Latest news with #WaysandMeans
Business Insider
28-05-2025
- Business
- Business Insider
From celebration to concern, Nigeria's debt may rise despite repaying the IMF
The tone of Nigeria's debt conversation in less than a month has pivoted from jubilant to concerned, owing to the intent of President Bola Tinubu to borrow more money, despite recently clearing its IMF debts. President Bola Tinubu proposes additional borrowing to finance key sectors including infrastructure, agriculture, and healthcare. The new loan could potentially increase Nigeria's total public debt from N144.67 trillion to over N182.91 trillion by 2026. Nigeria recently repaid a $3.4 billion obligation to the IMF and cleared a N30 trillion Ways and Means debt. The president of Nigeria, Bola Tinubu, recently reached out to the country's National Assembly to approve a new round of borrowing composed of $21.54 billion, €2.19 billion, and ¥15 billion which he noted is aimed at supporting key sectors, including infrastructure, agriculture, healthcare, education, water resources, security, and public finance reforms. This comes a few weeks after the country settled its financial obligations of $3.4 billion to the International Monetary Fund. Additionally, the administration had announced the clearance of the country's Ways and Means debt, totalling over N30 trillion, back in October 2024. However, during the recent plenary, on Tuesday, Senate President Godswill Akpabio read a letter that contained the president's request. A description of the financial breakdown was also provided in the letter, but its contents were kept confidential. According to a report by The Punch, the newly proposed loan would increase Nigeria's current debt stock by approximately N38.24 trillion at the current official exchange rate of N1,583.74/$1, potentially causing Nigeria's total public debt to rise from N144.67 trillion at the end of 2024 to over N182.91 trillion by 2026. For more context, Nigeria's external debt would rise from $45.78 billion to approximately $69.92 billion, an extra $24.14 billion, or a 52.7% increase, if the National Assembly approves the president's plan. This will raise the external debt component of Nigeria's overall national debt to more than N108 trillion in the country's local currency. The scheme, which is part of the 2023 Presidential Executive Order on Foreign Currency-Denominated Financial Instruments, aims to improve foreign currency reserves, grow the domestic financial sector, draw in local dollar investments, and aid in exchange rate stabilization. Nigeria's World Bank loan under President Bola Tinubu Since President Bola Tinubu's administration took over, the World Bank has authorized approximately 11 loan projects for Nigeria worth $7.45 billion in less than two years. According to data from the Debt Management Office, the World Bank held $17.32 billion of Nigeria's external debt as of the third quarter of 2024. Nigeria's debt to the World Bank's International Development Association (IDA) is $16.5 billion as of FY2024, making it Africa's largest debtor and the world's third-highest, according to the Bank's financial statements.
Yahoo
22-05-2025
- Business
- Yahoo
GOP to End Clean Power Credits Years Earlier in Revised Bill
(Bloomberg) -- Subsidies for clean power would end years earlier in a giant tax and spending bill narrowly passed by the Republican-led House of Representatives early Thursday, driving down shares of solar companies including Sunrun Inc. Can Frank Gehry's 'Grand LA' Make Downtown Feel Like a Neighborhood? Chicago's O'Hare Airport Seeks Up to $4.3 Billion of Muni Debt NJ Transit Makes Deal With Engineers, Ending Three-Day Strike It now moves to the Senate, where key Republicans have already balked at some of the House's plans. Some wanted longer transition times before the latest House bill cut those even further. The House bill is 'worse than feared' for clean energy, analysts at Jeffries said in a research note Thursday. They added, however, that 'we don't expect this to last into Senate draft.' Shares of Sunrun fell 44% in early trading Thursday. SolarEdge Technologies Inc. sank 17%. The revised text released Wednesday night marked an extended effort to win over Republican dissidents, including fiscal hardliners who wanted deeper cuts to a series of tax credits created under former President Joe Biden's signature climate law. The revisions would include ending technology-neutral clean electricity tax credits for sources like wind and solar starting in 2029 and requiring those projects to commence construction within 60 days of the legislation becoming law. The initial version proposed by House Republicans had a longer phase-out time, allowing many of the credits to exist until 2032. 'They would probably amount to a hard shutdown of the IRA,' said James Lucier, managing director at research group Capital Alpha Partners, referring to Biden's Inflation Reduction Act. 