Tax reform plans are often in the making in different parts of the world. In this article we examine what is going on in the Philippines, the US and Great Britain.
First, the Duterte administration is moving toward more inclusive economic growth, with an assurance from the business community supporting tax reform plans. The Comprehensive Tax Reform Program (CTRP) is being put to the BusinessWorld Economic Forum. Chairman of the Metro Pacific Investments Corporation, Manuel V. Pangilinan, said “CTRP is central to DuterteNomics; it is in fact the catalyst to the government’s 10-point economic program. That is why I believe the business sector should support it.”
Second, it’s quite interesting what is happening with tax reform in America, primarily because of how concise the plan is. In just one page, Trump outlined possibly the largest tax cut individuals have received (since Reagan’s administration) in his tax code reformation proposal. Should it go ahead, a reduction from seven to three in the current tax brackets would be implemented with rates of 10 percent, 25 percent and 35 percent. a married couple would have nearly double in their deductions and would not even have to any amount of taxes on the first $24,000 income they earn, effectively creating a zero tax rate. Tax breaks for charitable giving, mortgage interest and retirement savings would remain in place.
Trump also is seeking to eradicate state and local tax deductions. According to the Tax Policy Center, the SALT deduction is one of the largest federal tax expenditures, with an estimated revenue cost of $96 billion in 2017 and $1.3 trillion from 2017 to 2026, in an effort to put an end to the Alternative Minimum Tax (AMT) which calls for over 5 million taxpayers to calculate their liability twice and then pay the higher amount.
Third, when looking at the situation in Great Britain, Theresa May is running on a platform of tax reduction for businesses and working families. She is promising no increase in value-added taxes and a maintenance of plans to cut corporation tax to 17 percent by 2020.
Immigration and how the US handles refugees seeking to live in the country of the free has been a hot subject in the news lately. Here are a few facts about refugees many people might not be aware of:
Refugees must repay the cost of the airfare to the United States. Although the government does pay for the flights of refugees to the US, that money is an interest-free loan which must be repaid as soon as the refugee begins to earn an income. That money is then funneled back into a fund that pays for additional refugees to be brought over.
Studies show that although there are costs involved in resettling refugees, the positive contribution they make to the economy balances out the expense. Money is spent mostly to provide social services like language and vocational training, healthcare and cash allowances. One study showed that in Cleveland, where 4,518 refugees were resettled between 2000 and 2012, 38 new businesses were started, yielding an additional 175 jobs and $12 million in spending in Cleveland in 2012.
Refugees must prove their status. International law states that a refugee is someone with a “well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; or who, not having a nationality and being outside the country of his former habitual residence as a result of such events, is unable or, owing to such fear, is unwilling to return to it.” Being poor is not enough.
The process of resettlement is a long and arduous one. According to the World Bank Group, the average length of time a refugee waits in “limbo” until he is resettled is 10.3 years. The median is four years until a permanent home is found. Once the process of resettlement in the US begins, the minimum amount of time it takes is 18 months. Immigration lawyers say that it is not unusual for the process to take from four to eight years.
Theft of Trade Secrets: between $180 billion and $540 billion.
Counterfeit Goods: between $29 billion and $41 billion.
Pirated Software: $18 billion.
China, including Hong Kong, is the biggest culprit, says the commission, accounting for about 87 percent of the counterfeit goods which are confiscated at the border. The report issued by the commission states that Chinese authorities actually encourage the theft of intellectual property.
The commission is headed by former governor of Utah and Republican presidential candidate Jon Huntsman, who was also a US ambassador to China; and a former director of US national intelligence, Admiral Dennis Blair.
“The vast, illicit transfer of American innovation is one of the most significant economic issues impacting U.S. competitiveness that the nation has not fully addressed,” Huntsman said. “It looks to be, must be, a top priority of the new administration.”
The United States is faced with a serious challenge to an important treaty which could have dire consequences if not handled well.
The New York Times reported this week that Russia has deployed nuclear-capable cruise missiles which could be a critical threat to the countries of western Europe.
Officials believe that the missiles were 9M729s, which are ground-based missiles similar to Russia’s Kalibr missiles. The Kalibr were used to hit targets in Syria from a range of 1,000 miles away in the Caspian Sea.
Experts say these missiles are in violation of the Intermediate-range Nuclear Forces Treaty, INF, because they can reach targets from 620 to 3,420 miles away, from ground-based launchers. If this is true, then Russia has the capability of hitting a slew of European capital cities from home.
“We knew it was coming for a long time,” said one expert of the missiles. The Russians “started testing in 2008. In 2011, the Obama administration decided it was a compliance problem.”
The INF treaty is one of the few success stories from the arms-control talks between the two powerful nuclear-enabled countries. During the 1980s Russia had already begun to develop nuclear missiles with intermediate range which had the power to strike western European cities.
President Obama decided in 2014 that Russia had indeed violated INF. During an INF special verification meeting the US presented Russia with the evidence that they were in violation of the treaty. The Russians answered with “capricious arguments,” saying that the US had also violated the treaty.
“None of the Russian accusations amount to the US, in secret, deploying a large number of missiles that violate the treaty,” the expert said. “The US does not have ground-launched intermediate-range forces anywhere.”
President and Chief Legal Officer of Microsoft, Brad Smith, wrote an open letter to President Donald Trump asking for a formal exemption process for employees effected by Trump’s executive order travel ban. Microsoft would like to see exemptions upheld for all “responsible known travelers with pressing needs.” The idea would be proposed and sponsored by a US company or university. The proposal would allow anyone from the seven countries in question who have valid visas to travel safely outside the US without fear of having their return re-entry denied, on the understanding that they will travel for amounts of time less than two weeks, either for business or family reasons.
Smith stated that Microsoft does not consider this request a “fix” for the executive order, which it considers “misguided and a fundamental step backwards.” Rather, it is just an immediate solution to help foreign employees, who have been left stranded outside the US where they live and work; and those who are afraid to leave because they are worried they won’t be allowed to return.
Microsoft explained that they have 76 employees with 41 dependents, who are affected directly by the ban. Some of them have been unable to return to their children or visit sick relatives abroad.
Since the executive order has come under a maelstrom of criticism the Trump administration has eased up slightly on the terms of the order, allowing legal permanent residents an exemption from the ban. However, people on temporary visas are not exempt. Microsoft says its proposal does not change the terms of the order, it only asks that each case be judged on its own merits, granting exemptions under certain conditions.
“Immigration authorities already have a wide range of personal information about individuals in the visa categories that we have proposed,” writes Smith. “Many of these individuals also fill critical roles in the organizations that employ them, whether they are doctors, scientists, engineers, medical technicians, software developers, or any number of other highly skilled professionals. They are deeply valued contributors to the innovation, research and business acumen of our nation, and they serve critical roles in the successful operations of US companies.”