WASHINGTON: President Donald Trump proposed on Wednesday the biggest US tax overhaul in three decades, calling for tax cuts for most Americans, but prompting criticism that the plan favors business and the rich and could add trillions of dollars to the deficit.
The proposal drew a swift, skeptical response from Senator Bob Corker, a leading Republican “fiscal hawk,” who vowed not to vote for any federal tax package financed with borrowed money.
“What I can tell you is that I’m not about to vote for any bill that increases our deficit, period,” Corker, who said on Tuesday he would not seek re-election in 2018, told reporters.
Trump said his tax plan was aimed at helping working people, creating jobs and making the tax code simpler and fairer. But it faces an uphill battle in the US Congress with Trump’s own Republican Party divided over it and Democrats hostile.
The plan would lower corporate and small-business income tax rates, reduce the top income tax rate for high-earning American individuals and scrap some popular tax breaks, including one that benefits people in high-tax states dominated by Democrats.
Forged during months of talks among Trump’s aides and top congressional Republicans, the plan contained few details on how to pay for the tax cuts without expanding the budget deficit and adding to the nation’s $20 trillion national debt.
The plan still must be turned into legislation, which was not expected until after Congress makes progress on the fiscal 2018 budget, perhaps in October. It must then be debated by the Republican-led congressional tax-writing committees.
Analysts were skeptical that Congress could approve a tax bill this year, but that is what Republicans hope to achieve so they can enter next year’s congressional election campaigns with at least one legislative achievement to show for 2017.
Financial markets rallied on the plan’s unveiling, an event long anticipated by traders betting that stocks would benefit from both faster economic growth and inflation.
At an event in Indianapolis, Trump called the plan the largest tax cut in US history. “We want tax reform that is pro-growth, pro-jobs, pro-worker, pro-family and, yes, tax reform that is pro-American,” he said.
The real estate mogul-turned-politician, who promised big tax cuts as a candidate, told reporters he personally would not gain financially from the proposal.
“I think there’s very little benefit for people of wealth,” said Trump, who unlike many of his White House predecessors, has refused to make public his own tax returns.
Republicans have produced no major legislative successes since Trump took office in January, even though they control the White House and both chambers of Congress. Their top legislative priority, overhauling the US health care system, collapsed again in the Senate on Tuesday.
A comprehensive rewrite of the US tax code has eluded previous presidents and Congress for decades. The last one was passed in 1986 under Republican President Ronald Reagan.
Trump’s plan falls short of the sweeping, bipartisan package crafted by Reagan and congressional Democrats, analysts said.
The White House said that, under the proposal, typical middle-class families would have less income subject to federal tax. Trump said the first $12,000 earned by an individual and the first $24,000 by a married couple would be tax-free.
The plan would lower the top individual tax rate, paid by the nation’s top earners, to 35 percent from 39.6 percent.
It would lower the top corporate income tax rate to 20 percent from the current 35 percent. The existing rate is high globally, but many US-based multinationals pay much less than the headline rate because of abundant loopholes and tax breaks.
Trump has appealed to Democrats to back the plan, although they were not consulted in drafting it.
Republicans hold a thin 52-48 Senate majority and may need some Democratic support to win passage. But Democrats said the plan would expand the federal deficit in order to deliver tax cuts to wealthy Americans rather than the middle-class families that Trump and Republicans say they are trying to help.
“If this framework is all about the middle class, then Trump Tower is middle-class housing,” said Senator Ron Wyden, the top Democrat on the tax law-writing Senate Finance Committee.
Republican Kevin Brady, chairman of the tax-writing House of Representatives Ways and Means Committee, said he expected tax legislation to be passed by the end of this year.
The Committee for a Responsible Federal Budget, a Washington-based policy group, estimated on Wednesday the plan contained about $5.8 trillion of total tax cuts over a decade and would have a net cost of $2.2 trillion through 2027.
Analysts have warned huge tax cuts would balloon the deficit if economic growth projected by Republicans to offset the costs fails to materialize amid rising interest rates.
The plan would set a new 25 percent tax rate for “pass-through” businesses, which are usually small, private enterprises, such as partnerships and sole proprietorships. They represent about 95 percent of all US businesses.
