'It's very hard not to give tax cuts to the wealthy,' Steven Mnuchin now says - CNBC News

'It's very hard not to give tax cuts to the wealthy,' Steven Mnuchin now says

The Trump administration has now completed wholesale repeal of the "Mnuchin Rule."

"When you're cutting taxes across the board, it's very hard not to give tax cuts to the wealthy with tax cuts to the middle class," says Treasury Secretary Steven Mnuchin.

That represents a dramatic reversal from Mnuchin's initial assertions on the subject.

John Harwood CNBC.com

Treasury Secretary Steven Mnuchin .The fight for tax reform ramps up

The Trump administration, bent on deregulation from the start, has now completed wholesale repeal of the "Mnuchin Rule."

It happened in an interview with Treasury Secretary Steven Mnuchin that Politico published Wednesday. Faced with economic analyses showing the White House plan to cut corporate and personal income taxes provides big gains for wealthy Americans, Mnuchin called that result unavoidable.

"The top 20 percent of the people pay 95 percent of the taxes," the Treasury secretary said. "The top 10 percent of the people pay 81 percent of the taxes."

"So when you're cutting taxes across the board, it's very hard not to give tax cuts to the wealthy with tax cuts to the middle class," he concluded. "The math, given how much you are collecting, is just hard to do."

That represents a dramatic reversal from Mnuchin's initial assertions on the subject. After last November's election, he appeared on CNBC to pledge that wealthy Americans would receive no tax cut whatsoever.

"Any reductions we have in upper-income taxes will be offset by less deductions so that there will be no absolute tax cut for the upper class," Mnuchin told CNBC's "SquawkBox" then.

"When we work with Congress and go through this, it will be very clear: This is a middle-income tax cut."

After the administration took office in 2017, Mnuchin began softening that pledge, which had come to be known as the "Mnuchin Rule." When I interviewed him in May at the Peter G. Peterson Foundation's Fiscal Summit, he described avoiding tax cuts for the rich as a goal, not a commitment.

"The president's objective is to create a middle-class tax cut," he told me. "I can't pledge what the results will be, since the results are going to be a combined effort of the administration and the House and the Senate.

"The president's priority has been not cutting taxes for the high end," Mnuchin continued. "His priority is about creating a middle-income tax cut. So we'll see where it comes out."

Whereit came out, according to analysts at the Tax Policy Center, was a tax plan that in 2027 would give 80 percent of the benefits to the wealthiest 1 percent of Americans. That figure involved some educated guesswork based on details in earlier GOP proposals, since the White House-Congress "Big Six" plan has not yet filled in many details.

President Donald Trump has insisted the plan he wants Congress to pass by year's end will not benefit rich people like him. "The wealthy are not getting a tax cut under our plan," National Economic Council Director Gary Cohn told ABC recently.

Under the "Mnuchin Rule," that was once the Treasury secretary's promise, too. Yet his new remarks to Politico not only conceded that the rich will get a tax cut, but cast it as mathematically inevitable.

Of course, cutting the payroll taxes that all workers pay to finance Social Security, rather than income taxes, would produce a different mathematical outcome. So would dropping the GOP proposal to eliminate the estate tax — which currently applies only to estates valued at more than $5.5 million for an individual or $11 million for a couple.

But Mnuchin, who like Trump and many top administration officials is very wealthy, cast abolishing estate taxes as a matter of fairness rather than math.

"The estate tax is somewhat of an economic issue, and somewhat of a philosophical issue," he told Politico's Ben White. "People pay taxes once. Why should people have to pay taxes again when they die?"

US: Tillerson calls for India ties to counter China - BBC News

US: Tillerson calls for India ties to counter China

From the section Asia Share this with Facebook Share this

US Secretary of State Rex Tillerson in Washington, 13 October

Mr Tillerson visits India next week

US Secretary of State Rex Tillerson has said the US wants to deepen co-operation with India in the face of growing Chinese influence in Asia.

