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The former vice president vowed to raise the corporate tax rate from 21% to 28%

Presumptive Democratic nominee Joe Biden pledged during a call with potential campaign donors on Monday that his administration would reverse the bulk of President Trump’s tax cuts, even though “a lot of you may not like that.”

“I’m going to get rid of the bulk of Trump’s $2 trillion tax cuts, and a lot of you may not like that, but I’m going to close loopholes like capital gains and stepped-up basis,” Biden said, according to a pool report of the virtual fundraiser.

The former vice president vowed to raise the corporate tax rate from 21 percent to 28 percent, which he said is projected to raise $1.3 trillion over the next decade. The Trump administration permanently slashed the corporate tax rate from 35 percent to 21 percent with the passage of the 2017 Tax Cuts and Jobs Act.

He also floated the possibility of capping deductions — Trump substantially increased the size of the standard tax deduction in 2017 — and sanctioning companies for tax avoidance. Biden’s comments came after he was questioned by Vincent Mai, the founder and chairman of Cranemere, about how he would balance short-term needs in addressing the worst economic downturn since the Great Depression with long-term investments the nation needs to make — and how he would pay for it.

The recovery from the pandemic and subsequent shutdown could be used as an opportunity to build a “stronger, more inclusive middle class,” he said, in part by investing “record sums of money” in clean energy innovation and infrastructure.

But Biden lambasted Trump’s “irresponsible, sugar-high tax cuts,” accusing the president of making it “much harder to foot the bill” of the nation’s recovery.

The deficit for fiscal 2020 is expected to hit $3.8 trillion, a record, according to a projection from the Committee for a Responsible Federal Budget. Even before the pandemic, the gap between what the government spends and what it collects was expected to break $1 trillion for the first time since 2012, the Congressional Budget Office said in January.

“We have to think as big as the challenge we face,” Biden said. “But this is America, there is nothing we cannot do if we do it together. But I think the country is ready.”

In May, Biden and the DNC raised close to $81 million, marking their biggest single-month of fundraising in the 2020 cycle. They concluded the month with $130 million in the bank. Trump and the Republican National Committee brought in a combined $74 million last month and ended the month with $265 million in cash on hand.

Author: Megan Henney

Source: Fox Business: Biden pledges to roll back Trump’s tax cuts: ‘A lot of you may not like that’

Trump declined to say how much money Americans could see

President Trump signaled Monday that he’s open to a second stimulus check for Americans still reeling financially from the coronavirus pandemic and the related economic lockdown.

Asked during an interview by Scripps reporter Joe St. George whether he plans to give another cash payment to some Americans, Trump said: “Yeah we are. We are.”

“We will be doing another stimulus package,” he added. “It’ll be very good, it’ll be very generous.”

Trump declined to say how much money Americans could see. “You’ll find out about,” he said. “You’ll find out.”

The White House has not officially taken a stance on a second stimulus payment. Treasury Secretary Steven Mnuchin, while testifying before the Senate Committee on Small Business and Entrepreneurship, suggested the administration is exploring sending another check to some Americans.

“I think we’re going to seriously look at whether we want to do more direct money to stimulate the economy,” he said at the time.

White House economic adviser Larry Kudlow also floated the idea of another round of cash checks on Tuesday during an interview with FOX Business’ Stuart Varney.

“I think the tax rebates or the direct mail checks are on the table,” he said. “This is all pre-decisional, that’s a lot of discussions going on. Probably we would want to target those to those folks who lost their jobs and are most in need. That’s a speculation on my part, but that’s where I think this is going.”

But some Trump economic advisers, like Art Laffer and Stephen Moore, have questioned the need for additional spending, sounding the alarm on what is expected to be the highest deficit in the nation’s history. They’ve instead called for deregulation efforts, including a payroll tax cut.

It’s unclear what specific policies the White House is exploring, but there are several proposals — from Democrats and Republicans alike — on the table that would get money directly into the hands of a significant number of Americans.

