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This WSJ report says IRS is working on collecting $10.7 bill in taxes from Amgen for the shift of $14 billion in profits to its Puerto Rican subsidiary. Puerto Rico is considered a foreign country for US tax purposes, and by locating profits there Amgen paid much lower taxes than most companies. In 2013 this was effective tax rate of 3.5%. Now this is coming into careful scrutiny from the US government as president Biden plans to generate revenues to pay for the shift to renewable energy to combat climate change with COP26 commitments by the US, and to reduce pharmaceutical cost inflation for the US public. This is the idea behind the $369 billion Inflation Reduction Act of 2022, both a climate and a tax bill that is being passed in the US Congress.

This bill is the biggest climate change bill in history and yes it depends on revenues from fair taxation that has not happened till the Biden administration's resolute effort in this direction.

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Neil Irwin of NYT provides some counter intuitive ideas on U.S. Fed interest rate policy. He says it can't be take as a given that the Fed will raise rates in 2017-2018. This depends on how much punch there is in the Trump economic policies for stimulus, and for infrastructure spending, tax cuts. He cites Senate Majority Leader McConnell who said he would like to keep "tax reform revenue neutral." Getting large spending and pushing up the deficit is likely to run up against Republicans in Congress who have for 8 years opposed large spending increases and large deficits. Trump has given few details about his stimulus or infrastructure spending plans. He says the scale of the spending might not match the talk. Irwin cites JP Morgan Chase economists who have kept their forecasts for GDP growth just under 2% for 2017 and 2018. And he points out that even Trump appointees at the Fed might act independently. The Fed might look at being cautious considering that increased trade tensions with China, and the unpredictability of a Trump administration could hurt growth. Irwin does not mention the uncertainty in other areas such as policy towards Russia on which the Republican party and Congress have very different views than Trump, tensions over Taiwan, that can also affect growth. ...

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A new report by Medicare trustees found that the Medicare hospital trust fund would face insolvency by 2029, which is 12 years after the projection made last year. But Medicare's chief actuary questioned this by saying that this assumes cuts in payments to medical providers in the health reform bill would be implemented. Not realistic he says, considering that many doctors would drop out of Medicare causing difficulty for seniors. After 2029 Medicare would be able to pay 85% of the benefits according to this report. Separately the Social Security fund is expected to need a $41 billion cash infusion, with more paid out in benefits, than collected in tax receipts in 2010 and 2011, with this situation getting worse by 2015.

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This editorial in the Economist says Britain's economic recovery will not be complete until interest rates are well above zero and productivity growth is established. Without productivity growth and growth in wages, both lacking in the economic recovery since 2009, tax revenues will not be enough to reduce the deficit, requiring more spending cuts. That means the Bank of England will not raise interest rates, keeping a situation of no rate changes prevailing since March 2009 when the central bank cut rates by 0.5%. In the current situation the Bank of England is not expected to raise rates till 2016, only after the U.S. Federal Reserve increases rates to avoid appreciation in the pound and further deflationary pressure, according to Goldman Sachs. With inflation currently at zero, following the drop in oil prices, and 10% appreciation in the pound since mid 2013 making imports cheaper, there is little pressure to increase interest rates. In 2011 inflation with rising food and energy prices reached 5.2% , but the Bank of England did not raise rates because of the eurozone economic crisis affecting growth. Only since 2013 has economic growth picked up with 1.2 million jobs created since the beginning of 2013, bringing unemployment down from a high of 8.5% in 2011 to 5.6% in May 2015. Throughout the recovery productivity growth is falling behind- 2014 productivity measured by output per hour worked was 1.3% lower than in 2011, and 14% below the pre-crisis trend, according to the Economist....

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Many important changes in the health care bill do not come till 2013 or 2014. Its only in 2014 that government will hand out tax credits to low and middle incoem Americans to offset the cost of buying insurance and expand Medicaid federal-state programs to help expand insurance for the poorer sections of society.

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Sweden's prime minister, Reinfeldt, says he will cut corporate tax rates to 22% from 26.3% in the next budget for 2013.

