households by $1,600 per year, or almost 4% of their annual income, according to a report published earlier this month by the nonpartisan Congressional Budget Office. White House officials have previously questioned the CBO's scoring of the bill. But the highest-earning 10% of households would see a gain of $12,000 per year in resources, while middle-income households would see a gain of $500 to $1,000, the CBO projected. Its analysis is based on the bill's tax breaks, as well as reductions for federal programs and reductions in state funds for safety net programs such as Medicaid and food stamps. In considering the impact of higher U.S. debt on future generations, the cost would come in the form of lower wages and higher costs, such as more expensive mortgages, Smetters said. Already, the U.S. is spending more than $1 trillion a year to service its debt — almost double the amount it was paying five years ago, according to Federal Reserve Bank of St. Louis data. That's more than the nation currently spends on defense, data from the Stockholm International Peace Research Institute shows. Clock ticking Taking on more debt to pay for the GOP bill could make it tougher for the federal government to pay for programs like Social Security as more of its budget is eaten up by interest payments. Higher debt would also likely result in higher interest rates, as well as slowing economic growth, the Yale Budget Lab projects. Elements of the bill are still under debate on Capitol Hill, with congressional Republicans racing to meet a self-imposed July 4 deadline to send the package to President Trump for his signature. The last scheduled day in session for both the House and Senate before they leave town for the holiday is Friday, leaving little time to reach a deal. Some Republicans are at loggerheads over certain provisions, such as the state and local tax deduction, known as SALT, with House lawmakers pushing for a bigger deduction than in the Senate. If the bill moves ahead, the long-term combination of benefit reductions and swelling federal debt could outweigh the benefits of tax cuts for younger Americans, the Penn Wharton analysis said. "Sometimes people say, 'If I'm in 40th-60th [percentile of income], I won't get SNAP or Medicaid,' but actually there is a chance that you could still," Smetters said. "There is a chance anybody could be unemployed or be on food stamps." Young Cuban girl asks Trump to lift travel ban stopping her from joining mom in U.S. Hegseth gets heated over reporting on Iran strikes initial assessments Supreme Court allows South Carolina to block Medicaid funds from Planned Parenthood
CBS News
26-06-2025
- Business
- CBS News
GOP budget bill could transfer wealth from young Americans to older generations, study finds
The Republican budget package aims to make President Donald Trump's tax cuts permanent while offering a host of new financial breaks. Yet the "big, beautiful bill," as the legislation is dubbed, could also effectively transfer wealth from younger generations to older Americans over their lifetimes, a recent study finds. Long-term, the primary beneficiaries of the GOP bill would be older, wealthier Americans, while younger, middle- to low-income people would see fewer benefits, according to the analysis from the Penn Wharton Budget Model, a University of Pennsylvania think tank that studies the fiscal issues. The group's projection assesses the impact of proposed tax cuts under the bill, as well as reductions in federal programs such as Medicaid and the Supplemental Nutrition Assistance Program, or SNAP, better known as food stamps. Penn Wharton also factors in the long-term fiscal impact of the debt the U.S. would likely have to issue to pay for the bill's tax cuts, the group said. "Somebody has to pay" Younger Americans would bear the brunt of the nation's spiraling debt, Kent Smetters, director of the Penn Wharton Budget Model, told CBS MoneyWatch. "Somebody has to pay — nothing is for free. In this case, that's the future generations," he said. "We have finally reached this inflection point where under any reasonable estimation, younger people are going to be worse off in the future" if the current version of the bill is passed. For example, the bill would cost an infant born into a low-income family $14,100 over their lifetime. This loss stems from factors including reduced social safety net benefits and lower wages resulting from slower economic growth driven by increased national debt and deficits. On the other hand, a high-income 70-year-old stands to gain $120,000 over his remaining years due to the proposed legislation's tax cuts and other benefits, the analysis found. The House narrowly passed the legislation in May. Senate lawmakers are pressing to vote on the measure by the end of the week. The White House took issue with Penn Wharton's analysis. "So-called 'experts' panning the One, Big, Beautiful Bill without a smidge of humility should remember that they made these same exact gloomy predictions about President Trump's tax cuts during his first term – tax cuts that helped usher in historic job, wage, investment and economic growth along with the first decline in wealth inequality in decades," White House spokesman Kush Desai told CBS MoneyWatch. Biggest winners Like Penn Wharton, other researchers have said the Republican bill is likely to benefit wealthy Americans at the expense of people lower down the ladder. The measure would likely reduce the financial resources available to the lowest-earning 10% of U.S. households by $1,600 per year, or almost 4% of their annual income, according to a report published earlier this month by the nonpartisan Congressional Budget Office. White House officials have previously questioned the CBO's scoring of the bill. But the highest-earning 10% of households would see a gain of $12,000 per year in resources, while middle-income households would see a gain of $500 to $1,000, the CBO projected. Its analysis is based on the bill's tax breaks, as well as reductions for federal programs and reductions in state funds for safety net programs such as Medicaid and food stamps. In considering the impact of higher U.S. debt on future generations, the cost would come in the form of lower wages and higher costs, such as more expensive mortgages, Smetters said. Already, the U.S. is spending more than $1 trillion a year to service its debt — almost double the amount it was paying five years ago, according to Federal Reserve Bank of St. Louis data. That's more than the nation currently spends on defense, data from the Stockholm International Peace Research Institute shows. Clock ticking Taking on more debt to pay for the GOP bill could make it tougher for the federal government to pay for programs like Social Security as more of its budget is eaten up by interest payments. Higher debt would also likely result in higher interest rates, as well as slowing economic growth, the Yale Budget Lab projects. Elements of the bill are still under debate on Capitol Hill, with congressional Republicans racing to meet a self-imposed July 4 deadline to send the package to President Trump for his signature. The last scheduled day in session for both the House and Senate before they leave town for the holiday is Friday, leaving little time to reach a deal. Some Republicans are at loggerheads over certain provisions, such as the state and local tax deduction, known as SALT, with House lawmakers pushing for a bigger deduction than in the Senate. If the bill moves ahead, the long-term combination of benefit reductions and swelling federal debt could outweigh the benefits of tax cuts for younger Americans, the Penn Wharton analysis said. "Sometimes people say, 'If I'm in 40th-60th [percentile of income], I won't get SNAP or Medicaid,' but actually there is a chance that you could still," Smetters said. "There is a chance anybody could be unemployed or be on food stamps."