One such package, the $3 trillion HEROES Act passed by House Democrats in May, would send another round of $1,200 checks to American adults and children and expand the number of people who are eligible to receive the government aid. One criticism of the CARES Act, which sent up to $1,200 to Americans earning less than $75,000, was that it did not include older teens and college students.

But the HEROES Act broadens the scope of the money to include those individuals. The payments would be capped at $6,000 per household.

To see how much money you would receive through the HEROES Act, you can use this online calculator provided by Omni.

Some Democrats have proposed a more aggressive approach to stimulus measures. At the beginning of May, Sens. Kamala Harris, D-Calif., Bernie Sanders, I-Vt., and Ed Markey, D-Mass., unveiled a bill that would give most Americans a monthly payment of $2,000 until the virus begins to fade — a nod to universal basic income championed by former Democratic presidential candidate Andrew Yang.

Similar to a House bill proposed in mid-April, the senators called for $2,000 cash payments to every American who earns less than $120,000. It would expand to $4,000 for married couples and also provided an extra $2,000 for each child up to three. That means families with three children could theoretically receive $10,000 per month.

Republicans, meanwhile, have pitched a back-to-work bonus for unemployed Americans returning to their jobs.

Close to 46 million Americans have lost their jobs as a result of the coronavirus-induced economic shutdown, a rate unseen since the Great Depression. But Republicans have voiced concern that extra unemployment benefits of $600 a week are actually discouraging some workers from returning to their jobs. The sweetened benefits are set to expire at the end of July.

Texas Rep. Kevin Brady, the top Republican on the House Ways and Means Committee, proposed a bill to give recipients of unemployment benefits who go back to their jobs a one-time lump payment of $1,200, or two weekly payments of $600.

Another proposal from Sen. Rob Portman, R-Ohio, would provide $450 weekly to laid-off Americans returning to work, in addition to their wages. In both cases, the money would last through July 31, the same date on which the extra $600-a-week unemployment benefit expires.

The idea of a back-to-work bonus has also gained traction among some White House officials, who have voiced support for reforming unemployment benefits in the next aid package.

“We’ve got to reward individuals for coming back to work,” Kudlow said recently. “There will be some kind of re-employment bonus. We’re not going to go to the $600, that’s a disincentive to work.”

Americans eager for a second check may have to wait a while, however.

White House officials have said they do not intend to pass more relief measures until at least the beginning of July. The Senate is not scheduled to return from its two-week summer recess until July 20, making it unlikely that a fourth round of aid is passed before then.

“I think it’s going to be bipartisan, I think it’s going to be over the next couple of weeks probably,” Trump said.

Author: Megan Henney

Source: Fox Business: Trump hints at ‘generous’ second coronavirus stimulus check. Here’s how much you could get

The CARES Act included one-time payments of up to $1,200 for some Americans

Treasury Secretary Steven Mnuchin said Wednesday the Trump administration will “seriously look” at sending another round of direct cash payments to some Americans in the fourth coronavirus relief package.

“I think we’re going to seriously look at whether we want to do more direct money to stimulate the economy,” Mnuchin said while testifying before the Senate Committee on Small Business and Entrepreneurship. “But I think this is all going to be about getting people back to work, and we look forward to working with the entire Senate on this one.”

At the end of March, Congress passed the $2.2 trillion CARES Act, approving one-time payments of up to $1,200 for individuals and $2,400 for married couples. There’s also an extra $500 payment for each dependent child under the age of 17. The payments were tapered for individuals who earned more than $75,000 and cut-off completely for those earning more than $99,000.

The cash was intended to blunt the financial pain caused by the coronavirus pandemic, which brought the economy grinding to a halt in mid-March. In the span of 11 weeks, more than 43 million Americans filed for unemployment, the Labor Department said last week.

Mnuchin’s comments come on the heels of the surprisingly strong May jobs report.