'The initial version of the Ways and Means bill gave investors some hope they could live under the old regime for another couple of years, but now no more.' The House bill would also hasten more stringent restrictions that would disqualify any project deemed to benefit China from receiving credits. Under the new version, those restrictions, which some analysts have said could render the credits useless for many projects, would kick in next year. At the same time, the revised bill would restore 'transferability' of a nuclear production tax credit, which would allow a project sponsor to sell tax credits to a third party, according to a summary of the changes. It also lengthens the among of time the credit remains in place by allowing projects that have started construction but aren't yet operating to be eligible to receive them, the summary said. The new bill also would keep the tax credits for advanced nuclear projects and expanding existing plants if construction starts by the end of 2028. It also would phase out a consumer tax incentive of as much as $7,500 for the purchase of electric vehicles. The changes would come on top of limitations on the energy credits that were estimated to save $560 billion in cuts in Inflation Reduction Act spending and could cripple the clean energy industry. The legislation is the centerpiece of President Donald Trump's second term agenda. However it faces a delicate path to become law, and may still be altered further. Alaska Republican Senator Lisa Murkowski and three colleagues have vowed to defend the credits and called for a 'targeted, pragmatic approach.' 'I am watching right now to see how far the House goes,' Murkowski said in an interview on Tuesday. --With assistance from Derek Wallbank. (Adds reaction from solar stocks.) Why Apple Still Hasn't Cracked AI Inside the First Stargate AI Data Center Anthropic Is Trying to Win the AI Race Without Losing Its Soul Microsoft's CEO on How AI Will Remake Every Company, Including His Cartoon Network's Last Gasp ©2025 Bloomberg L.P. 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
21-05-2025
- Business
- Yahoo
Who benefits most from the state and local tax deduction and why raising the cap is contentious
Increasing the $10,000 cap on the state and local tax deduction could benefit millions of tax filers. But a proposal to do just that has become a point of contention and a possible roadblock to House Republicans' passing 'one big, beautiful bill' that reflects President Donald Trump's agenda. That agenda includes making permanent essentially all of the individual income tax provisions from the 2017 Tax Cuts and Jobs Act, which are otherwise scheduled to expire this year. The SALT deduction, as it is known, enables federal income tax filers to deduct either their state and local income taxes or their state and local general sales taxes. In addition, they are also allowed to deduct their property taxes, assuming their income or sales taxes don't put them over the cap. The tax break, however, may only be taken by those who itemize deductions on their federal returns, which only a minority of filers do. Prior to 2017, there was no limit on the SALT deduction. But the TCJA imposed a $10,000 cap — which, when coupled with the expanded standard deduction under that tax law, meant the number of people who claimed the SALT deduction fell dramatically — from about one-quarter of filers in 2017, according to the Urban-Brookings Tax Policy Center, to less than 10% today. Going forward, it appears there will still be a cap, but it likely will be higher than $10,000. The question is just how much higher and for whom? The House Ways and Means and House Budget committees already approved a tax package that would permanently raise the cap to $30,000 for any taxpayer whose modified adjusted gross income is $400,000 or less if married filing jointly (and $200,000 or less for single filers). But anyone above those income thresholds would still be able to deduct at least $10,000, according to the Tax Foundation. But a small group of House Republicans with constituents who benefit from the tax break publicly rejected the proposal. By Wednesday morning, House Speaker Mike Johnson said a new agreement was reached with the so-called SALT caucus to raise the cap to $40,000 for a decade for households making less than $500,000. For those making more, the cap would be reduced gradually between $500,000 and $800,000. Households making more than $800,000 would be able to deduct $10,000. What's not clear is whether that compromise, if finalized, will be accepted by conservatives who dislike the SALT deduction and have been insisting on deep spending cuts. Republicans introduced the cap as part of their 2017 tax cuts bill to help pay for the sweeping legislation. And they are hoping to use it again as a revenue raiser in this year's package. For example, the $30,000 cap proposal was estimated to raise $915.6 billion over 10 years relative to simply letting the cap expire as it is otherwise set to do if lawmakers don't act, according to estimates from the Joint Committee on Taxation. A higher cap covering more households, like that reached in the tentative agreement Wednesday, will result in less revenue gained. That may further fuel the intraparty battle over the