YCLOAK

Last week, the White House unveiled what it called “the largest tax reform in U.S. history.”  Gary Cohn, who heads the President’s National Economic Council said, “We’re going to cut taxes for businesses to make them competitive and we’re going to cut taxes for the American people, especially low- and middle-income families.”

But analysts say to call the one page proposal a plan, may be a bit of a stretch. 

Policy documents from the White House usually provide pages of detail says Scott Greenberg, a tax analyst at the conservative leaning Tax Foundation.  He says it’ s more of a wish list.

“That being said, it opens a window onto what the administration’s main priorities are,” he said.

Aside from simplifying the nation’s notoriously complicated tax forms, the plan includes doubling the current standard deductions. For individual tax filers, that means zero taxes on the first $12,000 of income, and for couples filing jointly, no taxes on the first $24,000.  

According to Greenberg, “We estimated that the average household making between the 40th and 60th income percentile, so households right in the middle would be about 1.3 percent richer as a direct result of the various tax cuts.”

But the Tax Foundation’s estimates show wealthier Americans would enjoy much larger gains, up to 16 percent more of their after tax income. 

William Gale, a senior fellow in Economic Studies at the Brookings Institution says, “It’s basically a massive tax cut for the very highest income households.”

While Trump’s tax plan eliminates some loopholes used by wealthy Americans, the Tax Foundation says the proposal aims to level the playing field for high income earners who have traditionally shouldered the country’s tax burden.

 

But given the widening income gap, Gale says it makes no sense to reward wealthier Americans with more tax breaks. 

“They’ve done enormously well over the last two, three, four decades, their average tax rates is actually lower now than it was in the past,” he said.

Without corresponding cuts to government programs, analysts say the Trump tax cuts are likely to “blow a hole in the deficit” (expand the deficit shortfall). 

New estimates show the revenue lost to tax cuts would add between $5 to $7 trillion to the U.S. debt over 10 years.  But U.S. Treasury Secretary Steven Mnuchin says tax reforms combined with sensible trade policies would, over time “help the economy grow at a sustained rate of three to four percent”, a claim many economists say is unrealistic.  

“What I like about this plan is that it is bold in attempting to lower the business tax burden in the United States and to create a more competitive economic climate.  In that I think perhaps the heart of the plan is in the right place,” says Greenberg.

Small business owners like Rick McVey who runs the Dilly Lily Flower Shop says the tax cuts would help his business grow. 

“I think with the decrease in the tax rate, I may be able to re-invest the money to buy some capital equipment,” he said.

And Donna Seabusch, the owner of Cookie Creations in Atlanta, says tax cuts will help businesses still trying to recover from the downturn. 

“The economy was so bad several years ago, it hurt everyone.  And I think this is going to give people a jump start.  When your taxes are lowered – from your income tax, corporate taxes – it gives more people more money to spend,” she said.

The administration says slashing the the U.S. corporate tax rate from 35 percent to 15 percent could also potentially bring back trillions of dollars from companies that have moved capital and investments offshore in search of lower tax rates.  But William Gale, who is also co-director at the Tax Policy Center, says it’s a mistake to think other countries will not respond. 

“If we cut our rate to 15 percent other countries are going to cut theirs, and we’ll end up in a sort of race to the bottom on the corporate rate,” he said.  

Analysts who spoke with VOA believe there is little chance the president’s tax reform proposal will become law in its current form.  But at a recent panel discussion hosted by the Conference Board on the president’s first 100 days, William Hoagland at the Bipartisan Policy Center added yet another political wrinkle. 

Hoagland told the audience, “I think its going to be very difficult for Congress and Democrats to provide that 60 votes for tax reform unless the president of the United States releases his tax forms.”
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U.S. Secretary of State Rex Tillerson met Southeast Asian foreign ministers on Thursday to seek their support in pressing North Korea to give up its nuclear and missile programs.

Tillerson’s first meeting with all members of the 10-nation Association of Southeast Asian Nations will also address another pressing regional issue – China’s assertive pursuit of territory in the South China Sea, where several ASEAN members have competing claims.

Tillerson told reporters at the start of the Washington meeting that he and his counterparts would discuss North Korea.

Last week in the U.N. Security Council, Tillerson called on all U.N. members to fully implement U.N. sanctions on Pyongyang, which has ignored demands to abandon its weapons programs and is working to develop a nuclear-tipped missile capable of reaching the United States.

He also called on countries to suspend or downgrade diplomatic ties with Pyongyang, saying it abuses diplomatic privileges to help fund the arms programs. Tillerson warned countries that if they did not do so, Washington would sanction foreign firms and people conducting business with North Korea.

All ASEAN members have diplomatic relations with North Korea and five have embassies there.

