Congress Sends Tax Bill to the White House
The Republican-controlled U.S. House of Representatives gave final approval on Wednesday to the biggest overhaul of the U.S. tax code in 30 years, sending a sweeping $1.5 trillion bill to President Donald Trump for his signature.
In sealing Trump’s first major legislative victory, Republicans steamrolled opposition from Democrats to pass a bill that slashes taxes for corporations and the wealthy while giving mixed, temporary tax relief to middle-class Americans.
The House approved the measure, 224-201, passing it for the second time in two days after a procedural foul-up forced another vote on Wednesday. The Senate had passed it 51-48 in the early hours of Wednesday.
Trump had emphasized a tax cut for middle-class Americans during his 2016 campaign. At the beginning of a Cabinet meeting on Wednesday, he said lowering the corporate tax rate from 35 percent to 21 percent was “probably the biggest factor in this plan.”
Trump planned a tax-related celebration with U.S. lawmakers at the White House in the afternoon but will not sign the legislation immediately. The timing of the signing was still up in the air.
After Trump repeatedly urged Republicans to get it to him to sign before the end of the year, White House economic adviser Gary Cohn said the timing of signing the bill depends on whether automatic spending cuts triggered by the legislation could be waived. If so, the president will sign it before the end of the year, he said.
The debt-financed legislation cuts the U.S. corporate income tax rate to 21 percent, gives other business owners a new 20 percent deduction on business income and reshapes how the government taxes multinational corporations along the lines the country’s largest businesses have recommended for years.
Millions of Americans would stop itemizing deductions under the bill, putting tax breaks that incentivize home ownership and charitable donations out of their reach, but also making tax returns somewhat simpler and shorter.
The bill keeps the present number of tax brackets but adjusts many of the rates and income levels for each one. The top tax rate for high earners is reduced. The estate tax on inheritances is changed so far fewer people will pay.
Once signed, taxpayers likely would see the first changes to their paycheck tax withholdings in February. Most households will not see the full effect of the tax plan on their income until they file their 2018 taxes in early 2019.
In two provisions added to secure needed Republican votes, the legislation also allows oil drilling in Alaska’s Arctic National Wildlife Refuge and repeals the key portion of the Obamacare health system that fined people who did not have healthcare insurance.
“We have essentially repealed Obamacare and we’ll come up with something that will be much better,” Trump said on Wednesday.
“Pillaging”
Democrats have called the tax legislation a giveaway to the wealthy that will widen the income gap between rich and poor, while adding $1.5 trillion over the next decade to the $20 trillion national debt, which Trump promised in 2016 he would eliminate as president.
“Today the Republicans take their victory lap for successfully pillaging the American middle class to benefit the powerful and the privileged,” said House Democratic leader Nancy Pelosi.
few Republicans, whose party was once defined by its fiscal hawkishness, have protested the deficit-spending encompassed in the bill. But most of them have voted for it anyway, saying it would help businesses and individuals, while boosting an already expanding economy they see as not growing fast enough.
“We’ve had two quarters in a row of 3 percent growth,” Senate Republican leader Mitch McConnell said after the Senate vote. “The stock market is up. Optimism is high. Coupled with this tax reform, America is ready to start performing as it should have for a number of years.”
Despite Trump administration promises that the tax overhaul would focus on the middle class and not cut taxes for the rich, the nonpartisan Tax Policy Center, a think tank in Washington, estimated middle-income households would see an average tax cut of $900 next year under the bill, while the wealthiest 1 percent of Americans would see an average cut of $51,000.
The House was forced to vote again after the Senate parliamentarian ruled three minor provisions violated arcane Senate rules. To proceed, the Senate deleted the three provisions and then approved the bill.
Because the House and Senate must approve the same legislation before Trump can sign it into law, the Senate’s late Tuesday vote sent the bill back to the House.
Democrats complained the bill was a product of a hurried, often secretive process that ignored them and much of the Republican rank-and-file. No public hearings were held and numerous narrow amendments favored by lobbyists were added late in the process, tilting the package more toward businesses and the wealthy.