SALT deduction between GOP lawmakers from high-tax blue states, such as California and New York, and their colleagues from lower-tax red states, whose residents don't benefit from the deduction nearly as much. And even if all House GOP can get on board, it's not clear where the Senate, which is expected to amend the final House tax-and-spending bill, will come down. It's hardly the first time SALT has been the subject of dispute in modern times, said tax historian Joe Thorndike. The SALT break has been on the books since 1913, when the federal income tax code was created. It also had a decade-long stint during the Civil War as well. But there have been efforts to limit the deduction over the past five decades. While originally the SALT deduction was created so that the federal government didn't encroach upon states' ability to collect revenue, SALT today is portrayed as a subsidy to high-tax states and as regressive in that it disproportionately benefits higher-income households, Thorndike noted. In 2020, the SALT deduction was claimed on just 8.6% of all federal tax returns, according to the Tax Policy Center. But the incidence of people claiming it was most concentrated in 13 states and the District of Columbia. The deduction was claimed on more than 20% of returns from Maryland and Washington, DC; and on 10% to 20% of returns filed by residents of California, Colorado, Connecticut, Georgia, Hawaii, Massachusetts, New Jersey, New York, Oregon, Utah, Virginia and Washington State. And those who have received the biggest break — both before and after the cap was imposed — are high-income filers, especially those in high-tax states and cities. In 2017, before the cap went into effect, for example, roughly two-thirds of the benefit went to those with incomes of $200,000 or more, according to the center. The average SALT deduction was about $13,000, but it topped $30,000 in eight counties, mostly in California and New York. While the vast majority of middle- and upper-income households received tax relief from TCJA regardless of where they lived, they would have received even more, had the cap not been instituted, said Howard Gleckman, a senior fellow at the TPC. For example, the tax cut for those in the top 20% would have been $2,500 larger, on average, had their state and local tax deductions not been limited, according to the center. Their average individual income tax cut was only about $6,200, instead of $8,700. The cap had an even greater impact on taxpayers in the top 1%, whose average tax cut was $40,100, instead of $71,000. But those in the bottom 80% would not have seen much of a change in the size of their tax cut had the cap not been put in place.
Axios
20-05-2025
- Business
- Axios
Johnson offers $40,000 SALT deduction cap with income limits
House Speaker Mike Johnson offered GOP holdouts a detailed proposal on Monday to set the SALT deduction cap at $40,000 for anyone who makes less than $751,600 a year. Why it matters: But Johnson (R-La.) also offered the SALT members an entirely different option: Figure out the math yourself, he said, according to a person familiar with the matter. Johnson offered a crucial caveat: they still need to stay within the fiscal constraints of the Ways and Means framework, which has only has a set amount of money to spend on the SALT portion for the tax portions of the bill. Johnson needs to resolve the SALT issue this week, but he doesn't have unlimited money to do it with. "We continue to work on it," Johnson told reporters last night. "It's not a final resolution yet and I think we're getting very close." Punchbowl News first reported, on X, some of the details in Johnson's offer. Driving the news: Members of the SALT caucus appeared to be more interested in Johnson's second option. Rep. Andrew Garbarino (R-N.Y.) told reporters last night that "we have to follow up with Joint Committee on Tax and CBO on" on how much different proposals will cost. "They hope to have some numbers back to us by the morning." Zoom out: Johnson wants to signal flexibility to the half-a-dozen members who are threatening to vote against President Trump's one big, beautiful bill if they don't get more relief for their constituents who are hit with high taxes in blue states. The SALT caucus had been eyeing an additional $200 billion in headspace based on the Ways and Means instructions to authorize a total of $4 trillion in spending. By the numbers: There are firm income limits and phase-out in Johnson's proposal, according to the person familiar with the matter. For years 1-4: The deduction would be at $40,000 for anyone making less than $751,600. That includes individual and joint-filers. For anyone making more than roughly $850,000, the deduction would be $10,000, with a $20,000 deduction at the $800,000 threshold. Then starting in year five, both the deduction and the income levels drop. For anyone making less than $400,000 a year, the cap is at $30,000 in state and local taxes. For anyone in the $400,000 to $450,000 range, the deduction would be $20,000. For $500,000 and up, the deduction is back at the $10,000 level.
