Latest news with #taxlegislation

Joni Ernst doubles down on bleak ‘We are all going to die' comments in sarcastic non-apology

The Independent

3 days ago

Business
The Independent

Joni Ernst doubles down on bleak ‘We are all going to die' comments in sarcastic non-apology

The senator went viral after she said, 'We all are going to die,' when responding to a question about the proposed cuts in President Donald Trump 's tax legislation during a town hall in Parkersburg on Friday. As Ernst began to answer the question, a person in the audience shouted, 'People will die!' "People are not — well, we all are going to die. For heaven's sakes, folks,' she said in response. Ernst shared a video on her Instagram story on Saturday where she spoke directly to the camera, seemingly from a cemetery. "Hello everyone. I would like to take this opportunity to sincerely apologize for a statement that I made yesterday at my town hall," said before going on to describe what happened. "I made an incorrect assumption that everyone in the auditorium understood that yes, we are all going to perish from this Earth," she added. "So I apologize. And I'm really, really glad that I did not have to bring up the subject of the tooth fairy as well.' "But for those that would like to see eternal and everlasting life, I encourage you to embrace my lord and savior, Jesus Christ," said Ernst. According to the Congressional Budget Office, the Republican tax bill will cut Medicaid spending by $723 billion over the next 10 years. The number of uninsured people could rise by as much as 7.6 million. During the town hall event in Parkersburg, Ernst argued that the goal of the legislation is to ensure that those not eligible for Medicaid don't get the benefits. "What you don't want to do is listen to me when I say that we are going to focus on those that are most vulnerable," she said. "Those that meet the eligibility requirements for Medicaid, we will protect. We will protect them. Medicaid is extremely important here in the state of Iowa. If you don't want to listen, that's fine." She subsequently went on to blame the "hysteria that's out there coming from the left" for the criticism of her initial statement. Former Republican Rep. Adam Kinzinger responded to Ernst's Instagram story on X, writing: 'Whelp. No sense of goodness left in her now.' 'I'm sorry… is she walking through a cemetery as she makes this?' Democratic strategist Tim Hogan added.