The Trump administration wants Southeast Asian countries to crack down on money laundering and smuggling involving North Korea and restrict legal business too, U.S. officials said.

The administration has been working to persuade China, North Korea’s neighbor and only major ally, to increase pressure on Pyongyang. U.S. officials say they are also asking China to use its influence with more China-friendly ASEAN members, such as Laos and Cambodia, to persuade them to do the same.

U.S. efforts have included a flurry of calls by President Donald Trump at the weekend to the leaders of the Philippines, Thailand and Singapore.

Diplomats say U.S. pressure has caused some irritation in ASEAN, including Malaysia, which has maintained relations with Pyongyang in spite of the assassination of North Korean leader Kim Jong Un’s estranged half brother at Kuala Lumpur International airport on Feb. 13.

On the South China Sea, ASEAN has adopted a cautious approach recently toward China, with a weekend summit of its leaders avoiding references to Beijing’s building and arming of islands there.

Analysts say this reflects concerns among some in the region that former U.S. President Barack Obama’s “pivot” to Asia has been abandoned in favor of Trump’s “America First” agenda, leading to more countries being pulled into Beijing’s orbit.

 
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The European Union’s competition watchdog says it accepts commitments made by online giant Amazon to change part of its e-book contracts to avoid fines for anti-competitive behavior.

 

Amazon has promised not to enforce any contract clause that might oblige other publishers to offer it similar terms and conditions as those offered to competitors.

 

The EU Commission said Thursday that it has made the commitments legally binding. Amazon could be fined 10 percent of annual turnover if it reneges over the next five years.

 

EU Competition Commissioner Margrethe Vestager said the “decision will open the way for publishers and competitors to develop innovative services for e-books, increasing choice and competition to the benefit of European consumers.”

 

The Commission says Europe’s e-books market is worth more than 1 billion euros ($1.1 billion).

 

 
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A closely watched survey indicates that economic growth across the 19-country eurozone struck a 6-year high in April.

Financial information company IHS Markit says Thursday that its purchasing managers’ composite output index — a broad gauge of economic activity — rose to 56.8 in April from 56.4 the previous month. The reading was at its highest level since April 2011.

Anything above 50 indicates expansion.

Chris Williamson, the firm’s chief business economist, said the survey portrays “an economy that is growing at an encouragingly robust pace and that risks are moving from the downside to a more balanced situation.” He said it’s consistent with quarterly growth of 0.7 percent.

On Wednesday, figures showed the eurozone grew by 0.5 percent in the first quarter.
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President Michel Temer’s proposal to reform Brazil’s costly social security system cleared a committee vote Wednesday, but the measure, deeply unpopular with voters, faces an uphill battle in the full Congress.

The committee voted 23-14 to approve the constitutional amendment, which would make Brazilians work longer and reduce pension benefits to plug a widening budget deficit at the root of the country’s worst recession.

Temer spokesman Alexandre Parola told reporters the vote numbers showed that “Brazilian society recognizes the urgent need for reforming the social security system.”

Presidential aides said, however, the government was not certain it had secured the two-thirds vote needed in the full chamber to approve a bill that is crucial to Temer’s efforts to recover investor confidence and restore investment and growth.

A vote in the full house planned for next week has been put back to allow the government coalition to muster the necessary 308 votes by swaying lawmakers worried about angering voters ahead of next year’s elections.

A generous system

Pension reform is a contentious issue in Brazil, which has one of the world’s most generous social security systems, allowing retirement on average at the age of 54 with almost full benefits, compared with 72 years in Mexico.

The bill sets a minimum retirement age for the first time in Brazil, at 65 for men and 62 for women.

Changes to the country’s labor laws and pension system triggered violent clashes between demonstrators and police in Brazil’s main cities Friday during the first national strike called by unions against Temer’s austerity agenda.

About 71 percent of Brazilians oppose the bill, according to a Datafolha survey Monday.

Concessions

Economists warn that the social security system is one of the main threats to Brazil’s government finances, with pension expenditures accounting for nearly half of its spending before debt payments.

Temer made concessions to ease passage of the proposal at the center of his austerity plan, raising doubts among investors about the watered-down bill’s ability to help narrow a bulging budget deficit that cost Brazil its investment-grade credit rating two years ago. Temer agreed to set a lower retirement age for women, police, teachers and rural workers and grant more generous transition rules for workers after allies balked at backing it.

Finance Minister Henrique Meirelles has said the changes will reduce the reform’s impact by 25 percent over 10 years, lowering fiscal savings to 600 billion reais ($190 billion).

Pension reform or taxes

Investors see pension reform as the only way for Brazil to shore up its finances without resorting to huge tax hikes. The Brazilian real would probably drop more than 10 percent if the scandal-plagued Congress fails to pass the bill, currency strategists estimated in a Reuters poll Wednesday.