Under current law, the profits of those companies “pass through” directly to their owners and are taxed as personal income, often at the top 39.6 percent individual income rate.
Cutting that to 25 percent could mean big tax savings for small-business owners, but also be vulnerable to abuse by other individuals and companies, analysts said.
Republicans proposed eliminating some tax deductions. They did not target the popular ones for mortgage interest and charitable giving, but called for scrapping the one for state and local tax payments. That could especially hurt people in high-tax states like California and New York.
In a step to simplify tax returns, the plan would shrink the current seven tax brackets to three: 12 percent, 25 percent and 35 percent. That would raise the bottom tax rate on low-earning Americans to 12 percent from 10 percent, but analysts said other parts of the plan would still mean a net tax cut.
Trump proposes biggest US tax overhaul in 30 years
Trump proposes biggest US tax overhaul in 30 years
MODON inks $453m in private sector deals to expand Saudi industrial cities
JEDDAH: Saudi industrial cities are set for further growth as the sector's authority revealed it has signed 23 development contracts with the private sector, valued at over SR1.7 billion ($453 million).
The agreements, announced by the Saudi Authority for Industrial Cities and Technology Zones, or MODON, encompass a wide range of projects aimed at boosting industrial capabilities.
These include the expansion of industrial cities, the construction of ready-made factories, the enhancement of MODON’s safety and security systems, and initiatives aligned with the National Industry Strategy.
Additionally, the projects will address water and irrigation needs, improve water treatment facilities, upgrade electricity services, and expand road networks.
MODON’s latest contracts highlight the growing role of the private sector in supporting Saudi Arabia’s ambitious Vision 2030 goals, which emphasize economic diversification, local production, and the creation of an attractive environment for both domestic and foreign investment.
The projects are expected to enhance the competitiveness of Saudi industrial cities, foster greater investment, and improve operational efficiency for businesses.
The agreements will also contribute to regional development, improve environmental sustainability, and promote vegetation growth, MODON stated in a post on its X account.
The development of these projects is in line with Saudi Arabia’s broader efforts to build a dynamic and innovative economy.
This move follows a previous round of agreements in July, when MODON signed nine contracts valued at SR1 billion to enhance infrastructure and service facilities across various industrial hubs. Key initiatives from that round included the development of infrastructure in Makkah’s and Jeddah’s industrial cities and the installation of 132-kilovolt overhead power lines in Tabuk’s industrial city.
Looking ahead, MODON plans further expansion with projects that will improve electrical services, such as the construction of 115-kV overhead power lines in Hafr Al-Batin’s industrial city. The authority is also focusing on enhancing infrastructure networks for the first and second phases of Dammam’s Third Industrial City.
Since its establishment in 2001, MODON has overseen the development of 36 industrial cities and is responsible for managing both operational and under-construction industrial lands across the Kingdom.
In the first quarter of 2024, MODON attracted SR3.4 billion in private sector investments, signed 142 new industrial contracts, and registered a total of 6,758 factories.
As part of its commitment to sustainable growth, MODON also planted over 576,000 trees and finalized 335 logistics contracts, underscoring its broader environmental and economic development objectives.
2.25m freelancers in Saudi Arabia join national economy
- The 25— 34 age group is particularly active in freelancing
- 62% of freelancers hold bachelor’s degrees
JEDDAH: Freelancing is emerging as a key contributor to Saudi Arabia’s economy, with over 2.25 million individuals registered on the freelance platform by September.
This growth reflects the rising popularity of flexible work, supported by the Ministry of Human Resources and Social Development’s launch of the “Future Work” company in 2019 to enhance the freelancing ecosystem by promoting modern workstyles, including remote work and flexible-hour freelancing.
The company’s mission is to create more job opportunities, empower Saudi talent, and develop a labor market that complements traditional employment while aligning with global trends, according to the Saudi Press Agency.
Freelancers make a notable contribution to Saudi Arabia’s economy. In 2023, the sector contributed SR72.5 billion ($19 billion) to the gross domestic product, representing 2 percent of the Kingdom’s total output. This highlights its role in diversifying income sources and strengthening the national economy.