He described India as a "partner" in a "strategic relationship", adding the US would "never have the same relationship with China, a non-democratic society".

He said Beijing sometimes acted outside international conventions, citing the South China Sea dispute as an example.

His comments come ahead of his visit to India next week.

Meanwhile, President Donald Trump will visit a number of Asian countries including China, in November.

Speaking at the Center for Strategic and International Studies think tank in Washington, Mr Tillerson said "the United States seeks constructive relations with China, but we will not shrink from China's challenges to the rules-based order and where China subverts the sovereignty of neighbouring countries and disadvantages the US and our friends".

He also described the US and India as "increasingly global partners" who "don't just share an affinity for democracy. We share a vision of the future."

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China's military shifts signal bigger changes

The secretary of state's remarks came hours after Chinese President Xi Jinping's speech at the Chinese Communist Party congress, where Mr Xi signalled that Beijing intended to play a greater role in world affairs.

Mr Xi said that China had now "become a great power in the world", and that the Chinese growth under Communist rule had given "a new choice" to other developing countries.

China hopes to play a more global role in the future

However, in his speech on Wednesday, Mr Tillerson criticised "China's provocative actions in the South China Sea", saying they directly challenged "the international law and norms that the United States and India both stand for".

"China, while rising alongside India, has done so less responsibly, at times undermining the international, rules-based order," he added.

He called on India to play a greater security role in the region, saying "India and the United States should be in the business of equipping other countries to defend their sovereignty... and have a louder voice in a regional architecture that promotes their interests and develops their economies."

Following Mr Tillerson's speech, the Chinese Embassy in Washington said in a statement that Beijing "will never seek hegemony or engage in expansion, never pursue development at the expenses of others' interests".

It added that China "contributes to and defends the rules-based world order".

Xi Jinping speech: five things you need to know - Guardian

Xi Jinping speech: five things you need to know

The Chinese president spoke for three hours and 23 minutes – here are the most interesting points

Wednesday 18 October 2017

Xi Jinping opened a historic Communist party meeting in Beijing with a three hour and 23 minute speech that heralded a “new era” in Chinese politics. A mostly monotone affair, Xi became emotional at several points, and the party faithful in the audience responded with applause at the appropriate pauses.

Here are the most important points and what to watch during Xi’s next five years as China’s leader:

Xi wants China to rise on the global stage

Xi made several pointed comments directed at the US president, casting himself as the anti-Donald Trump by denouncing isolationism and championing cooperation among nations.

“No country can retreat to their own island, we live in a shared world and face a shared destiny,” he said, making at least one indirect reference to the US leaving the Paris climate accord.

He also mapped out a long-term future for China’s rise on the global stage, predicting that by 2050 the country will “stand proudly among the nations of the world” and “become a leading global power”. Part of that plan includes building a “world-class” military than can fight and win wars.

Xi Jinping heralds 'new era' of Chinese power at Communist party congress

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China has no interest in systems of western democracy

Xi warned the Communist party faced a variety of challenges, most notably corruption, but doubled down on the system, saying China would never copy political systems in other countries. His comments are a clear signal that China’s leaders have no interest in western notions of democracy.

In the past five years, Xi has become known as a strongman, and he did not shy away from the reputation, saying the party would permeate all aspects of life in China, from law to technological innovation.

He also unveiled his theoretical contribution to party thought, the very wonky “Socialism with Chinese characteristics for the new era”. On corruption, he promised new laws to tackle the problem, as graft cases are currently handled by a shadowy internal party process.

Beijing talks tough on regions eyeing independence

Mostly addressing Taiwan – whose government China does not recognise – but also Hong Kong, Xi became visibly animated and received the longest applause for his tough talk on regions with designs to declare formal independence.

“We will not tolerate anyone, using any means, at any time to separate one inch of land from China,” he said. “Blood is thicker than water.”