Without the overhaul, Brazil’s aging population is expected to lift social security spending to 17.2 percent of gross domestic product by 2060, from 8.1 percent last year, according to government estimates.
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Veterans Affairs Secretary David Shulkin says his department is seeking to close perhaps more than 1,100 VA facilities nationwide as it develops plans to allow more veterans to receive medical care in the private sector.

At a House hearing Wednesday, Shulkin said the VA had identified more than 430 vacant buildings and 735 that he described as underutilized, costing the federal government $25 million a year.

He said the VA would work with Congress in prioritizing buildings for closure and was considering whether to follow a process the Pentagon had used in recent decades to decide which of its underused military bases to shutter, known as Base Realignment and Closure, or BRAC.

“Whether BRAC is a model that we should take a look, we’re beginning that discussion with members of Congress,” Shulkin told a House appropriations subcommittee. “We want to stop supporting our use of maintenance of buildings we don’t need, and we want to reinvest that in buildings we know have capital needs.”

Aging buildings

In an internal agency document obtained by The Associated Press, the VA pointed to aging buildings it was reviewing for possible closure that would cost millions of dollars to replace. It noted that about 57 percent of all VA facilities were more than 50 years old. Of the 431 VA buildings it said were vacant, most were built 90 or more years ago, according to agency data. The VA document did not specify the locations.

While President Donald Trump’s budget blueprint calls for a 6 percent increase in VA funding, Shulkin has made clear the government’s second-largest agency with nearly 370,000 employees will have to operate more efficiently and that budget increases should not be considered a given in future years. 

The department recently announced hiring restrictions on roughly 4,000 positions despite the lifting of the federal hiring freeze and also left open the possibility of “near-term” and “long-term workforce reductions.” Shulkin is also putting together a broader proposal by fall to expand the VA’s Choice program of private-sector care.

BRAC controversial

The Pentagon’s BRAC process often stirred controversy in the past as members of Congress expressed concern about the negative economic impact of shuttering military bases and vigorously opposed closures in their districts.

Rep. Jeff Fortenberry, R-Neb., a vice chair of the appropriations panel, told Shulkin that Congress was looking forward to working with the VA “constructively” on the issue in part by determining how excess VA buildings could be put to good community use, such as for fire-fighting, security or landscape maintenance.

“Don’t ever use the term BRAC because it brings up a lot of bad memories,” Fortenberry cautioned. “You automatically set yourself up for a lot of controversy.”
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African-Americans and Hispanics, the largest racial and ethnic minorities in the United States, made positive strides economically and educationally during the past year but continue to lag behind whites, a civil rights group’s annual study contends.

“The theme of this year’s State of Black America report is ‘protecting our progress,’ ” National Urban League CEO Marc Morial said.

In its study, released Tuesday, the league found the standard of living for African-Americans was 72.3 percent of that of whites, on average. For Hispanics, the equality index was a bit higher, at 78.4 percent. The index measures quality of life for blacks and Hispanics in terms of economics, health, education, social justice and civic engagement.  

Minority employment is at its highest level in almost a decade, but “any progress made towards racial equality is increasingly under threat.” Morial said. More minorities have health care at a time when efforts are underway to roll back expanding coverage, he added.

Improvements in education

The report indicated that African-Americans made gains in education, with a growing percentage of blacks staying in school and obtaining associate degrees.

According to the report, racial disparities plague minorities in terms of social justice equality. As examples, the report noted that more blacks are jailed after being arrested than is the case with whites, and that whites posted a greater decline than blacks in their likelihood of being victims of violent crime.

The study also found a troubling rise in hate crimes committed against members of religious and racial minorities. “A nation of a great mosaic that the United States of America represents cannot tolerate hateful incidents. It is corrosive, it is divisive and it is un-American,” Morial said.

The Trump administration has proposed major budget cuts to government programs that help low-income Americans, who are disproportionately black. The civil rights organization said it would press lawmakers and private groups to invest $4 trillion over the next 10 years in job training, enhanced education programs and infrastructure projects to revitalize minority communities.
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On a trip to India, the president of Portland State University reassured prospective students they’d be safe on his campus. Purdue University sent overseas applicants a note from two mayors touting Indiana’s “friendly smiles” and hospitality. And dozens of other schools produced online videos to welcome foreign students.

As U.S. colleges face new but significant declines in applications from abroad, many are rolling out marketing efforts to combat fears of harassment and concerns that President Donald Trump’s stance on immigration reflects a United States that is becoming less welcoming to foreigners.

“Students are telling us that they don’t feel safe here in the United States. That they’re concerned about discrimination, racism,” said Katharine Johnson Suski, admissions director at Iowa State University. “This year it was a little more important to make sure that they felt comfortable with their decision.”