The initiative, along with other efforts, has contributed to reducing the Kingdom’s unemployment rates. Saudi Arabia has revised its unemployment target to 5 percent by 2030, down from the previous goal of 7 percent, as part of Vision 2030’s ambitions.
The progress was highlighted by Minister of Human Resources and Social Development Ahmed Al-Rajhi during a panel discussion at the Budget Forum 2024 in November, where he detailed the Kingdom’s strides in improving employment figures. Al-Rajhi said that the unemployment rate among Saudis was 12.8 percent in 2018, and it has recently dropped to 7.1 percent.
The Ministry of Human Resources and Social Development issues freelance certificates to individuals specializing in specific fields, enabling them to work independently in activities approved by the ministry through the official freelance portal.
A recent report from Future Work highlights the sector’s rapid development and its alignment with Vision 2030. The report also emphasizes the diverse nature of freelance activities, with trade and retail leading at 38 percent, followed by industry at 13 percent and business services at 11 percent. The diversity demonstrates the sector’s adaptability to meet various economic needs.
Freelancing accommodates individuals with different educational backgrounds. According to the report, 62 percent of freelancers hold bachelor’s degrees, while 31 percent have high school diplomas or less, and 7 percent possess higher degrees.
Technology plays a pivotal role in the sector’s growth, with digital platforms becoming indispensable for freelancers, especially in fields like technology, information, and finance. These tools enhance productivity and connectivity, fostering sustainability and success in freelance careers.
Geographically, the Riyadh region accounts for the largest share of freelancers at 27 percent, followed by Makkah at 22 percent, and the Eastern Province at 14 percent.
The 25— 34 age group is particularly active in freelancing, reflecting the younger generation’s growing interest in this flexible career path.
The report said that 3.2 million women have expressed interest in joining the freelance market, underscoring the effectiveness of initiatives aimed at enabling women to balance professional and personal commitments.
Government programs like Reef, the Social Development Bank, and the Human Resources Development Fund further support freelancers by fostering an environment conducive to their growth and success, SPA reported.
Saudi Arabia’s food & beverage sales drive $3.14bn in consumer spending
- Restaurants and cafes topped the list with SR1.69 billion in transactions: SAMA data
RIYADH: Saudi Arabia’s consumer spending reached SR11.8 billion ($3.14 billion) in the week of Dec. 15 to Dec. 21, with the food and beverage sectors continuing to lead in sales, official data showed.
Despite a slight overall decline of 8.1 percent from the previous week, key sectors, especially dining and food, showed consistent performance, according to data from the Saudi Central Bank, also known as SAMA.
The restaurants and cafes sector topped the list with SR1.69 billion in transactions, despite a 13.9 percent weekly dip. Food and beverage spending followed closely, settling at SR1.69 billion as well, reflecting a 9 percent decrease. These categories, however, maintained their dominance in consumer expenditure.
The overall decrease in consumer spending is attributed to the timing of salary disbursements, traditionally paid on the 27th of each month, which typically leads to lower spending in the preceding weeks.
Additionally, the winter holiday season, during which many expatriates travel home, further influenced the dip in domestic spending.
Other sectors saw more moderate drops. The value of clothing and footwear transactions fell by 5.2 percent to SR864.15 million, while construction and building materials recorded a small 0.9 percent decline, totaling SR355 million.
The electronics and electric devices sector saw an 8.7 percent weekly decrease in value, while gas stations and health-related sales also experienced declines of 9.4 percent and 7.3 percent, respectively.
Jewelry sales recorded a 14.4 percent drop in transaction volumes, with a slight 3.9 percent decrease in value. Miscellaneous goods and services saw a 9.1 percent reduction in sales, totaling SR1.4 billion.
Regional breakdown
Regionally, Riyadh remained the largest market with a POS value of SR4.2 billion, although this represented a 6 percent decrease compared to the previous week.
Jeddah saw a 7.5 percent drop to SR1.6 billion, while Dammam recorded a slight 3.6 percent decline to SR617.5 million.
Among smaller cities, Hail experienced the largest decrease, with spending down 14.8 percent to SR169.6 million, and a 12.2 percent reduction in transaction volumes. Makkah recorded a 4.4 percent decline in value, settling at SR502.8 million, while Tabuk saw a 12.8 percent decrease in transaction value to SR210.4 million.