Distrust of China has been growing in both Taiwan and Hong Kong, and Xi announced propaganda pushes for the regions in order to “strengthen the ranks of patriot who love our country”. Similar overbearing attempts in the past have had little success in swaying the younger generation.

Xi seeks to calm fears over the economy

Xi worked to calm fear of rising home prices that have hit ordinary Chinese particularly hard. Real estate is a preferred investment in a country where the financial system is viewed with distrust.

“Houses are for living, not for speculating,” he said, coining a catchphrase that will no doubt become a mantra.

He also pledged to transform China into a “country of innovators”, focusing on aerospace, cyberspace, transportation. He promised to increase market access for foreign companies and also increase the markets’ role in the financial system and exchange rate, but it remains to be seen if this speech will translate into concrete policies.

The communist party wants a “Beautiful China”

As part of making China great, Xi spent a lot of time tackling environmental issues. He pledge to build a “beautiful China” with a clean environment, high tech companies and responsive government.

The Communist party need to “meet people’s ever-growing demands for a beautiful environment”, Xi said. “Chinese people will enjoy greater happiness and well-being.”

He acknowledged that happiness was more than just material goods, long believed the key to winning the loyalty of the masses, and said the party would fix the toxic levels of air, water and soil pollution that have plagued China for years.

Balance of Power: Trump Pleads for Unity Under Bannon’s Shadow - Bloomberg

Balance of Power: Trump Pleads for Unity Under Bannon’s Shadow

By Kathleen Hunter

October 17, 2017, 8:15 PM GMT+10

Trump, McConnell Talk Taxes

After all of Donald Trump’s efforts to browbeat lawmakers, it’s ousted White House strategist Steve Bannon that Republican senators — and the U.S. president himself — actually fear.

That was the signal Trump sent yesterday with an impromptu Rose Garden appearance alongside Senate Majority Leader Mitch McConnell in which the president urged an end to Republican infighting. Bannon responded by doubling his efforts to purge the Senate of McConnell supporters.

The bid by Trump and McConnell to smooth over past tensions demonstrates the depth of Republicans’ fear that their promised tax overhaul will follow the attempted repeal of Obamacare onto the ash heap, leaving the party without a substantive legislative accomplishment and threatening House and Senate seats in next year's midterm elections.

A political action committee allied to Bannon yesterday endorsed anti-establishment candidates in Arizona and Wisconsin. A Bannon-backed upstart beat McConnell and Trump’s preferred candidate in last month’s Alabama primary runoff.

McConnell’s got reason to be concerned about the schism given the events of 2010, when establishment candidates lost to Tea Party-backed challengers only to fall to Democrats in the general election.

As McConnell reminded Republicans yesterday, “The goal here is to win elections.’’

Every U.S. President Faces a Major Crisis. What Will Trump's Be? - TIME

Every U.S. President Faces a Major Crisis. What Will Trump's Be?

Ian Bremmer

Oct 16, 2017

Every U.S. President faces a major crisis at some point in their presidency. Although the administration of Donald Trump has already been buffeted by a hurricane season for the record books, and a stubbornly persistent Russia investigation, he's yet to be hit by the kind of geopolitical crisis that will make the world stop and watch what happens next. Here are five candidates for Trump’s big pressure moment:

1. A large-scale cyber attack

Let's say a cyberattack makes public all the proprietary information of a major corporation, roiling markets. Or a shadowy hacking collective brings down the electrical grid of the Pacific Northwest. Chaos ensues; people will look to the White House for guidance and comfort. As Puerto Rico made clear, playing comforter-in-chief is not Trump’s forte. Compounding the issue is that when it comes to cyber warfare, you can’t publicize your military response—the most effective cyber measures are covert. For a showman like Trump, that’s a problem.