Consensus estimates predicted the economy lost somewhere around 9 million jobs in May, pushing unemployment to 20 percent — the highest since the Great Depression. Instead, the Labor Department said employers actually added 2.5 million jobs last month, and the unemployment rate dropped to 13.3 percent. Still, that remains well above the peak seen during the 2008 financial crisis.

“I do think the economy is going to recover strongly, but there is still significant damage in parts of the economy,” Mnuchin said. “And we’re going to consider using all of our fiscal tools, working with Congress to make sure we restore this economy back to where it was and where it should be.”

Democrats and Republicans have maintained that another round of aid is needed to incentivize economic growth, although they disagree on specific measures.

Some options currently under consideration at the White House include a payroll tax cut, liability protections for businesses reopening during the outbreak, tax deductions or write-offs for individuals who take a vacation during a defined period of time, and a back-to-work bonus for unemployed Americans returning to their jobs.

“We need to move from rescue assistance to more long-term economic growth incentives,” Larry Kudlow, another senior White House economic adviser, told FOX Business on Friday.

Author: Megan Henney

Source: Fox Business: Mnuchin: Trump admin to ‘seriously look’ at more direct payments in next coronavirus relief package

The result of the shutdowns has been an economic free fall that experts warn will be worse than the 2008 financial crisis

Treasury Secretary Steven Mnuchin said Tuesday that President Trump is looking at how to reopen parts of the U.S. economy as the coronavirus pandemic forces an unprecedented shutdown of business throughout the country.

“The president is very much looking at how we can reopen parts of the economy,” Mnuchin told FOX Business’ Maria Bartiromo. “There are parts of the country, like New York, where obviously this is very, very concerning. There are other parts of the country where it’s not.”

Restaurants, bars, hotels, gyms, beauty salons, entertainment venues and other businesses deemed nonessential have been ordered to close, while 41 states have enacted strict stay-at-home policies, bringing American life to a grinding halt.

The result has been an economic free fall that experts warn will be worse than the 2008 financial crisis. In the final two weeks of March, a record-shattering 10 million Americans filed for unemployment benefits, a stunning sign of the depth of the downturn.

Estimates vary drastically for how high unemployment will climb, but economists broadly agree that it will be grim. An analysis published by the Federal Reserve Bank of St. Louis last week projected that unemployment could hit 32 percent in the second quarter as more than 47 million workers are laid off because of the pandemic. That would exceed the 24.9 percent peak during the Great Depression.

To prop up the economy, Congress, at the end of March, passed a $2.2 trillion stimulus package that includes a one-time cash check of up to $1,200 for adults who earn less than $99,000; $350 billion in forgivable loans for small businesses to maintain their payrolls and a $500 billion fund for bigger companies.

Mnuchin said the direct payments are slated to be sent by the end of next week.

The $349 billion Payroll Protection Program, meanwhile, is designed to get cash in the hands of struggling small businesses and incentivize them to keep staff on payroll, or re-hire workers who have already been laid off. To receive the aid, businesses must have been operational by at least Feb. 15.

At least 3,000 lenders backed by the Small Business Administration are participating in the program, Mnuchin said. As of Monday afternoon, more than 130,000 loans worth more than $40 billion had been paid, a senior administration official told FOX Business.

Companies may borrow up to 2.5 times their payroll, or up to $10 million, which can be used for payroll and other expenses, like insurance premiums, mortgages, rent or utilities through June 30. The loans, which are guaranteed by the federal government, will be fully forgiven if 75 percent of the money goes toward keeping workers employed, according to the SBA.

If the program runs out of money, Mnuchin said the Trump administration plans to ask Congress to replenish the fund.

“If you can’t get the loan today or tomorrow, don’t worry,” he said. “There will be money. And if we run out of money we’ll come back for more.”

