WASHINGTON: Dismissing concerns about ballooning federal deficits, President Donald Trump on Wednesday proposed dramatic tax cuts for US businesses and individuals — outlining an overhaul his administration promises will spur economic growth and simplify America’s tangle of tax code rules.
His proposal, a one-page sketch short on detail, would reduce the top corporate tax rate by 20 percentage points and allow private business owners to claim the new lower rate for their take-home pay. It would whittle the number of tax brackets for individuals from seven to three, lower the top tax rate from 39.6 percent to 35 percent and double the standard amount taxpayers could deduct.
It would eliminate the estate tax and reduce taxes on investments, typically paid by the rich. It would further reduce the tax burden for the wealthy by eliminating the catch-all alternative minimum tax, which takes an additional bite out of high-income Americans.
More lower-income Americans would pay no tax at all, and there would be relief — still undefined — for families with child care expenses.
The plan does not propose any budget cuts or tax increases that might offset the lost revenue, a choice that alarms some fiscal conservatives in Trump’s party who have spent years railing about the dangers of deficit spending.
It also does not fully embrace tax proposals backed by Republican House Speaker Paul Ryan, an essential ally if the president is to make good on his promise to deliver a tax overhaul that creates growth and brings jobs to struggling parts of the country.
Still, “I would never, ever bet against this president. He will get this done for the American people,” said Gary Cohn, director of the White House National Economic Council. “He understands that there are a lot people who work hard and feel like they’re not getting ahead.”
The president’s proposal marks a rehash of an economic theory popularized in the 1980s. Trump officials essentially argue that benefits from the tax cuts will trickle down from higher profits for companies into stronger pay raises for workers and greater consumer spending. This expected surge in growth, in theory, would be enough to keep the federal budget deficit from shooting upward.
Some economists agree, but most budget experts say it’s unlikely.
“Unfortunately, it seems the administration is using economic growth like magic beans — the cheap solution to all our problems,” said Maya MacGuineas, president of the non-partisan Committee for a Responsible Federal Budget. “But there is no golden goose at the top of the tax cut beanstalk, just mountains of debt.”
Trump’s plan resembles aspects of the tax ideas he campaigned on last year. The right-learning Tax Foundation estimated that, even after accounting for growth, the Trump campaign plan would put a $2.6 to $3.9 trillion hole in the budget over 10 years.
“We know this is difficult,” Cohn said. “We know what we’re asking for is a big bite.”
Despite the details provided Wednesday, the proposal leaves significant open questions that could affect its impact on taxpayers and the economy.
The administration has yet to decide the incomes at which the new personal tax rates — 10 percent, 25 percent and 35 percent — would apply, meaning that some Americans might see their taxes increase if they get bumped into a higher bracket. It also has yet to spell out how the plan would stop wealthier Americans from exploiting a lower corporate rate to reduce their own taxes.
Administration officials intend to finalize details with members of the House and Senate in the coming weeks for what would be the first massive rewrite of the US tax code since 1986.
The possibility of a deficit increase, unacceptable to some Republicans, means that Trump would need to attract Democratic support to make the overhaul permanent.
Senate Democrats say his plan tilts its benefits to the wealthy, including Trump himself. The real estate magnate might save millions of dollars in his personal taxes because of the changes.
“This is an unprincipled tax plan that will result in cuts for the one percent, conflicts for the president, crippling debt for America and crumbs for the working people,” said Sen. Ron Wyden, or Oregon, ranking Democrat on the Finance Committee.
The Trump proposal would double the standard deduction for married couples to more than $24,000, while keeping deductions for charitable giving and mortgage interest payments.
On the other hand, it would trim other deductions, including for state and local tax payments, a change that could alienate lawmakers in states such as California and New York with higher state taxes.
“It’s not the federal government’s job to be subsidizing the states,” said Treasury Secretary Steve Mnuchin.
The administration has emphasized that the plan is focused on simplifying the tax code and helping middle class Americans. The median US household income is slightly above $50,000 annually.
In a boon for wealthier taxpayers, it would repeal the 3.8 percent tax on investment income from President Barack Obama’s health care law
The proposal has yet to be vetted for its precise impact on top earners, as several specifics are still being determined.
On the corporate side, the top marginal tax rate would fall from 35 percent to 15 percent. Small businesses that account for their owners’ personal incomes would see their top tax rate go from 39.6 percent to that corporate tax rate of 15 percent. Mnuchin said the change for small business owners — a group that under the current definition could include doctors, lawyers and even major real estate companies — would be done in a way that would ensure wealthier Americans could not exploit the change to pay less than intentioned in taxes.