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The $3.5 trillion bill of president Biden to help America get back on its feet after the pandemic and after years of neglect of infrastructure, manufacturing technologies, child care, health and education, is that much only if offsetting tax increases and spending cuts are not included. When this is taken into account the US is spending about $871 billion to rebuild its economy and for a better life for Americans. That is the estimate provided in the report September 13 by the Congressional Joint Committee on Taxation.

Experts say that if president Trump's bill- Tax Cuts and Jobs Act of 2017 was calculated without offsetting cuts and tax increases the same bill would be $5.5 trillion package.

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The IMF and Egypt reach preliminary agreement on a $4.8 billion loan in Nov. 2012. Andreas Bauer, IMF division chief for the Middle East says fiscal reforms by reducing waste in expenditures, changing energy subsidies to better channel them to the most needy are part of the plan for Egypt. This includes tax reforms increasing progressive nature of income tax and broadening the sales tax. The goal is to bring the deficit down from 11% of GDP in 2011-2012 financial year to 8.5% in 2013-2014. As part of this plan more money can go to infrastructure investment. Monetary polcies will be geared to keeping inflation down and increasing Egypt's competitiveness to attract foreign investment and increase international reserves. Egypt's international reserves are at $15 billion in Nov. 2012. In all the program of assistance to Egypt including IMF assistance and other donor loans gives Egypt access to $14.5 billion in loans.

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Chile's president Bachelet takes office for the second time in Jan 2014, after serving a term from 2006-2010. Her new administration will boost public spending and spending on education. Corporate tax rates will be increased and personal tax rates lowered. As growth slowed to 4% in 2013 from the 5.8% in prior years, Chile will have to look for new ways to boost growth.

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WSJ shows breakdown on federal spending hikes and cuts in the big DJT US Tax Bill. 2025 US Tax Bill renews the tax cuts put in place by Trump in his first term that expire in 2017. About $2.75 trillion in spending increases are not offset says WSJ. Briefly it has spending hikes for $2.18 trillion      DJT Tax Cuts from first term  $1.31 trillion       Increase Standard Deduction $820 billion         Deduction for businesses $797 billion         Child tax credit $1.41 trillion        Limits on Alternative Minimum Tax The goal is to promote business growth and help small business owners, parents with children, help ordinary Americans take more in take home pay during cost of living pressures for the average American. Savings come from $1.87 trillion repealing personal dependent exemption and $916 billion from capping state and local tax deductions. Added savings from repealing clean energy tax incentives and EV credits. Increasing work requirements for Medicaid saves $625 billion, tution aid cuts $346 billion, $300 billion from SNAP changes.   ...

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House Democrats in the U.S. see the Republican health care plan making the same mistakes in 2017 that the Democrats made in 2008. With the passage of the bill in the House of Representatives with a vote margin on May 4, 2017, rushed through in the way the Obama bill was also rushed through, the nation remains as divided as ever on the issue of health care. The Republicans favoring limiting subsidies and cutting Medicaid, and using some of the savings for a tax cut. The Democrats favoring mandated coverage for all and large subsidies to reduce the number of uninsured Americans, with expansion of Medicaid for very low incomes. Democrats in the House say the Republican House bill will result in Republicans losing seats in the House in midterm elections.

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The skills to navigate different personalities and work patiently on the issues surrounding changes to the U.S. tax system of Rep. Dave Camp (MI), chairman of the U.S House of Representatives Ways and Means Committee, will be immensely useful in the effort to make changes to the U.S. tax system. Camp works well with fellow House Republican leaders Boehner, Ryan, Cantor, and his Democratic counterpart in the U.S. Senate Max Baucus. Camp is a good listener, refuses to engage in partisan criticism, and has the patience to work through difficult issues of achieving savings and keeping fairness in the the tax changes. Earlier efforts to achieve consensus in late 2011 failed, making it even more important to have leadership which can create productive debate and bridge the differences. The tax changes are part of the overall effort for U.S. economic recovery by reducing the deficit.

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Goldfarb says everyone is focussed on the "fiscal cliff," yet there are other issues which when put together could lead to a drop of 1 percentage point in growth and add a million people to the jobless. The temporary payroll tax cut for 160 million workers was setup in Dec. 2010. The payroll tax which funds Social Security is 4.2% since then, down from 6.2%, adding about $1000 for the average family to spend. The unemployment insurance benefits which expire for millions of people will also have an impact. As will the $60 billion in spending cuts on domestic and defense spending under an agreement made in the summer of 2012.