Author: Megan Henney

Source: Fox Business: Mnuchin: Trump looking at how parts of US economy can be reopened

Proposals are very preliminary, senior administration official says

As Americans await relief from the $2 trillion stimulus package passed less than two weeks ago, the Trump administration and Congress have begun deliberations on a fourth aid plan intended to alleviate economic pain caused by the coronavirus pandemic.

In recent days, White House officials have discussed pitching a payroll-tax cut, a capital-gains tax cut, creating 50-year Treasury bonds and a waiver that would clear businesses of liability from workers who contract COVID-19, the respiratory illness caused by the novel coronavirus, on the job, a senior administration official confirmed to FOX Business.

But the proposals are very preliminary, according to the official, and do not reflect any sort of presidential direction beyond what President Trump has already mentioned. Last week, Trump called for a $2 trillion infrastructure bill focused on jobs and rebuilding the nation’s crumbling bridges and roads that he said would serve as “phase 4.”

Trump’s chief economic adviser Larry Kudlow told reporters at the White House on Monday that he’s discussed the possibility of a coronavirus-related Treasury bond to raise cash for relief efforts.

“We’re just looking at it,” he said. “Let’s see where it leads.”

Democrats have pushed for another round of aid, as well, with House Speaker Nancy Pelosi pushing for more money for states, free coronavirus treatment, worker protections and expanded paid family and sick leave. But Pelosi is publicly at odds with Senate Majority Leader Mitch McConnell and other Senate Republicans, who have taken a wait-and-see approach to additional legislative help.

“I think we’ll have to wait and see,” McConnell said last week during an interview on the “Hugh Hewitt Show.” “Remember, this bill was only signed into law last Friday. So it’s only been law for about four days. And the Speaker is already talking about another bill.”

The U.S. has the highest number of confirmed cases of COVID-19, the respiratory illness caused by the novel coronavirus, with at least 337,971 people infected, according to Johns Hopkins University data. More than 9,600 people in the country have died from the virus.

The depth of the economic downturn is still unknown, but early data indicates it will be severe: In the final two weeks of the month, a record-shattering 10 million Americans applied for unemployment benefits, surging past the levels seen during the worst of the 2008 financial crisis.

Restaurants, bars, hotels, airlines, cruise lines, automakers and entertainment venues have been hit hard by the pandemic as a growing number of jurisdictions have ordered the closure of nonessential businesses and directed residents to stay at home.

Estimates vary drastically for how high unemployment will climb, but economists broadly agree that it will be grim.

The $2.2 trillion CARES Act that Trump signed at the end of March includes a cash check of up to $1,200 for individuals who earn less than $99,000; expanded unemployment benefits and $350 billion in loans for small businesses.

FOX Business’ Blake Burman contributed to this report.

Author: Megan Henney

Source: Fox Business: Fourth coronavirus stimulus package could include capital gains tax cut, 50-year bond sales

The number of Americans filing for unemployment surged to 3.28 million last week, shattering a decades-old record in coronavirus pandemic forced businesses around the country to shutter their doors.

The number eclipsed the previous record of 695,000 set in 1982 and is well above the levels seen in the midst of the 2008 financial crisis, the Labor Department said in its weekly report. The data dates back to 1967.

Estimates varied drastically for how high the number of people who applied in mid-March for unemployment benefits would be, ranging from 1 million to 2.25 million Americans who lost their jobs during the period between March 15 and March 21, but economists agreed it would be grim.

The four-week moving average was 1,731,000, an increase of 27,500 from the previous week’s revised average.

“Most historical comparisons of this scale are inadequate,” said Glassdoor senior economist Daniel Zhao. “The closest would be natural disasters like major hurricanes. However, as today’s report shows, the coronavirus outbreak is economically akin to a major hurricane occurring in every state around the country for weeks on end.”

Restaurants, bars, hotels, airlines, cruise lines, automakers and entertainment venues have been hit hard by the pandemic as cities and states, trying to mitigate the spread of the virus, have ordered the closure of non-essential businesses and told residents to stay at home.