Trump tax plan could be good news for many, bad for deficit
Trump tax plan could be good news for many, bad for deficit
Hong Kong jails 45 democracy activists in landmark national security trial
Activists charged with subversion over unofficial ‘primary election’
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Organizers had faced up to life in prison under national security laws
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US criticizes trial as politically motivated, calls for activists’ release
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China, Hong Kong defend laws as necessary for order post-2019 protests
HONG KONG: Hong Kong’s High Court on Tuesday sentenced 45 pro-democracy activists to jail terms of up to 10 years in a landmark national security trial that has damaged the city’s once feisty democracy movement and drawn international condemnation.
A total of 47 pro-democracy activists were arrested and charged in 2021 with conspiracy to commit subversion under a Beijing-imposed national security law and had faced sentences of up to life in prison.
Benny Tai, a former legal scholar identified as an “organizer” of the activists, was sentenced to 10 years in jail, the longest sentence so far under the 2020 national security law.
Some Western governments have criticized the trial, with the US describing it as “politically motivated” and saying the democrats should be released as they had been “peacefully participating in political activities” that were legal.
The Chinese and Hong Kong governments say the national security laws were necessary to restore order after mass pro-democracy protests in 2019, and the democrats have been treated in accordance with local laws.
CLOSELY WATCHED TRIAL
The charges related to the organizing of an unofficial “primary election” in 2020 to select the best candidates for an upcoming legislative election. The activists were accused by prosecutors of plotting to paralyze the government by engaging in potentially disruptive acts had they been elected.
After a 118 day trial, 14 of the democrats were found guilty in May, including Australian citizen Gordon Ng and activist Owen Chow, while two were acquitted. The other 31 pleaded guilty.
Sentences ranged from just over four years to 10 years.
Prominent Hong Kong activist Joshua Wong was sentenced to four years and eight months in jail, while Chow was sentenced to seven years and nine months; former journalist-turned-activist Gwyneth Ho, was sentenced to seven years.
Elsa Wu, the mother of Hendrick Lui, who was sentenced to more than four years in jail, was taken away in a police van outside the courtroom and shouted: “He’s a good person … he’s not a political prisoner … why does he have to go to jail?”
She screamed before police slammed the van door.
Hundreds of people had queued from the early hours outside the court, many holding umbrellas in light rain as they tried to secure a seat within the main courtroom and several spillover courts.
Authorities deployed a tight police presence outside the West Kowloon Magistrates Court and for several blocks in the vicinity.
“I feel such an injustice needs witnessing,” said one woman who gave her name as Margaret and had been in the queue since Sunday afternoon. “I’ve long followed their case. They (the democrats) need to know they still have public support.”
The ruling, which critics have said tarnishes Hong Kong’s role as a global financial hub, comes as the city is hosting an international financial summit to attract more business.
US President-elect Donald Trump’s nominee as secretary of state, Marco Rubio, has been a staunch critic of the trial and in an earlier open letter criticized the convictions of the 47 democrats as evidence of the national security law’s “comprehensive assault on Hong Kong’s autonomy, rule of law, and fundamental freedoms.”
Britain, which handed Hong Kong back to China in 1997, has said the 2020 security law has been used to curb dissent and freedom.
Divided G20 fails to agree on climate, Ukraine
- In a statement, the G20 called for “comprehensive” ceasefires in both Gaza and Lebanon
- On Sunday, Biden, who is attempting to ringfence support for Ukraine before Trump’s return to power, gave Kyiv the green light to use long-range US missiles to strike deep inside Russian territory
RIO DE JANEIRO: G20 leaders failed on Monday to break a deadlock in UN climate talks at a summit in Rio that was dominated by divergences over the war in Ukraine and Donald Trump’s impending return to the White House.
Ahead of the meeting, the UN had implored the leaders of the world’s richest economies to rescue stalled climate talks in Azerbaijan by boosting funding for developing countries struggling with global warming.
G20 members, who are divided on who should pay, did not make such commitments, saying only that the trillions of dollars needed would come “from all sources.”
“The leaders are kicking the can back to Baku,” said Mick Sheldrick, co-founder of the advocacy group Global Citizen, referring to the capital of Azerbaijan where the UN climate talks are taking place.
“This is probably going to make it harder to achieve an agreement,” he told AFP.
The risk of an escalation in the war in Ukraine and the prospect of a return of US President-elect Trump’s isolationist “America First” policies also dominated the talks in Brazil.
US President Joe Biden is attending the summit, but as a lame duck eclipsed by China’s Xi Jinping, who has cast himself as a protector of the international order in the new Trump era.
Xi, who held back-to-back meetings with other leaders, warned the world faced a new period of “turbulence” and said there should be “no escalation of wars, and no fanning of flames.”
In a statement, the G20 called for “comprehensive” ceasefires in both Gaza and Lebanon.
The summit was riven with divisions over Ukraine, however.
On Sunday, Biden, who is attempting to ringfence support for Ukraine before Trump’s return to power, gave Kyiv the green light to use long-range US missiles to strike deep inside Russian territory.