U.S. House Speaker Paul Ryan defended the bill in television interviews on Wednesday morning, saying support would grow for after it passes and Americans felt relief.
“I think minds are going to change,” Ryan said on ABC’s “Good Morning America” program.
Reporting by David Morgan and Amanda Becker; Additional reporting by Richard Cowan, Roberta Rampton, Gina Chon and Susan Heavey; Editing by Jeffrey Benkoe and Bill Trott.
Trump’s ‘Make America Great Again’ Hat Is Already Sold Out
Maybe it’s just another lesson in the art of the deal.
Donald Trump had the Internet flipping out — again — on his visit to the Mexican border last week by covering his signature orange coif with an ill-fitting white cap emblazoned with his campaign slogan, “Make America Great Again” — a slogan made famous by Ronald Reagan but recently trademarked by Trump.
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While Trump’s campaign website doesn’t yet have a store, the hats quickly went on sale at Trump Tower in midtown Manhattan, a destination for tourists and some Fifth Avenue shoppers. The hats are available for $20 in a choice of red, blue or the white version Trump wore.
Or make that were available. As of Monday, the initial order of the Republican presidential candidate’s caps were sold out. A salesperson said the store expected to have them back in stock by the end of the week. In the meantime, the store still had plenty of $15 “Make America Great Again” t-shirts for sale. And if you’re really desperate to get your hands on Trump’s new lid, there are plenty of knockoffs popping up online.
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5 Cities with the Most Credit Card Debt
Why is the Lone Star State racking up so much debt? Its two largest cities—Dallas and Houston/Fort Worth make the list of the cities with the most credit card debt, and San Antonio comes in as No. 1.
The new study from CreditCards.com used credit report data from Experian to compare the average credit card debt in the 25 largest U.S. metro areas with each area’s median income. It assumed that 15 percent of a person's monthly income would be spent on paying down credit card debt.
The analysis claims it would take San Antonio residents with median incomes of $27,491 a full 16 months to pay off an average of $4,880, making monthly payments of $344 a month. By comparison, a resident of San Francisco making $42,613 a year would pay off $4,393 in credit card debt with nine monthly payments of $533 per month.
The cities with the highest credit card debt burdens were:
- San Antonio
- Dallas/Fort Worth
- Atlanta
- Miami/Fort Lauderdale
- Houston
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The metro areas with the highest debt don’t necessarily have the highest debt burdens when adjusted for income. For example, Washington, D.C. has the nation’s highest average credit card debt at $5,046, but since it also has the highest median income in the nation, its debt burden is lower. By applying 15 percent of their paychecks, residents can pay off that debt in 10 months.
The cities with the lowest credit card debt burdens were:
- New York City
- Minneapolis/St. Paul
- Washington, D.C.
- Boston
- San Francisco/Oakland/San Jose
Matt Schulz, senior industry analyst at CreditCards.com, points out that there isn’t much difference between the city with the highest credit card debt, Washington, D.C. ($5,046), and the city with the lowest credit card debt, the Riverside-San Bernardino area ($4,137), but there is a big difference in income. A higher income means that debts can be paid off more quickly. “It really is all about earnings,” Schulz says. “People are using their credit cards whether they live in the biggest city in the country or they live in the 25th biggest city in the country.”
While most folks won’t be able to increase their income that dramatically, there are still steps they can take to make sure they’re tackling their credit card debt in the most effective way possible.
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His advice to consumers? “Absolutely, positively pay more than the minimum on your credit card balance every month.” And the next best thing? “If you can’t pay the full balance, then you have to pay off more than the minimum.”
Schulz also recommends calling the credit card issuer and asking if you can get better terms. “It’s certainly worth a call,” says Schulz. “We did a study last year that showed that 65 percent of people who asked for a lower interest rate got a lower APR.” The same study said that 86 percent of people who asked for a waiver of a late payment fee were successful in getting the charge removed.
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The 10 Friendliest Cities in the U.S.
The friendliest city for visitors is Honolulu, according to more than 6,400 respondents in a newly released poll by Travelzoo.