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Experts say Kuroda of the Bank of Japan still has some Finance Ministry DNA, as he is from Japan's Finance Ministry which has pushed for the consumption tax to be increased to 10% in 2015. Even though Kuroda favors aggressive monetary stimulus compared to others in the Finance Ministry, he shares the views of Ministry colleagues on the tax changes. LDP leaders in the Abe cabinet and Abe see the recession with 2 consecutive quarters of declining GDP for the 2nd and 3rd quarters of 2014, as good reason for delaying the next tax increase from the 8% already implemented in 2014 to 10% in 2015. Under Abe's revised plan the tax increase would be postponed till 2017. Abe referred to the different views on the tax increase in his announcement for a snap election in Dec. 2014 for a new mandate to pursue his Abenomics economic policies of Three Arrows. Kuroda for his part downplayed their differences saying fiscal policy was the mandate of the elected government.

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Encourage homeownership by offsetting high property taxes. Makes auto loans $10,000 interest deductible. State and local taxes deduction $40,000 from $10,000 set in 2017. Makes it friendly to homeowners and encourage home ownership, building new homes. $10,000 property tax bills not common in 2017 when the SALT deduction was set, are now common after the price rise during covid years 2020-2024.  Help Parents by setting a ceiling on student loan debt, fund childcare, and fund future savings accounts for newborns. Makes Social Security benefits tax free for 88% of recipients. Sets a ceiling on student loan of $20,000 per year, borrowing limit $65,000 per student. Much of the bloated student loans are from universities raising tution as a tax on young people. This is a burden on the middle class. Child care credits are doubled to $2000, made permanent. Newborns get $1000 from government to which parents can contribute upto $5000. SNAP benefits changed the law to adults under 65 years from 55 years able bodied asked to work, with caregivers to children under 14 instead of under 18 years exempted. For Medicaid benefits one has to work 80 hours a month for able bodied persons under 65 years, appointments upto $35 for income $32,000 to $44,000. ...

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Democrats approach to tax reform is to retain the removal of tax breaks enacted by the Republicans under president Trump. Democrats simply increase the tax rates in their proposals so that $1 trillion net is generated in new tax revenues to finance the nation's infrastructure, to fund the other building blocks of society through social services, and help to struggling middle or lower income classes. Republican 2017 law changed tax rates for corporations from 35% to 21%. This is now seen as too generous leaving little for infrastructure and other essential needs of society such as education, child care and health. Democrats will adjust the tax rates directly.

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The key people in the effort to implement DJT agenda of the Border and renewing the Tax cuts that expire on Dec 31, 2025 are Senate Majortiy Leader John Thune, Deputy Senate majority Leader. Alos playing a part are the Budget Committee chair Lindsay Graham and Mike Crapo of Idaho who chairs the Senate Finance Committee. Here is the approach Tohn Thune plans to use. He will do it two step, first getting the Border right by committing additional resources including offsets of cost from clean energy tax credits. Only after enough technology and resources for Border Patrol are made to secure the Border will the second step of tax cut renewal be taken up.  The process Thune plans to use is budget reconciliation which requires only a simple majority in the US Senate. Things are tight in Congress, in the House very tight with 217-215 and in Senate 53-47. Budget reconciliation means cannot add to budget deficits beyond 10 year window and bill have to budgetary. ...

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When George Osborne took over at the British Treasury the deficit was 10.2% of GDP. Osborne's hope in 2010 was that the budget could be balanced by 2015, now it looks like this will happen in 2019 or later.The forecast for the end of the 2015 fiscal year is a deficit of 5% of GDP. Lower than expected tax receipts are a big reason for the difficulty in lowering the deficit. The Office for Budget Responsibility, the budget agency, has reduced the forecast for tax receipts for 2015-2019 by 87 billion pounds. This means further spending cuts will be needed, according to OBR. Budget surplus is not expected before 2019. This is happening even though lower inflation and lower market interest rates have helped reduce outlays to service the debt. OBR assumes productivity will increase to 2% for the budget to be balanced in 2019. At the average productivity growth rate of 0.5% seen since 2008, the budget deficit will still be 2.2% in 2019, in another scenario of numbers run by OBR.