The source of the cyberattack matters too, and information in the early hours and days can oftentimes be spotty. When China allegedly hacked into the U.S. Office of Personnel Management (OPM) and stole the data of 21.5 million government employees in April 2015, it set off months of investigations and counter-measure planning. The FBI made an arrest just last month related to the OPM breach, highlighting just how long and complicated catching cyber perpetrators can be, especially if the suspects reside outside the country. Trump tweets first and asks questions later. A problem in most instances, but downright debilitating when responding to cyberattacks, especially those unprecedented in scale.

2. A faceoff between Washington and Moscow

Russian President Vladimir Putin had high hopes for the incoming Trump administration, and while Trump has given every indication he would like to work closely with Putin, political realities (the Mueller investigation, congressional Republicans, the 70 percent of Americans who hold unfavorable views of Russia) have gotten in the way. There is no coming Russia rapprochement. And in the seemingly zero-sum world of US-Russia relations, if you’re not Moscow’s friend, you’re its enemy.

Every day brings fresh revelations of Russia’s sophisticated campaign against Hillary Clinton and the Democratic party during the 2016 campaign. And as domestic political realities pull Trump further from Putin’s orbit, we’re liable to see just how extensive those Russian hacking operations were. An increasingly-frustrated Putin may well start releasing RNC emails as a shot across the bow at Trump, deepening divisions between Trump and the GOP establishment. And if things get bad enough, Russia might even start releasing damaging information about Trump himself. Then we’re off to the races.

3. A stumble into direct conflict with North Korea

To put this bluntly: Kim Jong-Un is winning. He already has a nuclear weapon, and continues to make progress towards an ICBM capable of striking the U.S. mainland. As Trump threatens “fire and fury”, Kim creeps closer to the ability to deliver his own.

The Trump administration’s responses so far have been all over the place, and it’s unclear if this is by design. Trump has promised direct intervention and hinted at the possibility of war. Beleaguered Secretary of State Rex Tillerson tried communicating directly with the North Koreans, but Trump warned publicly that he was wasting his time; Defense Secretary James Mattis said a preemptive military strike is on the table. Before being shown the door, chief strategist Steve Bannon (correctly) pointed out that the number of South Korean casualties Kim could inflict makes any first move by the U.S. prohibitively costly in terms of human life.

Trump and Kim each have a flair for escalatory rhetoric, and it might be hard for either of them to back away from an accidental escalation. Now factor in China, which would surely find itself in the middle of any escalation, with military and/or economic implications for relations with Washington. There’s no shortage of ways this one goes sideways.

4. A stumble into direct conflict with Iran

North Korea is scary, because an accident can come without warning. Iran is scary precisely because we’re witnessing the escalation in real time.

Trump’s refusal to recertify Iran’s compliance with the nuclear deal doesn’t automatically withdraw the U.S. from the agreement. Trump has simply kicked the question to Congress, which now has the option to reimpose sanctions if it chooses. European allies will likely join China and Russia to keep the deal in place—the last thing Europe needs is another political flashpoint that divides the continent.

But just as Trump has political incentives to look tough on Iran, some members of Congress do too. They may be tempted to reinstitute sanctions. If that happens, Washington could find itself in a diplomatic crisis with some of its closest allies—or in a standoff with two hostile powers at once.

5. A terrorist attack on the U.S.

Finally, the one threat that looms over every president—a foreign terrorist attack on U.S. soil.

The response by Americans in the immediate aftermath of 9/11 is arguably America’s finest hour. People stood in line for hours across the country to donate blood. Politicians, including then-President George W. Bush, took pains to emphasize that “The face of terror is not the true faith of Islam… Islam is peace.” It’s hard to imagine Trump delivering that speech, or anything like it. In fact, Trump’s reference to 9/11 on the campaign trail was to single out the “thousands and thousands” of people (read: Muslims) he says were cheering in New Jersey (they weren’t).If such a situation unfolded on Trump’s watch, Trump would likely deflect blame from himself and his administration for any security lapses, and point to the event as proof he was right all along about Muslim bans and immigration. In short, he would further divide the country rather than rallying it together.