Proposed Section 899 Of Big Beautiful Bill Challenges Global Investors

Forbes

3 days ago

Business
Forbes

Proposed Section 899 Of Big Beautiful Bill Challenges Global Investors

T WASHINGTON, DC - MAY 22: U.S. Speaker of the House Mike Johnson (R-LA) speaks to the media after the ... More House narrowly passed a bill forwarding President Donald Trump's agenda at the U.S. Capitol on May 22, 2025 in Washington, DC. The tax and spending legislation, in what has been called the "One, Big, Beautiful Bill" Act, redirects money to the military and border security and includes cuts to Medicaid, education and other domestic programs. Johnson was flanked by House Committee Chairmen who helped craft the legislation. (Photo by) he United States has been a major destination for foreign direct investment for years. In 2022, foreign firms invested over $177 billion in the country. In May 2025, the U.S. House of Representatives passed the One Big Beautiful Bill Tax Act (OBB). Beyond the potential impact on foreign direct investment in the U.S. overall, certain provision of the OBB may have a broader impact, especially affecting common asset protection and wealth planning strategies. The increased rate on withholding, investments, corporate holdings, and more, is designed as a retaliatory measure on taxes, especially digital taxes, imposed by other countries which the U.S. describes as discriminatory foreign countries. The broader application of Section 899 would create additional reporting obligations, complicate foreign asset protection trust holdings, and subject investors to penalties and taxes that were previously unexpected. Foreign individuals or entities that own at least 25% of a U.S. corporation or foreign corporations engaged in a trade or business in the U.S. are subject to reporting requirements under Internal Revenue Code (IRC) Section 6038A. The IRS requires filing Form 5472 to disclose transactions between the implicated corporations and its holders accordingly. Failure to file Form 5472 accurately and timely can result in significant and repeated penalties of $25,000 in each instance and more. Corporations may be subject to the filing requirement regardless of its level of activity. Oftentimes, U.S. investments, whether in real estate, private equity, intellectual property, or otherwise, are held in U.S. Corporations and foreign asset protection vehicles are used in conjunction with such entities to further tax-efficiency, privacy, and creditor protection. These layered wealth protection structures may face additional tax burdens if proposed Section 899 becomes final. Foreign asset protection trusts (FAPTs) often hold U.S. entities with U.S. investments. This structure presents additional challenges with compliance and reporting. Unless structured otherwise, the transfer of assets by a U.S. person to a foreign trust is treated as a grantor trust where the U.S. person is taxed on the trust's income. Distributions by the foreign trust, especially to U.S. beneficiaries subjects the beneficiaries to tax also and additional foreign trust reporting requirements, including filing Forms 3520 and 3520-A. Substantial penalties of $10,000 or 35% of the gross value of any property transferred to the foreign trust, and more may apply for noncompliance. Wealth planning incorporating ownership and transfer of business interests to multinational beneficiaries, and investors abroad or considered foreigners even if located in the U.S. may be impacted by the legislation. The underlying investment in U.S. companies or assets where potential beneficiaries or other investors may be foreign and from the list of discriminatory countries would be subject to the additional tax rates that range from 5% to 20%. Restructuring investments and ownerships to mitigate any potential tax exposure in light of proposed Section 899 would be prudent. Additionally, in conjunction with enforcing the increased rates and compliance obligations under proposed Section 899, increased enforcement of penalties for noncompliance on foreign trust reporting and foreign corporate holdings can be expected if Section 899 is passed and impacted taxpayers would be prudent in ensuring that all prior reporting obligations have been met. For foreign investors and global families with U.S. investments and connections, ensuring comprehensive review of their existing investment and asset protection structures along with ensuring full compliance with U.S. tax reporting requirements is critical. Proactively filing any required returns that may have been inadvertently delayed or omitted will start applicable statutes of limitations on audits and provide potential relief from some penalties where a reasonable cause of noncompliance failure exists. Additionally, preparing for potential legislative changes, including the implementation of proposed Section 899 by restructuring investments, ownerships, and transfers, can prevent additional tax exposure before it is too late.

Markets Are Getting More Used to Trump: Franklin CEO

Bloomberg

21-05-2025

Business
Bloomberg

Markets Are Getting More Used to Trump: Franklin CEO

Jenny Johnson, president and CEO at Franklin Templeton, believes markets are becoming more comfortable with US President Donald Trump's approach. "People have seen a couple of deals, frameworks done, you're seeing the tax legislation move forward, they're getting more comfortable," Johnson said during a panel discussion moderated by Erik Schatzker at the Qatar Economic Forum 2025, powered by Bloomberg. (Source: Bloomberg)