Drop in overseas students expected

Colleges and universities have received a financial boost in recent years from international students, who are typically charged higher tuition rates than American peers who live in state. Some schools have come to rely on revenue from foreign students, whose enrollment has climbed sharply over much of the past decade, according to federal data.

But there is evidence enrollment figures at some schools could drop next fall. Nearly half the nation’s 25 largest public universities saw undergraduate applications from abroad fall or stagnate since last year, according to data colleges provided to The Associated Press in response to public records requests. Eight schools did not provide data, while six saw gains.

International applications to the University of Arizona are down 24 percent compared with this time last year; California State University, Northridge, is down 26 percent. The University of Houston has seen a 32 percent drop, although it’s still accepting applications and its numbers will likely rise.

The U.S. Department of Education did not immediately comment.

Temple posts a ‘you are welcome here’ video

Philadelphia’s Temple University sparked a chain reaction in November when it posted an online video featuring students and staff members saying “You are welcome here” in multiple languages, set to upbeat piano music. Since then, more than 100 other schools have made similar videos and circulated them abroad. Temple, a private university, also hosted seven overseas receptions for admitted students, more than in the past.

At Iowa State University, officials are ramping up their overseas mailings to sell students on the school’s Midwestern charm. The University of Minnesota is considering a phone campaign. The University of Florida has produced videos featuring “global Gators” and is offering online video chats.

“Given the current climate, it seems like this is something which is even more important,” said Joseph Glover, provost at Florida. “Obviously we are concerned about the situation, like every other public university in the United States.”

Safety concerns are nothing new among international students, but many schools say anxieties have grown since Trump was elected. Some students have said Trump’s “America first” rhetoric and his proposal to ban immigration from six majority-Muslim nations have given them pause. Some application deadlines fell before the election, but even Trump’s campaign rhetoric cast doubts, experts say.

Kansas shooting a common subject

Students in India have been particularly alarmed, especially after a gunman shot two Indian men at a Kansas bar in March, killing one, after allegedly saying “get out of my country.”

Portland State President Wim Wiewel was in India soon after the shooting to meet prospective students, and the discussion quickly turned to safety. Wiewel and his wife reassured families that Portland is friendly to foreign visitors.

“People in America recognize that even though there are a few crazies around, it’s not like it’s open season on Indians or Muslims,” Wiewel said. “Having us talk to them totally took away their fears. But the problem, of course, is we can’t talk to everyone.”

Some government officials are trying to tackle the problem, too. Several of the videos feature cameos from state governors or congressional members. A top official from America’s embassy in India penned a newspaper column last week stressing that “U.S. colleges and universities take pride in providing safe and welcoming environments.”

Along with India, fewer applications have been coming from China and Saudi Arabia, which previously sent large numbers to American colleges. Experts say factors at play include economic turmoil in China and India, but some have blamed the downturn on a “Trump effect.”

University officials offer assurances

Officials at the University of New England say Trump’s election has complicated plans to recruit Moroccan students. At a February open house in Tangier, the election was a frequent concern.

“Several students wearing hijabs wondered whether they would be welcome in the United States, given the election of Donald Trump and the rhetoric they were hearing,” said Anouar Majid, vice president for global affairs at the private school in Portland, Maine. “We assured them that the United States is very welcoming.”

When he applied to the University of New England, 17-year-old Aymane Lamharzi Alaoui was worried about discrimination, he said. Since then, he has spoken with family members in Boston and believes Americans are more welcoming than some of Trump’s comments suggest.

“I know there’s an increase in xenophobia and racism in the past couple of months in the U.S.,” he said in an interview.  “I’m sure there are some places where I wouldn’t be very welcome, especially places in the southern United States, but I think most of the country is very tolerant.”

Loss of overseas students will hurt

For most colleges, it’s too early to know how many overseas students will enroll next fall. But many say any loss could be a blow.

At Iowa State, where applications are down 23 percent, international students bring valued diversity, said Suski, the admissions director. And there is also the revenue they provide.

 

“There will,” Suski said, “be a financial impact on our campus come this fall.”

 
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Royal Caribbean International has announced it will resume weeklong cruises from New Orleans to the Bahamas and Mexico’s Yucatan Peninsula.

News outlets report Royal Caribbean said in a news release Monday that their 2,435-passenger Vision of the Seas cruise ship will relocate in December 2018 to the Port of New Orleans after a three-year hiatus. The company announced the move as part of an overview of its 2018-2019 fleet plans.

After a two-year agreement with the Port of New Orleans ended in 2014, the Miami-based company chose to end sailings from the city. The departure came despite several years of growth for the city as a cruise hub.

The 915-foot ship will sail from Miami to Los Angeles before setting sail for New Orleans.
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