Jobless claims bring the first hard evidence that the novel coronavirus is bringing the nation’s economy to a grinding halt. But economists have warned the number will likely continue to rise in the coming weeks.

“I expect this number to keep rising as workers heed orders to shelter in place,” said Jason Reed, assistant chair and teaching professor of finance at the University of Notre Dame. “Fiscal stimulus will be coming just in time to help millions of Americans weather the storm, but we’re not out of the woods yet. The state of jobless claims and unemployed workers will certainly get worse before it gets better. ”

Laid-off workers reported waiting hours on the phone last week to apply for unemployment benefits. Websites in multiple states, including New York and Oregon, crashed because so many people were trying to apply at once.

Claims increased in all 50 states and Washington, D.C. with nine states reporting increases of at least 100,000 from the previous week. Pennsylvania reported the biggest number of claims, with 378,900, followed by Ohio at 187,000 and California at 186,000.

Lawmakers are looking to provide relief to laid-off workers with a $2 trillion stimulus package, the largest relief bill in recent memory, that’s awaiting approval by the House. In addition to giving adults who earn less than $99,000 annually up to $1,200 cash checks, the bill would expand unemployment benefits.

Federal Reserve Chairman Jerome Powell, during a rare televised interview on Thursday morning, said the U.S. economy may already be in a recession, but said the downturn is unlike any other the U.S. has seen before.

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The head of the central bank said that the virus will dictate the recovery time-table, but warned that economic activity will decline, “probably substantially,” in the second quarter of the year.

“We may well be in a recession,” Powell said. “There’s nothing fundamentally wrong with our economy, quite the contrary. In principle, if we get the virus under control, economic activity can resume, and we want to make that rebound as vigorous as possible.”

Author: Megan Henney

Source: Fox Business: US unemployment claims shatter record as coronavirus hammers economy

More than half of the world’s banks are too weak to survive a recession, according to a new survey published by McKinsey & Company.

The consulting firm said in its latest global banking review that more than a decade after the financial crisis, banks still have not regained the profitability they enjoyed in 2007. Plus, more than 60 percent of banks don’t generate their cost of equity, 10 years after the recession, the study found.

“A prolonged economic slowdown with low or even negative interest rates could wreak further havoc,” the report found.

A majority of banks are struggling as a result of “geography, scale, differentiation and business model,” McKinsey said.

For instance, American banks see returns that are 10 percentage points higher than those of their European counterparts, which are bogged down by sluggish home markets, the firm said. The importance of geography comes in the midst of drastically different monetary, fiscal and trade policies across the developed world.

One way for banks to improve profitability is to get bigger: The report found that banks increasing their size across a country, region or a client segment via a new acquisition or partnership can play a significant role in their business model.

“Going forward, scale will likely matter even more as banks head into an arms race on technology,” the report said.

If banks don’t change their behavior in order to meet new consumer behavior, they risk becoming a “footnote to history,” the American firm wrote.

It suggested that banks expanding their offerings, pointing to Amazon in the U.S. and Ping An in China, as examples of technology firms that are meeting customers’ needs by engaging user interfaces.

“For instance, in China, Ping An has built an ecosystem that includes healthcare, automotive, entertainment, and tourism services, while in the U.S., Amazon offers businesses the traditional banking suite (that is, current accounts, credit cards, unsecured loans), while connecting them to the Amazon ecosystem, which includes non-financial products and services,” McKinsey said.

Too often though, banks fail to recognize an emerging trend, losing their ability to remain competitive. Although more clients are trusting huge tech companies like Google (58 percent) and Amazon (65 percent) to handle their finances, banks only spend 35 percent of their budget on innovation (compared to fintechs, which devote more than 70 percent of their budget on it).

Author: Megan Henney

Source: Fox Business: Most banks aren’t prepared for a recession, McKinsey warns

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