The Republican party is being torn apart by Trump's new tax bill

Telegraph

20-05-2025

Business
Telegraph

The Republican party is being torn apart by Trump's new tax bill

Class conflict has erupted in Trump's America – within his own Republican Party. The party controls both houses of Congress, as well as the presidency. But their struggle to agree upon tax legislation shows that Republicans in Washington are challenged by the clashing interests of their traditional wealthy constituents and their new working-class base. For decades, the Democratic Party, once the party of labour and farmers, has been losing white working-class and white rural voters to the Republicans. In the last decade and a half, working-class whites have been joined by growing numbers of Hispanic and black voters in the exodus to the GOP. Meanwhile, college-educated professionals and high-income voters – once the core of the Republican coalition – have migrated in the opposite direction to the Democratic Party. The results of this realignment were dramatically evident in the election of 2024. Kamala Harris won voters from households earning more than $100,000 a year – roughly the top third of the population – along with low-income voters making less than $30,000 a year. At the same time, Trump enjoyed a 20 percentage point improvement in support among voters from households earning between $50,000 and $100,000 a year. This long-term class realignment of the parties has caused a crisis for the winners, the Republicans, as well as the losers, the Democrats. Affluent, college-educated 'country club' Republicans, no longer dominant, are forced to share the party with working-class, less-educated 'country music' Republicans. The tensions between the country club and country music wings of the party have erupted in debates over the tax bill that Congressional leaders and President Trump seek to pass by Memorial Day, May 26. State and Local Tax deduction One source of tension involves the State and Local Tax (Salt) deduction in the federal tax code, which allows taxpayers to deduct state and local taxes like property taxes and sales taxes from their federal income tax liability. The Salt deduction has indirectly subsidised the richest households who reside in places with the highest state and local taxes, like the New York and San Francisco metropolitan areas. The Joint Committee on Taxation in 2014 found that only 1 per cent of households earning less than $50,000 benefited from the Salt deduction, while 88 per cent of the benefit went to households with income above $100,000. And for decades there was no cap to the deduction that the rich could claim. This changed in 2017, when the Republican Congress in the first Trump administration capped the Salt deduction at $10,000 per household in the Tax Cuts and Jobs Act (TCJA) of 2017. That Republicans, not Democrats, imposed the cap was shocking proof of how much the party had changed since the Reagan era. Members of the country music wing of the party asked: why should taxpayers in lower-income, less-educated states like Missouri and Montana subsidise millionaires and billionaires in high-tax, big-government coastal states like New York and California? The fate of the Salt cap in the Republican tax bill has provoked furious controversy. The dwindling number of Republicans from Northeastern and West Coast 'silk stocking' districts have insisted that the cap must be raised to benefit their constituents. One of the most vocal is Representative Nick LaLota. He represents Suffolk County, New York, the fourth wealthiest county in New York State. Nationwide, however, few benefit from the Salt deduction – only 9.5 per cent of taxpayers claimed it in 2022. Medicaid Another flashpoint of conflict between the country club and country music factions of the Republican Party involves Medicaid, the joint federal-state programme of health insurance for low-income Americans. Back in the Reagan era, calls to cut spending on Medicaid and other social insurance and welfare programmes, whose recipients mostly voted for Democrats, were uncontroversial in a Republican party dominated by upscale voters angry at their tax bills. But many of the Republican Party's new working-class and rural voters depend on Medicaid and other programmes like food stamps. This explains why some populist Republicans like Senator Josh Hawley of Missouri oppose cuts in Medicaid. In addition, some Republicans fear that Democrats will claim that they cut spending on working-class and poor Americans to reduce taxes on the rich. To immunise themselves from Democratic attack ads, Republicans in Congress have included measures that benefit ordinary Americans and retirees in the bill, including an increase in the standard deduction for all taxpayers, an increase in the child tax credit to $2,500 until 2028, when it would revert to $2,000, a new $4,000 deduction for Americans over 65 (instead of the elimination of taxation on Social Security that Trump favoured), and the elimination of taxes on tips, one of Trump's campaign promises, but only until 2028. Having criticised President Biden's policies of forgiving student loan debts of some college graduates as elitist, Congressional Republicans would allow car owners of all classes to deduct up to $10,000 in interest on car loans. Slowly but surely, then, the Republican Party is responding to its newly-important working-class voters by letting them share – if only a little – in the tax-cut largesse given to its traditional affluent supporters. Balance of power But the existing Republican budgetary approach is threatened by the overhang of the national debt from the Great Recession and massive Covid-era federal spending. In 2024, the federal government spent more on interest payments on the national debt than on defence. Concerns about the US debt and deficit have led Moody's to downgrade America's credit rating. Republicans want to increase spending on defence and border security. At the same time, attempts to cut Social Security and Medicare benefits for working-class voters would be politically disastrous. For decades, the party has reconciled high levels of government spending with tax cuts that chiefly benefit the rich by means of deficit spending. But no realistic amount of economic growth or inflation can get the debt and deficit within reasonable bounds without raising federal taxes overall. Recognising this, President Trump, a billionaire himself, has said that he is open to higher taxes on the richest Americans. According to Pew, nearly half of all Republicans – 43 per cent – favour raising taxes on households making more than $400,000 and large corporations. But tax increases on the rich are bitterly opposed by many Republican donors, as well as by Republican office-holders who came of age during the Reagan era, when tax cuts were the be-all and end-all of Republican domestic policy. The final version of the Republican tax bill in Congress, if it survives to passage, will reflect the balance of power within the party between its upscale and downscale constituents. Whatever happens to the bill, the long-term evolution of the Republican party from a country-club establishment party to a country-music populist party is unlikely to be reversed.