Biden’s move — a major policy shift by the US — threatens to escalate a war Trump has vowed to quickly end.
Russia on Monday warned of an “appropriate response” if its territory was hit.
German Chancellor Olaf Scholz said he would not follow Biden’s lead with his country’s Taurus missiles, but French President Emmanuel Macron praised a “good” move by Biden.
Brazilian President Luiz Inacio Lula da Silva attempted to put issues close to his heart, such as fighting hunger and climate change, at the top of the agenda.
At the opening of the summit, he launched the centerpiece of his G20 presidency: a Global Alliance against Poverty and Hunger backed by 82 countries that aims to feed half a billion people by 2030.
He won further praise from campaigners by garnering support for a bid to make billionaires pay more tax.
The summit statement included a pledge to “engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed,” and to devise mechanisms to prevent them dodging tax authorities.
“Brazil has lit a path toward a more just and resilient world, challenging others to meet them at this critical juncture,” anti-poverty group Oxfam said in a statement.
But Lula’s progressive social agenda met some resistance from Argentina’s libertarian president Javier Milei, an ardent fan of Trump and his billionaire adviser Elon Musk.
Milei said he opposed points in the summit declaration, including increasing state intervention to combat hunger and regulating social media but saved Brazil’s blushes by nonetheless signing up to the joint statement.
The meeting comes in a year marked by another grim litany of extreme weather events, including Brazil’s worst wildfire season in over a decade, and the opening of a new front in Israel’s wars with its Arab neighbors.
“Today the world is on a knife edge,” EU Council President Charles Michel warned.
The get-together caps a diplomatic farewell tour by Biden that took him to Lima for a meeting of Asia-Pacific trading partners, and then to the Amazon in the first such visit for a sitting US president.
Conspicuously absent from the summit was Russian President Vladimir Putin, whose arrest is sought by the International Criminal Court over the Ukraine war.
Hong Kong to sentence dozens of democracy campaigners
- The sentencing is “a very important indicator to show the general public (the degree of) openness and inclusivity in our society,” Lee Yue-shun, one of those acquitted, told AFP on Tuesday as he waited outside court
HONG KONG: Hong Kong’s largest national security trial will draw to a close on Tuesday, with dozens of the city’s most prominent democracy campaigners set to be sentenced for subversion, a charge that can carry up to life imprisonment.
Beijing imposed a sweeping national security law on the financial hub in 2020, snuffing out months of massive, sometimes violent, pro-democracy protests.
Western countries and international rights groups have condemned the trial as evidence of Hong Kong’s increased authoritarianism.
The “Hong Kong 47” were arrested in 2021 after holding an unofficial election primary that aimed to improve pro-democracy parties’ chances of winning a majority in the city’s legislature.
Two of the 47 were acquitted in May, but on Tuesday, the rest will learn their sentences, many after more than 1,300 days in jail.
The sentencing is “a very important indicator to show the general public (the degree of) openness and inclusivity in our society,” Lee Yue-shun, one of those acquitted, told AFP on Tuesday as he waited outside court.
A friend of defendant Gordon Ng, named by prosecutors as one of five organizers, told AFP she had been suffering insomnia in the past few days.
“Gordon seemed nervous too,” the woman said about her visit to Ng in prison. “But... he kept telling us not to overthink.”
This case is the largest by number of defendants since the law was passed in mid-2020.
Another major national security trial will see a key development on Wednesday, when jailed pro-democracy media tycoon Jimmy Lai testifies in his collusion trial.
The charges against Lai revolve around publications in his now-shuttered tabloid Apple Daily, which supported the pro-democracy protests and criticized Beijing’s leadership.
China and Hong Kong say the security law restored order following the 2019 protests, and have warned against “interference” from other countries.
At dawn on Tuesday, more than 200 people stood in the chilly drizzle outside the court where the sentencing will take place.
Some had been queuing since Saturday to nab a public seat.
Eric, an IT professional based in mainland China, spent a day of holiday waiting in line.
“I want to bear witness of how Hong Kong becomes mainland China,” Eric told AFP.
“In the future, cases like this may not be open to the public anymore.”
Jack, a law student, said he wanted to witness the sentencing because he found the judgment “was not particularly convincing.”
He said he was pessimistic that the sentencing would be lenient, but that even if it was, “people’s passion for political participation has dissipated in the face of restrictions.”
The aim of the election primary, which took place in July 2020, was to pick a cross-party shortlist of pro-democracy candidates to increase their electoral prospects.
If a majority was achieved, the plan was to force the government to meet the 2019 protesters’ demands — including universal suffrage — by threatening to indiscriminately veto the budget.
Three senior judges handpicked by the government to try security cases said the group would have caused a “constitutional crisis.”
The “principal offenders” face 10 years to life in jail.