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The Republican tax bill that passed the House and Senate in Dec. 2017 is likely to increase the deficit in the range of about $516 billion according to Tax Foundation or $ 1trillion according to the Congressional Joint Committee on Taxation, after boost to growth is included. This time in an effort to get a win Republicans cast aside doubts about the effects on the deficit to get it passed. During the Obama years tax legislation failed to get Republican support because of impact on deficits. The reluctance of president Obama to touch the deductions as proposed by the Simpson-Bowles Commission showed the politically cautious approach taken by Obama.  The new bill was examined by the NYT for its impact on various income groups. For people making over $50,000 over 80% get a cut in taxes, about 10% see no difference and the rest see increase in taxes. This goes up by a few percentage points to 84-85% in cuts for people making over 200,000 to $ 1 million, and drops to 80% for over $1 million incomes. About 20% see an increase in taxes for incomes over $1 million.  As evidence of how the tax bill impacts in greater detail this is not provided by the NYT, and shows that the impact of the bill is still not fully understood.     ...

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Doctors face a 21% cut in the amount of Medicare payments for treating seniors having Medicare, though this cut will be delayed till 2011 under legislation in Congress. This issue goes back to 1997, when a budget law set spending targets, and stated that if they were exceeded formulas to reduce doctors payments would go into effect. The formulas seriously cut into doctor payments by Medicare in 2002, so the formula was put off. The result of this is that the cuts based on the formula now amount to 21%. The cuts are not expected to go through, but at the same time Congress has an headache on its hands with the growing deficit. In the Senate there is opposition to a $120 billion bill to extend long term unemployment benefits which lapsed in June 2010, for tax breaks, and other expenses. Senators want to pare down the bill's price tag, as $80 billon of this is unfunded and will be added to the budget deficit. For a primary care doctor in Washington state, Medicare pays about $95 compared to private insurers payment of $129, and a plan for state workers that pays $140....

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GE's decision to exit the banking business ends a period of aggressively reducing taxes using GE Capital operations. This ended in disaster in the 2008 global fianncial crisis with GE shares down to $6 and GE needing a government rescue. GE reported in its securities filing that its tax rate of 10.3% in 2014 would have been 17% without the use of GE Capital operations to reduce taxes. Experts say GE's tax rate is lower using GE Capital because of doing business in lower tax jurisdictions overseas and global funding base. In 2013 securities filing cited in the Washington Post show GE taxes were an astonishing 4.2%. GE will repatriate $36 billion in overseas earnings as the first step and pay taxes to the U.S. Treasury of $6 billion.

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Italy's budget deficit was brought down to 3% of GDP in 2012 under Mario Monti's government. The cost of austerity measures is a expected economic contraction of 1.8% in 2013, according to OECD and Moody's forecasts. There is intense opposition in Italy to the 4 billion euro property tax. The right wing parties under Berlusconi have called for this tax to be cancelled and reimbursing of 2012 payments. Italy's 2013 budget also assumes a one percentage point increase in the value added tax rate, a 4 billion euro additional tax. The new prime minister of a technocratic government, Enrico Letta, faces a delicate balancing act to keep the coalition of the right and left parties together, and still keep the confidence of the EU that Italy will control its deficit. The OECD expects the deficit to grow by half a percentage point in 2013-2014 as steps are taken to promote economc growth.