Survey takers were asked to pick the cities, states and countries where they felt the most welcome, could easily ask for directions, and get dining recommendations. New York City came in second, followed by New Orleans.
Last year was a record-breaking year for tourism, and the numbers confirm the popularity of these destinations for travelers. In 2014, 8.3 million visitors came to the Aloha State, with total visitor expenditures estimated at $14.7 billion. On average, 205,044 visitors are in the state of Hawaii on any given day.
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New York City, where tourism also hit a record high in 2014 with 56.4 million visitors streaming into the Big Apple, claimed the second spot in the poll.
Third place New Orleans has 9.52 million visitors and tourism spending of $6.81 billion in 2014. Fourth place Las Vegas also broke tourism records with 40 million visitors last year, thanks to renovated and rebranded resorts and direct flights from Canada and Mexico. Boston rounded out the top five, with a total of 16,250,000 international and domestic visitors in 2014.
Here are the top 10 friendly cities:
- Honolulu
- New York
- New Orleans
- Las Vegas
- Boston
- San Diego
- San Francisco
- Charleston, S.C.
- Chicago
- Seattle
Travelzoo also ranked states for friendliness, with warm climes dominating the list. In the top spot was Florida, followed by California and Hawaii. New York and Maine were the only states from the Northeast to make the list.
- Florida
- California
- Hawaii
- New York
- Texas
- South Carolina
- Maine
- Georgia
- Washington
- Arizona
In Europe, Amsterdam, London, and Dublin were considered the friendliest cities to visit, with Italy and Ireland seen as the friendliest countries.
Why ‘In a Relationship’ on Facebook Means More Than You Think
Worried about your relationship with your significant other? A quick look at your Facebook profile can tell you a lot about how you’re doing as a couple.
Listing yourself as “in a relationship” with your partner, posting photos of you and your partner together, and posting on your partner’s wall are all signs of a committed relationship, at least among college-age couples, according to a new study from the University of Wisconsin-Madison.
The study looked at 180 undergraduates who were in romantic relationships and asked them a number of questions about their relationship and looked at their Facebook profiles. Six months later, the researchers returned and asked the students whether they were still in that relationship.
The study results suggest that displaying a public commitment on Facebook, a highly public platform, is correlated with more enduring relationships between couples. These public displays of devotion actually help cement relationships as they develop over time.
However, not all couple-related activity on Facebook is good for a relationship. The number of mutual friends each couple had and the number of partner-initiated wall posts were negatively correlated with relationship commitment. In addition, joint affiliations, such as attending the same events or being in the same Facebook groups, was not associated with commitment.
As annoying as couples who broadcast their relationship all over Facebook might be, they’re more likely to be in it for the long haul. So consider blocking them if you’ve had enough of the online PDA, because as they study suggest, there’s probably going to be a whole lot more of it.
Why GM Should Send a Thank You Note to Saudi Arabia
General Motors shares are up more than 4 percent Thursday after the automaker reported better-than-expected profits. The company earned more than $1 billion in profits last quarter, well above Wall Street’s forecasts.
A big reason for the blowout quarter was record margins in North America, thanks in large part to increased sales of trucks and SUVs. The headline at the Detroit Free Press says it all: “GM earns $1.1B in Q2 as pickup, SUV sales surge in U.S.”
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As a general rule, big pickup trucks and SUVs deliver higher profit margins than smaller, cheaper cars, so Detroit is always happy when large vehicles are selling. Another general rule seems to be that when gas is cheap, Americans start dreaming about gas-guzzling vehicles of all kinds, from blinged-out GMC Yukon XL Denalis to fuel-blasting Chevy Camaro ZL1s. And gas certainly has been cheap lately, thanks in large part to Saudi Arabia’s decision to maintain crude oil production levels in the face of increased U.S. production and a global slowdown in demand for energy.
Here’s a chart of gas and oil prices over the last three years, courtesy of GasBuddy. Note the steep decline starting in 2014:
As long as oil and gas are cheap, GM can probably count on selling lots of its most profitable vehicles. And with China slowing and Iran rejoining the global oil market, cheap fuel may be here for a while.
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