Legal scholar Benny Tai has been named “the brain behind the project” by prosecutors.
Others singled out as “more radical” are the ex-leaders of the now-disbanded Civic Party Alvin Yeung and Jeremy Tam, young activist Owen Chow and former journalist Gwyneth Ho.
The oldest defendant is “Long Hair” Leung Kwok-hung, the 68-year-old co-founder of the city’s last standing opposition party the League of Social Democrats.
His wife Chan Po-ying, the leader of the LSD, told AFP that Leung “does not have any special thoughts on the sentence” after visiting him on Monday.
“I feel rather calm too... I wish for no surprise and no shock,” Chan said.
Emilia Wong, girlfriend of rally organizer Ventus Lau, said Lau appeared more anxious in recent months.
They hadn’t discussed the potential sentence much because “it’s an unprecedented case,” she said.
“A long time ago, he said if the sentence is up to 10 years or 20 years, I should not wait for his release,” Wong told AFP.
“The (sentencing) day may be a significant milestone for the outside world but for me... I will just have to carry on with my normal life, visiting him and handling his matters.”
Starmer stays quiet on Ukraine’s use of UK Storm Shadow missiles
- Britain, which has provided Ukraine with Storm Shadow long-range missiles, has consistently pushed to ease restrictions on Kyiv’s use of the weapons
RIO DE JANEIRO: British Prime Minister Keir Starmer on Monday said he would not “get into operational details” after US President Joe Biden gave Ukraine permission to use Western-supplied long-range missiles against Russia.
Speaking to broadcasters at the G20 in Brazil, Starmer refused to be drawn “because the only winner, if we were to do that, is (Russian President Vladimir) Putin.”
Kyiv has long sought authorization from Washington to use the powerful Army Tactical Missile System, or ATACMS, to hit military installations inside Russia as its troops face growing pressure.
A US official said Washington’s major policy shift on the missiles was in response to Russia’s deployment of thousands of North Korean troops in its war effort.
Britain, which has provided Ukraine with Storm Shadow long-range missiles, has consistently pushed to ease restrictions on Kyiv’s use of the weapons.
Putin had previously warned that letting Ukraine use long-range weapons would mean NATO was “at war” with Moscow.
In parliament in London, lawmaker Roger Gale asked if Britain planned to “align with the United States” in granting Kyiv permission to use the UK-supplied missiles “as it sees fit in its own defense.”
Junior defense minister Maria Eagle said the government intended to “align with our allies” on how Ukraine “can make use of the capabilities that’s been offered” by its backers.
Starmer added: “I’ve been really clear for a long time now we need to double down.
“We need to make sure Ukraine has what is necessary for as long as necessary, because we cannot allow Putin to win this war,” he said.
Asked if he had spoken to Russian Foreign Minister Sergei Lavrov at the G20, he said: “I haven’t spoken to Russia and I’ve got no plans to do so.”
Foreign Secretary David Lammy, speaking to reporters after a UN Security Council meeting in New York, also refused to discuss the use of British missiles, because it “risks operational security.”
Asked how concerned he was about the implications of Donald Trump’s presidency on the war in Ukraine, he said: “One president at a time.”
“We’re dealing with President (Joe) Biden and we are committed to putting Ukraine in the strongest possible position,” he added.
Biden in ‘historic’ pledge for poor nations ahead of Trump return
- The outgoing leader unveiled the money for the International Development Association as he attends the G20 summit underway in Rio de Janeiro, his last time at the gathering of world leaders
RIO DE JANEIRO: US President Joe Biden announced a “historic” $4 billion pledge for a World Bank fund that helps the world’s poorest countries, the White House said Monday, before Donald Trump takes office with a new cost-cutting agenda.
The outgoing leader unveiled the money for the International Development Association as he attends the G20 summit underway in Rio de Janeiro, his last time at the gathering of world leaders.
“The president announced today that the United States intends to pledge $4 billion over three years... which is really exciting,” a senior US administration official told reporters on condition of anonymity.
The official said the pledge would not be binding on Trump’s incoming administration but said previous Republican governments had also backed top-ups for the fund.
US Deputy National Security Adviser Jon Finer earlier called the pledge “historic” and said Biden would “rally other leaders to step up their contributions.”
The International Development Association is the concessional lending arm of the World Bank and is used for some of the poorest countries in the globe, including for projects focused on climate.
During a six-day tour of South America, Biden has been trying to shore up his international legacy ahead of President-elect Trump’s return to the White House on January 20.
On Sunday he visited the Amazon rainforest in Brazil to promote his record on climate change, saying that the United States had hit its target of increasing bilateral climate financing to $11 billion a year.
Billionaire Trump has pledged to take a wrecking ball to many of Biden’s policies and has appointed tech tycoon Elon Musk as head of a commission to target what he calls federal government waste.