Yahoo
16-05-2025
- Business
- Yahoo
Geothermal and nuclear could lose big under GOP tax proposal
This analysis and news roundup comes from the Canary Media Weekly newsletter. Sign up to get it every Friday. The House Ways and Means budget proposal would gut the Inflation Reduction Act and slow the rollout of solar, wind, and storage. It'd crimp EV adoption and crush clean-energy manufacturing. Energy costs and carbon emissions would rise. Green hydrogen would remain forever a whisper in the wind, even after so much screaming about the arcane rules governing its incentives. But it'd also derail two Republican hobbyhorses: nuclear power and advanced geothermal. The proposal introduced Monday is 'a backdoor repeal' of the Inflation Reduction Act, Ted Lee, a former Biden administration Treasury official, told Canary Media's Jeff St. John. Onerous 'foreign entity of concern' requirements would likely render an important incentive available to all carbon-free energy sources useless for any project not already underway, including nuclear and geothermal installations. Lee described it as 'death by red tape.' That could be painful for advanced geothermal projects, which are few in number but crucial to developing an industry whose promise of 24/7 carbon-free energy has captivated Republicans, Democrats, and even Big Tech firms. Tax credits help make these early-stage projects financially feasible — and repealing them could cause developers to 'struggle to secure financing and price output competitively,' per a March Rhodium Group report. The proposal would also end the 45U nuclear power tax credit three years early, in 2031, meaning it could disappear before any planned nuclear power plant can even use it. A tax expert told Latitude Media that nuclear would be 'by far the most disadvantaged' if the bill became law. Republicans in the Senate and House have already criticized the tax-credit cuts as too far-reaching and have called for changes, including to the foreign-entity requirements. A geothermal trade group told Axios several Republican offices are open to creating carve-outs for the energy source; at least one GOP lawmaker is pushing to preserve 45U. 'There's going to be lots of changes,' Ways and Means Vice Chair Vern Buchanan, a Florida Republican who supports IRA tax credits, told a Politico reporter. 'It's not over.' Other recent moves by Republicans and the Trump administration could create additional headwinds for nuclear. That includes the ongoing effort to dissolve the Department of Energy Loan Programs Office, which has backed the only U.S. nuclear reactors to come online this century as well as a more recent effort to revive a shuttered Michigan nuclear plant. All of this is difficult to square with Trump's broad proclamations that he will unleash American energy dominance. It's even harder to reconcile with Energy Secretary Chris Wright's specific call for a 'nuclear renaissance' and explicit support for geothermal. But then, the prevailing principle of this Trump administration has not been tidy logic. Instead, it appears to be volatility and chaos — and this proposal from Congress certainly furthers that tradition. The steady rise of electric vehicles While Tesla sees its sales shrink and cedes its status as the world's biggest EV-maker to China's BYD, the global EV market as a whole is growing apace. This year, more than one-quarter of vehicles sold worldwide will be full EVs or plug-in hybrids, which have big, chargeable batteries, per a new International Energy Agency report. China is by far the biggest EV market in the world. Over 11 million EVs and plug-ins were sold there last year — more than were sold worldwide in 2022. Almost half of all cars sold in the country were electric in 2024. Europe is the next-biggest market, though sales are stagnating in the region. Stateside, the IEA expects modest growth, but that outlook is clouded by the propensity of the Trump administration and Republicans to introduce extreme new measures that could tank EV sales. Maine keeps innovating on heat pumps The persistent myth that heat pumps don't work in the cold has met its match: Maine. In 2023, the very cold state not only reached its heat-pump installation goal ahead of time — it doubled down on more heat-pump adoption. Now, Canary Media's Sarah Shemkus reports that the clean-heat technology is central to the state's plan to lower electricity bills for its residents — even those who aren't planning to get a heat pump themselves. The idea is to install as many heat pumps as possible in order to save households money on heating costs and also suppress statewide power rates, which could lead to an estimated $490 million in savings on electricity rates alone over the long term. Trade war relief… for now: China and the U.S. agree to significantly reduce tariffs on one another for 90 days, easing a tense trade war that has already driven up costs for domestic manufacturers of batteries, solar panels, EVs, and other cleantech and which has cast deep uncertainty over the entire economy. (CNBC) Batteries still face a tough road: Domestic battery manufacturing and deployments have been growing fast — but Trump's trade wars and uncertainty around clean-energy tax credits threaten to derail progress. (Canary Media) Fighting for IRA: A dozen House Republicans come out against this week's budget proposal that would effectively repeal the Inflation Reduction Act, pushing for revisions to its 'foreign entity of concern' and eligibility provisions as well as the preservation of tax-credit transferability. (E&E News) Here comes the sun: The solar industry prepares a lobbying blitz following the House GOP budget proposal that would gut clean energy incentives, the sector's latest attempt to preserve the tax credits that have helped solar installations grow rapidly. (Latitude Media) What emergency? 15 states sue the Trump administration over its executive order declaring an 'energy emergency,' arguing that no such crisis exists and that the declaration is encouraging federal agencies to unlawfully skip over proper environmental protections. (New York Times) Empire Wind wobbles: Equinor says it will abandon its Empire Wind offshore wind project off the coast of New York if the Trump administration doesn't lift its stop-work order. (E&E News) Finding the words: At a recent offshore wind industry conference, speakers had lots of advice on how to make the case for President Trump's least favorite form of energy to Republicans. (Canary Media) The right direction: A new analysis finds that despite China's growing power demand, the nation's emissions have declined by 1% over the last 12 months compared with the year prior, the result of surging clean energy construction. (Carbon Brief)