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EIA says half of the benefit of higher fuel efficiency standards for Automobiles 2010-2020 in US was lost because of SUV's and the incentivizing of SUV's in the 2006 CAFE standards have made things worse. The first SUV's came in the 1980's. By 2004 SUV's made up half of car sales and by 2025 outsold cars 2 to 1. What if we took all SUV's and large cars off the roads, or even some of these SUV's by deincentivizing of SUV's in the US CAFE corporate fuel efficiency standards? What would be the savings in crude oil and in carbon footprint? Would it be about the same as releasing an additional 400 million barrels of oil into the markets in addition to the 400 million barrels that are now released through EIA and member countries? This New Yorker essay touches on this idea. During the Iran war the volatile Middle East as a source of oil supplies is a major problem for countries. Some are rationing supplies and in one country 40 million children are not going to school for 2 weeks starting this week because of the sources of oil are so precarious, government offices will only have half of the employees, the rest working from home (almost like Covid pandemic). Many other countries face that situation. The International Energy Agency recently reported that, if “SUVs were an individual country, they would rank sixth in the world for absolute emissions in 2021, emitting over 900 million tonnes of CO2.” The agency says governments must redesign their CAFE standards and their policies so that it would reduce S.U.V. sales, tax gas guzzling vehicles. EIA cites governments in the EU doing this- “Some governments have already started introducing relevant measures, such as France and Germany, which have put a tax on large and high-emissions cars.” Within SUV's also there is an opportunity to reduce the size and make more efficient space utilization designs. Small savings also add up. One has to realize that the current freedom to use energy freely in places like the US with self sufficiency in oil comes with a sense of responsibility for using it wisely so that it can be exported to cut the trade deficit, precisely what the president is doing with India, to cut a trade deficit of $58 billion before it gets to $100 billion. Section 301 is already in place for investigations by the US of 18 countries for a new basis to use tariffs after the Supreme Court decision. A similar approach is taken with EU for hundreds of billions of reductions in trade deficit that will only strengthen the US dollar and the US economy in the long run , and be good for stock markets and jobs as it reduces oil prices and increases the manufacturing capacity/cost for the Nation. Europe, India and China can do the same. Remember that in 2010 SUV's made up 17% of total world sales, and by 2025 SUV's made up 46% of world vehicle sales. This would create another 400 million barrels for the oil markets, which would triple what was released through EIA  this week to 1.2 billion barrels and this would create 120 days of supply replacement for the 10 million b/d lost from Straits of Hormuz, and effectively end the Iran War as it would be clear that prices can be kept low even in the $50's. Essentially buying time till the SU can get more production in Venezuela and other parts of the world to replace much of the Middle Eastern oil that is ending up in a quagmire. This is the best way for the US and Europe, India, China to ensure jobs growth, economic growth with low cost crude oil in the $50 range and ensure much of the poorer countries like Egypt and Indonesia, Vietnam, Sri Lanka, Pakistan, Bangladesh, have access to oil at prices they can afford and eliminate poverty. ...

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A bill requiring that women make up 30% of nonexecutive supervisory board members of 100 companies by 2016 is likely to pass in the German parliament in Dec. 2014. Women make up 22% of the supervisory board of 30 companies on the DAX. The new bill requires that companies have to leave the positions unfilled if they cannot find women. France requires 20% of nonexecutive director positions go to women, which goes up to 40% in 2017. Women make up 29.7% of the boards of the 40 companies in France's CAC 40 index, which is up from 12.3% in 2011. The European Union has set a goal of 40% women on boards by 2020.

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The LDP Party led by prime minister Abe wins 290 seats in the lower house of parliament in the Dec. 2014 elections. Its ally the Komeito Party gets 34 seats giving the government a two thirds majority in parliament. The LDP previously had 295 seats from the 2012 elections. Of the total 475 seats in parliament, 73 seats went to the opposition DPJ Party and 21 seats to the Communist Party. This gives Abe a 4 year mandate reducing the uncertainty from having a regular change in prime ministers in recent history, making Abe the 17th prime minister in 25 years. The stable government and clear economic policy will help the economy. Abe says he will focus on prodding companies to raise wages, as many people say they have not personally seen any benefit from Abenomics. As a result turnout hit a new low of 52% compared to 59% in 2012 parliamentary elections, with prospective voters showing their dissatisfaction by staying away. Severe winter weather and public confusion about why the snap election was being held may have added to low voter turnout. Other parts of the Abe agenda include restarting some of the 48 nuclear reactors offline since the Fukushima disaster. Abenomics faces hard work ahead as it grapples with two quarters of declining growth in 2014, consumers feeling the effects of the increase in the consumption tax from 5% to 8%, and small businesses feeling the effects of higher cost for imports with the weaker yen. ...