Despite the seasonal slowdown, the food and beverage sectors continue to drive the market, maintaining a steady pace as consumer behavior shifts with the winter season.
Saudi Arabia leverages project management to achieve Vision 2030 milestones
RIYADH: In Saudi Arabia’s pursuit of the ambitious goals set out in Vision 2030, project management has emerged as a key enabler, ensuring that planning aligns seamlessly with execution to achieve transformative outcomes.
This vital discipline is playing a crucial role in turning visionary ideas into reality, as highlighted during a prominent forum held on Tuesday.
The event emphasized the central role of project management in realizing Vision 2030, a comprehensive framework launched in 2016 by Crown Prince Mohammed bin Salman.
The vision aims to diversify the economy and reduce the Kingdom’s dependence on oil. Currently, over 5,000 projects, valued at $5 trillion, are underway, signaling Saudi Arabia's substantial progress in reshaping both its economic and social landscapes.
“Project management is the bridge where vision meets ambition, converting plans into tangible results,” said Badr Burshaid, chairman of the Global Project Management Forum.
He also pointed to the Kingdom's significant investment in human capital, particularly through initiatives such as the Human Capability Development Program, which has placed Saudi Arabia among the top 10 nations globally in equipping professionals with essential business skills.
The forum highlighted the importance of strategic execution in driving economic transformation.
Badr Al-Dulami, deputy minister of transport and logistics services for roads affairs, described project management as the “pulse of transformation,” underscoring its role in fostering competitiveness and innovation.
“This summit is not just an event but a platform for uniting expertise and driving collaboration,” Al-Dulami said.
During the forum, excellence awards were presented to pioneering projects that exemplify Vision 2030’s focus on innovation, sustainability, and impactful outcomes.
Al-Dulami noted that these awards serve as an invitation to explore new horizons of creativity while staying aligned with national objectives.
Saudi Arabia’s success under Vision 2030 is evident across several key sectors. With 87 percent of initiatives either completed or on track, the Kingdom has made significant strides in improving its business environment, generating employment, and advancing major projects like NEOM and the Red Sea Project.
These achievements not only demonstrate Saudi Arabia’s strategic capabilities but also highlight its leadership in executing large-scale initiatives.
In closing, Burshaid urged participants to harness the insights and momentum gained from the forum to ensure continued progress.
“The seeds planted today will grow into achievements that inspire future generations,” he said, encouraging stakeholders to prioritize innovation and collaboration as Saudi Arabia moves forward.
With project management at the heart of Vision 2030, Saudi Arabia is setting a global benchmark for strategic execution and sustainable development, solidifying its role as a leader in transformative growth.
Egypt and Jordan discuss collaborations in natural gas
- Two parties explored ways to exploit shared expertise and resources
- It aligns with both countries’ national security and sustainable development strategies
RIYADH: Cooperation in energy and natural gas between Egypt and Jordan is set to grow as the North African country’s Minister of Petroleum and Mineral Resources Karim Badawi met with the Jordanian Minister of Energy and Mineral Resources, Saleh Kharabsheh.
The talks at the Ministry of Energy and Mineral Resources in Amman revolved primarily around diversifying energy sources and propelling natural gas projects, the Jordanian news agency Petra reported.
This aligns with both countries’ national security and sustainable development strategies.
During the meeting, the two parties explored ways to exploit shared expertise and resources to implement future projects that are projected to yield positive economic returns and further strengthen regional cooperation.
The meeting came during Badawi’s visit to Jordan, during which he assessed the plans and operations of the Jordanian-Egyptian Fajr Co. in developing the natural gas infrastructure in Jordan.
The visit underlined the strategic importance of the 500-kilometer main gas network stretching from southern to northern Jordan.
Badawi also evaluated the progress in enhancing the network’s capacity and related facilities during his stay.
The Egyptian minister reviewed the current and upcoming projects by Egyptian petroleum sector companies planned for implementation in Jordan.
He highlighted the importance of accelerating these initiatives to maximize the economic and environmental benefits of natural gas use across various sectors in Jordan.
Badawi’s visit to Jordan underscores the strong ties and fruitful collaboration between the two nations.
